Third Quarter 1999: SACO Increases Sales by 65 % and EBITDA by 30 %, and Strengthens Balance Sheet-The Company is on Solid Ground to add to its Already Well-Filled Order Book
MONTREAL, QUEBEC--Management of SACO SmartVision Inc. is pleased to announce its results for the quarter ended August 31, 1999. During the period, the Company strengthened its financial position considerably thanks to a private placement and the sale of the assets related to its industrial computer operations.
SACO's revenues for the third quarter rose to $23.2 million, up 65 % over the sales of $14.0 million recorded in the same quarter of last year. Several screens were delivered during the quarter, including the XL Video and Montreal Hippodrome units and the first section of the NASDAQ screen (the second section will be delivered in the fourth quarter).
Selling and administrative expenses rose to $6.0 million, up from $1.8 million in the third quarter of 1998. This increase was due to significant marketing expenses and the additional costs incurred by the New York office, the full impact of which will be seen only as of the year 2000. Gary Nalven, Managing Director of our New York office, indicated in this regard: ``Our team now includes 15 people assigned to sales, marketing and technical support for our American clientele. Results to date are conclusive and are just the beginning.'
SACO recorded earnings before interest, income taxes, depreciation and amortization (EBITDA) and discontinued operations of $2.6 million or $0.13 per share, compared with $2.0 million or $0.12 per share for the corresponding quarter in 1998, an increase of 30 %. Earnings before amortization of technology held steady at $0.9 million.
Concluded on July 28, 1999, the sale of the Industrial Computers Division yielded an after-tax gain of $11.0 million. Despite the amortization of technology of $8.4 million, this non-recurring gain enabled the Company to post net earnings of $4.7 million or $0.24 per share, as opposed to a net loss of $4.8 million or $0.30 per share for the corresponding quarter in 1998. It should be pointed out that the Company issued 3,990,000 shares during the quarter, raising the weighted average number of shares outstanding to 19,056,985 for the quarter. In addition, technology will be fully amortized by the end of the current fiscal year.
Distinct improvement in financial position
During the third quarter, SACO collected $27.3 million from the sale of the assets related to its Industrial Computers Division along with net proceeds of $17.4 million from a private placement. As planned, these funds were used to repay part of its debt and build up its working capital. Management thus reduced the long-term debt by $9.2 million, from $41.2 million as at May 31, 1999 to $32.0 million as at August 31 (including the current portion). As for the line of credit, $5.0 million was applied to its repayment in the second quarter, and $8.5 million in the third quarter. The difference of approximately $25 million was used to increase the Company's working capital, thereby fueling its organic growth.
SACO now benefits from a solid balance sheet. As at August 31, the current ratio was 2.1:1, while the long-term debt/equity ratio went from 2.7:1 as at May 31 to 0.8:1.
Positioned to add to its already well-filled order book
``We have $12 million in cash and credit facilities of $15 million. We enjoy a comfortable financial position that enables us to optimize our internal development and complete acquisitions. In fact, we are on the active lookout for acquisition opportunities that will give rise to synergies by broadening our distribution network and/or product line,' stated Paul Mathurin, Executive Vice-President of the Company.
``Our products are in great demand in both the United States and Europe,' concluded Fred Jalbout, Chairman of the Board, President and Chief Executive Officer of SACO. ``Our order book currently stands at over $40 million, and more than 20 screens will be manufactured and delivered in the next six months. Fiscal 2000 already looks promising as we have recently bid on projects in excess of $100 million.'
SACO SmartVision Inc. is a pioneer in the design of giant new-generation video screens. Its screens' technological advantages have made SACO a world leader in the entertainment industry. The Company, which has a sales and technical support office in New York, sells its products throughout North America and Europe.
Financial Highlights
Consolidated Operating Results
(in thousands of dollars, except per-share amounts)
For the 3 months For the 9 months
ended August 31, ended August 31,
1999 1998* 1999 1998*
Sales $23,186 $14,051 $47,272 $32,224
Gross profit 9,327 4,973 19,928 12,183
Selling and
administrative
expenses 5,960 1,842 10,287 4,577
Research and development
expenses 932 1,156 2,263 1,283
EBITDA 2,556 1,975 7,741 6,324
Non-recurring items --- --- --- 1,255
Financing charges 1,110 880 3,381 2,149
Depreciation and
amortization 541 151 1,629 368
Earnings before
amortization of
technology 904 945 2,730 2,552
Amortization of
technology 8,387 7,189 22,765 18,630
Operating profit from
discontinued operations
(after taxes) 11,046 604 13,074 (160)
Net earnings (loss) 4,668 (4,818) (4,009) (14,019)
Per share
EBITDA before
non-recurring items
and discontinued
operations $0.13 $0.12 $0.45 $0.41
Earnings (loss) before
amortization of
technology and
discontinued
operations
(after taxes) 0.03 0.04 0.10 0.11
Net earnings (loss) 0.24 (0.30) (0.24) (0.91)
Weighted average
number of shares
outstanding 19,056,985 15,986,334 17,017,356 15,341,126
Consolidated Balance Sheet (in millions of dollars, unaudited)
Periods ended August 31,
1999 1998*
------------------------
Current assets $66.4 $36.8
Fixed assets 8.2 3.4
Technology 8.4 38.9
Other assets 13.9 7.9
Assets from discontinued operations --- 6.2
------------------------
96.9 93.2
------------------------
Current liabilities 31.3 21.8
Long-term liabilities 28.0 39.6
Liabilities from
discontinued operations --- 1.3
Shareholders' equity 37.6 30.5
------------------------
96.9 93.2
------------------------
* restated on the basis of amortization of technology over two years
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Contact:
SACO SmartVision Inc.
Fred Jalbout
Chairman of the Board, President and Chief Executive Officer
(514) 745-0310
Web site: www.smartvision.com
or
SACO SmartVision Inc.
Gaston Perron
Vice-President, Chief Operating and Financial Officer
(514) 745-0310
Web site: www.smartvision.com
or
SACO SmartVision Inc.
Paul Mathurin
Executive Vice-President
(514) 745-0310
Web site: www.smartvision.com |
