Minacs Worldwide posts Q2 profit of $1.84-million
Minacs Worldwide Inc (2) (TSX:MXW)
Shares Issued 21,776,876
Last Close 8/10/2004 $2.07
Wednesday August 11 2004 - News Release
Mr. Jason Craine reports
MINACS WORLDWIDE REPORTS RECORD PROFIT IN SECOND QUARTER RESULTS; $3.3 MILLION PROFIT SWING IN SECOND QUARTER OVER FIRST QUARTER 2004
Minacs Worldwide Inc. has released its financial results for the second quarter and six months ended June 30, 2004.
Results highlights:
record revenue of $71.4-million in second quarter;
record second quarter profit of $1.8-million -- nine cents per share;
Minacs profitable year to date;
sales, general and administration percentage down significantly; and
cash flow from operations doubles to $3.9-million.
"The substantial swing in profitability illustrates that Minacs's financial turnaround has taken hold and the continuous improvement programs the company initiated in early 2004 have created the desired financial results," said Elaine Minacs, chief executive officer. "These results put Minacs firmly on the path towards a profitable 2004 and to continued leadership in the business process outsourcing space."
Second quarter revenue was $71.4-million, a 7.4-per-cent increase over the second quarter of 2003 and a 6.9-per-cent increase over the first quarter of 2004. The increase in revenues resulted from extensive organic and new client growth. For the six months ended June 30, revenue was $138.2-million, a 6.0-per-cent increase over the first six months of 2003.
Gross profit increased to $24.8-million (34.8 per cent of revenue) from $23.1-million (34.8 per cent of revenue) in the second quarter of 2003 and from $22.7-million (34.1 per cent of revenue) in the previous quarter. While sales, general and administrative expenses increased to $16.4-million versus $16.3-million in the second quarter of 2003, they decreased by 6.3 per cent or $1.1-million from the first quarter of 2004. As a percentage of revenue, sales, general and administrative expenses decreased to 22.9 per cent of revenue in the second quarter of 2004, from 24.5 per cent in the second quarter of 2003 and 26.2 per cent in the first quarter of 2004. The percentage decrease in ales, general and administrative expenses is attributable to increased revenue, as well as the cost-savings and efficiency improvements initiated by Minacs's continuous improvement team.
EBITDA (earnings before interest, taxes, depreciation and amortization) grew to $8.4-million in the second quarter of 2004, from $6.8-million in the second quarter of 2003 and $5.3-million in the first quarter of 2004. This represents 23.5-per-cent and 58.5-per-cent increases respectively.
Minacs's second quarter profit of $1.8-million is a record quarterly profit. The profit is a substantial improvement over the $415,000 loss in the second quarter of 2003 and the $1.5-million loss in the first quarter of 2004. Higher revenues and gross margin were the major contributors to Minacs's return to profitability.
Cash flow from operations grew to $3.9-million from $1.7-million in the second quarter of 2003. For the second quarter, Minacs had a working capital surplus of $9.9-million, including cash on hand of $5.7-million, compared with $27.2-million as at Dec. 31, 2003. The decrease in working capital was due to the 2004 classification of the revolving facility as a current liability.
"These solid financial results are just the beginning. As part of our 100-day plan, we said that we would have a profitable second quarter, and we have achieved this. Looking forward, the next step is to finalize our debt restructuring, effectively strengthening our balance sheet while reducing the company's overall cost of borrowing. The continuous improvement team will maximize the profitability opportunities at every site location while the business development team remains focused on identifying and winning significant new business within our target markets. We look forward to communicating further progress at our 100-day plan conference call event on Sept. 30, 2004," concluded Ms. Minacs.
Conference call reminder
Minacs will be hosting an analyst and media conference call on Aug. 11 at 10 a.m. EDT.
Dial-in numbers:
Local: 416-695-5259
Toll-free: 1-888-789-0089
An audio webcast will be archived on the Minacs website at www.minacs.com.
WARNING: The company relies upon litigation protection for "forward-looking" statements |
