****NEWS RELEASE****
NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: SIMMONDS CAPITAL LIMITED
TSE SYMBOL: SMM
MAY 27, 1999
Simmonds Capital Reports $1.5 Million Profit For The
First Quarter Of 1999
TORONTO, ONTARIO--Simmonds Capital Limited (SCL) today announced a
net profit of $1.5 million on sales of $8.0 million for the three
month period ended March 31, 1999. This compares with a net loss
of $79,000 on sales of $9.1 million for the same period a year
ago. This represents a basic earnings per share of $0.10 compared
with a loss per share of $0.01 in the prior year period.
Sales revenues decreased 12 percent from the prior year primarily
due to declines in the distribution business which offset sales
growth in the contract manufacturing business. Due to a change in
the product mix from all three operating divisions, both gross
margin and operating expenses were lower than the prior year
period. Gross margins were 26 percent of revenue in the first
quarter of 1999 and operating expenses were reduced by 16 percent
from the prior year period.
The financial results for the first quarter of 1999 include other
income of $2.2 million, including a gain from the sale of the SCL
Plastics division, management fees earned, and gains from the
renegotiation of the remaining long term loan and the settlement
of leases.
Mr. John Simmonds, CEO of SCL, stated "I am very pleased with the
results for the first quarter. In addition to the $1.5 million
net profit, the company made significant progress on several
strategic growth initiatives. This includes a three year
exclusive manufacturing contract with Develcon, a division of
Vianet Technologies, Inc. Since the launch in April of the
TrackPower satellite horse racing service, we have been very
pleased with the development of the TrackPower business and the
appreciation of our investment in American Digital
Communications."
Simmonds Capital Limited (TSE:SMM) is a diversified management
company with strategic investments in contract manufacturing,
electronics distribution, wireless communications, and internet
service markets including both equity investments and wholly owned
operations.
/T/
SIMMONDS CAPITAL LIMITED
Selected Financial Results
Three months ended March 31
1999 1998
$ 000's $ 000's
Sales $8,027 $9,117
Other income $2,235 $ 611
Net income (loss) after tax $1,519 $ (79)
Basic earnings (loss) per share $ 0.10 $(0.01)
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