WINNIPEG, May 2, 2010 – Empire Industries Ltd. (TSX-V: EIL) today reported its audited consolidated financial results for the year ended December 31, 2010. The audited consolidated financial statements and MD&A have been filed on SEDAR and can be viewed at www.sedar.com or at www.empind.com.
Summary of results
- Annual revenue from continuing operations of $66 million versus $68 million in the prior year;
- OG&A expenses from continuing operations of $9.3 million versus $12.3 million in the prior year, a reduction of $3 million or 25% from 2009;
- Positive EBITDA from continuing operations of $1.3 million versus negative EBITDA of $1.1 million in the prior year;
- Net loss from continuing operations of $3.3 million ($0.04 loss per share) versus a net loss of $10.4 million ($0.11 loss per share) in the prior year
- Net loss of $17.8 million ($0.20 loss per share) versus a net loss of $15.5 million ($0.17 loss per share) in the prior year.
- Cash flow used in continuing operations in 2010 was $0.6 million, or $0.01 per share, which was substantially improved over the $4.2 million, or $0.05 per share, of cash flow used in continuing operations in 2009.
In 2010, the Company exited its Petrofield process equipment business and its steel fabrication facility located in Burnaby, BC (the “Trapp plant”). Management determined that the significantly lower demand was creating excess capacity in the industry which in turn, was driving pricing to levels that were unsustainable given the fixed cost of operations. The two discontinued operations incurred a $14.0 million net loss in 2010 ($8.2 million of which was Goodwill impairment) and $5.7 million net loss in 2009 associated with these two discontinued businesses.
In February, 2011, the Company completed a private placement valued at $2.6 million. In addition, the Company is currently undertaking a further private placement of up to $3.0 million, which is expected to close on or before May 31, 2011. If the warrants from these private placements are executed, an additional $8.0 million of equity would be raised.
“We feel that we have turned the corner operationally, having closed or sold several unprofitable or non-core businesses through 2010 and 2009. With that restructuring behind us now, the stage is set for our return to profitability through growth driven by our amusement ride manufacturing business, our First Nations joint venture in the oil sands maintenance business, our Chinese joint venture and the recovery of industrial and infrastructure spending for steel fabrication and construction in western Canada,” said Guy Nelson, Chief Executive Officer of Empire Industries Ltd. “Our current private placement initiatives will provide the required working capital to enable us to exploit these opportunities.”