WINNIPEG, MANITOBA--(Marketwire - April 16, 2008) - Empire Industries Ltd. (TSX VENTURE:EIL) ("Empire" or the "Company"), today announced its audited consolidated financial results for the year ended December 31, 2007. The audited consolidated financial statements and Management's Discussion and Analysis ("MD&A";) for the fourth quarter and year ending December 31, 2007 have been filed on SEDAR and can be viewed at www.sedar.com. A detailed investor presentation has been uploaded on Empire's website at www.empind.com under the "Why Invest with Us" link on the home page.
Fiscal 2007 Financial Highlights:
- Revenue increased 60.3% to $117.0 million;
- Gross profit margin increased to 17.4% of revenue from 13.9% of revenue in fiscal 2006;
- Operating income increased 169.7% to $8.9 million;
- Net income was $3.1 million, or $0.05 per share, compared with $2.2 million or $0.04 per share in fiscal 2006;
"Fiscal 2007 was a year of significant growth and transition for Empire," said Guy Nelson, Chairman and CEO of Empire Industries Ltd. "We grew our top line and our profitability and increased our scale while augmenting our capabilities by successfully completing four acquisitions during 2007. As a result of these strategic acquisitions and the two we made in 2006, Empire is much better positioned to capitalize on the substantial growth opportunities in Western Canada."
For the year ending December 31, 2007, Empire generated revenue of $117.0 million, gross profit of $20.4 million (17.4% of revenue) and operating income of $8.9 million (7.6% of revenue). This compares to the prior year ending December 31, 2006 with revenue of $72.9 million, gross profit of $10.1 million (13.9% of revenue) and operating income of $3.3 million (4.6% of revenue). Net income for the year was $3.1 million compared to $2.2 million in 2006. The earnings per share for the year was $0.05 compared to $0.04 in 2006.
For the fourth quarter ending December 31, 2007, Empire generated revenue of $35.5 million, gross profit of $5.5 million (15.4% of revenue) and operating income of $1.9 million (5.2% of revenue). This compares to the fourth quarter ending December 31, 2006 with revenue of $16.7 million, gross profit of $3.8 million (23.1% of revenue) and operating income of $1.2 million (7.0% of revenue). Net earnings for the fourth quarter were $0.8 million compared to $0.3 million in 2006. Earnings per share for the fourth quarter of 2007 were flat at $0.01 compared to $0.01 in 2006, reflecting the growth in average number of shares outstanding.
At December 31, 2007, Empire had net working capital of $8.4 million compared with $6.5 million at December 31, 2006. Total assets increased to $110.9 million from $41.8 million the prior year. The significant increase in total assets was primarily attributable to the four acquisitions completed in fiscal 2007. In addition to Dynamic Structures and KWH, which were acquired in April, Tornado Technologies was acquired at the end of November and Parr Metal was acquired at the end of December. The four acquisitions in fiscal 2007 were financed by issuing 35 million common shares and the assumption and placement of long term debt. At December 31, 2007 the Company had long term debt of $12.0 million and shareholders' equity of $40.4 million compared with long term debt of $1.5 million and shareholders' equity of $16.6 million the year before.
"The significant increase in fabrication capacity and product and service additions arising from the acquisitions has positioned the Company for future growth in per share earnings," said Mr. Nelson. "However, our earnings in the second half of 2007 were dampened by the lower margin backlog of projects inherited from these acquisitions and as a result of our ongoing integration efforts. We expect the pressure on earnings to continue through much of the first half of 2008 as we continue to work through the lower margin backlog and replace it with higher margin projects and as we continue to integrate our acquired businesses. We expect the integration to be substantially completed by the second half of the year, which should lead to stronger earnings per share in the third and fourth quarters."
Mr. Nelson added: "Our backlog of uncompleted contracts continues to grow from $40 million at the end of 2006 to $73 million at the end of December 2007 and to $91 million at the end of March 2008. Most of our current attention is being spent on business development. The acquisitions completed over the past 18 months have more than tripled our capacity and Empire is still operating below that capacity. The Company is actively working on an impressive array of projects and is driving hard to convert them into new business."
