Revenue up nearly 24% with EBITDA of $3.0 million
WINNIPEG, Manitoba, Aug. 26, 2019 (GLOBE NEWSWIRE) -- Empire Industries Ltd. (TSX-V: EIL, OTC:ERILF) (“Empire”, “EIL” or the “Company”) today reported its unaudited consolidated financial results for the second quarter ended June 30, 2019. The unaudited consolidated financial statements and MD&A have been filed on SEDAR and can be viewed at sedar.com or at empind.com.
“Our EBITDA growth plan is generating positive results. Empire’s revenues of $41.6 million in the quarter are in line with the expectations we set out with our 1Q19 financial reporting,” said Guy Nelson, Executive Chairman and Chief Executive Officer of Empire. “The strong growth in margins, $3.0 million of Adjusted EBITDA, and $1.0 million of operating cash flow after Finance costs are all a reflection of our ongoing focus on higher margin business, our continuing cost reduction programs and persistent emphasis on profitability. We remain confident in our ability to deliver strong financial results for the remainder of 2019 and beyond.”
“We are also excited about the progress we’re making on our co-venture initiatives. With our option on the Pigeon Forge project, and the other location opportunities we are negotiating, we see the recurring revenue business model as a key element of Empire’s future.”
Update on convertible preferred share offering
In the second quarter, Empire closed its non-brokered private placement financing first announced on April 25, 2019 (the “Offering”). Overall, the Offering yielded gross proceeds to the Company of $7,550,000.
Each Preferred Share will accrue dividends at 8% per annum. The shares are convertible into common shares at $0.45 per share for thirty-six months, and at $0.75 per share before sixty months from the date of issue. The preferred shares may be redeemed by the Company in certain circumstances, and may be retracted by the holder any time after thirty-six months. The Company is using the proceeds for general working capital purposes.
Update on Co-ventures
The Co-venture project to be located at The Island theme park in Pigeon Forge, Tennessee, is ranked as the sixth most popular amusement park in the USA and the ninth most popular in the world according to the 2019 Trip Advisor Travelers’ Choice. The work is proceeding on the building, the equipment and the movie with a planned opening date of the co-venture of March, 2021. Dynamic Attractions Ltd., a wholly owned subsidiary of Empire, has a contract to supply a 39 seat Dynamic Flying Theater attraction to the co-venture. Dynamic Entertainment Group Ltd., a 74% owned subsidiary of Empire, structured its 50% ownership as an option to purchase in order to conserve cash and delay the cash investment.
Discussions are also proceeding with several other co-venture opportunities and strategic partners interested in financing these co-venture opportunities. The co-venture business model would see Empire’s subsidiary, Dynamic Entertainment Group Ltd., having the right to co-own attractions in high traffic tourist areas, thereby generating steady, recurring revenue and profit that are predominantly self-financed.
Update on Thirty Meter Telescope (TMT)
Empire’s design contract for the enclosure for the Thirty Meter Telescope (TMT) is continuing as planned. This work is expected to be substantially complete and fully billed by the end of 2019. Popular support in Hawaii remains solidly in favor of the TMT being located in Hawaii but there are protests on the Mauna Kea site that may delay the civil construction phase of the TMT project. However, the design phase is not affected. Moreover, there remains a credible back-up plan to locate the TMT in the Canary Islands where no indigenous land claims issues exist if it should come to that.
Summary of Second Quarter 2019 Consolidated Results
Contract Backlog as of June 30, 2019 was $255 million, up 9.4% from $233 million at March 31, 2019, with over 90% being non-first generation contract backlog.
Revenues increased by $8.0 million to $41.6 million, from $33.6 million in 2Q18, up 24%
Adjusted EBITDA increased to $3.0 million, from $nil in 2Q18.
Net income increased by $2.9 million to $1.7 million from net loss of $1.2 million in 2Q18.
Summary of Second Quarter 2019 Consolidated Financial Results
For the quarter ended June 30
Adjusted EBITDA ($)1
Adjusted EBIT ($)1
Net income (loss)
Per Share Information
Loss per share – basic & diluted
1Adjusted earnings (loss) before interest, tax, depreciation and amortization (Adjusted EBITDA) is not defined by IFRS. The definition of Adjusted EBITDA does not take into account the Company’s share of profit of an associate investment, gains and losses on the disposal of assets, fair value changes in foreign currency forward contracts and non-cash components of stock-based compensation. Adjusted EBIT is the result of the Company’s Adjusted EBITDA less depreciation and amortization expenses. While not IFRS measures, Adjusted EBITDA and Adjusted EBIT are used by management, creditors, analysts, investors and other financial stakeholders to assess the Company’s performance and management from a financial and operational perspective
Conference Call Information
Empire’s management team will be holding an investor/analyst conference call to discuss the second quarter 2019 results and the outlook for the company. The call-in details are as follows:
Tuesday, August 27 at 2:00PM Eastern time
1-800-319-4610 (Canada/USA toll-free)
Callers should dial in 5 – 10 minutes prior to the scheduled start time and ask to join the Empire Industries Second Quarter 2019 Results Conference Call. This call will be available for replay on our website (http://empind.com/document_type/presentations/)
About Empire Industries Ltd.
Empire focuses on designing, supplying, and installing iconic media-based attractions and ride systems for the global theme park industry. Empire also uses these same turn-key integration services for special projects such as large optical telescopes and enclosures. Empire also has commenced an initiative to leverage its world class flying theater and attraction development capability on a co-venture ownership basis. Empire’s common shares are listed on the TSX Venture Exchange under the symbol EIL. Empire’s common shares are listed on the TSX Venture Exchange under the symbol EIL.
For more information about the Company, visit empind.com or contact:
This news release contains forward-looking statements, within the meaning of applicable securities legislation, concerning Empire’s business and affairs. In certain cases, forward-looking statements can be identified by the use of words such as ‘‘plans’’, ‘‘expects’’ or ‘‘does not expect’’, ‘‘budget’’, “booked”, ‘‘scheduled’’, “positions”, ‘‘estimates’’, “forecasts’’, ‘‘intends’’, ‘‘anticipates’’, “believes” or variations of such words and phrases or state that certain actions, events or results ‘‘may’’, “may be”, ‘‘could’’, “should”, ‘‘would’’, ‘‘might’’ or ‘‘will’’, ‘‘occur’’ or ‘‘be achieved’’. Such statements include statements with respect to: (i) the Company’s belief that revenues will increase in the balance of the fiscal year, (ii) the development of the co-ventures positioning the Company for a stream of long term, recurring revenue and profit, and (iii) the timeline for completion and billing of the TMT design contract. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although Empire believes these statements to be reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. Actual results could differ materially from those anticipated in these forward-looking statements as a result of prevailing economic conditions, and other factors, many of which are beyond the control of Empire. The forward-looking statements contained in this news release represent Empire’s expectations as of the date hereof, and are subject to change after such date. Empire disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by applicable securities regulations.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.