Omni-Lite Industries Canada Inc. (the “Company”) (TSXV: OML; OTCQX:
OLNCF) reported financial and operating results for the first
quarter of fiscal 2020, ended March 31, 2020.
First Quarter Fiscal 2020
Results
First quarter fiscal 2020 revenue was
US$2,144,870, representing a 12% decrease compared to first quarter
of fiscal 2019 revenue of US$2,444,525, and US$2,176,487, or a 1.5%
decline, for the fourth quarter fiscal 2019. First quarter fiscal
2020 Adjusted EBITDA(1) was US$196,683, a decrease of 73% compared
to US$730,783 for first quarter fiscal 2019, and US$(121,084) , or
US$317,767 increase, for the fourth quarter fiscal 2019.
Bookings were US$2.6 million for the first quarter fiscal 2020,
representing a book-to-bill ratio of 1.2
Net Loss in the first quarter of fiscal 2020 was
US$(87,077) or US$(0.01) per diluted share, a decrease of
US$322,088 compared to first quarter 2019 income of US$235,011, or
US$0.02. Decreases in first quarter fiscal 2020 Adjusted
EBITDA(1) and Net Income compared to the year ago quarterly period
were largely a result of reduced operating leverage due to
decreased revenue from munitions sales and increased development
costs on new aerospace fastener components.
Management Comments
"Before we discuss our first quarter fiscal 2020
financial results, I would like to address the current global
crisis resulting from the COVID-19 pandemic," said David Robbins,
Omni-Lite’s President and Chief Executive Officer. "First, we are
committed to provide a safe working environment for all of our
employees. Our leadership team is closely monitoring daily
developments and managing our activities and responses, adjusting
policies and work environment to align with regional and national
governmental guidance. Both manufacturing locations have been
deemed essential businesses and continue to operate in support of
our customers, communities and employees." Through the second
quarter of fiscal 2020, we expect the impact of COVID-19 on certain
of our end markets will become more severe, most notably in our
commercial aerospace segment. "Omni-Lite is a company that provides
high performance products into a range of defense aerospace and
other defense platforms and end markets, and we expect this profile
will help us offset these challenged markets through these
unprecedented times.”
In recent years, the Company has generated sales
of approximately $1.5 million annually from our munitions product
line, which Omni-Lite manufactures bullet and tracer components in
support of certain small arms platforms. We learned during in
the quarter that we will be experiencing a more competitive climate
as we seek to bid for munitions follow-on contracts which could
impact our quarterly revenue as it did in the first quarter.
In the first quarter fiscal 2020, our munitions revenue was down
40% compared to the year ago period. Also, while the
long-term impact of COVID-19 on air travel remains uncertain,
stress in the commercial airline market will most likely cause
demand reductions and delivery deferrals for new aircraft and have
some effect on our fastener product line offering.
We do serve several end markets where demand is
robust. For example, Omni-Lite’s Monzite business manufactures
customized high-performance electronic products that are used in
self-protection and navigation systems on airborne and terrestrial
platforms that serve domestic and international public safety and
national security applications, including PAC-3, Joint Strike
Fighter, AEGIS, EuroFighter, and F-16. National security and
public safety programs are amongst the top funded priorities in the
current global climate. In addition, our electronics group supplies
manufacturing services and products used in the development of next
generation high bandwidth 5G communication systems and are
currently under development contracts.
Further, Omni-Lite is producing precision
fasteners used for aerospace platforms, both commercial and defense
applications, and some development programs for near net shaped
fasteners components serving these same platforms that could lead
to more Omni-Lite content per shipset. Evidence that points
to the strength of these defense programs is our 2019 results that
experienced 26% year-over-year increase in aerospace fastener
shipments and a 22% year-over-year increase in shipments in defense
electronics applications.
Across our business, we are managing production
capacity to meet prevailing demand conditions and are taking steps
to realign costs for volume shortfalls. We are approaching the
uncertainty facing us over the rest of 2020 from a position of
reduced costs and we are realigning to focus our energy in growth
areas of defense aerospace and defense electronics. We are
appreciative of the PPP Funds established as part of the
Coronavirus Aid, Relief and Economic Security Act (“CARES Act) we
have received. The safety and wellbeing of our employees and
suppliers and our ability to meet our customer requirements is our
highest priority. The PPP Funds will provide the flexibility
necessary to cover our employee related costs and continue to
operate at full staff during this unprecedented health crisis.
"As we move forward, we are confident the steps
we have taken to manage costs, emphasize our addressable markets
with strong demand, and better position Omni-Lite to manage through
this uncertain period."
SUMMARY OF FINANCIAL HIGHLIGHTS
All figures in US dollars unless noted.
|
For the three months ended March 31, 2020 |
For the three months ended March 31, 2019 |
% Increase
(Decrease) |
Revenue |
$2,144,870 |
$2,444,525 |
(12%) |
Adjusted EBITDA (1) |
196,683 |
730,783 |
(73%) |
Net (loss) |
-87,077 |
235,011 |
(137%) |
About Omni-Lite Industries Canada Inc.
Omni-Lite Industries Canada Inc. is an
innovative company that develops and manufactures mission critical,
precision components utilized by Fortune 100 companies in the
aerospace and defense industries. For further information,
please contact:
Mr. David RobbinsPresident and Chief Executive OfficerTel. No.
(562) 404-8510 or (800) 577-6664Email:
d.robbins@omni-lite.comWebsite: www.omni-lite.com
Forward Looking Statements
Except for statements of historical fact, this
news release contains certain “forward-looking information” within
the meaning of applicable securities law. Forward-looking
information is frequently characterized by words such as “plan”,
“expect”, “project”, “intent”, “believe”, “anticipate”, “estimate”
and other similar words, or statements that certain events or
conditions “may” or “will” occur. Forward-looking information in
this press release includes, but is not limited to, the expect
future performance of the Company. Although we believe that the
expectations reflected in the forward-looking information are
reasonable, there can be no assurance that such expectations will
prove to be correct. We cannot guarantee future results,
performance or achievements. Consequently, there is no
representation that the actual results achieved will be the same,
in whole or in part, as those set out in the forward-looking
information. Forward-looking information is based on the opinions
and estimates of management at the date the statements are made,
and are subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ
materially from those anticipated in the forward-looking
information. Some of the risks and other factors that could cause
the results to differ materially from those expressed in the
forward-looking information include, but are not limited to:
general economic conditions in Canada, the United States and
globally; industry conditions, governmental regulation, including
environmental consents and approvals, if and when required; stock
market volatility; competition for, among other things, capital,
skilled personnel and supplies; changes in tax laws; and the other
risk factors disclosed under our profile on SEDAR at www.sedar.com.
Readers are cautioned that this list of risk factors should not be
construed as exhaustive.
The forward-looking information contained in
this news release is expressly qualified by this cautionary
statement. We undertake no duty to update any of the
forward-looking information to conform such information to actual
results or to changes in our expectations except as otherwise
required by applicable securities legislation. Readers are
cautioned not to place undue reliance on forward-looking
information.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
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