UNISYNC Reports Fiscal 2021 Financial Results
29 Dezember 2021 - 2:30PM
Unisync Corp. (“Unisync") (TSX:"UNI")
(OTCQX:“USYNF”) announces its audited financial results for the
fourth quarter and fiscal year ended September 30, 2021. Unisync
operates through two business units: Unisync Group Limited (“UGL”)
with operations throughout Canada and the USA and 90% owned
Peerless Garments LP (“Peerless”), a domestic manufacturing
operation based in Winnipeg, Manitoba. UGL is a leading
customer-focused provider of corporate apparel, serving many
leading Canadian and American iconic brands. Peerless specializes
in the production and distribution of highly technical protective
garments, military operational clothing and accessories for a broad
spectrum of Federal, Provincial and Municipal government
departments and agencies.
Results for Fiscal 2021 versus Fiscal
2020
Revenue for the year ended September 30, 2021 of
$86.3 million decreased by $6.8 million or 7% from the prior year
on a $4.6 million decline in revenue in the UGL segment to $68.9
million and a $2.2 million revenue reduction to $18.5 million in
the Peerless segment. UGL segment revenue decreased by 6% over the
prior year as a result of the segment’s transportation revenues
falling $11.1 million from a year ago due to massive employee
layoffs caused by COVID-19 pandemic travel restrictions. These
sales declines, mainly within the UGL segment’s airline accounts,
were partially offset by a $4.7 million increase in personal
protective equipment (“PPE”) sales which Unisync began distributing
for the first time during the third quarter of fiscal 2020. The
Peerless segment’s revenue fell 11% over the prior year, despite a
$2.7 million increase in PPE sales, with a decline in the release
of new contracts and the exercise of outstanding options on
existing contracts by the Department of National Defence (“DND”),
the segment’s largest customer.
Gross profit of $15.8 million slipped to 18.3%
of revenue from 18.9% of revenue in the prior year due to less
absorption of fixed costs. The UGL segment recorded gross profit of
$12.2 million while the segment’s gross profit margin dropped to
18% of revenue from 19% of revenue due to lower economies of
scale. Stimulus subsidies in an amount of $0.3 million
(2020 - $1.0 million) received from the Federal Governments of
Canada under the Canada Emergency Wage Subsidy (“CEWS”) and from
the United States under the Paycheck Protection Program ("PPP") to
help offset the negative impact of the COVID-19 pandemic reduced
direct payroll costs in the UGL segment and minimized layoffs for
employees that would have been otherwise affected. The Peerless
segment’s gross profit margin rose from 20% of revenue to 22% of
revenue on account of the product mix of sales.
Depreciation and amortization expense rose by
$0.6 million from fiscal 2020 to $3.8 million in the current year
primarily on account of a full year’s amortization of the Company’s
new Enterprise Resource Planning (“ERP”) software.
General and administrative expenses increased by
less than 1% to $16.5 million for the year ended September 30, 2021
after receipt of CEWS and PPP amounts of $0.1 million (2020- $0.8
million). Total interest expense of $2.2 million for the year ended
September 30, 2021 decreased by $0.4 million from the prior year on
account of lower utilization on the Company’s operating lines of
credit and lower interest rates following the onset of the COVID-19
pandemic in March 2020. The share-based payment expense rose to
$0.4 million in the current year from $0.1 million in the previous
year with the grant of 1,250,000 (2020 – nil) stock options in
October 2020.
The Company reported a net loss attributable to
Unisync shareholders of $2.8 million, ($0.15 per share) for the
year ended September 30, 2021 compared to a loss of $1.3 million
($0.07 per share) in the year before. Adjusted EBITDA
(comprehensive income before interest expense, income taxes,
depreciation and amortization, share-based payment, and acquisition
related costs) was $3.1 million for fiscal 2021 compared to $4.5
million for fiscal 2020.
Adjusted EBITDA does not have a standardized
meaning prescribed by IFRS and is therefore unlikely to be
comparable to similar measures presented by other issuers and
should not be considered in isolation nor as a substitute for
financial information reported under IFRS. Unisync uses non-IFRS
measures, including adjusted EBITDA, to provide shareholders with
supplemental measures of its operating performance. Unisync
believes adjusted EBITDA is a widely accepted indicator of an
entity’s ability to incur and service debt and commonly used by the
investing community to value businesses.
Results for Q4 2021 versus Q4
2020
Revenue for the three months ended September 30,
2021 of $19.4 million decreased by $1.7 million or 8% over the
three months ended September 30, 2020. Excluding PPE revenue, Q4
2021 revenues increased 15% over the corresponding quarter last
year, while PPE related revenue decreased from $6.7 million in Q4
2020 to $2.8 million in Q4 2021.
Gross profit for the three months ended
September 30, 2021 of $2.7 million or 14% of revenue was down from
19% of revenue in the same period last year on account of reduced
operating leverage on the lower volume of sales and a swing in
foreign exchange rates as the Canadian dollar weakened by 3%
against the US dollar in the current period compared to a
strengthening of 2% in the 4th quarter of fiscal 2020. The UGL
segment recorded gross profit of $1.9 million or 12% of segment
revenue compared to $2.5 million or 16% of segment revenue in the
same quarter of the prior fiscal year as an exchange loss of $0.3
million was included in direct expenses in the current period
compared to an exchange gain of $0.2 million in the same period of
the prior year. The Peerless segment recorded gross profit of $0.8
million or 22% of segment revenue in the fourth quarter of fiscal
2021 against $1.5 million or 24% of segment revenue in the same
quarter of the prior fiscal year.
At $3.8 million, total general and
administrative expenses for the three months ended September 30,
2021 were up $0.1 million from the three months ended September 30,
2020.
Interest expense of $0.7 million for the current
quarter was up $0.1 million from the same period last year due to
interest incurred on the extension of long-term lease obligations
at the Company’s Guelph, Ontario distribution facility in the
current quarter.
The Company reported a net loss of $1.5 million
in the quarter ended September 30, 2021 compared to a net loss of
$0.3 million in the same quarter last year for the reasons cited
above. Adjusted EBITDA was a loss of $0.4 million for the three
months ended September 30, 2021 versus $0.8 million for the
three-month period ended September 30, 2020.
More detailed information is contained in the
Company’s Consolidated Financial Statements for the fiscal year
ended September 30, 2021 and Management Discussion and Analysis
dated December 23, 2021 which may be accessed at www.sedar.com.
Business Trends
The Company began seeing a build-up in orders in
the transportation and hospitality sectors during the latter part
of Q4 2021 and, notwithstanding the recent surge in COVID cases
caused by the Omicron variant, continues to experience a strong
increase in uniform orders from these sectors to pre-pandemic
levels. With a resulting 50% increase in deferred revenue to $12.4
million at the end of fiscal 2021 complimented by recent new
account additions, management expects an improving revenue and
profitability picture as we move through fiscal 2022.
On Behalf of the Board of Directors
Matthew Graham CEO
Investor relations
contact:Douglas F Good, Executive Chairman at 778-370-1725
Email: dgood@unisyncgroup.com
Forward Looking StatementsThis
news release may contain forward-looking statements that involve
known and unknown risk and uncertainties that may cause the
Company’s actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied in these forward-looking
statements. Any forward-looking statements contained herein are
made as of the date of this news release and are expressly
qualified in their entirety by this cautionary statement. Except as
required by law, the Company undertakes no obligation to publicly
update or revise any such forward-looking statements to reflect any
change in its expectations or in events, conditions or
circumstances on which any such forward-looking statements may be
based, or that may affect the likelihood that actual results will
differ from those set forth in the forward-looking statements.
Neither the TSX nor its Regulation Services Provider (as that term
is defined in the policies of the TSX) accepts responsibility for
the adequacy or accuracy of this release.
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