TORONTO, Aug. 14, 2019 (GLOBE NEWSWIRE) -- Unisync Corp. (TSX: "UNI") (the “Company") operates through two business segments: Unisync Group Limited (“UGL”) of Mississauga, Ontario and Peerless Garments LP (“Peerless”) of Winnipeg, Manitoba.
Consolidated revenues for the three months ended June 30, 2019 of $21.6 million increased by $6.6 million or 44% from the $15.0 million recorded in the three months ended June 30, 2018. Revenue was up by $4.2 million to $17.7 million in the UGL segment and by $2.4 million to $3.9 million in the Peerless segment. The revenue increase in the UGL segment was due to the contribution of $5.8 million from Utility Garments Inc. (“Utility”) and $1.3 million from the former Red The Uniform Taylor (“RTUT”) operations that were both acquired in the current fiscal year. Revenue from the UGL segment’s existing operations was down $2.9 million from the same period in the prior year when a new uniform rollout was launched for Canada’s biggest drugstore chain and when the UGL segment disposed of the remaining discontinued uniforms of its largest airline customer following that customer’s new uniform rollout in the second quarter of fiscal 2018. The UGL segment’s next significant new uniform rollout for its first major US based airline account is expected to take place from September 2019 to March 2020. Deferred revenues at UGL increased by 14% over the previous quarter to $12.3 million as at June 30, 2019 (September 30, 2018: $1.1 million).
The $2.4 million revenue increase in the Peerless segment in the current quarter compares against the third quarter last year when results were negatively effected by delays in the release of new contracts and in the exercise of outstanding options on existing contracts by the Department of National Defence (“DND”). These delays continued to affect performance in Q1 and Q2 of this fiscal year. The improvement in the Peerless segment revenue experienced in Q3 is expected to continue into the coming year as the DND has recently exercised $8.5 million in contract options bringing the firm portion of the $34 million in contracts outstanding to $20.5 million.
Consolidated gross profit for the three months ended June 30, 2019 was unchanged at $2.9 million from the previous year’s quarter but as a percentage of revenue fell to 13.5% from 19.3%. The Peerless segment reported a $0.6 million increase in gross profit to $0.9 million while its gross profit margin slipped from 25.4% of revenue to 24.7% of revenue due to a change in the mix of sales. Gross profit in the UGL segment fell by $0.2 million to $2.3 million and its gross profit margin fell from 18.8%(Q3 2018) of revenue to 13.0%(Q3 2019) due to a) increased fixed distribution and production labour and property costs relative to the start-up of the Henderson, Nevada, facility in support of the upcoming launch of new uniforms for a US based airline and b) lower economies of scale at the existing Canadian operations.
General and administrative expenses increased by $2.5 million or 128% in the three months ended June 30, 2019 from the third quarter one year ago with the inclusion of $0.7 million of Utility and $0.5 million of new US location expenses and with increases of $0.6 million, $0.5 million and $0.2 million across the existing UGL, Corporate and Peerless segments respectively. General and administrative expenses rose in the UGL segment due to additional sales and customer service staffing, redundant online ordering support and programing costs with the transition to a new vendor and litigation expenses related to three former employees terminated with cause in 2017. The increase in Corporate expenses was mainly attributable to fees related to defending a legal challenge to the hiring of a former executive of a competitor and increased officer and director compensation.
The Company realized a net loss and total comprehensive loss of $1.6 million in the quarter ended June 30, 2019 compared to net income and total comprehensive income of $2.0 million (after recording an income tax recovery of $1.7 million) in the same quarter last year. Adjusted EBITDA (earnings before interest expense, income taxes, depreciation and amortization, share-based payment, and acquisition costs) was negative $0.9 million for Q3 2019 against positive $1.1 million for Q3 2018.
More detailed information is contained in the Company’s Interim Financial Statements for the three months ended June 30, 2019 and Management Discussion and Analysis dated August 13, 2019 which may be accessed at www.sedar.com.
On Behalf of the Board of Directors
Douglas F Good
Investor relations contact:
Douglas F Good at 778-370-1725 Email firstname.lastname@example.org
Forward Looking Statements
This 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.
Source: Unisync Corp.
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