TORONTO, May 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.
Revenue for the three months ended March 31, 2019 (fiscal “Q2”) of $19.1 million increased 13% over the previous quarter ended December 31, 2018 (fiscal “Q1”) revenues of $16.9 million. Revenues for the comparable quarter in 2018 were $17.3 million higher due to the initial shipment of multiple garment kits of newly designed uniforms to approximately 23,000 employees of the Company’s largest airline account - the most significant new uniform rollout in Company history. This rollout followed the launch of new uniforms to this airline’s pilots during the latter half of fiscal 2017. Since these rollouts, volumes with this significant customer have returned to normal “steady state” replenishment levels i.e. at approximately 1/3 the size of the initial kit rollout of new uniforms. Partially offsetting the revenue decrease from this return to steady state was the contribution of $4.6 million of revenue generated by Utility Garments Inc. (“Utility”) and $1.3 million from the former Red the Uniform Tailor (“RTUT”) operations that were both acquired in the current year. A $0.9 million revenue decrease in the Peerless segment was caused by continued delays in ramping up production capacity at sub-contractors following delays in the exercise of outstanding options on existing contracts by the Department of National Defence (“DND”).
The Company realized a net loss and total comprehensive loss of $1.3 million in Q2 compared to net income and total comprehensive loss of $0.9 million in Q1. Net income was impacted by a non-cash fair value adjustment of $0.5 million to inventory acquired on the acquisition of Utility and $0.7 million of increased legal, public company and higher technology support costs for the Company’s new Enterprise Resource Planning (“ERP”) computer system under implementation.
Adjusted EBITDA (earnings before interest expense, income taxes, depreciation and amortization, share-based payment, and acquisition related costs) was negative $0.4 million for Q2 against $0.3 million for Q1.
More detailed information is contained in the Company’s Interim Financial Statements for the three months ended March 31, 2019 and Management Discussion and Analysis dated May 10, 2019 which may be accessed at www.sedar.com.
Business Outlook
The UGL segment is seeing rationalization of its competition and opportunities to expand its market share both in Canada and the United States. Following upon the October 1, 2018 Utility acquisition, the Company leased a new 45,000 square foot distribution centre facility in Henderson, Nevada for operation in late fiscal 2019 and acquired the hospitality assets of RTUT in Lakewood, New Jersey (since relocated to Farmingdale, New Jersey). Building upon these initial investments, the Company sees significant opportunities for growth in the US market.
UGL’s second largest airline account, Alaska Airlines, is scheduled to officially rollout its new uniforms to its 19,000 uniformed employees starting in early fiscal 2020. UGL is responsible for all aspects of the program including manufacturing, quality, safety, inventory planning, online ordering, customer service, and warehouse and distribution. UGL will be distributing to Alaska Airlines employees from its Henderson, Nevada distribution centre. UGL intends to use this location to expand its marketing efforts to other US customers in industry sectors where UGL has built a strong knowledge base, such as in food service, hospitality, private security, retail and transportation. In addition, UGL was recently selected by WestJet to take over its current uniform program and to test, manufacture and distribute a new uniform to its 10,000 uniformed employees starting in early fiscal 2021.
With $36 million in firm contracts and options on hand as at March 31, 2019, the Peerless business segment is well positioned to return to more normal levels of revenues and profitability for the balance of fiscal 2019 and 2020.
On Behalf of the Board of Directors
Matthew Graham
CEO
Investor relations contact:
Douglas F Good at 778-370-1725 Email dgood@unisyncgroup.com
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.