Unisync Reports 60% Increase in Q1 2020 Revenues
VANCOUVER, British Columbia, Feb. 13, 2020 (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 revenue for the three months ended December 31, 2019 of $27.1 million increased by $10.1 million or 60% over the three months ended December 31, 2018 on a $7.1 million revenue increase in the UGL segment and a $3.0 million revenue improvement in the Peerless segment. First quarter 2020 UGL segment revenue of $22.5 million increased by 47% over the same period in the prior year with the addition of $7.1 million in US market sales. The Company reported a net income of $0.1 million in the quarter ended December 31, 2019 compared to a net loss of $0.9 million in the same quarter last year. Net income before interest, taxes, depreciation and amortization (“EBITDA”) was $1.8 million for the three months ended December 31, 2019 versus negative $0.4 million for the three-month period ended December 31, 2018. More detailed information is contained in the Company’s Interim Financial Statements for the three months ended December 31, 2019 and Management Discussion and Analysis dated February 10, 2020 which may be accessed at www.sedar.com.The level of improvement in net income and EBITDA was adversely impacted by a buildup in our professional sales staff and significant non-recurring costs associated with upgrading our various systems to accommodate the Company’s growth opportunities domestically and in the US. These non-recurring costs included the impact of redundant online ordering support and programming costs associated with the conversion of existing clients to the Company’s new proprietary state-of-the-art electronic storefront, testing and ongoing customization associated with the implementation of the new ERP system, professional fees related to the successful completion of the segment’s first SOC II audit over its data security, and the costs associated with the preparation of the Company’s bid response to the estimated $1 billion Operational Clothing and Footwear Contract (“OCFC2”) solicitation by the Department of National Defense. Some of these one-time costs will continue to cause net income and EBITDA improvement to trail top-line growth well into fiscal 2020 but are expected to establish a systems platform for improved capacity, efficiency and more pro-active management capabilities going forward.Business OutlookThe UGL segment is seeing significant opportunities to expand its market share both in Canada and the United States. Following the October 1, 2018 Utility acquisition, the Company leased a new 45,000 square foot distribution and service facility in Henderson, Nevada and acquired the hospitality assets of RTUT in Lakewood, New Jersey (since relocated to Farmingdale, New Jersey). In fiscal 2017 and 2018 Unisync successfully launched newly designed uniforms to the 30,000 employees of Air Canada. In the first quarter of fiscal 2020 UGL assumed distribution of WestJet’s current uniform program from a competitor and has been working on field testing a new uniform design. It is expected that the manufacture of WestJet’s new uniform will take place during fiscal 2020 with the rollout of the new uniform program to start in early fiscal 2021.In addition, UGL’s began a rollout of new uniforms to the 19,000 uniformed employees of its first U.S. based airline account, Alaska Airlines, starting in mid-September 2019 for completion by March 2020. UGL is responsible for all aspects of the program including manufacturing, quality, inventory planning, online ordering, customer service, and warehouse and distribution. UGL is distributing the new uniforms to the employees of Alaska Airlines from its Henderson Nevada distribution center. UGL intends to use this location to expand its marketing efforts to other potential US customers in industry sectors where UGL has built a strong knowledge base, such as in food service, hospitality, private security, retail and transportation.Unisync is not expecting any material effect on our fiscal 2020 performance from the coronavirus epidemic currently centered in the Hubei Province of China as a result of a combination of current high levels of inventory and our recent diversification of production to other countries. Although some shipping delays may be expected, this would affect only a limited amount of our 2020 production requirements.With $26 million in firm contracts and options on hand as at December 31, 2019 and a number of large potential contracts expected to go to public bid in the near future, the Peerless business segment is well positioned to maintain more normal levels of revenues and profitability for the balance of fiscal 2020 and beyond.On Behalf of the Board of DirectorsMatthew Graham
CEOInvestor relations contact:
Douglas F Good, Chairman at 778-370-1725 Email [email protected]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.