press release 2009-3
FOR IMMEDIATE RELEASE
Toronto Stock Exchange
Symbol “TSX: CSA”
Commercial Announces Fiscal 2008 Annual Results
Edmonton Alberta, Canada, December 18, 2008 - COMMERCIAL SOLUTIONS INC. ("Commercial" or "Company") (TSX:CSA) a leading Canadian distributor of bearings, power transmission, oilfield, industrial, safety products today announced its financial results for the three-month and twelve-month periods ended September 30, 2008. A complete copy of the Company's report is available on the Internet at www.sedar.com. Financial highlights
from fiscal 2008 are as follows:
For the three-month period ended September 30, 2008, Commercial reported revenue of $38.3 million compared to revenue of $35.6 million for the same period last year, representing a year-over-year increase of 7.6 percent due to increased activity in the Western Canadian oil and gas industry. Gross margin in the quarter decreased slightly to 29.7 percent from 30.6 percent in the fourth quarter of 2007. The Company reported Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $2.1 million versus $1.7 million for the same period last year. Net income for the quarter amounted to $0.8 million compared to $0.3 million during the fourth quarter of fiscal 2007.
For the twelve-month period ended September 30, 2008, Commercial reported revenue of $143.4 million compared to revenue of $157.9 million for the same period last year, representing a year-over-year decrease of 9.1 percent. Gross margins improved to 29.2 percent from 28.6 percent. However, EBITDA decreased to $5.6 million versus $9.1 million during 2007. Without the $15.0 million goodwill impairment charge, the fiscal 2008 net earnings would have been $1.4 million and basic and diluted EPS would have been $0.07.
"Fiscal 2008 was a challenging year for all companies impacted by the slowdown in the Western Canadian oil and gas and forest industries," noted James Barker, President & CEO of Commercial. "We focused on restructuring operations based on a strategy of maintaining the Company's current Canada-wide branch network. As a result of further expected industry contraction, this strategy is being examined for fiscal 2009."
As at September 30, 2008, the basic average number of shares outstanding was 20,079,633 (20,079,633 fully diluted) versus 19,359,381 (20,097,009 fully diluted) at the end of the same period in the year prior.
Outlook
Commercial will move forward in fiscal 2009 with a clear sense of direction. The Company expects the industrial supply and oilfield parts distribution business to remain extremely competitive, however, Commercial will continue to reduce operating costs, strive to maximize management of inventories, and work closer with its suppliers to concentrate on maximizing higher profit margins. Management's primary focus for fiscal 2009 will be to reorganize operations in order to reduce operating expenses and under-performing assets; optimize operating profit through a series of staffing, branch distribution, and administration assessments; and re-direct existing sales and distribution strategies into focused market areas.
About Commercial
Headquartered in Edmonton, Alberta, Commercial is one of Canada's leading independent industrial distributors with 36 Services Centres and approximately 360 employees located across Canada. Commercial offers more than 160,000 items critical to maintenance repair and operations (MRO) and original equipment manufacturer (OEM) customers. The Company represents 450 leading manufacturers and serves over 11,000 customer accounts within a broad cross-section of industries, including oil and gas, forestry, food processing, chemical processing, mining and aggregate, utilities, agriculture and construction. Commercial trades under the symbol "CSA" on the Toronto Stock Exchange. For further information on the Company, please visit www.commercialsolutions.ca and for detailed financial information visit www.sedar.com.
Forward Looking Statements
From time to time, the Company may publish forward-looking statements relating to such matters as expected financial performance, business prospects, development activities and like matters. These statements involve risk and uncertainties, including but not limited to the risk factors previously described. Actual results could differ materially from those projected as a result of these risks and should not be relied upon as a prediction of future events. Commercial undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, with an exception to securities laws requirements.
FOR FURTHER INFORMATION PLEASE CONTACT:
Commercial Solutions Inc.
Rozina Kassam CA
Chief Financial Officer
(780) 577-4360
rkassam@csinet.ca
or
Spinnaker Capital Markets Inc.
Ali Mahdavi
(416) 962-3300
+1 (866) 430-6247
am@spinnakercmi.com
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