Electrohome Limited Reports Third Quarter Results
July 12, 1999
for the third quarter were $28.9 million, $7.9 million ahead of last year,
while year-to-date numbers were $90.9 million, $23.1 million ahead of last
loss before interest, taxes, depreciation and amortization (EBITDA) from
ongoing operations for the quarter was $1.7 million versus a loss of $2.4
million last year. On a year-to-date basis, a loss of $0.1 million compares
to a loss of $2.7 million last year, a year over year improvement of $2.8
in the above numbers are unfavourable foreign exchange adjustments versus
last year due to the strengthening of the Canadian dollar of $1.0 million
for the quarter and $3.4 million year-to-date.
net loss for the quarter of $3.5 million compares to a loss of $1.7 million
for the same period last year. On a year-to-date basis, a net loss of $3.8
million compares to earnings of $6.0 million last year which included a gain
of $10.0 million from discontinued operations.
Third Quarter and Nine Months Results
for both the three and nine months ended May 31, 1999 were substantially ahead
of last year due to strong demand across all product lines with particularly
strong results from VistaGRAPHX and HAL DLV product lines. On a year-to-date
basis, the revenue increase has come from all major markets, North American,
European and Asian.
at the operating level (EBITDA) of $1.7 million for the quarter was a $0.8
million improvement over last year, while on a year-to-date basis, a loss of
$0.1 million was $2.7 million ahead. Although results have improved, they are
still not at satisfactory levels. For both the quarter and year-to-date, gross
margin increases due to higher revenues have been more than offset by increased
distribution and manufacturing expenses as well as unfavourable ordinary course
foreign exchange losses. When the foreign exchange impact is excluded, EBITDA
improved a further $1.0 million for the quarter and $3.4 million on a
year-to-date basis. These adjustments to our foreign denominated net assets must
be included in our profit and loss statement (as opposed to being included as a
separate component of shareholders equity on the balance sheet) due to our
operating and legal structure.
loss for the third quarter of $3.5 million compares to a net loss of $1.7
million the prior year, which included $2.0 million of one-time benefits (income
tax recoveries and a gain from discontinued operations). For the nine months, a
net loss of $3.8 million compares to a loss of $4.0 million last year, excluding
a $10.0 million gain from discontinued operations.
in both the quarter and year-to-date figures are the four month s results of
Robotel. On February 1, 1999, the Company purchased an additional 80% of the
equity of Robotel Electronique Inc. of Montreal for $4.7 million, increasing its
ownership to 90%. Robotel provides a broad range of computer-based classroom
training and distance learning products. Its proprietary hardware and software
connects training room computers, monitors and keyboards so that an instructor
can interact on-site or remotely, with individual students or the whole class,
via voice and video links.
revenue growth has been substantial in fiscal 1999, expenses have also increased
at a much higher pace than originally planned. The high-end Projection business
is undergoing dramatic change, in terms of technological advances, channels to
market and increased competition. To remain a significant player in the global
high-end projection market requires a high level of investment in how we do
business and in research and development. Our Projection System division has
been very successful in the past, however, the rate of change over the last two
years has proven to be difficult and costly. The division has just completed a
major restructuring and now has an organization in place, which should enable it
to return to an acceptable level of earnings. Improved financial performance
will remain the major area of focus for the company.
the division introduced a number of new products including a 10,000 lumen Roadie
built specifically for the rental staging marketplace, listing for US$110,000.
Other major introductions are also planned over the balance of calendar 1999.
These new purpose built products will continue to be targeted at the high
brightness and high resolution markets. They are feature rich and incorporate
ever higher performance standards to ensure leading positions in the highly
specialized market niches we serve.
from Robotel over the past four months have met our expectations and we
anticipate a positive contribution to our fourth quarter results as this is
typically Robotel s strongest period. We also see ongoing opportunities from our
Visualization business, which aside from Robotel, includes equity investments in
Fakespace, Inc. and Immersion Studios Inc.
to resolve potential Year 2000 problems have been underway since the latter part
of 1996. Currently, all Year 2000 issues considered "business
critical" have been completed, tested and implemented. There are still a
small number of non-critical issues outstanding, which are scheduled to be
resolved in the fall of 1999. None of these issues are considered essential to
our on-going operations.
Chairman and Chief Executive Officer
An Adobe Acrobat (PDF) version of the full report
is available at the Electrohome site. Go
there by clicking http://www.electrohome.com/.