TSX Symbol: SQP For Immediate Release
Strongco Reports Fourth Quarter, Profit of $1.8 Million ($0.19 per share) and Full Year Profit of $5.0 Million ($0.53 per share)
Mississauga, Ontario February 26, 2004: Strongco Inc. today released financial results for the fourth quarter fiscal 2003.
Strongco’s fourth quarter profit after tax was $1.8 million or $0.19 per share, compared to an after tax loss of $5.8 million or $0.62 per share in last year’s fourth quarter.
For the 2003 fiscal year, Strongco’s profit after tax was $5.0 million or $0.53 per share, compared to an after tax loss of $11.4 million or $1.22 per share in the 2002 fiscal year.
The improvement in profit is a result of higher gross margins, combined with lower operating and interest expenses. The balance sheet has been significantly strengthened with leverage reduced to 2.26:1 as at December 31, 2003 vs. 3.7:1 as at the previous year end.
Mr. Larry Pirnak, President commented, “We are extremely pleased with our performance in 2003 and anticipate continued improvement in 2004.”
Strongco will host a conference call at 3:00 p.m. on Thursday February 26th to further discuss its fourth quarter and year-end results. To participate in the conference call, dial 800.289.6406, reservation number is 21184759. A taped version of the call will be available until March 11th, 2004. Dial 800.558.5253 and enter the reservation number of 21184759.
Strongco is a full-line equipment sales and service company with operations from Alberta through Atlantic Canada. Its shares are listed on the Toronto Stock Exchange and its website can be accessed at www.strongco.com
For further information contact:
Larry Pirnak, President
Telephone No.: 905.565.3804
Email: lpirnak@strongco.com
| STRONGCO INC. | ||||
| CONSOLIDATED BALANCE SHEETS | ||||
| ($000's) | ||||
| As At | As At | |||
| December 31 | December 31 | |||
| 2003 | 2002 | |||
| ASSETS | ||||
| Current | ||||
| Accounts receivable | 31,040 | 36,162 | ||
| Inventories | 87,295 | 122,218 | ||
| Prepaid expenses and deposits | 1,797 | 769 | ||
| Income and other taxes receivable | — | 381 | ||
| Total current assets | 120,132 | 159,530 | ||
| Rental equipment, net [note 3] | 17,425 | 25,790 | ||
| Capital assets, net [note 4] | 17,548 | 19,120 | ||
| Capital assets held for sale, net [note 5] | 3,980 | 4,318 | ||
| Accrued benefit asset [note 12] | 3,314 | 1,823 | ||
| 162,399 | 210,581 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| Current | ||||
| Bank indebtedness [note 6] | 21,465 | 28,285 | ||
| Accounts payable and accrued liabilities | 25,312 | 38,855 | ||
| Equipment notes payable [note 7] | 57,540 | 79,633 | ||
| Current portion of long-term debt [note 8] | 4,663 | 10,952 | ||
| Income and other taxes payable | 424 | — | ||
| Total current liabilities | 109,404 | 157,725 | ||
| Long-term debt [note 8] | 1,720 | 7,719 | ||
| Future income taxes [note 10] | 229 | 121 | ||
| Accrued benefit liability [note 12] | 1,295 | 317 | ||
| Total liabilities | 112,648 | 165,882 | ||
| Commitments and contingencies [notes 11 and 14] | ||||
| Shareholders' equity | ||||
| Share capital [note 9] | 52,131 | 52,100 | ||
| Deficit | (2,380) | (7,401) | ||
| Total shareholders' equity | 49,751 | 44,699 | ||
| 162,399 | 210,581 | |||
| See accompanying notes | ||||
UNAUDITED
| STRONGCO INC. | |||||||||
| CONSOLIDATED STATEMENTS OF INCOME (LOSS) | |||||||||
| AND DEFICIT | |||||||||
| ($000's) | |||||||||
| Three Months | Twelve Months | ||||||||
| ended December 31 | ended December 31 | ||||||||
| 2003 | 2002 | 2003 | 2002 | ||||||
| Revenue | 81,746 | 98,414 | 320,162 | 346,239 | |||||
| Cost of sales | 66,944 | 90,113 | 261,620 | 300,050 | |||||
| Gross margin | 14,802 | 8,301 | 58,542 | 46,189 | |||||
| Expenses | |||||||||
| Administration, distribution and selling | 11,662 | 13,435 | 48,483 | 52,479 | |||||
| Income (loss) before the following | 3,140 | (5,134) | 10,059 | (6,290) | |||||
| Interest [note 8[f]] | 1,056 | 1,503 | 4,802 | 6,601 | |||||
| Income (loss) before income taxes | 2,084 | (6,637) | |||||||