OSHAWA, Ont. - Equipment supplier Cygnal Technologies Corporation reported a soft first quarter of 2003 as revenue and EBITDA decreased during the three-month period ended March 31st.
Revenues for the quarter were $33.8 million, a drop of 6.9% compared to the first quarter of 2002. While gross profit increased approximately $200,000 to $8.2 million, EBITDA (defined here as earnings before interest, taxes, depreciation, amortization, restructuring charges and other expenses), Cygnal incurred a loss of approximately $400,000 during the quarter, compared to positive EBITDA of $1.3 million for the first quarter of last year.
The company incurred a net loss for the quarter of $1 million, compared to net earnings of $600,000 for the same period a year ago.
During the quarter, Cygnal continued to roll out its restructuring plan developed in the fourth quarter of 2002. During Q1 2003, the corporation recorded restructuring charges of $500,000, which were primarily composed of workforce reduction charges.
This charge relates to the restructuring plan, for which the corporation took a charge of $1.6 million during the fourth quarter of 2002, and which is being implemented in 2003. The company is closing its Oshawa office, too, which had previously been announced, and re-confirmed its guidance for the year. For additional background, click here.
"Since the corporation's restructuring program is an aggregation of multiple phases that are currently being executed, actual costs may differ from estimated amounts," said the press release. "This action will permit the corporation to reduce its selling, general and administrative (SG&A;) expenses in future quarters. The corporation will be seeking additional debt or equity financing of at least $5 million to fund operations, restructuring and potential strategic acquisitions."
"While Cygnal incurred a loss for the quarter, the company achieved its revenue and gross profit estimates," said Kieron Dowling, Cygnal's president and CEO. "We are satisfied with our progress, to date, in streamlining the company and are confident about our new organization's ability to compete for business."
For the full release, go to www.cygnal.ca. The company will hold its AGM this Thursday at the Toronto Stock Exchange at 11 a.m.
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