PLM Group generates increase in sales and net earnings in Q3
Press release from the issuing company
MARKHAM, ON, Nov. 19 - PLM Group today reported an increase in sales and net earnings for the three months ended September 30, 2003 as it derived significant benefits from recent acquisitions, organic growth and a foreign exchange gain.
Third Quarter Highlights
- Net earnings were $1.5 million (5 cents per share basic and diluted), an increase over net earnings of $0.5 million (2 cents per share basic and diluted) during the same period last year. Net earnings this year included a pre-tax $1.1 million foreign exchange gain resulting from the planned refinancing of the Company's U.S. dollar-denominated debt to Canadian dollars completed in July.
- EBITDA grew 50% to $4.4 million compared to $3.0 million a year go, reflecting overall margin growth and the benefit of the foreign exchange gain discussed above.
- Sales increased 21.2% to $28.6 million versus $23.6 million a year earlier, driven higher by contributions made by newly acquired Optium and Mailer Mailer and strong organic growth in the Company's print businesses.
Nine Month Highlights
- Net earnings for the nine months ended September 30, 2003 increased 11.3% to $2.7 million from $2.4 million. On a per share basis, net earnings for the first nine months of 2003 were even with last year at 9 cents basic and diluted. Net income a year ago was favourably impacted by a one-time income tax recovery of $1.4 million (5 cents per share basic and diluted).
- EBITDA was ahead 19.3% to $10.5 million from $8.8 million a year ago.
- Sales increased 9.4% to $79.2 million from $72.4 million a year ago as a result of acquisitions and organic sales growth.
"PLM's performance in the third quarter was excellent," said Barry Pike, PLM Chairman and CEO, "and there were a variety of reasons for this extremely positive showing. First, we achieved strong, on-plan contributions from newly acquired Optium and Mailer Magic, which have added new sales, new capabilities, increased value-added processes and most important, new growth opportunities to PLM in high demand areas such as large format digital printing and finishing, offline digital inkjet printing, data management and personalization.
"Secondly, PLM achieved solid growth in our traditional print-based businesses, which is the result of our own efforts and not from a significant market recovery. In fact, our results have been achieved in spite of continuing intense competition in Canadian markets and a substantial reduction in paper costs, which is the single largest component of our cost of goods sold."
Added Dave Stuart, President and COO: "We also combined sales growth with significant improvements in our production flow and gross margin, which reflect investments in value-added processes and highly efficient equipment over the past few years and a continued focus on cost containment by our employees."
"Finally," said Peter Bradley, Executive Vice President and CFO, "we benefited from a significant foreign exchange gain that arose from our strategic decision to capitalize on the high value of the Canadian dollar by refinancing the Company's U.S. dollar-denominated debt to Canadian dollars. This gain allowed PLM to deliver an impressive bottom line and reduce exposure to future foreign currency swings going forward.
Mr. Pike said the Company's operating agenda for the fourth quarter "is action-packed and includes a continued emphasis on cross-selling the combined PLM, Optium and Mailer Magic capabilities to an ever-widening array of customers, successfully delivering on important customer marketing programs now in development and increasing utilization on our new printing equipment."
Said Mr. Stuart: "The planned relocation of our sheet fed equipment to our 210 Duffield location and the installation of our new Heidelberg 6 colour 40 inch press were completed right after third quarter end. That means we are now moving ahead - on schedule - with the renovation of our former sheet-fed building to house our recently created Digital Services Operations (part of PLM's print related services), which incorporates the combined operations of Mailer Magic and PLM 1:1, our direct mail operations. A new, purpose-designed, state of the art Digital Services facility is on track for completion by the end of the first quarter of 2004 and we expect to generate significant synergies and efficiencies from the physical integration of these two important operations."
Concluded Mr. Pike: "PLM's results to date in 2003 demonstrate the value of consistently applying our print-based operating strategy not only this year, but over the last 15 years. But it's more than a strict adherence to this strategy. We are being rewarded because our team is breathing new life to this operating philosophy by dedicating themselves to adding value to customers through creative ideas, attention to detail, responsiveness and the innovative application of both new and existing print-based technologies.
We're especially proud of the efforts of our team - including the contributions made by the 86 new people who have joined us from Optium and Mailer Magic. Together, we believe we can build on our performance for the benefit of shareholders and customers now and in the future.
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