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SMTX - SMTC News Story

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Last Trade - 01/04/21

Sector
Technology
Size
Micro Cap
Market Cap £n/a
Enterprise Value £n/a
Revenue £291.1m
Position in Universe th / 7292

SMTC Corporation Announces Fourth Quarter and Full Year 2020 Financial Results

Wed 17th March, 2021 12:35pm
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TORONTO, March 17, 2021 (GLOBE NEWSWIRE) -- SMTC Corporation (Nasdaq:SMTX), a
global electronics manufacturing services provider and winner of Frost &
Sullivan’s 2019 Best Practices Award for Customer Value Leadership in the
Electronics Manufacturing Services Industry, today announced its fourth
quarter and full year 2020 financial results.

Fourth Quarter Financial Highlights
* Fourth quarter 2020 revenue was $101.3 million, up 12.3% vs. the prior year.
* EPS was ($0.13) compared to $0.04 in the prior year.
* Adjusted EPS was $0.12 compared to $0.10 in the prior year.
* Net Loss was $3.6 million compared to $1.0 million net income in the prior
year.
* Adjusted Net Income was $3.4 million compared to $2.9 million in the prior
year.
* EBITDA was $0.6 million compared to $6.7 million in the prior year.
* Adjusted EBITDA was $7.2 million compared to $7.0 million in the prior year.
In calculating Adjusted EBITDA, primary addbacks to EBITDA included $3.6
million of restructuring charges associated with the Company’s Mexico site
consolidation, in addition to, $1.3 million of merger and acquisitions related
expenditures.
2020 Full Year Financial Highlights
* 2020 revenue was $386.5 million, up 3.8% vs. the prior year.
* EPS was ($0.02) compared to ($0.23) the prior year.
* Adjusted EPS was $0.42 compared to $0.27 the prior year.
* Net Loss was $0.6 million compared to $6.0 million the prior year.
* Adjusted Net Income was $11.9 million compared to $6.9 million the prior
year.
* EBITDA was $17.9 million compared to $19.1 million the prior year.
* Adjusted EBITDA was $27.4 million compared to $24.8 million the prior year.
 $s millions (except EPS)          Q4 2020          Q3 2020          Change        Q4 2019         Change          
 Revenue                           $    101.3       $    99.5        1.7     %     $    90.2       12.3    %       
 GAAP                                                                                                              
 Gross Profit                      $    11.8        $    11.1        6.7     %     $    10.5       12.9    %       
 Gross Profit Percentage                11.7   %         11.2   %                       11.6  %                    
 Net Income (Loss)                 $    (3.6   )    $    1.2         (385.9  %)    $    1.0        (456.8  %)      
 EPS                               $    (0.13  )    $    0.04        0.0     %     $    0.04       (453.9  %)      
 Non-GAAP                                                                                                          
 Adjusted Gross Profit             $    12.8        $    12.5        1.8     %     $    12.2       5.0     %       
 Adjusted Gross Profit Percentage       12.6   %         12.6   %                       13.5  %                    
 Adjusted Net Income               $    3.4         $    3.8         (10.9   %)    $    2.9        17.6    %       
 Adjusted EPS                      $    0.12        $    0.13        (6.9    %)    $    0.10       16.6    %       
 Adjusted EBITDA                   $    7.2         $    7.5         (4.1    %)    $    7.0        3.9     %       
 Adjusted EBITDA Percentage             7.1    %         7.6    %                       7.7   %                    
 Net Debt                          $    87.4        $    85.9        1.8     %          82.1                       
                                                                                                                   
 $s millions (except EPS)               2020             2019        Change                                        
 Revenue                           $    386.5       $    372.5       3.8     %                                     
 GAAP                                                                                                              
 Gross Profit                      $    43.3        $    37.0        16.9    %                                     
 Gross Profit Percentage                11.2   %         9.9    %                                                  
 Net Loss                          $    (0.6   )    $    (6.0   )    (90.3   %)                                    
 EPS                               $    (0.02  )    $    (0.23  )    (91.2   %)                                    
 Non-GAAP                                                                                                          
 Adjusted Gross Profit             $    48.7        $    44.2        10.2    %                                     
 Adjusted Gross Profit Percentage       12.6   %         11.9   %                                                  
 Adjusted Net Income               $    11.9        $    6.9         73.6    %                                     
 Adjusted EPS                      $    0.42        $    0.27        58.3    %                                     
 Adjusted EBITDA                   $    27.4        $    24.8        10.5    %                                     
 Adjusted EBITDA Percentage             7.1    %         7.6    %                                                  
 Net Debt                          $    87.4        $    82.1        6.5     %                                     
                                                                                                                   

Note: Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted Net
Income, Adjusted Earnings Per Common Share (Adjusted EPS), EBITDA, Adjusted
EBITDA, Adjusted EBITDA Percentage, and Net Debt (each as defined below) are
non-GAAP measures. Please refer to the section below labeled “Non-GAAP
Information” and the various reconciliations to the applicable most directly
comparable GAAP measures shown below in this press release.

Management Commentary

“I am proud that our organization did an outstanding job supporting our
customers and employee wellness during the pandemic and we were able to
successfully navigate through the challenges presented by the COVID-19
pandemic during the year,” said Ed Smith, SMTC’s President and Chief
Executive Officer. “We finished 2020 on a strong note with sales up 12.2%
compared to the same quarter in the prior year and are looking forward to
opportunities ahead for SMTC.”

“We saw a strong rebound and expansion in our semiconductor business in 2020
and our focus on the Industrial IoT market and our growth in the defense and
aerospace industry enabled us to provide a stable and solid base to grow our
business,” noted Smith.

                                                                                                                                                       
                                             Twelve months ended January 03, 2021        Twelve months ended December 29, 2019       Change            
 Industry Sector                             $                    %                      $                    %                      $       %         
 Industrial IoT, Power and Clean Technology  154.2                39.9                   147.3                39.5                   6.9     4.7       
 Semiconductors                              52.6                 13.6                   23.0                 6.2                    29.6    128.7     
 Medical and Safety                          44.2                 11.4                   45.5                 12.2                   (1.3)   (2.9)     
 Retail and Payment Systems                  41.1                 10.6                   46.1                 12.4                   (5.0)   (10.8)    
 Avionics, Aerospace and Defense             37.3                 9.7                    24.7                 6.6                    12.6    51.0      
 Test and Measurement                        35.4                 9.2                    48.7                 13.1                   (13.3)  (27.3)    
 Telecom, Networking and Communications      21.7                 5.6                    37.2                 10.0                   (15.5)  (41.7)    
 Total                                       386.5                100.0                  372.5                100.0                  14.0    3.8 %     
                                                                                                                                                       

The Company initiated its previously announced Mexican consolidation to
enhance operational efficiencies and incurred $3.6 million of restructuring
charges in the fourth quarter. The Company also generated $3.3 million in
changes in working-capital from operations in the fourth quarter and capital
expenditures were $2.4 million. During the fourth quarter, the Company also
amended its credit facilities to provide increased covenant flexibility as it
navigates through the COVID-19 pandemic.

As of the end of the fiscal year 2020, subject to borrowing base conditions,
SMTC had $28.4 million available for borrowing under its asset-based lending
facility and reduced its debt-to-adjusted EBITDA ratio to 2.62 (excluding
leases).

Special Shareholder Meeting

The Company will conduct its previously announced special meeting of
stockholders on March 31, 2021 at 12:00 p.m. Eastern Time. In light of the
COVID-19 pandemic, to support the health and well-being of our stockholders,
employees and directors, and taking into account recent federal, state and
local guidance, the Special Meeting will be held in a virtual meeting format
only, via the Internet, with no physical in-person meeting. Shareholders as of
the stock market close on February 11, 2021, the record date, can attend and
participate in the Special Meeting by visiting www.proxydocs.com/SMTX (the
“Virtual Special Meeting Website”) where shareholders will be able to vote
electronically and submit questions. In order to attend the Special Meeting,
shareholders must register in advance at www.proxydocs.com/SMTX prior to the
deadline of March 29, 2021 at 5:00 p.m. Eastern Time. Shareholders will be
asked to provide the control number located on their proxy card or voting
instruction form. Upon completing their registration, shareholders will
receive further instructions via email.

Additional Information and Where to Find It:

This communication relates to the proposed merger involving the Company. In
connection with the proposed merger, the Company filed a definitive proxy
statement and other documents related to the proposed merger, including a form
of proxy, with the Securities and Exchange Commission (the “SEC”) on
February 18, 2021, and will file or furnish other relevant materials with the
SEC. The definitive proxy statement and a form of proxy were first mailed or
otherwise furnished to the stockholders of the Company on February 18,
2021. BEFORE MAKING ANY VOTING DECISION, THE COMPANY’S STOCKHOLDERS ARE
URGED TO READ THE PROXY STATEMENT IN ITS ENTIRETY AND ANY OTHER DOCUMENTS TO
BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED
BY REFERENCE IN THE PROXY STATEMENT, IF ANY, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND THE PARTIES TO THE
PROPOSED MERGER. This communication is not a substitute for the proxy
statement or any other document that may be filed by the Company with the
SEC. Investors and stockholders are able to obtain the documents free of
charge at the SEC’s website, http://www.sec.gov, and the Company’s
website, www.smtc.com. In addition, the documents may be obtained free of
charge by directing a request by mail or telephone to: SMTC Corporation, 425
North Drive Melbourne, FL 32934, Attention: Secretary, (905) 479-1810.

Participants in the Solicitation

The Company, H.I.G. Capital, LLC (“H.I.G.”) and certain of their
respective directors, executive officers, certain other members of management
and employees of the Company and H.I.G. and agents retained by the Company may
be deemed to be participants in the solicitation of proxies from stockholders
of the Company in favor of the proposed merger. Information about directors
and executive officers of the Company and their beneficial ownership of the
Company’s common stock is set forth in the Company’s definitive proxy
statement on Schedule 14A for its 2020 annual meeting of stockholders, as
filed with the SEC on June 26, 2020. Certain directors, executive officers,
other members of management and employees of the Company may have direct or
indirect interests in the proposed merger due to securities holdings, vesting
of equity awards, rights to severance payments or the purchase of equity in
EMS Silver Topco Inc. Additional information regarding the direct and indirect
interests of these individuals and other persons who may be deemed to be
participants in the solicitation is included in the proxy statement with
respect to the proposed merger the Company filed with the SEC and furnished to
the Company’s stockholders.

Non-GAAP Information

Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted Net Income,
Adjusted Earnings Per Common Share (Adjusted EPS), EBITDA, Adjusted EBITDA,
Adjusted EBITDA Percentage, and Net Debt are non-GAAP measures and are
referred to herein as “Non-GAAP Financial Measures.” Adjusted Gross Profit
is computed as gross profit excluding amortization of intangible assets,
unrealized foreign exchange gains or losses on unsettled forward foreign
exchange contracts and COVID-19 related expenses. COVID-19 related expenses
include expenses associated with the retention of temporary replacement labor,
additional sanitation, cleaning and disinfection of facilities, personal
protective equipment and related supplies and costs associated with
facilitating social distancing.

Adjusted Gross Profit Percentage is computed as Adjusted Gross Profit divided
by revenue. Adjusted Net Income is computed as net income (loss) before
amortization of intangible assets, restructuring charges (recovery),
stock-based compensation, fair value adjustment of warrant liability, merger
and acquisition related expenses, fair value adjustment to contingent
consideration, COVID-19 related expenses and unrealized foreign exchange gains
and losses on unsettled forward foreign exchange contracts. Adjusted EPS is
computed as Adjusted Net Income divided by Diluted Weighted Average Shares
Outstanding. EBITDA is computed as net income (loss) before interest, taxes,
depreciation, and amortization. Adjusted EBITDA is computed as EBITDA as
further adjusted to exclude restructuring charges, stock-based compensation,
fair value adjustment of warrant liability, fair value adjustment to
contingent consideration, merger and acquisition related expenses, COVID-19
related expenses and unrealized foreign exchange gains and losses on unsettled
forward foreign exchange contracts. Adjusted EBITDA Percentage is computed as
Adjusted EBITDA divided by revenue. Net Debt is computed as total debt minus
cash. Reconciliations of Reconciliation of Adjusted Gross Profit and Adjusted
Gross Profit Percentage, Reconciliation of Adjusted Net Income and Adjusted
EPS, Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Percentage,
and Net Debt to total debt are each included in this press release below.

Management believes that these Non-GAAP Financial Measures, when used in
conjunction with GAAP financial measures, provide useful information to
investors about operating results, enhance the overall understanding of past
financial performance and future prospects, and allow for greater transparency
with respect to the key metrics SMTC uses in its financial and operational
decision making. The Company’s management believes that adjusting for the
additional temporary costs attributable to the COVID-19 pandemic allows for a
better comparison of the Company’s performance to prior periods, which is
consistent with the Company’s recent amendments to the financial covenants
in its financing agreements. These Non-GAAP Financial Measures are used by
management to manage and monitor SMTC’s performance, and also frequently
used by analysts, investors and other interested parties to evaluate companies
in SMTC’s industry. The presentation of this financial information is not
intended to be considered in isolation or as a substitute for, or superior to,
the financial information prepared and presented in accordance with GAAP, and
should not be construed as an inference that SMTC’s future results will be
unaffected by any items adjusted for in these Non-GAAP Financial Measures. In
evaluating these non-GAAP measures, you should be aware that in the future
SMTC may incur expenses that are the same as or similar to some of those
adjusted in the presentation below. The Non-GAAP Financial Measures that SMTC
uses are not necessarily comparable to similarly titled measures used by other
companies due to different methods of calculation.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Exchange Act of 1934, as amended, including statements regarding the
proposed merger and the ability to consummate the proposed merger.
Forward-looking statements are indicated by words or phrases such as
“guidance,” “believes,” “expects,” “intends,” “forecasts,”
“can,” “could,” “may,” “anticipates,” “estimates,”
“plans,” “projects,” “seeks,” “should,” “targets,”
“will,” “would,” “outlook,” “continuing,” “ongoing,” and
similar words or phrases and the negative of such words and phrases.
Forward-looking statements are based on the Company’s current plans and
expectations and involve risks and uncertainties which are, in many instances,
beyond the Company’s control, and which could cause actual results to differ
materially from those included in or contemplated or implied by the
forward-looking statements. Actual results could differ materially from those
contained in any forward-looking statement as a result of various factors,
including, without limitation: (1) the Company may be unable to obtain
stockholder approval as required for the proposed merger; (2) the conditions
to the closing of the proposed merger and required regulatory approvals may
not be obtained; (3) the proposed merger may involve unexpected costs,
liabilities or delays, including the payment of a termination fee to EMS
Silver Inc. (“Parent”) by the Company; (4) the business of the Company
may suffer as a result of uncertainty surrounding the proposed merger;
(5) the effect of the announcement or pendency of the proposed merger on the
Company’s business relationships, including with customers and suppliers;
(6) the outcome of any legal proceedings related to the proposed merger;
(7) the Company may be adversely affected by other economic, business,
legislative, regulatory and/or competitive factors, including, but not limited
to, future response to, and effects of, the COVID-19 pandemic, including the
Company’s continued operations, customer demand, supply chain availability
and implementation of protective measures and public policy response to
the COVID-19 pandemic, including legislation or restrictions, and access to
additional funding under and compliance with its credit facilities; (8) the
occurrence of any event, change or other circumstance that could give rise to
the termination of the merger agreement; (9) the attention of the Company’s
management and employees may be diverted from ongoing business concerns as a
result of the proposed merger; (10) limitations placed on the Company’s
ability to operate its business under the proposed merger agreement;
(11) risks that the proposed merger disrupts current plans and operations and
the potential difficulties in employee retention as a result of the proposed
merger; (12) the fact that under the terms of the merger agreement, the
Company is restricted from soliciting other acquisition proposals after the
date of the merger agreement; (13) the failure by Parent or EMS Silver Merger
Sub Inc. to obtain the necessary debt and equity financing arrangements set
forth in the commitment letters received in connection with the proposed
merger; and (14) other risks to consummation of the proposed merger,
including the risk that the proposed merger will not be completed within the
expected time period or at all, which may adversely affect the Company’s
business and the price of the Company’s common stock.

The foregoing review of important factors that could cause actual results to
differ from expectations should not be construed as exhaustive and should be
read in conjunction with the information contained in the Company’s SEC
filings, including, but not limited to, the risk factors included in the
Company’s filings with the SEC, including the Company’s Annual Report on
Form 10-K for the fiscal year ended January 3, 2021 . No assurance can be
given that these are all of the factors that could cause actual results to
vary materially from the forward-looking statements.

Except as required by applicable law, the Company does not intend, and assumes
no obligation, to update any forward-looking statements. The Company’s
stockholders are advised, however, to consult any future disclosures the
Company makes on related subjects as may be detailed in the Company’s other
filings made from time to time with the SEC.

About SMTC

SMTC Corporation was founded in 1985 and acquired MC Assembly Holdings, Inc.
in November 2018. SMTC has more than 50 manufacturing and assembly lines in
the United States and Mexico which creates a powerful low-to-medium volume,
high-mix, end-to-end global electronics manufacturing services (EMS) provider.
With local support and expanded manufacturing capabilities globally, including
fully integrated contract manufacturing services with a focus on global
original equipment manufacturers and emerging technology companies, including
those in the Avionics, Aerospace and Defense, Industrial IoT, Power and Clean
Technology, Medical and Safety, Retail and Payment Systems, Semiconductors,
Telecom, Networking and Communications, and Test and Measurement industries.
As a mid-size provider of end-to-end EMS, SMTC provides printed circuit board
assembly production, systems integration and comprehensive testing services,
enclosure fabrication, as well as product design, and sustaining engineering
and supply chain management services. SMTC services extend over the entire
electronic product life cycle from the development and introduction of new
products through to the growth, maturity and end-of-life phases. For further
information on SMTC Corporation, please visit our website at www.smtc.com. 

 Consolidated Statements of Operations and Comprehensive Income (Loss)                                                                                                                                                                     
 (Unaudited)                                                                                                                                                                                                                               
                                                                                                  Three months ended                                                          Twelve months ended                                          
 (Expressed in thousands of U.S. dollars, except number of shares and per share amounts)          January 3, 2021                           December 29, 2019                 January 3, 2021                  December 29, 2019           
                                                                                                                                                                                                                                           
 Revenue                                                                                          $         101,359                         $         90,244                  $       386,450                  $       372,511             
 Cost of sales                                                                                              89,513                                    79,750                          343,177                          335,490             
 Gross profit                                                                                               11,846                                    10,494                          43,273                           37,021              
 Selling, general and administrative expenses                                                               8,566                                     7,132                           29,602                           27,040              
 Change in fair value of contingent consideration                                                           -                                         -                               -                                (3,050      )       
 Restructuring charges                                                                                      3,600                                     (669        )                   4,125                            7,955               
                                                                                                                                                                                                                                           
 Operating earnings (loss)                                                                                  (320        )                             4,031                           9,546                            5,076               
 Fair value loss (gain) on warrant liability                                                                837                                       640                             852                              (279        )       
 Interest expense                                                                                           2,028                                     2,213                           8,049                            10,562              
 Net income (loss) before income taxes                                                                      (3,185      )                             1,178                           645                              (5,207      )       
 Income tax expense (recovery)                                                                                                                                                                                                             
 Current                                                                                                    383                                       356                             1,255                            948                 
 Deferred                                                                                                   (14         )                             (174        )                   (29         )                    (160        )       
                                                                                                            369                                       182                             1,226                            788                 
 Net income (loss) and comprehensive income (loss)                                                $         (3,554      )                   $         996                     $       (581        )            $       (5,995      )       
                                                                                                                                                                                                                                           
 Basic income (loss) per share                                                                    $         (0.13       )                   $         0.04                    $       (0.02       )            $       (0.23       )       
 Diluted income (loss) per share                                                                  $         (0.13       )                   $         0.04                    $       (0.02       )            $       (0.23       )       
                                                                                                                                                                                                                                           
 Weighted average number of shares outstanding                                                                                                                                                                                             
 Basic                                                                                                      28,353,147                                28,117,372                      28,244,244                       25,745,499          
 Diluted                                                                                                    28,353,147                                28,117,372                      28,244,244                       25,745,499          
                                                                                                                                                                                                                                           



 Consolidated Balance Sheets                                                                               
 (Unaudited)                                                                                               
 (Expressed in thousands of U.S. dollars)            January 3, 2021             December 29, 2019         
 Assets                                                                                                    
                                                                                                           
 Current assets:                                                                                           
 Cash                                                $       600                 $       1,368             
 Accounts receivable - net                                   69,627                      69,919            
 Unbilled contract assets                                    39,336                      26,271            
 Inventories - net                                           49,799                      47,826            
 Prepaid expenses and other assets                           7,872                       7,044             
 Derivative assets                                           1,055                       -                 
 Income taxes receivable                                     307                         -                 
                                                             168,596                     152,428           
 Property, plant and equipment - net                         24,305                      25,310            
 Operating lease right of use assets - net                   7,791                       3,330             
 Goodwill                                                    18,165                      18,165            
 Intangible assets - net                                     9,701                       12,747            
 Deferred income taxes - net                                 569                         540               
 Deferred financing costs - net                              812                         859               
 Total assets                                        $       229,939             $       213,379           
                                                                                                           
 Liabilities and Shareholders' Equity                                                                      
                                                                                                           
 Current liabilities:                                                                                      
 Revolving credit facility                                   34,694                      34,701            
 Accounts payable                                            72,608                      74,126            
 Accrued liabilities                                         21,946                      11,164            
 Warrant liability                                           3,233                       1,730             
 Restructuring liability                                     2,443                       1,597             
 Income taxes payable                                        478                         157               
 Current portion of long-term debt                           2,500                       1,250             
 Current portion of operating lease obligations              2,590                       1,128             
 Current portion of finance lease obligations                2,245                       1,226             
                                                             142,737                     127,079           
                                                                                                           
 Long-term debt                                              30,930                      33,750            
 Operating lease obligations                                 5,590                       2,615             
 Finance lease obligations                                   9,492                       8,838             
 Total liabilities                                           188,749                     172,282           
                                                                                                           
 Shareholders equity:                                                                                      
 Capital stock                                               511                         508               
 Additional paid-in capital                                  294,060                     293,389           
 Deficit                                                     (253,381  )                 (252,800  )       
                                                             41,190                      41,097            
 Total liabilities and shareholders' equity          $       229,939             $       213,379           
                                                                                                           



 Consolidated Statements of Cash Flows                                                                                                                                         
 (Unaudited)                                                                                                                                                                   
                                                                                                                                                                               
 (Expressed in thousands of U.S. dollars)                        Three months ended                                     Twelve months ended                                    
 Cash provided by (used in):                                     January 3, 2021              December 29, 2019         January 3, 2021               December 29, 2019        
 Operations:                                                                                                                                                                   
 Net income (loss)                                               $       (3,554  )            $       996               $       (581     )            $       (5,995   )       
 Items not involving cash:                                                                                                                                                     
 Depreciation on property, plant and equipment                           1,401                        1,646                     6,168                         6,548            
 Amortization of acquired Intangible assets                              328                          1,656                     3,046                         7,188            
 Unrealized foreign exchange gain on unsettled forward                                                                                                                         
 exchange contracts                                                      (335    )                    -                         (1,055   )                    -                
 Deferred income taxes (recovery)                                        (14     )                    (174    )                 (29      )                    (160     )       
 Write down of property, plant and equipment                             -                            (103    )                 -                             158              
 Amortization of deferred financing fees                                 313                          292                       1,205                         1,592            
 Stock-based compensation                                                286                          237                       761                           775              
 Change in fair value of warrant liability                               837                          640                       852                           (279     )       
 Change in fair value of contingent consideration                        -                            -                         -                             (3,050   )       
                                                                                                                                                                               
 Change in non-cash operating working capital:                                                                                                                                 
 Accounts receivable                                                     3,779                        (8,711  )                 292                           3,067            
 Unbilled contract assets                                                3,400                        519                       (13,065  )                    (5,866   )       
 Inventories                                                             1,738                        1,709                     (1,973   )                    5,377            
 Prepaid expensesand other assets                                        (1,308  )                    77                        (828     )                    (1,018   )       
 Income taxes payable                                                    77                           421                       14                            305              
 Accounts payable                                                        (5,082  )                    7,233                     (1,404   )                    (2,612   )       
 Accrued liabilities                                                     (1,167  )                    (1,611  )                 10,800                        (1,876   )       
 Restructuring liability                                                 2,137                        (1,139  )                 901                           1,597            
 Net change in operating lease right of use asset and liability          (208    )                    (464    )                 (24      )                    (50      )       
                                                                         2,628                        3,224                     5,080                         5,701            
 Financing:                                                                                                                                                                    
 Advances (repayments) of revolving credit facility                      338                          (139    )                 (7       )                    9,681            
 Repayments of long-term debt                                            (625    )                    (625    )                 (1,562   )                    (23,250  )       
 Debt issuance and deferred financing fees                               (378    )                    (569    )                 (515     )                    (940     )       
 Principal repayments of finance lease obligations                       (545    )                    (366    )                 (1,542   )                    (1,565   )       
 Purchase treasury stock                                                 (464    )                    (74     )                 (464     )                    (74      )       
 Proceeds from issuance of common stock rights offerings                                              -                         -                             14,044           
 Proceeds from issuance of stock options                                 377                          1                         377                           46               
                                                                         (1,297  )                    (1,772  )                 (3,713   )                    (2,058   )       
 Investing:                                                                                                                                                                    
 Purchase of property, plant and equipment                               (1,006  )                    (685    )                 (2,241   )                    (3,876   )       
 Proceeds from sale of property, plant and equipment                     106                          -                         106                           -                
                                                                         (900    )                    (685    )                 (2,135   )                    (3,876   )       
 Decrease in cash                                                        431                          767                       (768     )                    (233     )       
 Cash, beginning of period                                               169                          601                       1,368                         1,601            
 Cash, end of the period                                         $       600                  $       1,368             $       600                   $       1,368            
                                                                                                                                                                               



 Supplementary Information:                                                                                                                                                                 
 Reconciliation of Adjusted Gross Profit and Adjusted Gross Profit Percentage                                                                                                               
 (Unaudited)                                                                                                                                                                                
                                                      Three months ended                                                             Twelve months ended                                    
 (Expressed in thousands of U.S. dollars)             January 3, 2021                             December 29, 2019                  January 3, 2021              December 29, 2019         
                                                                                                                                                                                            
 Gross Profit                                         $          11,846                           $          10,494                  $       43,273               $       37,021            
 Add (deduct):                                                                                                                                                                              
 Amortization of intangible assets                               328                                         1,656                           3,046                        7,188             
 Unrealized foreign exchange gain                                                                                                                                                           
 on unsettled forward exchange contracts                         (335       )                                -                               (1,055  )                    -                 
 COVID-19 related expenses                                       924                                         -                               3,457                        -                 
 Adjusted Gross Profit                                $          12,763                           $          12,150                  $       48,721               $       44,209            
 Adjusted Gross Profit Percentage                                12.6       %                                13.5       %                    12.6    %                    11.9    %         
                                                                                                                                                                                            



 Supplementary Information:                                                                                                                                                                            
 Reconciliation of Adjusted Net Income and Adjusted EPS                                                                                                                                                
 (Unaudited)                                                                                                                                                                                           
                                                     Three months ended                                                                 Twelve months ended                                            
 (Expressed in thousands of U.S. dollars)            January 3, 2021                                      December 29, 2019             January 3, 2021                  December 29, 2019             
                                                                                                                                                                                                       
 Net income (loss)                                   $               (3,554          )                    $       996                   $       (581        )            $       (5,995      )         
 Add (deduct):                                                                                                                                                                                         
 Amortization of intangible assets                                   328                                          1,656                         3,046                            7,188                 
 Restructuring charges (recovery)                                    3,600                                        (669        )         $       4,125                            7,955                 
 Stock compensation expense                                          286                                          237                           761                              775                   
 Fair value adjustment of warrant liability                          837                                          640                           852                              (279        )         
 Fair value adjustment of contingent consisderation                  -                                            -                             -                                (3,050      )         
 Merger and acquisitions related expenses                            1,340                                        54                            1,340                            286                   
 COVID-19 related expenses                                           924                                          -                             3,457                            -                     
 Unrealized foreign exchange gain                                                                                                                                                                      
 on unsettled forward exchange contracts                             (335            )                            -                             (1,055      )                    -                     
                                                                                                                                                                                                       
                                                                                                                                                                                                       
 Adjusted Net income                                 $               3,426                                $       2,914                 $       11,945                   $       6,880                 
 Adjusted EPS                                        $               0.12                                 $       0.10                  $       0.42                     $       0.27                  
 Weighted average number of shares outstanding                                                                                                                                                         
 Basic                                                               28,353,147                                   28,117,372                    28,244,244                       25,745,499            
 Diluted                                                             28,353,147                                   28,117,372                    28,244,244                       25,745,499            



 Supplementary Information:                                                                                                                                                                      
 Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Percentage                                                                                                                        
 (Unaudited)                                                                                                                                                                                     
                                                    Three months ended                                                                    Twelve months ended                                    
 (Expressed in thousands of U.S. dollars)           January 3, 2021                                 December 29, 2019                     January 3, 2021              December 29, 2019         
                                                                                                                                                                                                 
 Net income (loss)                                  $           (3,554      )                       $           996                       $       (581    )            $       (5,995  )         
 Add (deduct):                                                                                                                                                                                   
 Depreciation of property, plant and equipment                  1,401                                           1,646                             6,168                        6,548             
 Amortization of Intangible assets                              328                                             1,656                             3,046                        7,188             
 Interest                                                       2,028                                           2,213                             8,049                        10,562            
 Income tax expense                                             369                                             182                               1,226                        788               
                                                                                                                                                                                                 
 EBITDA                                             $           572                                 $           6,693                     $       17,908               $       19,091            
                                                                                                                                                                                                 
 Add (deduct):                                                                                                                                                                                   
 Restructuring charges (recovery)                               3,600                                           (669        )                     4,125                        7,955             
 Stock compensation expense                                     286                                             237                               761                          775               
 Fair value adjustment of warrant liability                     837                                             640                               852                          (279    )         
 Fair value adjustment of contingent consideration              -                                               -                                 -                            (3,050  )         
 Merger and acquisitions related expenses                       1,340                                           54                                1,340                        286               
 COVID-19 related expenses                                      924                                             -                                 3,457                        -                 
 Unrealized foreign exchange gain                                                                                                                                                                
 on unsettled forward exchange contracts                        (335        )                                   -                                 (1,055  )                    -                 
                                                                                                                                                                                                 
 Adjusted EBITDA                                    $           7,224                               $           6,955                     $       27,388               $       24,778            
 Adjusted EBITDA Percentage                                     7.1         %                                   7.7         %                     7.1     %                    6.7     %         
                                                                                                                                                                                                 



 Supplementary Information:                                                                                                                                                                     
 Reconciliation of Net Debt                                                                                                                                                                     
 (Unaudited)                                                                                                                                                                                    
                                                                                                                                                                                                
 (Expressed in thousands of U.S. dollars)  January 3, 2021                                                                     December 29, 2019                                                
                                                                                                                                                                                                
 Revolver                                  $                    34,694                                                         $                    34,701                                      
 Long-term debt                                                 37,188                                                                              38,750                                      
 Discount (long-term debt)                                      (3,758               )                                                              (3,750               )                      
 Finance lease obligations (1)                                  11,737                                                                              10,064                                      
 Operating lease obligations (2)                                8,180                                                                               3,743                                       
 Total Debt                                $                    88,041                                                         $                    83,508                                      
 Cash                                      $                    (600                 )                                         $                    (1,368               )                      
 Net Debt                                  $                    87,441                                                         $                    82,140                                      
                                                                                                                                                                                                
                                                                                                                                                                                                
 (1)Capital lease obligations includes $1.4 million for new lease effective September 2020 and $1.7 million for new lease effective December 2020                                               
 (2)Operating lease obligations includes $4.9 million for new lease for Fremont facility effective July 2020 and Vandell office effective Nov 2020                                              

Investor Relations Contact

Peter Seltzberg
Managing Director
Darrow Associates, Inc.
516-419-9915
pseltzberg@darrowir.com

(https://www.globenewswire.com/NewsRoom/AttachmentNg/ca974b46-a735-457d-847c-7eb19fa73b34)



GlobeNewswire, Inc. 2021
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