Algo announces first quarter profit after year end loss fresh injection of funds to strengthen balance sheet.MONTREAL--(BUSINESS WIRE)--MAY 10, 1995--Algo Group Inc. (ME,TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :AO.A) today reported a profit for the first quarter ended March 31, 1995. Net earnings were $588,000 or $0.03 per share on sales of $70.6 million. This corresponds with net earnings of $898,000 or $0.04 per share on sales of $80.0 million for the first quarter a year ago. "These earnings and the corresponding decrease in sales are in part a reflection of management's decision to discontinue the operations of certain divisions. While these operations contributed to Algo's profitability during the first quarter last year, they accounted for significant losses during the remainder of 1994. As a result, this year, the Company is anticipating a much improved situation," said Algo Group President, Joseph Schaffer. The Company also confirmed an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $8 million or $0.39 per share for the fiscal year ended December 31, 1994. This compares with operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $3.6 million or $0.19 per share for the same period last year. The Company stated that the Board of Directors authorized the filing of a preliminary prospectus Preliminary Prospectus A first draft registration statement filed by a firm prior to proceeding with an initial public offering of securities. The document, filed with the Securities & Exchange Commission, is intended to provide pertinent information to prospective shareholders in relation to a proposed right offering. The offering, subject to regulatory approval, is expected to raise up to $7 million. The 1994 loss includes an approximately $700,000 foreign exchange adjustment which was recognized as a result of the reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of self sustaining operations. Sales for the year totaled $318 million, compared to $338.3 million last year. The Company also confirmed a further write off of $3.1 million in future tax benefits. This action, which has no cash implications, increased the net loss for the year to $11.1 million (or $0.55 per share) compared with net earnings of $2.0 million (or $0.10 per share) in 1993. The Company has $14.2 million in tax losses available to carry forward against future profits. The operating loss for the fourth quarter ended December 31, 1994 was $7.3 million or $0.36 per share. This loss includes the foreign exchange adjustment referred to above. This compares with an operating loss of $3.0 million or $0.16 per share for the same period last year. Fourth quarter sales were $68 million, compared to $77 million a year ago. The weighted average number of Class A subordinate voting shares Voting Shares Shares that give the stockholder the right to vote on matters of corporate policy making as well as who will compose the members of the board of directors. Notes: Different classes of shares, such as preferred stock, sometimes don't allow for voting rights. and Class B multiple voting shares issued and outstanding during 1994 was 20,261,224 compared to 19,296,790 in 1993. Pursuant to the proposed rights offering, one right will be issued for each Class A subordinate voting share and Class B multiple voting share. Fifteen rights will entitle the holder to subscribe for one unit at a unit price of $5.25. Each unit will consist of one 6 percent Cumulative Redeemable Convertible Second Preferred second preferred A class of preferred stock that has a subordinate claim to dividends and assets relative to another class of preferred stock of the same issuer. Compare prior preferred. Share, Series 1 of Algo and two warrants to purchase Class A Subordinate Voting Shares. The Second Preferred Shares will be convertible into Class A Subordinate Voting Shares. The final terms of the offering, including the price at which the second preferred shares may be converted into Subordinate Voting Shares and the exercise price of the warrants, will be determined prior to the filing of a final prospectus Final Prospectus A legal document stating the price of a newly issued security, the delivery date, and other facts that are important for investors. Notes: The final prospectus must be given to every investor who purchases a new issue of registered securities. . A preliminary prospectus is expected to be filed in all provinces today. "Management's commitment to subscribe to this offering is proof of our confidence in the Company's future," stated Schaffer. Management has committed to subscribe to a sufficient number of units in order for the Company to realize minimum gross proceeds of $4.55 million from the offering. Management has also agreed to provide the Company with additional funding, by way of a subordinated loan, so as to ensure total infusion of $6.5 million. Net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the offering will be used to improve working capital and to strengthen the Company's capital base. Richardson Greenshields of Canada Limited has been engaged to form and manage a soliciting dealer group for the purpose of soliciting subscriptions for units from residents of Canada and to act as financial advisor to the Company in connection with the offering. Algo Group Inc. is a major Canadian manufacturer and importer of ladies' and children's fashion apparel which is marketed throughout North America and Europe. The company designs and imports fabric marketed through North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. apparel manufacturers and retail outlets. Algo owns two retail chains, La Vie en Rose Lingerie and One Plus One Fashions. Company shares trade publicly on both The Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. and the Montreal Exchange Montreal Exchange A Canadian derivatives exchange that facilitates the trading of stock options, interest rate futures and options, as well as index options and futures. Located in Montreal, Quebec, it is the country's main financial derivative market, while the Winnipeg under the symbol AO.A. CONTACT: ALGO GROUP INC. Jack Wiltzer, (514) 382-1240 or Maison Brison Rick Leckner, (514) 731-0000 |
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