Savaria Announces its Results for the Third Quarter of 2009

LAVAL, QUEBEC--(Marketwire - November 11, 2009) - Savaria Corporation (TSX: SIS), Canada’s leader in the accessibility industry, today discloses its financial results for the third quarter ended September 30, 2009.

Third-Quarter Highlights

- Repurchase of 4.7 million common shares by the Corporation, being the equivalent of 17% of its capital stock;

- Sustained sales for the Corporation, despite unfavourable economic conditions;

- Significant growth of the Corporation’s operations in Asia;

- Substantial increase in cash flows from operating activities, which rise to $1,243,088.

The Corporation generated third-quarter revenues of $14,350,000 from its continuing business operations, compared with revenues of approximately $14,681,000 for the corresponding quarter of 2008. The Corporation’s sustained revenues can be explained by current conditions in the U.S. real estate market, which temporarily brought down Savaria’s export potential in the same territory. Revenues from sales in Europe and Asia amounted to $1,400,514, up 66% over $843,666 for the corresponding quarter of the previous fiscal year.

“In light of the rather challenging global economic context, we are obviously pleased with these results, which attest to both the relevance of our products and our ability to increase efficiencies,” indicated Marcel Bourassa, President and Chief Executive Officer of the Corporation. “Based on a progressive and diversified growth strategy, we already expect Savaria to achieve significant breakthroughs in high-business-potential foreign markets. The aging population is definitely an issue worldwide that will allow us to continue to capitalize on our expertise in equipment for people with mobility challenges on more than one continent,” added the President and Chief Executive Officer.

The Corporation posted net earnings of 1 cent per share in the third quarter of 2009, compared with 2.3 cents for the corresponding period of 2008(1). Gross profit as a percentage of sales worked out to 26.7% for the third quarter of 2009, an increase of 2.1% over the figure obtained in the third quarter of 2008.

(1) The recent repurchase of 17% of the Corporation’s capital stock could logically lead to an increase in net earnings per share as of the next quarter.

Cash flows from operating activities totalled $1,243,088 for the third quarter of 2009, up 93% over $644,506 for the third quarter of 2008. These inflows come primarily from foreign exchange contracts of $1 million cashed-in in advance. During the same period, the Corporation’s long-term debt increased by $4 million. This increase was planned for the repurchase of 4.7 million common shares, being the equivalent of 17% of the Corporation’s capital stock, at a price of 90 cents per share(2).

(2) Fees of 2.9 cents were added for each of the repurchased shares, for a total of 92.9 cents per share.

“We are obviously pleased that the Corporation benefits from such substantial cash flows. This liquidity not only attests to our sound and effective management, but also provides us with the flexibility to pursue our expansion. As for the repurchase of 17% of our capital stock, this is excellent news for our present and future investors, given that the value of their shares and dividends will likely rise in the short and long term. All in all, there is no doubt in our minds that the outlook for Savaria’s future is very bright,” concluded Marcel Bourassa.

New Markets, New Products

Thanks to its Huizhou-based Chinese plant employing more than 70 people, the Corporation can bank on steadily deploying its efforts in Asia in order to diversify and multiply its revenue streams. With its efficient production and marketing teams, Savaria aims to ensure the gradual development of this fast-growing market.

Van-Action, a wholly-owned subsidiary of Savaria, recently finalized the tests prerequisite to marketing a new wheelchair-accessible vehicle equipped with both a rear and a side entry. Unique in North America, the vehicle is now offered to the adapted taxi industry, which has further diversified the Corporation’s operations and revenue streams.

Forward-Looking Statements

Certain statements in this press release may be forward-looking. Forward-looking statements involve known and unknown risks, uncertainties or other factors that may cause the Corporation’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The reader is warned against the risk of giving excessive credibility to these forward-looking statements.

Compliance with Canadian Generally Accepted Accounting Principles

The information appearing in this press release has been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). However, the Corporation uses earnings before interest, income taxes and amortization (“EBITDA”) for analysis purposes to measure its financial performance. This measure has no standardized definition in accordance with GAAP and is therefore regarded as a non-GAAP measure. This measure may therefore not be comparable to similar measures reported by other companies. A reconciliation between net earnings and EBITDA is provided in the Financial Highlights section below.

Savaria Corporation

(www.savariaconcord.com) is Canada’s leader and the second largest accessibility company in North America responding to the needs of people with mobility challenges. The Corporation designs, manufactures and distributes primarily elevators for residential and commercial use, as well as stairlifts and inclined platform lifts. Through its subsidiary Van-Action, Savaria converts and adapts automotive vehicles for the disabled and offers scooters and motorized wheelchairs as well. Its line of products, one of the world’s most comprehensive, enables Savaria to stand out by proposing an integrated and customized solution for its disabled and elderly customers’ mobility needs. Savaria records approximately 60% of its sales outside Canada, primarily in the United States, and is currently penetrating the Chinese market. The Corporation has a network of some 600 retailers in North America and employs more than 370 people in its plants in Ville Saint-Laurent, Quebec, Brampton, Ontario and Huizhou, China.

Complete financial statements and the management’s report for the quarter ended September 30, 2009 will shortly be available on Savaria’s website and at SEDAR (www.sedar.com).

 Savaria Corporation Financial Highlights ------------------------------------------------------------------------- ------------------------------------------------------------------------- (in thousands of dollars, except per-share amounts, percentages and exchange rates Quarters Ended Nine-Month Periods Ended - unaudited) September 30, September 30, ------------------------------------------------------------------------- 2009 2008 Change 2009 2008 Change ------------------------------------------------------------------------- Average effective exchange rate(1) 1.0642 1.0289 0.0353 1.0650 1.0151 0.0499 ------------------------------------------------------------------------- Sales $14,350 $14,681 (2.3)% $40,204 $40,557 (0.9)% ------------------------------------------------------------------------- Gross profit as a % of sales 26.7% 24.6% n/a 26.8% 21.8% n/a ------------------------------------------------------------------------- Selling and administrative expenses $3,023 $2,631 14.9% $8,562 $8,066 6.1% Selling and administrative expenses as a % of sales 21.1% 17.9% n/a 21.3% 19.9% n/a ------------------------------------------------------------------------- Operating earnings (loss) $599 $796 (24.7)% $1,602 $2,198 (27.1)% Operating earnings (loss) as a % of sales 4.2% 5.4% n/a 4.0% 5.4% n/a ------------------------------------------------------------------------- EBITDA(2) $413 $1,357 (69.6)% $2,819 $3,232 (12.8)% ------------------------------------------------------------------------- EBITDA per share $0.016 $0.050 (68)% $0.105 $0.119 (11.8)% ------------------------------------------------------------------------- Cash flows from operating activities $1,243 $645 92.7% $3,877 $(427) 1,008% ------------------------------------------------------------------------- Exchange gain (loss) $(472) $400 (218)% $(317) $611 (152)% ------------------------------------------------------------------------- Net earnings $224 $631 (64.5)% $1,442 $1,696 (15.0)% ------------------------------------------------------------------------- Net earnings per share - basic and diluted $0.009 $0.023 (60.9)% $0.054 $0.062 (12.9)% ------------------------------------------------------------------------- Dividends declared per share - - n/a $0.03 $0.063 n/a ------------------------------------------------------------------------- Weighted average number of common shares outstanding - diluted 26,047 27,298 (4.6)% 26,722 27,414 (2.5)% ------------------------------------------------------------------------- ------------------------------------------------------------------------- As at Sept. 30, 2009 As at Dec. 31, 2008 ------------------------------------------------------------------------- Total assets $41,537 $40,683 Total liabilities $21,745 $22,844 Shareholders’ equity $19,792 $17,839 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (1) Calculated considering the hedge accounting applied to foreign exchange contracts maturing during the period (2) Reconciliation of EBITDA with net earnings provided in the following table Reconciliation of Earnings before Interest, Income Taxes and Amortization (“EBITDA”) with Net Earnings ------------------------------------------------------------------------- ------------------------------------------------------------------------- (in thousands of dollars Quarters Ended Nine-Month Periods - unaudited) September 30, Ended September 30, ------------------------------------------------------------------------- 2009 2008 2009 2008 ------------------------------------------------------------------------- Net earnings $224 $631 $1,442 $1,696 ------------------------------------------------------------------------- Plus: Interest on long-term debt 70 27 223 93 ------------------------------------------------------------------------- Interest expense and banking fees 29 44 98 169 ------------------------------------------------------------------------- Income taxes (117) 486 479 733 ------------------------------------------------------------------------- Amortization of fixed assets 104 73 287 276 ------------------------------------------------------------------------- Amortization of deferred development costs 74 70 224 211 ------------------------------------------------------------------------- Amortization of intangible assets 34 38 102 114 ------------------------------------------------------------------------- Less: Interest income and dividends 5 12 36 60 ------------------------------------------------------------------------- Earnings before interest, income taxes and amortization (“EBITDA”) $413 $1,357 $2,819 $3,232 ------------------------------------------------------------------------- -------------------------------------------------------------------------