Glendale International reports second quarter fiscal 2006 financial results

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OAKVILLE, ON, July 17 /CNW/ - Glendale International Corp. (TSX: GIN) today reported financial results for the second quarter of fiscal 2006, ended June 2, 2006. Highlights for the quarter include: > "With our differentiated product offering and innovative features, our core Recreational Vehicles business remains very competitive, however, sales were negatively affected by the stronger Canadian dollar and higher fuel prices," said Edward C. Hanna, Chief Executive Officer and Chairman, Glendale International Corp. "While our overall RV business experienced weaker sales, our Travelaire division based in Red Deer, benefited from the continued strength of resource-based industries in Western Canada, with sales of our specialty trailers doing exceptionally well. Our Electronics business achieved record sales for the quarter, despite the impact of the stronger Canadian dollar and production disruptions at their Chatsworth facility, which resulted from planned upgrades to plant and equipment. And, although sales and operating earnings were down in Canadian dollars, our Navigational Aids business had recent contract wins and increased bookings, with a significant order book backlog half way through the fiscal year." Financial Results Sales for the second quarter of fiscal 2006 were $44.5 million compared with $48.4 million for the second quarter of fiscal 2005. The decrease was primarily due to lower sales from the Recreational Vehicles business, as well as lower sales from the Navigational Aids business when translated into Canadian dollars. Net earnings for the quarter were $1.1 million, or $0.09 per share, compared with $1.7 million, or $0.13 per share, for the second quarter of fiscal 2005. Sales for the first six months of fiscal 2006 were $83.1 million compared with $85.4 million for the corresponding period of fiscal 2005. Net earnings for the first six months were $1.9 million, or $0.15 per share, consistent with $1.9 million or $0.15 per share for the same period last year. As of June 2, 2006, Glendale International had working capital of $14.9 million, including cash and cash equivalents of $2.2 million, compared to working capital of $9.2 million, including cash and cash equivalents of $6.2 million, on November 30, 2005. Recreational Vehicles (Glendale RV and Travelaire Canada) Sales for the Recreational Vehicles business for the second quarter of fiscal 2006 were $25.1 million compared with $29.0 million for the second quarter of last year. Sales for the quarter were impacted by the stronger Canadian dollar, which resulted in increased price competition and reduced the value of U.S. dollar denominated sales, and by higher fuel prices, which influence consumers' purchase decisions. Sales were also lower as a result of a two-week production disruption at the Travelaire plant in Red Deer, due to a temporary supply issue, which has since been resolved. The Recreational Vehicles business continued to experience strong demand for its specialty trailers in Western Canada. Operating earnings for the quarter were $1.5 million compared with $2.6 million for the same quarter last year. Electronics (Firan Technology Group Corporation) Sales for Firan Technology Group Corporation (TSX:FTG) for the second quarter increased to a record $14.8 million compared with $14.2 million a year ago, despite the appreciation in the Canadian dollar reducing the translated value of U.S. denominated sales by approximately $1.1 million. Sales for the Circuits Division increased to $12.1 million from $11.7 million a year ago, with improving market conditions and an improved sales team driving the year-over-year improvement. Sales for the Aerospace Division increased to $2.7 million from $2.5 million a year ago, with the increase being attributable to higher 'Quick Turn' activity and increased shipments to key customers. Operating earnings for the quarter were $0.4 million compared to $0.3 million for the same period last year. In accordance with its ownership position in Firan Technology Group Corporation, Glendale International recorded net earnings from the company for the second quarter of fiscal 2006 of $0.2 million compared with a net loss of $47,000 for the same period last year. Navigational Aids (Fernau Avionics) Sales for Fernau Avionics for the quarter were $4.6 million compared with $5.2 million for the second quarter of fiscal 2005. Operating earnings for the quarter were $0.6 million compared with $0.7 million for the second quarter of fiscal 2005. When adjusted for the effect of the stronger Canadian dollar, sales for the quarter remained flat to last year, while operating earnings increased by 19.0%. During the quarter, Fernau signed significant contracts for the provision of Distance Measuring Equipment ("DME"), including 103 units for Nav Canada, and 52 units for Avinor AS, a Norwegian company, which owns and operates 46 airports in Norway. Additionally, Fernau received its second significant order for its Personal Locator Beacon ("PLB"), with a sale to the Royal Danish Air Force. Other Developments Subsequent to quarter end, the Corporation completed a sale-leaseback of its property located at 353 Iroquois Shore Road, in Oakville, Ontario, for net proceeds of $2.4 million. The Corporation intends on selling and leasing back its property located at Golden West Avenue, in Red Deer, Alberta, with proceeds less carrying value expected to be approximately $4.5 million before taxes. The sale is expected to close in the next 12 months. The Corporation intends to acquire land and construct a modern facility to replace the current 40-year old constrained facility. Outlook "In keeping with our continued focus on innovation and differentiation, late last year we made the strategic decision to introduce a line of 12-foot wide park models to capture a larger share of a growing market for park models over the next several years," said Mr. Hanna. "With strong advantages in producing locally, our increased presence in park models will help mitigate the affects of higher fuel prices and competitive pricing pressures resulting from changes in currency valuation. And, we will continue to look at implementing additional strategies that would protect each of our businesses from external factors and create superior value for our shareholders." > About Glendale International Corp. Glendale International Corp. manages businesses that provide the opportunity for superior long-term value creation through the application of proven managerial expertise and innovative business strategies. The Corporation has built a core portfolio of profitable growth businesses in the recreational vehicles, electronics and technology sectors and will seek to acquire complementary businesses that support its value-building proposition. Glendale International's businesses include: Glendale Recreational Vehicles/Travelaire Canada, the largest Canadian manufacturer of recreational vehicles (RVs); A controlling position in Firan Technology Group Corporation, the largest aerospace and defence supplier of advanced technology printed circuits in Canada and among the top 25 PCB manufacturers in North America; and Fernau Avionics, a leading international supplier of ground-based air navigational systems for military, naval and civil aviation applications. Glendale International Corp. is a public corporation whose shares trade on the Toronto Stock Exchange ("TSX") under the symbol "GIN". The Corporation has approximately 12.5 million common shares outstanding. To reach Glendale International via the worldwide web logon to www.glendaleint.com. This press release contains certain forward-looking statements that reflect the current views and/or expectations of management of Glendale International Corp. with respect to its performance, business and future events. Such statements are subject to a number of risks, uncertainties and assumptions. Actual results and events may vary significantly.

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