EDMONTON, Alta. – Raydan Manufacturing Inc. today reported revenue increased by 95 per cent over the third quarter of fiscal 2004.
Revenues for the third quarter rose more than 95 per cent to $2,734,551 from $1,398,438 in the third quarter of fiscal 2004, company officials reported. Gross margins increased to 13 per cent from 12per cent for the same period in the previous year.
Company officials said the increase in gross margins was achieved through improved manufacturing processes and a more efficient use of resources by the company.
Revenues for the nine months ending Jan. 31, 2005 increased by 84 per cent to $8,187,514 from $4,450,442 in the corresponding period last year, while gross margins rose to 17 per cent from 12 per cent for the same period in the previous year. Net income was $442,560 for the nine-month period versus a loss of ($108,262) for the same nine-month period in the last fiscal year; and net income for the third quarter was $67,972 versus a loss of ($49,373) in the corresponding period last year.
The financial results reflect an increase in economic activity in Canada and the U.S., and greater acceptance of the Air Link(TM) suspension in the marketplace by both new and existing customers, say company officials, adding the most significant area of growth is in the truck crane market with a 90 per cent increase in sales from the corresponding nine-month period last year.
Management sees continued strength in the market and believes that it will remain strong into the next fiscal year. Underlying these strong results are Raydan’s aggressive business development programs which have positioned the company for significant growth, say company officials, adding Raydan’s determination to penetrate new vertical markets substantially larger than the company’s current markets should lead to exponential growth in the short to medium term.
They point to management’s focus on targeting international manufacturers of vocational equipment and trucks through its association with ArvinMeritor Inc. Implementation of their August 2004 licensing agreement has already begun, with Raydan having prepared the required jigs and equipment for production of the licensed products, which will begin in Mexico in August 2005. Training of key Mexican personnel will take place at Raydan’s Nisku facility early this summer.
During the third quarter Raydan also attracted a significant institutional shareholder when it concluded a non-brokered private placement for the issuance of 2,150,538 common shares to Sprott Asset Management Inc. of Toronto, realizing gross proceeds of $2.0 million. Officials say the company will use the funds to finance the Nisku plant expansion, to conclude product evaluations for future projects, to pursue establishing a chassis modification centre in Ontario and for working capital purposes.
Raydan also continued to expand its OEM market base in the third quarter with the addition of Schwing America of St. Paul, Minn., and American LaFrance, of Cleveland, N.C. Schwing is a manufacturer of concrete and construction equipment, and started offering the Air Link(TM) suspension for tandem rear at the factory level in January. American LaFrance is a fire apparatus manufacturer founded in 1832, and selected Raydan’s Air Link(TM) suspension as standard equipment for specific models of their tandem axle firetrucks, becoming the sixth major US manufacturer to do so.
Raydan’s current focus is on the vocational truck market. The company has already succeeded in making their proprietary suspensions available at the factory level through Mack Trucks, Inc., Freightliner LLC, International Trucks, and Western Star.
About Raydan Manufacturing
Raydan Manufacturing Inc. is an Edmonton, Alberta-based global leader in the development and production of specialized suspensions and coupling systems for trucks, trailers and heavy equipment, as well as a chassis modifications centre and a military service facility.
Established in 1992, Raydan exports its products to end-users and original equipment manufacturers (OEMs) in the heavy-duty truck, crane, fire/rescue and other severe use sectors around the world. Raydan’s common shares are listed for trading on the TSX Venture Exchange under the symbol “RDN”.
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