Mr. Hilton Price reports

IFABRIC CORP. REPORTS RECORD SECOND QUARTER 2017 RESULTS

iFabric Corp. has provided its financial results for its second quarter and six months ended March 31, 2017.

"I am extremely pleased with the company's performance in Q2 2017. Both the intelligent fabrics and intimate apparel divisions are poised to meet the growth objectives we have established for 2017 and beyond," said Hylton Karon, president and chief executive officer of iFabric.

Q2 2017 highlights

• Revenues of $4,255,192 compared with $3,072,027 in Q2 2016, an increase of $1,183,165 or 39 per cent. Revenues in the intimate apparel division increased by 19 per cent or $483,588 to $3,022,496 from $2,538,908 in Q2 2016, whilst revenues in the intelligent fabrics division, increased by 138 per cent or $699,577 to $1,207,096 from $507,519.
• Record net earnings before tax of $647,399 compared with loss of $440,796 in 2016, representing an increase of $1,088,195. The increased earnings were mainly as a result of higher revenues, higher gross profit contribution, lower selling, general and administrative costs, as well as increased foreign exchange gains.
• Record EBITDA (earnings before interest, taxes, depreciation and amortization) of $739,168 compared with negative EBITDA of $375,084 in Q2 2016, an increase of $1,114,252.
• Gross profit of $2,082,915 (49 per cent of revenue) compared with $1,502,446 (49 per cent of revenue) in Q2 2016, an increase of $580,469. The intimate apparel division realized higher gross profit margins than in the comparable quarter of 2016, mainly due to lower clearances of seasonal goods. However, the intelligent fabrics division contributed a higher proportion of consolidated revenue in Q2 2017 versus Q2 2016, at lower margins, thereby offsetting this increase, resulting in the overall gross profit per cent being unchanged from Q2 2016.
• Net earnings after tax attributable to shareholders were $472,221 (1.8 cents per share basic and 1.7 cents per share diluted) compared with a net loss attributable to shareholders of $324,657 in Q2 2016 (1.3 cents per share basic and diluted), representing an increase of $796,878.
• Working capital at March 31, 2017, amounted to $6,170,802 compared with $5,176,837 at Dec. 31, 2016, an increase of $993,965.
• Shareholder equity at March 31, 2017, attributable to common shareholders increased by $506,922 to $8,036,016 from $7,529,094 at Dec. 31, 2016.
• Net cash on hand of $601,731 as at March 31, 2017, compared with net cash on hand of $732,775 as at the end of the previous quarter ended Dec. 31, 2016, a decrease of $131,044. The company's full bank operating line of $3.5-million remains available to finance the anticipated future growth and expansion in both divisions.

Six-month highlights:

• Revenues increased by $956,274 to $7,357,311 compared with $6,401,037 for the corresponding six months in 2016, representing an increase of 15 per cent. With respect to its two operating divisions, intimate apparel revenues decreased by 16 per cent or $913,781 while intelligent fabrics division revenues increased by 307 per cent or $1,884,129.
• Gross profit for the six months ended March 31, 2017, decreased by $56,660 to $3,230,001 (44 per cent of revenues) from $3,286,661 (51 per cent of revenues) for the comparable six months of 2016. The decrease in gross profit percentage for the six months was mostly the result of a higher proportion of sales in the intelligent fabrics division, which carry lower margins compared with the intimate apparel division.
• The net profit attributable to iFabric shareholders for the six months ended March 31, 2017, was $346,846 (1.3 cents per share basic and diluted) compared with a loss of $285,069 in the corresponding six months of 2016 (1.1 cents per share basic and diluted), representing an increase of $631,915. This increase was mainly as a result of lower selling, general and administrative costs and increased foreign exchange gains.

      
  
                                             FINANCIAL HIGHLIGHTS                                                                                     
                                                                                                         
                                                         Quarter ended March 31, Six months ended March 31,
                                                            2017           2016         2017          2016    
                                                                                                         
Revenue                                                  $4,255,192  $3,072,027    $7,357,311   $6,401,037  
Income (loss) from operations                               654,955    (226,413)      515,070     (156,337) 
Share-based compensation                                     16,101      41,258        32,560       85,663  
EBITDA                                                      739,168    (375,084)      664,154     (238,083) 
Net income (loss) before tax                                647,399    (440,796)      495,460     (282,471) 
Net income (loss) after tax attributable to shareholders    472,221    (324,657)      346,846     (285,069) 
Net income (loss) per share -- basic                          0.018      (0.013)        0.013       (0.011) 
Net income (loss) per share -- diluted                        0.017      (0.013)        0.013       (0.011) 

About iFabric Corp.

Headquartered in Markham, Ont., iFabric currently has 26.0 million shares issued and outstanding.

Through its wholly owned subsidiaries, Intelligent Fabric Technologies (North America) Inc. (IFTNA) and Coconut Grove Pads Inc., the company offers a variety of products and services in both of its strategic divisions:

• IFTNA is focused on proprietary chemical formulations that render fabrics, foams, plastics and numerous other surfaces intelligent, thereby improving the safety and well-being of the consumer.
• Coconut Grove, operating as Coconut Grove Intimates, is a designer, manufacturer, distributor, licensor and licensee of ladies intimate apparel products, accessories and sleepwear.

We seek Safe Harbor.