Mr. Hilton Price reports

IFABRIC CORP REPORTS RECORD FOURTH QUARTER AND ANNUAL REVENUE AND EARNINGS FOR ITS FINANCIAL YEAR ENDED SEPTEMBER 30, 2017

iFabric Corp. has released its results for the fourth quarter and fiscal year ended Sept. 30, 2017.

Q4 ended Sept. 30, 2017, highlights:

• Revenues of $6,610,765 compared with $4,170,011 in Q4 2016, representing an increase of $2,440,754 or 59 per cent. This represents a record revenue quarter for iFabric.
• Revenues for the intelligent fabrics division were $896,839 compared with $1,257,166 in Q4 2016, representing a decrease of $360,327 or 29 per cent.
• Revenues for the apparel division were $5,677,077 compared with $2,887,215 in Q4 2016, representing an increase of $2,799,862 or 97 per cent.
• Gross profit increased by 75 per cent, or $1,201,064, to $2,801,745 from $1,600,681 in Q4 2016.
• Gross profit margins increased from 38 per cent in Q4 2016 to 42 per cent in Q4 2017.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) amounted to $1,472,081 compared with adjusted EBITDA of $174,773 for the same quarter last year. This represents an increase of $1,297,308.
• Net earnings attributable to shareholders were $969,911 (or 3.7 cents per share basic and 3.6 cents diluted) compared with net earnings of $32,745 in the same quarter of 2016 (or 0.1 cent per share basic and diluted), representing an increase in net earnings of $937,166.

"I am extremely pleased about our performance in the current quarter and fiscal 2017," stated Hylton Karon, president and chief executive officer of iFabric. "We have delivered record sales and profits and have also improved our margins in Q4, which was achieved through a combination of improved sourcing and tighter inventory turns. In addition, we have substantially strengthened our balance sheet, which places us in a great position to meet our future growth objectives," concluded Mr. Karon.

Year ended Sept. 30, 2017, highlights:

• Total 2017 revenues of $18,856,477 compared with $13,570,365 in 2016, representing an increase of $5,286,112 or 39 per cent. This represents record annual revenues for iFabric.
• Apparel division revenue increased from $11,272,334 in 2016 to $13,981,487 in 2016, representing an increase of $2,709,153 or 24 per cent. By way of comparison, for the 2017 financial year, intelligent fabric division revenue increased to $4,772,590 from $2,181,527 in 2016, representing an increase of $2,591,063 or 119 per cent.
• Gross profit of $8,481,495 (or 45 per cent) for the year ended Sept. 30, 2017, compared with $6,305,673 (or 46 per cent) in 2016, representing an increase of $2,175,822 or 35 per cent. The higher gross profit for the year was mainly attributable to the record increase in revenues for the year.
• Adjusted EBITDA amounted to $3,124,130 compared with negative adjusted EBITDA of $41,506 for 2016, representing an increase of $3,165,636.
• Net earnings attributable to shareholders were $1,597,070 (or 6.1 cents per share basic and 5.9 cents per share diluted) compared with net loss attributable to shareholders of $373,977 (or 1.4 cents per share basic and diluted) for the year ended Sept. 30, 2016. The increase in net earnings is mainly attributable to an increase in gross profit of $2,175,822 as well as a reduction in selling, general and administrative costs of $839,343. The impact of these changes was partially offset by higher share-based compensation costs of $329,000 in 2017.
• Working capital (excluding the demand term loan) amounted to $7,826,654 compared with $5,300,067 at Sept. 30, 2016, representing an increase of $2,526,587.
• Shareholder equity attributable to shareholders increased by $2,112,972 from $7,638,010 in 2016 to $9,750,982 at Sept. 30, 2017.
• Long-term debt relating to the building owned by the company decreased by $1,438,265 mainly as a result of the refinancing of the previous term loan with a 15-year demand-term loan. Due to the demand nature of the new loan, this has been classified as a current liability as required by International Financial Reporting Standards.
• The company's land and buildings have been appraised by independent appraiser in an amount of $4.4-million, representing an increase of $1,655,704 over the carrying value of this asset in the financial statements.
• Cash at year-end was $668,425.
• Bank operating line at year-end was $774,908, leaving $2,725,092 of unutilized bank operating line available to the company.

Complete financial statements are available on SEDAR and the company's website.

Business outlook

Mr. Karon, president and chief executive officer of iFabric, provided comments regarding the business outlook for the 2018 fiscal year: "Our intelligent fabrics division has confirmed a number of production projects for new customers which will go commercial during the coming year. In addition, we anticipate expanded product offerings with our technologies, from our current customer base. On a full-fiscal-year cycle, I believe we will see an annual growth rate in fiscal 2018 at least equal to what we achieved in fiscal 2017.

"Whilst we may see some levelling off in sleepwear sales in 2018, our apparel division has developed a number of new products that we are very excited about. In particular, I believe that one of the products we have developed is so revolutionary, that we will be filing a patent for this product in early 2018. Accordingly, 2018 should be another strong performing year for this division."

    
                                FINANCIAL HIGHLIGHTS
 
                                     Year ended Sept. 30     Quarter ended Sept. 30
                                      2017          2016          2017         2016                  
                                                                                
Revenue                        $18,856,477   $13,570,365    $6,610,765   $4,170,011   
Income (loss) from operations    2,881,314       (80,891)    1,365,977      162,693    
Share based compensation           447,402       118,402        45,483       16,459     
Adjusted EBITDA*                 3,124,130       (41,506)    1,472,081      174,773    
Net income (loss) after tax      1,589,922      (370,162)      960,096       34,271       
Net income (loss) after tax                                                     
attributable to shareholders     1,597,070      (373,977)      969,911       32,745     
Net earnings (loss) per share                                                   
Basic                                0.061        (0.014)        0.037        0.001        
Diluted                              0.059        (0.014)        0.036        0.001        
                                                                                
*Note: Adjusted EBITDA represents earnings before interest, taxes, 
depreciation, amortization and share based compensation.

About iFabric Corp.

Headquartered in Markham, Ont., iFabric currently has 26.2 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.