09:15 AM EDT, 08/15/2024 (MT Newswires) -- Unisync Corp. ( USYNF ) on Thursday reported higher gross profit for the third quarter despite lower consolidated revenues.

Cconsolidated revenue for the third quarter of $21.2 million, was down $4.2 million or 16.5% from Q3 2023.

UGL segment revenue of $18.1 million in the current quarter was off $4.6 million or 20.2% due to "an above normal seasonal slowdown in replenishment orders and orders from customers for new hires who require a full complement of work wear." Peerless segment revenue was $3.2 million for the quarter.

Despite lower revenues, the UGL segment experienced a $1 million increase in gross profit to $2.3 million or 12.6% of segment revenue compared to $1.3 million or 5.9% of segment revenue in Q3 2023.

The Peerless segment experienced an increase in revenue of $500,000 compared to the same quarter last year and recorded gross profit of $900,000 or 28.6% of segment revenue against $700,000 or 23.7% of segment revenue on a higher margin mix of product sales while discontinuing the use of subcontractors to perform a portion of manufacturing output.

UNI reported reported a net loss before tax of $1.2 million in the third quarter compared to a loss of $2.9 million in the same quarter last year. Adjusted EBITDA in the current quarter was $1.1 million versus a loss of $0.9 million for the corresponding 3-month period last year.

On business outlook, UNI said: "During the third quarter of fiscal 2024, the company continued to gain positive pricing adjustments under its customer contracts and has relocated offshore production from a number of factories with higher labour costs and subject to import duty, to those that offer lower labour costs and/or are duty-free. We expect these initiatives to positively impact future margins for UGL as these reduced input costs get reflected in the weighted average cost of inventory, although we are again experiencing increases in offshore container costs as a result of the geopolitical disruptions in the Middle East that could offset some of these input cost gains. In addition, the UGL segment continues to pursue additional headcount reductions and operational efficiencies that should result in lower Direct and Administrative costs going forward. We are also aggressively pursuing a tenant to lease out the resulting 40,000+ square feet of vacated space at its Saint-Laurent facility or an outright sale of the 60,000 square foot facility which, in either case, will materially reduce UGL's direct overhead costs."

It added: "With respect to new business, UGL management continues to actively pursue a number of material business opportunities that are currently under bid or coming to market during the 2024 calendar year in both the Canadian and US marketplace.

"With $36 million in firm contracts and options on hand as of June 30, 2024, the Peerless business segment is positioned to maintain its current level of revenues and profitability over the balance of fiscal 2024 and into fiscal 2025, although production levels will continue to fluctuate due to delays being experienced in the supply of materials and the timely release of production schedules by the Department of National Defense."

UNI -- which operates through two business units: Unisync Group Limited with operations throughout Canada and the USA and majority owned Peerless Garments LP, a domestic manufacturing operation based in Winnipeg, Manitoba -- closed up $0.01 at $1.69 on the TSX yesterday.