Wheels Announces Second Quarter 2013 Results Revenue up 9%, Gross Margin up 28%
TORONTO, Sept. 26, 2012 /CNW/ - Wheels Group Inc. ("Wheels" or the "Company") (TSXV: WGI) today announced results for the quarter ended July 31, 2012 with revenue increasing to $66.1 million, up 9.4% over $60.4 million for the same period in the prior year. The increase in revenue was largely due to the contribution from the acquisition of Logistics Holdings International Inc. ("Logistics") completed on December 31, 2011 and increased revenue from the balance of the core business. Gross margin increased 28.2% to $9.2 million from $7.2 million largely due to the increase in revenue and operational efficiencies. Adjusted EBITDA increased to $2.2 million in the second quarter compared to $1.6 million for the same period in the prior year. The increase in gross margin was partially offset by an increased investment in sales related activities to support strategic growth plans, along with the impact of personnel and other operating expenses from the acquisition of Logistics.
Comprehensive income for the quarter ended July 31, 2012 was $0.7 million or $0.01 per share, compared with comprehensive income for the same period in prior year of $0.9 million or $16.4 per share. This decrease was primarily due to the increase in gross margin and income tax recoveries being offset by the increase in personnel and other operating expenses, business combination costs, share-based compensation along with increased amortization of intangibles and dividends on preference shares.
|Financial Highlights||For the quarter ended||For the six months ended|
(in millions of dollars, except per share data and number
of shares outstanding)
|July 31, 2012||July 31, 2011||July 31, 2012||July 31, 2011|
|Gross margin for the period||9.2||7.2||16.9||13.5|
|Comprehensive income for the period||0.7||0.9||(0.5)||1.0|
|Earnings per share 1||- Basic||0.01||16.4||(0.01)||15.6|
|Adjusted EBITDA 2||2.2||1.6||3.0||2.5|
|Adjusted EBITDA per share 1, 2||0.03||31.28||0.03||39.40|
|Weighted average number of common shares outstanding||87,556,568||50,512||87,556,568||62,922|
1 Based on weighted average number of common shares outstanding.
2 See Adjusted EBITDA below.
"Wheels demonstrated solid revenue growth in the first half of the year," said Doug Tozer, CEO of Wheels. "We're pleased with the increase in the Company's gross margins which are attributable to revenue growth and operational efficiencies. The acquisition of MSM, expected to close the end of September, supports our strategic goal of enhancing and broadening Wheels' portfolio of logistics services by adding a well-established multi-national LTL component."
Doug Tozer further noted, "We remain focused on our strategy of organic and acquisition based growth while continuing to drive operational efficiencies within our existing business and recent acquisitions."
The term adjusted EBITDA is used to describe earnings before any deduction for income taxes, net finance cost, depreciation, amortization, one-time non-recurring expenses, share-based compensation, and business combination and other related costs. EBITDA and adjusted EBITDA are metrics used by many investors and analysts to compare organizations on the basis of ability to generate cash from operations. Wheels Management considers adjusted EBITDA (as defined) to be an indirect measure of operating cash flows, which is a significant indicator of the success of any business. EBITDA and adjusted EBITDA are not intended to be representative of cash flow from operations or results of operations determined in accordance with IFRS.
EBITDA and adjusted EBITDA are not recognized measures under IFRS. Wheels' method of calculating EBITDA and adjusted EBITDA may differ from methods used by other companies, and accordingly may not be comparable to similar measures presented by other companies.
Caution Regarding Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking statements within the meaning of Canadian securities laws. Forward-looking statements can be generally identified by the use of words such as "anticipate", "continue", "estimate", "expect", "expected", "intend", "may", "will", "project", "plan", "should", "believe", and similar expressions. Specifically, forward looking statements in this news release include statements respecting certain future expectations about: prices and demand for services and capital expenditures. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation the risks and uncertainties detailed under the "RISK FACTORS" section of the Company's latest Annual Information Form and the "RISKS AND UNCERTAINTIES" section of the Company's most recent Management Discussion and Analysis.
Although the Company believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results may be consistent with such forward-looking statements, and they should not be unduly relied upon. With respect to the forward-looking statements contained in this news release, the Company has made assumptions regarding: there being no significant disruptions affecting the Company's operations whether due to labour disruptions, power disruptions, transportation disruptions, damage to equipment, adverse weather conditions or otherwise; the ability of the Company to obtain equipment, transportation, services and supplies in a timely manner to carry out its activities and at prices consistent with current levels or in line with the Company's expectations; the ability of the Company to respond to competitive pressures in the marketplace, including the entry of new competitors, direct marketing efforts by railroads or marketing efforts of asset-based carriers; the ability of the Company to successfully protect its data from cyber-attack; the ability of the Company to maintain or enhance its information technology systems; fuel shortages or fluctuations in fuel prices; the ability of the Company to access tax losses and tax attributes; the ability of the Company to obtain financing on acceptable terms; currency, exchange and interest rates being consistent with current levels or in line with the Company's expectations; and global economic performance, including the financial condition of its customers, particularly, in the retail, consumer products and durable goods sectors.
Except as required pursuant to applicable securities law, the Company disclaims any intention or obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.
Further information can be found in the disclosure documents filed by Wheels Group Inc. with the securities regulatory authorities, available under the profile of the Company at www.SEDAR.com.
Founded in 1988, Wheels Group Inc. is a leading North American 3PL, supply chain logistics provider. As a non-asset provider, the Company develops advanced supply chain solutions delivered through its qualified partner network of over 5,000 truck, rail, air, and ocean carriers. Wheels Group Inc. serves consumer goods, food and beverage, manufacturing and retail clients through 20 offices throughout the US and Canada. Wheels Group Inc. has been named one of Canada's 50 Best Managed Companies since 1997, Platinum since 2003. Wheels Group has been named one of North America's Top 100 third-party logistics ("3PL"), one of the Top 100 Food 3PL's and one of the Top Five IMC's (intermodal marketing companies).
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SOURCE: Wheels Group Inc.For further information:
Chief Executive Officer
Edward R. (Ted) Irwin
Chief Financial Officer
Tel: (905) 602-2700