Vicwest Inc. Reports Strong Third Quarter 2012 Operating Profit, Declares Dividend
OAKVILLE, ON, Nov. 7, 2012 /CNW/ - Vicwest Inc. (the "Company") (TSX: VIC, VIC.DB) today reported its financial results for the three months ended September 30, 2012, a period punctuated by its best EBITDA1 performance in 12 quarters, significant debt reduction and the successful advancement of two strategic capital projects.
Third Quarter Consolidated Summary
- Revenue was $113.4 million compared to $117.9 million a year ago.
- Gross profit increased 21.4% to $21.4 million (18.9% margin) from $17.7 million (15.0% margin) in 2011.
- EBITDA1 increased 56.0% to $11.0 million from $7.1 million in the same period of 2011.
- Net income was $4.1 million ($0.20 per share basic) compared to net income of $4.5 million ($0.24 per share basic) a year ago.
- Net income excluding change in fair value of embedded derivative2 increased 114.3% to $4.9 million ($0.24 per share basic) from $2.3 million in the corresponding period of 2011 ($0.11 per share basic).
"We achieved the highest EBITDA as a percentage of revenue this quarter than at any time since the end of the recession and did it in a period of mixed global economic performance," said Colin Osborne, President and CEO. "While we did benefit from reduced input costs, we also realized efficiency gains, and benefitted from the growth trajectory we've created in the U.S. insulated metal panel market, Western Canadian construction sectors, and agriculture and liquid storage markets including water containment. Our leadership position in key markets and our increasingly efficient operations give us confidence in our continued positive earnings momentum."
"Strong cash generation and effective working capital management enabled us to reduce net debt 18.3% or $16.5 million since June 30th," said Kent Harris, Chief Financial Officer. "At the same time, we continued to invest in new productive capacity and efficiency enhancements. From a balance sheet and operations perspective, we continue to build flexibility and position the business for further growth."
On November 6, 2012 the Board declared a fourth quarter dividend of $0.15 per share, payable on January 15, 2013 for shareholders of record on December 31, 2012. This is consistent with the quarterly dividends declared and paid in respect of the first, second and third quarters of 2012.
1EBITDA is calculated as earnings before finance expense, income taxes,
depreciation and amortization and change in fair value of embedded
derivative. EBITDA and EBITDA margin are non-IFRS measures.
2 Net income excluding change in fair value of the embedded derivative is a non-IFRS measure.
Third Quarter Divisional Results
- Vicwest Building Product's net income increased 84.2% to $7.3 million on improved pricing and All Weather's contribution. Revenue was $80.7 million, off 5.2% or $4.4 million year over year on reduced volumes in Eastern and Central Canada regions.
- Westeel's net income increased year-over-year by 15.7% to $1.3 million on higher liquid storage product sales and lower material costs. Westeel's revenue of $32.7 million was flat to last year as strong domestic sales were offset by softness in U.S. and export markets.
Nine Month Consolidated Summary
- Revenue was $308.6 million compared to $308.5 million a year ago.
- Gross profit increased 12.6% to $57.1 million (18.5% margin) from $50.7 million (16.4% margin) in 2011.
- Net income was $8.8 million ($0.46 per share basic) compared to net income of $10.7 million ($0.58 per share basic) a year ago.
- Net income excluding change in fair value of embedded derivative2 improved 36.8% to $9.4 million ($0.49 per share basic) from $6.9 million ($0.36 per share basic) in the corresponding period of 2011.
At September 30, 2012, net senior debt to EBITDA1 improved to 0.7 to 1 compared to 1.4 to 1 at June 30, 2012. At period end, the Company had net debt of $73.6 million, down from $90.1 million at June 30, 2012 on improved working capital management and increasing earnings. At period end, the Company had $69.2 million in unused availability under its $100 million senior revolving credit facility secured February 27, 2012.
The Company expects to end 2012 with ongoing improvements in financial performance compared to a year ago. This positive outlook reflects a combination of factors including current crop harvest and pricing forecasts, internal efficiency and expansion activities, the steel price environment and the varying impacts of fourth quarter seasonality on its business units.
"Isolating our outlook by business line, we expect Westeel to generate record revenues this year on both strong Canadian agriculture fundamentals that should drive fourth quarter customer booking programs and on growth in our liquid storage tank markets, including sales of our new water containment systems for frac ponds," said Mr. Osborne. "Building Products should also sustain its momentum in insulated metal panel markets with the opening of our new Little Rock, Arkansas plant this quarter, solidifying Vicwest and All Weather as one of the leaders in this segment."
The Company continues to expect headwinds in international territories due to economic and political issues, and anticipates both a normal tailing off of activity in construction markets in the fourth quarter and continued softness in construction programs in Eastern and Central Canada.
"Current marketplace realities make us more determined than ever to sharpen our focus on key growth areas and maximize profitability, and we are executing on both," said Mr. Osborne. "In addition to opening our new IMP plant, we recently completed a significant Westeel plant automation project that will shorten lead times and lower costs going into 2013. And we are getting an early return on our investment in enterprise resource planning systems, with more to follow as we activate ERP across Westeel early next year. Together, these investments make us a stronger, more capable business."
Third Quarter Conference Call and Webcast
Vicwest Inc. will host its third quarter 2012 conference call and webcast on webcast on Thursday, November 8, 2012 at 11:00 a.m. (ET). To participate in the teleconference, the numbers are 416-644-3414 or 1-800-814-4859. Callers are advised to call in at least 10 minutes in advance. To participate in the webcast, please visit www.vicwestinc.com.
ABOUT VICWEST INC.
Vicwest Inc. is a leading North American manufacturer and distributor of engineered storage and handling systems for grain, fertilizer and liquid storage as well as building construction products for agricultural, institutional, commercial, industrial and residential markets. We operate through two strategically aligned divisions: Vicwest Building Products and Westeel. With approximately 7,000 customers, 1,200 dedicated employees and 34 business partners, we are positioned for growth in domestic and international markets. Vicwest Inc. is a member of the S&P/TSX SmallCap Index. For more information, visit www.vicwestinc.com.
Certain statements in this news release constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include, but are not limited to, management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by such statements. Readers are encouraged to review the most recently filed Management's Discussion and Analysis and other disclosure documents filed by the Company with Canadian securities regulatory agencies and commissions. Readers are cautioned not to place undue reliance on the Company's forward-looking statements. The forward-looking statements contained herein are made as of the date of this press release and except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE: Vicwest Inc.For further information:
President & Chief Executive Officer
Tel: (905) 469-5700
Chief Financial Officer
Tel: (905) 469-5706