CVTech Group Inc. reports strong increase in net earnings for the 3rd quarter of 2012
- Net earnings from continuing operations of $3.0 million, or $0.04 per share, compared to $1.3 million, or $0.02 per share, a year earlier
- EBITDA from continuing operations of $6.5 million, or 11.0% of revenues, versus $4.3 million, or 7.3% of revenues, for the same quarter in 2011
- Consolidated revenues from continuing operations up 1.1% to $59.4 million
Order backlog of approximately $237 million as of September 30, 2012
DRUMMONDVILLE, QC, Nov. 8, 2012 /CNW Telbec/ - CVTech Group Inc. ("CVTech" or "the Corporation") (TSX: CVT) today reported results for its third quarter ended September 30, 2012. On October 16, 2012, the Corporation announced the sale of its operations in the CVT systems and related products segment. The results from this segment are accordingly presented as discontinued operations and data for the corresponding period of the previous fiscal year have been restated. All amounts are in Canadian dollars unless otherwise indicated.
|Financial highlights||Three months ended Sept. 30||Nine months ended Sept. 30|
|(in thousands of dollars, except per-share data)||2012||2011||2012||2011|
|Revenues from continuing operations||59,350||58,721||166,629||166,552|
|EBITDA from continuing operations||6,510||4,271||17,128||13,088|
|Net earnings from continuing operations||3,040||1,263||8,232||4,279|
|Per share - basic and diluted ($)||0.04||0.02||0.11||0.06|
|Net earnings (loss) from discontinued operations||(461)||(153)||(1,871)||253|
|Per share - basic and diluted ($)||0.04||0.02||0.09||0.06|
|Weighted average number of shares outstanding (basic, in thousands)||72,420||72,514||72,418||72,588|
Revenues from continuing operations were up 1.1% to $59.4 million from $58.7 million in the third quarter of 2011. The rise was due mainly to higher revenues from contracts for the construction of electricity transmission lines, partly offset by lower revenues from contracts for the construction, maintenance and repair of electricity distribution lines.
Earnings from continuing operations before interest, taxes, depreciation and amortization ("EBITDA") were $6.5 million, or 11.0% of revenues, in the third quarter of 2012, compared to $4.3 million, or 7.3% of revenues, in the third quarter of 2011. The increase in EBITDA, both in dollars and as a percentage of revenues, is attributable to a more favourable product mix in the third quarter of 2012.
Net earnings from continuing operations for the third quarter of 2012 were $3.0 million, or $0.04 per diluted share, compared to $1.3 million, or $0.02 per diluted share, in the third quarter of 2011. The net loss from discontinued operations was $461,000, versus a net loss of $153,000 in 2011, as a result of a charge of $428,000, net of $158,000 in related income taxes, for remeasurement to fair value of property, plant and equipment as well as intangible assets. As a result, net earnings were $2.6 million, or $0.04 per diluted share, compared to $1.1 million, or $0.02 per diluted share, in the year-earlier period.
At September 30, 2012, the Corporation's order backlog stood at approximately $237 million.
"CVTech's profitability improved significantly as a result of a higher proportion of contracts for the construction of electricity transmission lines," said André Laramée, President and Chief Executive Officer of CVTech. "During the third quarter, our subsidiaries won numerous contracts from major utilities in northeastern North America. Moreover, the diversity of these contracts highlights the considerable breadth of our service offering, which extends to high-growth-potential sectors such as renewable energy sources."
Revenues from continuing operations for the nine-month period ended September 30, 2012 were $166.6 million, stable from the same period a year earlier. EBITDA from continuing operations was $17.1 million, or 10.3% of revenues, versus $13.1 million, or 7.9% of revenues, a year earlier. EBITDA for the first nine months of 2012 is net of a non-recurring charge of $854,000 related to a proxy fight with regard to acceptance of a circular from a dissenting shareholder and to the strategic alternatives review process, and of an amount of $2.2 million related to settlement of a life insurance claim recorded in the first quarter.
Net earnings from continuing operations in the first nine months of 2012 were $8.2 million, or $0.11 per diluted share, versus $4.3 million, or $0.06 per diluted share, in the first nine months of 2011. Net earnings in the first nine months of 2012 were $6.4 million, or $0.09 per diluted share, versus $4.5 million, or $0.06 per diluted share, in the corresponding period of 2011.
CASH FLOW AND FINANCIAL POSITION REMAIN STRONG
Reflecting the rise in net earnings, cash flow from operations before changes in working capital items was $16.7 million for the first nine months of 2012, compared to $14.0 million for the corresponding period of 2011.
This strong cash flow has enabled the Corporation to further improve its financial position since the beginning of the 2012 fiscal year. As of September 30, 2012, CVTech held $6.1 million in cash and was carrying long-term debt, including the current portion, of only $24.5 million. These amounts exclude cash and long-term debt related to assets held for sale. The ratio of long-term debt to equity was 0.32 as at September 30, 2012, versus 0.48 as at December 31, 2011.
"CVTech looks to the future with confidence. The concentration of its business in the Energy sector will enable the Corporation to better align the development of its strategic plan with the growth vectors it has identified. The transaction has also further strengthened our financial position, allowing us more than ever to consider new strategic acquisitions to broaden our product and service offering, our expertise and our geographical reach. We will be deploying all our resources to ensure that our decisions and initiatives lead to the creation of lasting value for our shareholders," Mr. Laramée concluded.
OVERVIEW OF THE CORPORATION
CVTech is a company operating in the energy sector. Through Thirau ltée and its subsidiaries, Riggs Distler Inc. and Thirau LLC, the Corporation provides services to the electric power industry for the maintenance of transmission and distribution lines, primarily in Quebec, Ontario and the eastern United States. Another Thirau ltée subsidiary, J.J.L. Déboisement inc., specializes in control of vegetation surrounding power lines and in clearing rights of way. Thirau LLC's wholly owned subsidiary Riggs Distler & Company, Inc. is a leading provider of maintenance and construction services to the utility and heavy industrial markets.
EBITDA is a measure that has no standardized meaning prescribed by IFRS and is thus considered to be a non-IFRS measure. Therefore, this measure may not be comparable to similar measures presented by other issuers. This measure is presented and described in this release in order to provide additional information regarding the Corporation's liquidity and its ability to generate funds to finance its operations.
This document may contain forward-looking statements that reflect management's current expectations regarding future events. Forward-looking statements are based on a number of factors and include risks and uncertainties. Actual results may differ from forecast results. Management has no obligation beyond what is required under the law to update or revise forward-looking statements pursuant to new information or future events.
SOURCE: CVTECH GROUP INC.For further information:
André Laramée, MBA
President and Chief Executive Officer
Mario Trahan, CPA, CMA
Chief Financial Officer
Martin Goulet, CFA