WesternOne Inc. Reports 2013 Q4 and Full Year Results

VANCOUVER, March 13, 2014 /CNW/ - WesternOne Inc. ("WesternOne") (Toronto Stock Exchange: WEQ, WEQ.DB, WEQ.DB.B and WEQ.DB.C) today announced the release of its financial results for the year ended December 31, 2013.

The results, consisting of WesternOne's audited financial statements for the year ended December 31, 2013 and Management's Discussion and Analysis ("MD&A") dated March 13, 2014, are available on SEDAR (www.sedar.com).

2013 Q4 financial highlights and recent events are as follows:

  • In Q4 WesternOne recorded consolidated revenue of $103.8 million, gross profit of $18.5 million and adjusted EBITDA(1) of $9.7 million. Annual consolidated revenue, gross profit and adjusted EBITDA were $377.6 million, $82.5 million and $46.7 million respectively.

  • WIS, WesternOne's infrastructure services division, recorded Q4 revenue of $23.7 million and adjusted EBITDA of $7.5 million, representing year-over-year organic growth of 28% and 12%, respectively. The growth was driven by (i) higher fleet utilization and rental rates; (ii) returns from incremental fleet investments, driven by continued demand for equipment and related services in Western Canada's construction and infrastructure sectors; and (iii) contribution from a new branch in Fort McMurray, Alberta which was launched in the fall of 2013.

  • Britco, WesternOne's modular construction and rental division, recorded Q4 revenue and adjusted EBITDA of $80.1 million and $3.1 million, respectively. Revenue grew 122.5% while adjusted EBITDA declined 37.5% year-over year. The revenue growth was due to (i) incremental revenue from Britco's Australia operations ("APB") which was acquired in early 2013; (ii) increase in site construction work relating to the Manitoba Hydro Keeyask workforce accommodations project; and (iii) higher production volume from Britco's operations in the United States. The decline in the adjusted EBITDA was due to (i) operating losses from APB; and (ii) lower modular construction margin in Canada due to sales product mix.

  • Corporate overhead for Q4 for adjusted EBITDA purposes was $0.9 million, consistent with Q4 of 2012.

  • WesternOne performed an impairment assessment in respect of its goodwill and intangible assets as required by IFRS.  As a result of the continuing weak domestic resource and energy sector in Australia and the slower than anticipated recovery from the economic downturn in the construction sector on Vancouver Island, BC, a non-cash impairment charge of $28.0 million was recorded for the year ended December 31, 2013.

  • Q4 net loss attributable to shareholders was $18.5 million ($0.74 per share). Excluding the impairment charge, adjusted net income attributable to shareholders was $4.4 million ($0.17 per share).

  • Operating cash flow before working capital changes for Q4 was $11.8 million, compared with $7.0 million in Q4 of 2012.

  • Q4 consolidated payout percentage(2) was 64.7%, or 53.3% for the year.

  • On December 10, 2013, Britco announced that it has entered into contracts with customers to design and build workforce accommodations valued, in aggregate, at approximately $31.4 million. The projects are scheduled for construction at Britco's modular construction facilities in British Columbia throughout 2014 and are destined for project sites located in Northern British Columbia and Alberta.

  • On December 19, 2013, WesternOne announced the closing of a public offering of common shares for $45 million. The net proceeds from the offering have been used (i) to fund its capital expenditure program including purchases of rental fleet equipment, modular space structures for lease, production equipment and production plant upgrades; (ii) for debt repayment; and (iii) working capital requirements and for other corporate purposes.

  • On January 15, 2014, Britco announced that it has entered into a $40 million supply agreement. Britco is providing modular buildings in Canada, the United States and Australia for a customer with operations in each country.

  • On February 7, 2014, WesternOne announced that all of the 8.5% Convertible Unsecured Subordinated Debentures due December 31, 2015 (the "Debentures") that are outstanding on March 20, 2014 (the "Redemption Date") will be redeemed on the Redemption Date. Pursuant to the trust indenture of the Debentures, WesternOne also announced that it is exercising its right to satisfy its obligation to pay all of the redemption price of $1,000 per Debenture (the "Redemption Price") payable to holders of the Debentures by issuing freely tradeable common shares of WesternOne obtained by dividing the Redemption Price by 95% of the Current Market Price (as defined in the trust indenture of the Debentures) of the common shares of WesternOne.

  • On February 28, 2014, Britco announced that it will be an Official Sponsor of the 2015 Canada Winter Games, providing in-kind contributions for the Host Society's modular building requirements. Britco is the exclusive modular building supplier for the event that will be held in Prince George, British Columbia from February 15 to March 1, 2015.  The 2015 Canada Winter Games will be the largest multi-sport and cultural event to ever be held in Prince George and northern British Columbia and is forecast to generate an economic impact of approximately $90 million.

"2013 marked a year of strong organic growth in our WIS platform in Western Canada, as we achieved double-digit growth in our operating results due to fleet investments and expansions into new niche markets. During the year Britco significantly expanded its capability to execute turn-key workforce accommodations projects and achieved success in securing major projects in Western Canada while continuing to grow its business in the United States," said Mr. Rob King, Chief Executive Officer. "We are excited about 2014 as we continue to execute our long-term strategic plan that is focused on growth in the energy, construction and infrastructure sectors."

Summary Financial Overview Three months ended
December 31,
Year ended
December 31,
($ millions except per share /unit amounts)
2013 2012 2013 2012
Revenue $     103.8 $    54.5 $   377.6 $  217.8
Gross Profit 18.5 16.5 82.5 67.0
         
Adjusted EBITDA (1) (2)        9.7     10.9 46.7 47.3
         
Adjusted Net Income (Loss) (1) (2) 4.4 3.5 8.9 (10.2)
         
Net Income (Loss) (2) (18.5) 3.5     (14.0)   (10.2)
Earnings (Loss) per Share/Unit (2)        
  - Basic (0.74) 0.16 (0.59)   (0.50)
  - Fully Diluted (0.74) 0.15 (0.59) (0.50)
         
Distributable Cash Generated (1) 6.0 8.1 27.4    29.8
Dividends/Distributions Declared 3.9 3.2 14.6 12.2
Distributable Cash per Share (4) 0.24 0.38 1.14 1.47
Dividends/Distributions Declared per Share 0.15 0.15 0.60 0.60
         
Payout Percentage (3) 64.7% 39.9% 53.3% 41.0%

___________________
Notes:
(1)      "Adjusted EBITDA", "Adjusted Net Income (Loss)" and "Distributable Cash" are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS. "Adjusted EBITDA" refers to net income (loss) before interest, income taxes, depreciation, amortization, gain/loss on financial derivatives relating to changes in the fair market value of the fixed interest rate swap, business acquisition and trust conversion costs, debenture issuance costs, gain/loss on debentures relating to changes in their fair values, gain/loss on trust unit issuances relating to conversion of debentures, gain/loss on WesternOne 's exchangeable units relating to changes in their fair values, share/unit based compensation, foreign exchange gains/losses, and write-down of capital assets, intangible assets and goodwill. "Adjusted Net Income (Loss)" refers to net income (loss) excluding goodwill and intangible asset impair charges. "Distributable Cash" refers to cash available for paying dividend/distribution to the shareholders/unitholders by WesternOne. For a full description of Adjusted EBITDA, Adjusted Net Income (Loss) and Distributable Cash refer to "Non-IFRS Measures" in the MD&A dated March 13, 2014.
(2)      Represents amount attributable to shareholders/unitholders.
(3)      Amounts calculated using distributable cash and dividends/distributions declared for the related period, not on per share/unit amounts. Calculated as dividend/distribution declared divided by distributable cash generated.
(4)      Calculated based on basic weighted average number of shares/units.

Conference Call

Rob King, CEO of WesternOne and the management team will host a conference call at 4:30pm (Eastern time) or 1:30pm (Pacific time), on Thursday, March 13, 2014, to review the financial results and corporate developments for the year ended December 31, 2013.

To participate in this conference call, please dial one of the following numbers approximately 10 minutes prior to the commencement of the call, and ask to join the WesternOne conference call.

Dial in numbers:  Toll Free....................................... 1-888-390-0546
  International or Local Toronto.....  1-416-764-8688

Conference Call Replay

If you cannot participate on March 13, 2014, a replay of the conference call will be available by dialing one of the following replay numbers. You will be able to dial in and listen to the conference two hours after the meeting end time, and the replay will be available until March 20, 2014. Please enter the Replay ID number 706943 followed by the # key.

Replay Dial-In:  Toll Free ..................................... 1-888-390-0541
  International or Local Toronto.....  1-416-764-8677

Forward-looking Information

Certain statements in this press release may constitute "forward-looking" information that involves known and unknown risks, uncertainties and other factors, and it may cause actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information. Forward-looking information is identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. Such information includes, without limitation, statements with respect to: the estimated contract value, project size, and start and completion dates in relation to the newly signed design and construction contracts, the host city of the 2015 Canada Winter Games (the "Games") and Britco's involvement with the Games, the growth prospects in sectors where WesternOne's businesses are conducted and the related long-term strategic plan that WesternOne will implement, and the redemption of the Debentures. Actual events or results may differ materially.

Forward-looking information contained in this press release is based on certain key expectations and assumptions made by WesternOne, including, without limitation: the outlook of WesternOne's business and the economy in Western Canada, the US and Australia, the supply and demand for WesternOne's products and services and management's assessment of future plans and operations. Although the forward-looking information contained in this press release is based upon what the WesternOne's management believes to be reasonable assumptions, WesternOne cannot assure investors that actual results will be consistent with such information. Forward-looking information reflects current expectations of management regarding future events and operating performance as of the date of this press release. Such information involves significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information, and a description of these factors can be found under "Risk Factors" in WesternOne's Annual Information Form dated March 28, 2013 and Management's Discussion and Analysis dated March 13, 2014, which are available on SEDAR (www.sedar.com).

The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information reflects management's current beliefs and is based on information currently available to WesternOne. The forward-looking information is made as of the date of this press release and WesternOne assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.

About WesternOne

WesternOne seeks to acquire and grow businesses in the construction and infrastructure services sectors in order to generate stable and growing dividends to its shareholders and to achieve capital appreciation.

Additional Information

Additional information relating to WesternOne and other public filings, is available on SEDAR at www.sedar.com or on WesternOne's website at www.weq.ca.

Trading Symbols

Toronto Stock Exchange: WEQ, WEQ.DB, WEQ.DB.B and WEQ.DB.C

THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE.

 

SOURCE WesternOne Inc.

For further information:

For more information about this press release, please contact:

Carlos Yam, Chief Financial Officer
WesternOne Inc.
Suite 910, 925 West Georgia Street
Vancouver, BC  V6C 3L2
Phone:  (604) 678-4042
E-mail:  cyam@weq.ca

For investor relations information, please contact:

Andrew Greig, Manager of Investor Relations
WesternOne Inc.
Suite 910, 925 West Georgia Street
Vancouver, BC  V6C 3L2
Phone:  (604) 678-4042
E-mail:  agreig@weq.ca