The Churchill Corporation Announces Improved Fourth Quarter and Annual 2013 Results and Record Backlog; Declares Quarterly Dividend

Continued growth in sequential and comparative quarterly revenue, net earnings and EBITDA while securing a record $2.1 billion of backlog

CALGARY, March 17, 2014 /CNW/ - The Churchill Corporation (TSX: CUQ, CUQ.DB) ("Churchill" or the "Corporation") today announced its 2013 annual and fourth quarter results and declared a quarterly dividend of $0.12 per common share.

FINANCIAL HIGHLIGHTS

                         
  Three months ended
December 31
  Year ended
December 31
($millions, except per share amounts) 2013   2012   2013   2012
Contract revenue $ 297.0   $ 289.9   $ 1,106.5   $ 1,222.1
Contract income   35.5     30.6     113.9     114.2
EBITDA from continuing operations   12.8     8.9     41.1     39.0
Net earnings (loss)   3.3     (62.8)     5.1     (62.3)
Net earnings per common share - Basic   0.13     (2.56)     0.21     (2.55)
  - Diluted   0.13     (2.56)     0.21     (2.55)
              As of Dec. 31,
2013
  As of Dec. 31,
2012
Backlog              $ 2,116.2   $ 1,690.5
Long-term debt (excluding current portion)               50.3     51.9
Convertible debentures               81.9     79.2
Total assets               694.7     742.4

 

These financial results are presented in conformance with International Financial Reporting Standards ("IFRS"). All figures are in Canadian dollars unless otherwise noted. Certain financial and operational measures referred to in this press release, including "EBITDA" and "backlog", are not prescribed measures under IFRS. For a description of these measures, see the Terminology section in Churchill's 2013 Management Discussion and Analysis.

  • Backlog increased 25.2% to a record $2,116.2 million as at December 31, 2013 from $1,690.5 million at December 31, 2012. The backlog consists of approximately 84% low-risk contracts, including 59% construction management ("CM") work and 25% cost-plus arrangements. Tendered (hard-bid) work represents approximately 16% of the backlog.
  • Annual contract revenue was $1,106.5 million compared to $1,222.1 million in 2012. The change in contract revenue reflects the timing of major projects as General Contracting progressed through the pre-construction and early construction stages on several new projects in 2013. This was partially offset by year-over-year increases in Commercial Systems and Industrial Services revenue.
  • Annual EBITDA increased 5.4% to $41.1 million, from $39.0 million in 2012.  The higher EBITDA reflects improved project execution in each of Churchill's core segments, partially offset by intersegment profit eliminations.
  • Consolidated net earnings increased to $5.1 million in 2013, from a $62.3 million loss in 2012, yielding net earnings and diluted earnings per share of $0.21.  Net earnings results in 2012 were negatively affected by an impairment loss of $64.6 million, which did not recur in 2013.
  • The Corporation ended 2013 with a strong balance sheet, reflecting improved cash management and long term debt reduction through the year. As at December 31, 2013, Churchill's net debt-to-EBITDA ratio was an improved 2.6x.
  • Subsequent to the year-end, Churchill's Board of Directors declared a quarterly dividend of $0.12 per common share.  The dividend will be paid on April 15, 2014 to shareholders of record on March 28, 2014.  The Corporation has a dividend reinvestment plan in place; details are available on Churchill's website (www.churchillcorporation.com).

"We are pleased with the progress made in 2013 and confident that we have the foundation in place to support better results in the future," said David LeMay, Churchill's CEO. "As we transition into 2014, we are well positioned with a record backlog of higher margin projects and the project leadership/teams to deliver superior project execution. Our strong base in Western Canada continues to provide significant opportunities to sustain our backlog funnel and to fuel the continued growth of our business."

FOURTH QUARTER HIGHLIGHTS

  • Consolidated revenue for the fourth quarter of 2013 increased 2.5% to $297.0 million, from $289.9 million in Q4 2012. Revenue from the General Contracting segment decreased by $15.7 million or 10.3%, primarily reflecting project timing. Several new projects were in the pre-construction or early construction stages during the fourth quarter in 2013.  Commercial Systems revenue increased by $10.9 million or 22.1%, reflecting additional work related to flood recovery efforts in Southern Alberta.  The Industrial Services segment increased revenue by $13.0 million or 13.5% as it responded to strong levels of activity in Alberta's oil sands and Saskatchewan's mining sectors.
  • Fourth quarter 2013 EBITDA increased 43.8% to $12.8 million, from $8.9 million during the same period in 2012. The improved EBITDA results primarily reflect strong project execution and the positive impact of higher revenues.
  • Driven by strong revenue and EBITDA performance, net earnings and diluted net earnings per share increased to $0.13 in the fourth quarter of 2013, from ($2.56) during the same period in 2012.
  • Record backlog of $2,116.2 million as at December 31, 2013, (December 31, 2012 - $1,690.5 million) was comprised of General Contracting segment backlog of $1,615.1 million (December 31, 2012 - $1,115.8 million); Commercial Systems segment backlog of $164.7 million (December 31, 2012 - $194.3 million); and Industrial Services segment backlog of $336.4 million (December 31, 2012 - $380.4 million).
  • Churchill's complete Financial Statements, Notes to the Financial Statements, Management's Discussion and Analysis and Annual Information Form will be filed on SEDAR (www.sedar.com) on March 17, 2014.  These documents will also be available in the Investors section of Churchill's website at www.churchillcorporation.com.

OUTLOOK

Churchill, through its three operating business segments, remains well positioned to compete for projects in Western Canada.

  • Stuart Olson Dominion anticipates revenue growth in 2014 together with sequential quarter-over-quarter growth in EBITDA margins as projects transition from tendering into construction phases.
  • Canem anticipates 2014 revenue and EBITDA results consistent with 2013 results.
  • The Industrial Services segment expects to grow revenues while maintaining current EBITDA margins.

Churchill will hold a conference call and webcast to discuss its 2013 Annual and Fourth Quarter results tomorrow at 7:30 a.m. Mountain Time (9:30 a.m. Eastern). The webcast will be broadcast live at http://www.newswire.ca/en/webcast/detail/1322663/1460855 and will also be available for replay in the News & Events section at www.churchillcorporation.com.  Financial analysts and institutional investors who wish to ask questions during the conference call are invited to call 1-800-319-4610 or email their questions directly to investor relations via the webcast.

2014 ANNUAL GENERAL MEETING

Churchill will hold its Annual General Meeting of shareholders on Thursday, May 22, 2013 (the "Meeting") at the Metropolitan Conference Centre, 333 - 4th Avenue SW, Calgary, Alberta.  The Meeting will start at 2:00 p.m. (Mountain Time) and the agenda will address the standard annual business items.

About The Churchill Corporation

The Churchill Corporation provides building construction, commercial and industrial electrical contracting, earthmoving and industrial insulation services to an array of public and private sector clients. Churchill operates office locations throughout British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. Churchill common shares and convertible debentures are listed on the Toronto Stock Exchange under the symbols "CUQ" and "CUQ.DB", respectively. www.churchillcorporation.com

Forward Looking Information

This press release contains certain statements that may constitute forward-looking information within the meaning of applicable securities laws. This forward-looking information includes, without limitation, the statements within the section entitled "Outlook" pertaining to expected margin growth or maintenance, revenue growth, project status and project fees. Often, but not always, forward-looking information can be identified by the use of such words as "may", "will", "expect", "believe", "plan", "intend", "estimate", "outlook", "forecast", "should", "anticipate" and other similar terminology, including statements concerning possible or assumed future results. Forward-looking information is based on management's reasonable assumptions, analysis and estimates in respect of its experience and perception of trends, current economic conditions, government policies and expected developments, as well as other material factors that it considers to be relevant at the time of making such statements.

The forward-looking information in this press release is included solely for the purpose of assisting investors in understanding the Corporation's financial position and the results of its operations as at the date hereof.  By its nature, forward-looking information involves known and unknown risks and uncertainties, which give rise to the possibility that management's assumptions, analysis and estimates will be incorrect and that the Corporation's anticipated results will not be achieved. Although the Corporation believes that the statements with respect to forward-looking information are reasonable and current, such statements should not be interpreted as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. Forward-looking information is necessarily subject to a number of factors that may cause actual results to differ materially from those results implied by the expectations suggested by such information. Those factors include, without limitation, the risks and uncertainties described in the Corporation's Annual Information Form filed with the securities regulatory authorities in Canada under the Corporation's profile at www.sedar.com.  Readers are encouraged to consider the foregoing risks and other factors carefully when evaluating the forward-looking information and are cautioned not to place undue reliance upon such information when making investment decisions.

The forward-looking information in this press release is current to the date hereof, and is subject to change following such date.  While the Corporation may elect to do so, unless required by applicable law, it undertakes no obligation to update this information to reflect new information or circumstances at any particular time.

 

SOURCE The Churchill Corporation

For further information:

David LeMay
Chief Executive Officer
The Churchill Corporation
(403) 685-7777
Email: inquiries@churchill-cuq.com 

Daryl Sands
Chief Financial Officer
The Churchill Corporation
(403) 685-7777
Email: inquiries@churchill-cuq.com

James Hirsch
Manager, Corporate Development and Planning
The Churchill Corporation
(403) 685-7777
Email: inquiries@churchill-cuq.com