Legumex Walker Reports Fourth Quarter and 2013 Financials
- Special Crops Segment Doubles Fourth Quarter EBITDA1/PCC Reaches Breakeven Production Despite North American Rail Congestion -
WINNIPEG, March 24, 2014 /CNW/ - Legumex Walker Inc. (TSX: LWP) (the "Company") today reported its financial results for the fourth quarter and full year ended December 31, 2013. All figures are in Canadian dollars unless otherwise stated.
Highlights for the Fourth Quarter (all comparative metrics are relative to the fourth quarter of 2012, unless otherwise stated):
Oilseed Processing (Canola) Segment
- First full quarter of commercial production for the Pacific Coast Canola (PCC) plant;
- Revenue of $33.9 million from 57,700 tonnes sold and 51,900 tonnes crushed (about 56% of operating capacity);
- Adjusted gross profit1 of $1.8 million, after excluding $1.6 million of unrealized losses on deferred commodity hedging contracts, compared with an adjusted gross loss1 of $0.9 million last year;
- EBITDA1 of $0.7 million after excluding unrealized losses on deferred commodity hedging contracts compared with a loss before interest, taxes, depreciation and amortization1 of $1.5 million last year;
Special Crops Segment
- Revenue of $101.5 million (126,300 tonnes shipped) compared with $103.5 million (118,300 tonnes shipped);
- Adjusted gross profit1 increased 42% to $6.9 million from $4.9 million;
- EBITDA1 doubled to $4.2 million from $2.1 million;
- Consolidated revenues increased 30% to $135.3 million from $104.0 million;
- Adjusted gross profit1 increased 81% to $7.1 million from $3.9 million;
- EBITDA1 increased to $3.0 million after excluding PCC's unrealized losses on deferred commodity hedging contracts from a loss before interest, taxes, depreciation and amortization1 of $1.0 million last year.
Highlights for the Full Year 2013 (all comparative metrics are relative to 2012, unless otherwise stated):
Oilseed Processing (Canola) Segment
- Revenue of $81.0 million from 127,100 tonnes sold and 132,700 tonnes crushed;
- Adjusted gross loss1 of $5.0 million after excluding $1.6 million of unrealized losses on deferred commodity hedging contracts compared with $0.9 million last year, reflecting the $6.8 million adjusted gross loss1 from commissioning and initial commercialization of the PCC Plant in the first three quarters of the year, which was offset by the $1.8 million of adjusted gross profit1 in the fourth quarter;
- Loss before interest, taxes, depreciation and amortization1 of $8.7 million, after excluding unrealized losses on deferred commodity hedging contracts, compared with a loss of $2.6 million last year;
Special Crops Segment
- Revenue increased 20% to $352.6 million (412,000 tonnes shipped) from $294.3 million (349,400 tonnes shipped);
- Adjusted gross profit1 increased 36% to $27.1 million from $20.0 million;
- EBITDA1 increased 48% to $15.6 million from $10.5 million;
- Revenue increased 47% to $433.6 million from $294.8 million;
- Adjusted gross profit1 increased by 8% to $20.5 million from $19.0 million;
- Loss before interest, taxes, depreciation and amortization1 for 2013 was $0.2 million, after excluding PCC's unrealized losses on deferred commodity hedging contracts, compared to EBITDA1 of $1.4 million last year.
Highlights Subsequent to the End of 2013
- PCC entered into agreements with Macquarie Bank Limited that provide additional liquidity of up to US$45 million through 1) a three-year, US$10 million working capital borrowing facility; 2) a US$15 million hedging line; and 3) up to US$20 million for feed stock purchase transactions;
- PCC finalized a six-month contract to deliver, by truck, super degummed canola oil to Imperium Renewables;
- PCC's Non-GMO canola meal received Non-GMO Project Verification;
- PCC expanded the geographic area of its truck canola origination program to include parts of western Canada.
"Fiscal 2013 was a year of tremendous success on our strategic priorities, and that was reflected in our financial results for the fourth quarter," said Joel Horn, President and Chief Executive Officer, Legumex Walker Inc. "The realignment of our Special Crops segment along three product lines to focus on specific markets and customers early in the year contributed to an impressive 48% increase in EBITDA1 for the year and a doubling of EBITDA1 for the fourth quarter versus last year."
"PCC continues to produce high quality products, crush margins are at historic highs and the plant is capable of running at full capacity. We successfully resolved the outbound logistical challenges we highlighted last November by expanding our book of business with local, truck-delivered customers. Now the first shipments under our new truck-delivered Canadian seed program have started arriving at the plant, providing a near-term solution to the limited seed availability due to the North American rail congestion we highlighted in January."
"Seed availability will improve naturally in the second half of the year as the local winter and spring canola crops are harvested in the third and fourth quarters - the majority of which will be delivered to PCC by truck - allowing us to ramp up the facility to full production."
"With Special Crops operating at new levels of profitability and PCC poised to reach its full potential, we are well positioned for a very strong year in 2014. Simply eliminating the EBITDA1 loss in PCC from the commissioning and initial commercialization of the plant in 2013 would add $9.4 million of EBITDA1."
Net loss attributable to shareholders for the fourth quarter of 2013 was $7.1 million, or $0.44 per share (and included a loss of $3.1 million, or $0.19 per share, for PCC), compared with a net loss of $5.4 million, or $0.34 loss per share, for the fourth quarter of 2012.
Net loss attributable to shareholders for the 2013 year was $25.4 million, or $1.56 per share (and included a loss of $17.0 million, or $1.04 per share, for PCC), compared with $12.6 million, or $0.89 per share for 2012.
Cash flow provided by operations in 2013, including Special Crops and Corporate, was $1.7 million offset by cash flow used in operations by PCC of $13.5 million.
This news release contains references to "Adjusted gross profit", "EBITDA," "Cash Flow from Operations", "Cash Flow Provided by Operations" and "Non-recurring Costs". Adjusted gross profit is defined for the purposes of this news release as gross profit before depreciation and amortization. EBITDA is defined for the purposes of this news release as earnings from operations before other income and expenses, depreciation and amortization, financing costs, non-recurring costs and income taxes. Cash Flow from Operations and Cash Flow Provided by Operations is defined for the purposes of this news release as the cash provided by or used in operating activities excluding non-cash working capital changes. Management believes excluding the seasonal swings of non-cash working capital assists in evaluation of long-term liquidity. Non-recurring Costs is defined as one-time costs deemed to be non-recurring by management relating to acquisitions, integration and other incorporation or amalgamation activities. Management believes that Adjusted Gross Profit, EBITDA and Cash Flow from Operations are useful supplemental measures of cash flow prior to finance costs, capital expenditures, income taxes and other non-cash items included in earnings. Management uses Adjusted Gross Profit, Cash Flow from Operations as a financial measure of liquidity. EBITDA and Cash Flow from Operations are not recognized earnings measures under Canadian Generally Accepted Accounting Principles or IFRS (collectively referred to herein as "Canadian GAAP") and do not have standardized meanings prescribed by Canadian GAAP. Therefore, Adjusted Gross Profit, EBITDA and Cash Flow from Operations may not be comparable to similar measures presented by other issuers. Investors are cautioned that EBITDA and Cash Flow from Operations should not be construed as an alternative to net earnings or loss (which are determined in accordance with Canadian GAAP) as an indicator of the performance of the Company or as a measure of liquidity and cash flows. The Company believes that Adjusted Gross Profit, EBITDA and Cash Flow from Operations are useful supplemental measures of cash flow prior to debt service, investing and financing activities and income taxes. The Company's method of calculating EBITDA and Cash Flow from Operations may differ materially from the methods used by other public companies and, accordingly, may not be comparable to similarly titled measures used by other public companies. A reconciliation of Adjusted Gross Profit and EBITDA to Net Earnings (loss) and a reconciliation of Cash Flow from Operations to Cash Flow provided by Operating Activities are set out in section 12 of the MD&A (as defined below).
Financial Statements and MD&A
Legumex Walker's Financial Statements and Management's Discussion and Analysis ("MD&A") for the period ended December 31, 2013 are available on the Company's website at www.legumexwalker.com in the "Investors" section and www.sedar.com.
Legumex Walker will host a conference call on Tuesday, March 25, 2014 at 8:30 a.m. ET to discuss its fourth quarter 2013 financial results. To access the conference call by telephone, dial (647) 427-7450 or (888) 231-8191. Please connect approximately 10 minutes prior to the start of the call to ensure access.
A recording of the conference call will be archived for replay by telephone until Tuesday, April 1, 2014 at midnight. To access the archived conference call, dial 1-855-859-2056 and enter the reservation number 3527213.
A live audio webcast of the conference call will be available at http://www.legumexwalker.com/investors-presentations.php. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast.
About Legumex Walker Inc.
Legumex Walker is a growth-oriented processor and merchandiser of special crops (sunflower seed, flax and canary seed), pulses (lentils, peas, beans and chickpeas) and canola products. The Company is one of the largest processors of special crops and pulses in Canada. Legumex Walker has 15 processing facilities strategically located in key growing regions in the Canadian Prairie Provinces, the American Midwest, and China, global sales, logistics, and distribution platform and access to multimodal transportation capabilities. In addition, the Company has an 84 percent interest in Pacific Coast Canola, LLC, which operates the first and only commercial-scale canola oilseed processing facility west of the Rocky Mountains.
Cautionary Note on Forward-looking Statements
This press release contains "forward‐looking information" within the meaning of Canadian securities laws which may include, but are not limited to, statements relating to the PCC plant reaching its full potential, the Company being positioned for a strong year in 2014 and the impact on 2014 results of the elimination of the loss in PCC from the commissioning and initial commercialization of the plant. Such forward‐looking information reflects the Company's views with respect to future events and is subject to risks, uncertainties and assumptions, including the risk that the PCC plant will not reach its full potential and the risk that the Company's 2014 financial results will be below expectations and will not exceed its 2013 results as a result of various factors, including as a result of problems related to the operation of the PCC Plant, weather related risks, the demand for and availability of rail, port and other transportation services, the actual results of harvests, fluctuations in the price of pulses and other crops and canola oil prices, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes, risks relating to the integration of acquisitions, as well as those factors referred to in the section entitled "Risk Factors" in the Company's Management's Discussion and Analysis for the period ended December 31, 2012 and the Company's 2013 Annual Information Form, which are available on SEDAR at www.sedar.com and which should be reviewed in conjunction with this document. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Although the Company believes the assumptions inherent in forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this press release. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.
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