Wheels Announces Fourth Quarter and Year End 2013 Results

Revenue Up 36.6%, Gross Margin Up 38%, EBITDA Up 32.2%

TORONTO, March 26, 2014 /CNW/ - Wheels Group Inc. ("Wheels" or the "Company") (TSXV: WGI) (OTCQX: WGIJF) today announced its results for the fourth quarter and year ended December 31, 2013.

Revenue for the year was $355.2 million, an increase of $95.3 million or 36.6% over the prior year eleven month period ended December 31, 2012. Gross margin was $47.9 million, an increase of $13.2 million or 38.0%. Adjusted EBITDA was $9.6 million, an increase of $2.3 million or 32.2%. Adjusted EBITDA as a percentage of revenue for the year was 2.7% compared to 2.8% for the prior year eleven month period.

Revenue for the quarter ended December 31, 2013 was $93.8 million, an increase of $37.8 million or 67.6%, compared to $56.0 million in the prior year two month period ended December 31, 2012. Gross margin for the quarter was $13.2 million, an increase of $5.2 million or 65.4%. Adjusted EBITDA for the quarter prior to the impact of restructuring costs was $3.3 million, an increase of $1.2 million or 55.8%. Adjusted EBITDA as a percentage of revenue for the quarter was 3.6%, compared to 3.8% for the prior year two month period.

                   
Financial Highlights   For the quarter ended4   For the year ended4
(in millions of dollars, except per share data and number of
shares outstanding)
  Three months
ended
  Two months
ended
  Twelve months
ended
  Eleven months
ended
    Dec 31, 2013   Dec 31, 20123   Dec 31, 2013   Dec 31, 20123
Revenue   93.8   56.0   355.2   260.0
Gross margin   13.2   8.0   47.9   34.7
Net income (loss)   0.7   0.9   (0.0)   0.1
Earnings per share1                  
  - Basic   0.01   0.01   0.00   0.00
  - Diluted   0.01   0.01   0.00   0.00
                   
Adjusted EBITDA2   3.3   2.1   9.6   7.3
Adjusted EBITDA per share1, 2   0.04   0.02   0.11   0.08
 
Weighted average number of common shares outstanding   89,556,568   88,105,822   89,556,568   88,105,822
1 Based on weighted average number of common shares outstanding.
2 See Adjusted EBITDA below.
3 Results reflect the acquisition of Wheels MSM ("MSM") completed on October 1, 2012.
4 As a result of a change in fiscal year end in the prior year, the corresponding reporting periods for the quarter and year ended December 31,
2013 are two months and eleven months ended December 31, 2012 respectively.
   

As the Company changed its fiscal year end in the prior year, comparison is provided with unaudited figures for the three months and twelve months ended December 31, 2012 to assist in assessing the Company's results.

Revenue for the year ended December 31, 2013 increased $74.8 million or 26.7% over the comparable unaudited twelve month period ended December 31, 2012. Revenue from MSM was $35.9 million of the increase, while revenue from the remainder of the operations increased $38.9 million or 14.4%. Revenue for the quarter ended December 31, 2013 increased $8.3 million or 9.7% over the comparable unaudited three month period ended December 31, 2012.

In the Canadian segment, revenue for the year was $175.6 million, an increase of $46.8 million or 36.3% over the comparable twelve month period. Revenue from MSM was $18.7 million of the increase, while revenue from the remainder of the segment increased $28.1 million or 22.7%. Revenue for the quarter was $50.3 million, an increase of $8.1 million or 19.1% over the comparable unaudited three month period.

In the US segment, revenue for the year ended December 31, 2013 was $183.3 million, an increase of $30.6 million or 20.0% over the comparable twelve month period. Revenue from MSM was $19.2 million of the increase, while revenue from the remainder of the segment increased $11.4 million or 7.8%. Revenue for the quarter was $44.6 million, an increase of $0.7 million or 1.7% over the comparable unaudited three month period.

Gross margin for the year ended December 31, 2013 increased $10.4 million or 27.8% over the comparable unaudited twelve month period. MSM contributed $7.0 million of the increase, while gross margin from the rest of the operations grew $3.4 million or 9.8%. Gross margin for the quarter increased $1.1 million or 8.6% over the comparable unaudited three month period.

"Wheels produced solid results in 2013. This included strong organic growth with positive contributions from our acquisitions, Wheels MSM and BBL," said Doug Tozer, Wheels Chief Executive Officer. "We continued to invest in the business to further enhance our service offerings and sales capabilities. Even with this investment, adjusted EBITDA for the year increased significantly over the prior year. We made management changes in the fourth quarter to streamline our operations and better align Wheels' business units to support our continued growth."

Adjusted EBITDA

The term adjusted EBITDA is used to describe earnings before any deduction for income taxes, net finance cost, depreciation, amortization, one-time non-recurring expenses, discontinued operations overhead adjustment and share-based compensation. EBITDA and adjusted EBITDA are metrics used by many investors and analysts to compare organizations on the basis of ability to generate cash from operations. Management considers adjusted EBITDA (as defined) to be an indirect measure of operating cash flows, which is a significant indicator of the success of any business. EBITDA and adjusted EBITDA are not intended to be representative of cash flow from operations or results of operations determined in accordance with IFRS.

EBITDA and adjusted EBITDA are not recognized measures under IFRS. Wheels' method of calculating EBITDA and adjusted EBITDA may differ from methods used by other companies, and accordingly may not be comparable to similar measures presented by other companies.

The financial statements and related Management's Discussion and Analysis will be available on the Company's website at www.wheelsgroup.com and on SEDAR at www.sedar.com.

Caution Regarding Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking statements within the meaning of Canadian securities laws. Forward-looking statements can be generally identified by the use of words such as "anticipate", "continue", "estimate", "expect", "expected", "intend", "may", "will", "project", "plan", "should", "believe", and similar expressions. Specifically, forward looking statements in this news release include statements respecting certain future expectations about: prices and demand for services and capital expenditures. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation the risks and uncertainties detailed under the "RISK FACTORS" section of the Company's latest Annual Information Form and the "RISKS AND UNCERTAINTIES" section of the Company's most recent Management's Discussion and Analysis.

Although the Company believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results may be consistent with such forward-looking statements, and they should not be unduly relied upon. With respect to the forward-looking statements contained in this news release, the Company has made assumptions regarding: there being no significant disruptions affecting the Company's operations whether due to labour disruptions, power disruptions, transportation disruptions, damage to equipment, adverse weather conditions or otherwise, the ability of the Company to obtain equipment, transportation, services and supplies in a timely manner to carry out its activities and at prices consistent with current levels or in line with the Company's expectations, the ability of the Company to respond to competitive pressures in the marketplace, including the entry of new competitors, direct marketing efforts by railroads or marketing efforts of asset-based carriers, the ability of the Company to successfully protect its data from cyber-attack, the ability of the Company to maintain or enhance its information technology systems, fuel shortages or fluctuations in fuel prices, the ability of the Company to access tax losses and tax attributes, the ability of the Company to obtain financing on acceptable terms, currency, exchange and interest rates being consistent with current levels or in line with the Company's expectations, and global economic performance, including the financial condition of its customers, particularly, in the retail, consumer products and durable goods sectors.

The Company disclaims any intention or obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.

Further information can be found in the disclosure documents filed by Wheels Group Inc. with the securities regulatory authorities, available under the profile of the Company at www.sedar.com.

About Wheels

Founded in 1988, Wheels is a leading North American third party logistics (3PL), supply chain logistics provider. As a non-asset provider, the Company develops advanced supply chain solutions delivered through its qualified partner network of over 6,000 truck, rail, air and ocean carriers. Wheels serves consumer goods, food and beverage, manufacturing and retail clients through 26 offices throughout Canada and the US. Wheels has been named one of Canada's Best Managed Companies since 1997, Platinum since 2003. Wheels has been named one of North America's Top 100 3PL Companies and one of the Top 100 Food 3PL's.

Neither the TSX Venture Exchange, nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

 

SOURCE Wheels Group Inc.

For further information:

Patrick J Marshall
VP Corporate Development & Investor Relations
Tel: (905) 602-2700
www.wheelsgroup.com