The Churchill Corporation Reports Improved First Quarter 2014 Results and Record Backlog; Declares Quarterly Dividend
Quarterly Revenue up 16%, EBITDA up 18%, Backlog Increases to $2.2 billion
CALGARY, May 6, 2014 /CNW/ - The Churchill Corporation (TSX: CUQ, CUQ.DB) ("Churchill" or the "Corporation") today announced its first quarter 2014 results and declared a quarterly dividend of $0.12 per common share.
Three months ended
|($millions, except per share amounts)||2014||2013|
|Net earnings per common share||- Basic||(0.02)||(0.05)|
As of Mar. 31,
As of Dec. 31,
|Long-term debt (excluding current portion)||71.4||50.3|
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 first quarter 2014 Management Discussion and Analysis.
- Backlog increased to a record $2,210.0 million as at March 31, 2014, up $93.8 million from $2,116.2 million at December 31, 2013. The backlog is made up primarily of lower-risk contracts including 66% construction management work and 17% cost-plus arrangements. Tendered (hard-bid) work represents approximately 17% of the backlog.
- First quarter consolidated contract revenue increased 15.9% to $274.6 million, from $236.8 million in the first quarter of 2013.
- General Contracting revenue increased by $17.2 million or 14.6%, reflecting a strong backlog of work, increased commercial and institutional activity in Alberta and B.C. and continued growth within the segment's industrial buildings division.
- Commercial Systems revenue increased by $12.5 million or 26.2%, supported by the ramp up of a number of significant projects in British Columbia and additional work related to flood recovery efforts in Southern Alberta.
- Industrial Services revenue increased by $11.0 million or 13.9%, reflecting increased activity levels in Alberta's oil sands and Northern Ontario.
- First quarter EBITDA increased 17.6% to $8.0 million, from $6.8 million in Q1 2013. The year-over-year improvement reflects increased revenue with stable margin performance.
- First quarter net loss was reduced to $0.6 million (fully diluted loss per share of $0.02), from a net loss of $1.2 million (fully diluted loss per share of $0.05) in Q1 2013. The $0.6 million improvement was driven by stronger results from the General Contracting and Commercial Systems segments.
- In the first quarter of 2014 Churchill announced $250 million of new contract awards, including the Mount Royal University Library in Calgary, a number of hospital and health care facility projects in British Columbia and Alberta, and a major sports and entertainment centre project in Western Canada. In addition, the Corporation realized a number of scope increases on existing projects and other awards in the first quarter, generating a book-to-bill ratio of 1.3 to 1.0.
- Churchill's Board of Directors declared a first quarter dividend of $0.12 per common share. The dividend will be paid on July 15, 2014 to shareholders of record on June 30, 2014. The Corporation has a dividend reinvestment plan in place; details are available on Churchill's website (www.churchillcorporation.com).
"2014 is off to a good start with first quarter results on track with our expectations for the year," said David LeMay, Churchill's CEO. "Our revenue continues to grow, supported by our record backlog. Profitability is also improving as we enhance project execution and benefit from an attractive project mix weighted towards lower-risk contracts. Overall we anticipate an increase in activity levels and revenue in 2014, combined with a consistent consolidated EBITDA margin."
"Strategically, we continue to pursue our goal of becoming an integrated full-service construction contractor operating in the commercial, institutional and industrial construction spaces. In support of this goal, we will be transitioning to a common brand in the coming months. We are also continuing to pursue tuck-in acquisitions that strengthen our service offering. We are currently developing a strategy to provide capital both for future acquisitions and to repay the $86.3 million convertible debentures at maturity in June 2015," said Mr. LeMay.
Churchill is well positioned as a leading supplier of construction services in Western Canada. With strong commercial, institutional and industrial activity across the West, the Corporation has significant opportunities to sustain its backlog and to fuel continued growth across its three operating segments.
- The General Contracting segment anticipates continued strong revenue growth through the balance of 2014, with EBITDA margins expected to modestly increase in the latter half of the year as projects transition from tendering to construction phases and other projects move towards completion with risk contingencies converted into additional margin.
- Commercial Systems anticipates moderate year-over-year revenue growth in 2014, along with slightly lower EBITDA margins as a result of the current project mix and timing.
- The Industrial Services segment is expected to achieve modest revenue growth in 2014 at similar to or slightly lower EBITDA margins compared to 2013.
Churchill will hold a conference call and webcast to discuss its first quarter 2014 results Wednesday, May 7 at 9:00 a.m. Mountain Time (11:00 a.m. Eastern). The webcast will be broadcast live 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.
2014 ANNUAL AND SPECIAL MEETING
Churchill encourages you to attend its Annual and Special Meeting of Shareholders on Thursday, May 22, 2014 (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 include a presentation by Churchill's senior management team.
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, statements pertaining to: (a) improving profitability due to enhanced project execution and lower risk contracts; (b) increased activity levels and revenue combined with consistent consolidated EBITDA margin; (c) the tuck-in acquisition and convertible debenture repayment strategies; and (d) future operational and financial performance, including those statements under the section entitled "Outlook" relating to sustained backlog, revenue growth, EBITDA margin sustainability and project mix or timing in respect of all of Churchill's businesses. 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.
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The Churchill Corporation