Wheels Announces First Quarter 2014 Results, Revenue Up 3.5% In Challenging Operating Environment

TORONTO, May 13, 2014 /CNW/ - Wheels Group Inc. ("Wheels" or the "Company") (TSXV: WGI, OTCQX: WGIJF) today announced its results for the quarter ended March 31, 2014.

Revenue for the quarter was $87.9 million, an increase of $3.0 million or 3.5% compared to $84.9 million for the prior year quarter ended March 31, 2013. Gross margin was $10.5 million, a decrease of $0.2 million or 1.7%. Adjusted EBITDA was $0.9 million, a decrease of $0.6 million or 39.6%. Adjusted EBITDA as a percentage of revenue for the quarter was 1.0%, compared to 1.7% for the prior year quarter.

Financial Highlights 



For the quarter ended

(in millions of dollars, except per share data and number of shares outstanding)   

  March 31, 2014

  March 31, 2013

Revenue



87.9

84.9

Gross margin



10.5

10.7

Net loss



(1.4)

(0.6)

Loss per share





- Basic



(0.02)

(0.01)

- Diluted



(0.02)

(0.01)






Adjusted EBITDA



0.9

1.5

Adjusted EBITDA per share 1, 2



0.01

0.02






Weighted average number of common shares outstanding



89,556,568

89,556,568

1 Based on weighted average number of common shares outstanding
2 See Adjusted EBITDA below

In the Canadian segment, revenue was $46.0 million, representing an increase of $5.5 million or 13.5% over the prior year quarter ended March 31, 2013. In the US segment, revenue for the quarter was $42.7 million, representing a decrease of $2.5 million or 5.6% over the prior year quarter.

"Wheels was not immune from the negative impacts of the extreme weather conditions and constrained carrier capacity experienced by the transportation industry in the quarter," said Doug Tozer, Chief Executive Officer of Wheels. Mr. Tozer added, "Despite these challenges, Wheels' overall revenue increased 3.5%. The Canadian business fared better with double digit revenue growth, while the US business was down from the prior year. We expect business conditions in North America to remain competitive through the year but we're confident that our strategy, combined with management changes made in the previous quarter to streamline our operations, will drive 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, 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, including the Securities Act (Ontario). 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 commodities, products and services, capital expenditures, the ability of Wheels to access tax losses and tax attributes, sources and use and sufficiency of cash flows, Wheels' ability to renew its term debt at maturity, the effect of changes in the exchange and interest rates and the prices of key services. Forward-looking statements in this news release describe the expectations of Wheels as of the date hereof. 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 Wheels 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 will 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 MD&A, Wheels has made assumptions regarding: there being no significant disruptions affecting the operations of Wheels, whether due to labour disruptions, damage to equipment or otherwise; the ability of Wheels to obtain transportation services and supplies in a timely manner to carry out its activities and at prices consistent with current levels or in line with Wheels' expectations; the ability of the Company to successfully access tax losses and tax attributes; the ability of Wheels to obtain financing on acceptable terms; currency exchange and interest rates being consistent with current levels or in line with Wheels' expectations; and global economic performance.

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 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 24 offices throughout the US and Canada. 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 Third-Party Logistics ("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