Armtec Infrastructure Inc. Reports Rating Change
Toronto Stock Exchange: ARF; ARF.DB
CONCORD, ON, June 18, 2014 /CNW/ - Armtec Infrastructure Inc. ("Armtec"") (TSX:ARF; ARF.DB) today reported that Standard & Poor's Rating Services has announced that it has changed its long-term corporate credit rating issued for Armtec Holdings Limited, a wholly-owned subsidiary of Armtec, to "CCC+" from "B-" with a negative outlook as the result of lower than expected profitability and liquidity concerns. Standard & Poor's further announced that it has changed its issue-level rating on the 8.875% Senior Unsecured Notes, Series A due September 22, 2017 issued by Armtec Holdings Limited (the "Senior Notes") to "CCC-" from "CCC. Standard & Poor's "6" recovery rating on the Senior Notes remained unchanged. For further information, please see the Standard & Poor's website.
Armtec previously disclosed that its performance during the first half of 2014 has put pressure on its near-term liquidity position and the Senior Secured Debt to EBITDA covenant under its term facility (the "Term Facility") with Brookfield Capital Partners Fund III LP ("Brookfield") and that it has entered into a memorandum of understanding with Brookfield to amend the Term Facility (the "Amendment") which is intended to offer both short-term covenant and liquidity relief. The Amendment remains subject to the parties entering into mutually acceptable definitive documentation.
"While the results for the first half of 2014 have been adversely impacted by the extreme and prolonged winter weather conditions, management believes the situation is short-term and anticipates stronger revenue and operational results in both the Drainage and Precast business units during the second half of 2014," said Mark Anderson, President and Chief Executive Officer. "We continue to remain focused on delivering improved earnings, by pursuing new product and market opportunities that will foster the long-term potential of the business within Canada's infrastructure market." See "Forward-Looking Statements" below for a discussion of the material factors or assumptions underlying the current forecasts referred to above.
About Armtec Infrastructure Inc.
Armtec is a manufacturer and marketer of a comprehensive range of infrastructure products and engineered construction solutions for customers in a diverse cross-section of industries that are located in every region of Canada, as well as in selected markets globally. These markets include Canada's national and regional public infrastructure markets and private sector markets in agricultural drainage, commercial building, residential construction and natural resources. Armtec operates through a network of offices and production facilities across the country. Armtec operates in two business units: Drainage Solutions manufactures and markets corrugated high-density polyethylene pipe, corrugated steel pipe and other drainage related products including small bridge structures. Precast Concrete Solutions manufactures and markets highly engineered precast systems such as parking garages, bridges, sport venues and building envelopes as well as standard precast products such as steps, paving stones and utility vaults.
This news release contains "forward-looking" statements within the meaning of applicable securities legislation, including statements regarding revenue and operational results in the second half of 2014.
Improved demand for drainage products is expected to be supported by some recovery of the unfavourable installation conditions experienced in the first half of 2014, but this increase will be partially offset by softer international market activity. Despite the anticipated volume increase, Drainage continues to face competitive pricing pressures in Western Canada, which is expected to impact both revenue and EBITDA.
The stronger second-half demand anticipated for Precast is based on customer schedule delays from the first half of 2014 being resolved and increased demand in the Prairie and Soundwall market areas. These improvements are expected to be partially offset by the completion of the Kitimat smelter modernization project in the Pacific market area and the softness in the Ontario marketplace. Armtec's portion of the Kitimat smelter modernization project was announced in December of 2011 to supply precast components to expand and upgrade Rio Tinto Alcan's aluminum smelter in Kitimat, British Columbia
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results or events to be materially different from any future results or events expressed or implied by such forward-looking statements. Forward-looking statements typically contain such words or phrases as "proposed", "may", "outlook", "objective", "intend", "estimate", "anticipate", "should", "could", "would", "will", "expect", "believe", "plan" and other similar terminology suggesting future outcomes or events. Forward-looking statements reflect current expectations regarding future results, events, performance and achievements and are based on information currently available to Armtec's management, anticipated operating and financial results of Armtec, and current and anticipated market conditions.
Forward-looking statements involve numerous assumptions and should not be read as guarantees of future results, events, performance or achievements. Such statements will not necessarily be accurate indications of whether or not such future results, events, performance or achievements will be achieved. You should not unduly rely on forward-looking statements as a number of factors, many of which are beyond the control of Armtec, could cause actual results, events, performance or achievements to differ materially from the results, events, performance or achievements discussed in the forward-looking statements, including, but not limited to the factors discussed in Armtec's materials filed with the Canadian securities regulatory authorities from time to time. Although the forward-looking statements contained in this news release are based upon what management of Armtec believes are reasonable assumptions, Armtec cannot assure investors that actual results, events, performance or achievements will be consistent with these forward-looking statements. All forward-looking statements in this news release are qualified by these cautionary statements. These forward-looking statements are made as of the date of this news release and, except as required by applicable law, Armtec assumes no obligation to update or revise them to reflect new events or circumstances.
SOURCE Armtec Infrastructure Inc.For further information:
Vice President & Corporate Secretary
Armtec Infrastructure Inc.
Tel: (647) 795-9290