Marked improvement in revenues and operating profitability
DRUMMONDVILLE, QC, May 13, 2014 /CNW Telbec/ - CVTech Group Inc.
("CVTech" or "the Corporation") (TSX: CVT) today reported results for
the first quarter ended March 31, 2014. All amounts are in Canadian
dollars unless otherwise indicated.
"The significant improvement in our performance reflects a rise in sales
volume across our network and better profitability in the execution of
our contracts. In Quebec, Thirau ltée showed a sharp increase in
revenues from contracts for the construction, maintenance and repair of
electricity transmission lines. Moreover, we are satisfied with the
sustained progress of our Ontario operations, reflecting our increasing
penetration of this market. Finally, our U.S. operations turned in a
solid quarter in mechanical work and in contracts for industrial,
commercial and institutional electrical energy projects", said André
Laramée, President and Chief Executive Officer of CVTech.
Three months ended March 31
(in thousands of dollars, except per-share data)
Per share - basic and diluted ($)
Weighted average number of outstanding shares (basic, in thousands)
Revenues for the quarter were $71.2 million, up 26.2% from the first
quarter of 2013. The increase was mainly due to higher revenues from
contracts for the construction, maintenance and repair of electricity
transmission lines and underground lines, from contracts related to
mechanical work and from contracts for industrial, commercial and
institutional electrical energy projects. In addition, the conversion
effect from fluctuations in the value of the Canadian dollar increased
the value of U.S.-dollar denominated revenues for the quarter ended
March 31, 2014 by $3.7 million, compared with the same period in 2013.
However, revenues from contracts for the construction, maintenance and
repair of electricity distribution lines were lower.
Revenues from work carried out in the U.S. were up 10.4% to $43.6
million. Revenues from contracts performed in Canada were up 63.2% to
$27.6 million. Of that amount, revenues from CVTech's Quebec operations
reached $20.0 million, up 25.0% from a year earlier, proving their
solid presence and reputation in the electrical services industry,
while revenues from Ontario operations were $7.6 million, up from just
over $900,000 in the first quarter of 2013.
Earnings before interest, income taxes, depreciation and amortization
("EBITDA") were $4.6 million, or 6.4% of revenues, compared to $2.3
million, or 4.1% of revenues, in the first quarter of 2013. The
increase, both in dollars and as a percentage of revenues, reflects the
increase in sales volume and a more favourable revenue mix. It should
be noted that EBITDA in the year-earlier quarter was affected by the
start-up of projects in new market segments.
Net earnings for the first quarter of 2014 were $1.4 million, or $0.02
per diluted share, compared to a net loss of $23,000, or $0.00 per
diluted share, for the first quarter of 2013.
At March 31, 2014, the value of the Corporation's order backlog was $213
million, essentially stable relative to $216 million at the end of the
During the first quarter of 2014, the Corporation reduced its long-term
debt, including the current portion, to $17.0 million at March 31, 2014
from $18.7 million at the beginning of the year. Consequently the ratio
of long-term debt to equity was 0.20 at March 31, 2014, down from 0.23
three months earlier. Also at March 31, 2014, CVTech held a cash
position of $832,000 and had $34.5 million in bank credit outstanding.
The Corporation has approached some financial institutions in order to
obtain loans under satisfactory terms and restrictions that better suit
its business model.
"In the short term, CVTech will reap further benefits from its new
organizational structure. We are very confident that this new structure
will enhance our efficiency and result in recurring cost savings. These
savings, mainly in overhead and workforce, together with expected
synergy gains, will be felt increasingly over the coming quarters and,
over time, will amount to more than $2.0 million annually. In addition,
the expansion of our service offering through cross-selling, combined
with our solid relationships with the main players in our target
markets, positions CVTech advantageously to benefit from business
opportunities that will arise for its subsidiaries", concluded Mr.
OVERVIEW OF THE CORPORATION
CVTech is a company operating in the energy sector. The Corporation is a
leading provider of construction and maintenance services to the public
utility and heavy industrial markets mainly in Quebec, Ontario and the
eastern United States. Through its subsidiaries, the Corporation
provides maintenance and construction services for electricity
transmission and distribution networks, substations and electrical
power houses, as well as the control of vegetation on rights-of-way for
EBITDA is a measure that has no standardized meaning prescribed by IFRS
and is thus considered to be a non-IFRS measure. Therefore, this
measure may not be comparable to similar measures presented by other
issuers. This measure is presented and described in this release in
order to provide additional information regarding the Corporation's
liquidity and its ability to generate funds to finance its operations.
This document may contain forward-looking statements that reflect
management's current expectations regarding future events.
Forward-looking statements are based on a number of factors and include
risks and uncertainties. Actual results may differ from forecast
results. Management assumes no obligation beyond what is required under
the law to update or revise forward-looking statements pursuant to new
information or future events.
Further information regarding CVTech is available in the SEDAR database
(www.sedar.com) and on the Corporation's website at www.cvtech.ca.
SOURCE: CVTECH GROUP INC.
For further information:
André Laramée, MBA
President and Chief Executive Officer
Mario Trahan, CPA, CMA
Chief Financial Officer
Martin Goulet, CFA