ORDER BACKLOG EXCEEDS $400 MILLION
DRUMMONDVILLE, QC, Aug. 12 /CNW Telbec/ - CVTech Group Inc. ("CVTech" or
"the Corporation") (TSX: CVT) today announced its second quarter results for
the period ended June 30, 2009. As in the previous quarter, overall results
reflect the softness in the economy affected the Corporation's two segments of
operations, as well as timing issues in the award of contracts related to
large electrical power distribution and transmission projects. Unless
otherwise indicated, all amounts are in Canadian dollars.
Consolidated revenues in the second quarter of 2009 reached $27.0
million, down $3.4 million or 11.1% from $30.4 million in the second quarter
of 2008. Earnings before interest, taxes, depreciation and amortization
("EBITDA") were $2.2 million or 8.2% of revenues, compared with $2.8 million
or 9.3% of revenues a year earlier. Net earnings were $0.9 million or $0.02
per diluted share, compared with $0.6 million or $0.01 per diluted share a
year earlier. Net earnings for the second quarter of 2009 reflect $465,000 in
prior-year income tax credits for a subsidiary of the Corporation.
Financial highlights Quarters ended Six months ended
(in $ thousands, June 30 June 30
except per-share data) 2009 2008 2009 2008
Revenues 27,022 30,384 53,721 67,422
EBITDA(*) 2,211 2,824 4,325 7,711
Net earnings for the period 925 555 1,239 2,451
Per share - basic and
diluted ($) 0.02 0.01 0.02 0.04
Weighted average number
of shares outstanding
(diluted, thousands) 58,135 57,752 58,035 57,551
(*) Earnings before interest, taxes, depreciation and amortization
Revenues in the CVT and related products segment totalled $3.5 million in
the quarter ended June 30, 2009, compared with $5.9 million for the same
quarter in 2008. The decline was due essentially to the effect of economic
uncertainty on demand for recreational vehicles. Reflecting previous
cost-reduction measures, the net loss for this segment increased only slightly
to $258,000 from $147,000 a year earlier.
Revenues in the electricity segment decreased slightly to $23.5 million
in the second quarter of 2009 from $24.4 million in 2008. The 3.8% decline was
due to lower revenues in the U.S., where some projects were delayed by
economic uncertainty. As a result, about 45% of revenues in the second quarter
of 2009 were from work carried out in the U.S. compared with 70% a year
earlier. Reflecting the income tax credits noted above, the electricity
segment ended the quarter with net earnings of $1.2 million, up from $0.7
million in the second quarter of 2008.
CVTech's balance sheet as at June 30, 2009 remained very sound, with
$16.1 million in cash and cash equivalents and long-term debt, including the
current portion, of $23.0 million. The ratio of long-term debt to equity was
0.51 compared with 0.44 three months earlier.
"Although difficult economic conditions had some impact on our operating
results, mainly in the vehicles segment, a revival of activity in the
electricity segment, as attested by the numerous contracts obtained in the
last three months, augurs well for the coming periods," said André Laramée,
President and Chief Executive Officer of CVTech Group. "The outlook for our
electricity business is excellent and our recent acquisition of Riggs Distler
& Company Inc. ("Riggs Distler") positions us well to benefit from upcoming
major expenditures for maintenance and modernization of electric power
transmission and distribution networks across the continent."
For the first six months of 2009, consolidated revenues were $53.7
million compared with $67.4 million a year earlier. EBITDA was $4.3 million or
8.1% of sales compared with $7.7 million or 11.4% of sales a year earlier. Net
income was $1.2 million or $0.02 cents per diluted share compared with $2.5
million or $0.04 per diluted share a year earlier.
RECENT EVENTS AND ORDER BACKLOG
On July 24, 2009, the Corporation completed the acquisition of Riggs
Distler, a company providing maintenance and construction services to the
utility and heavy industrial markets. This acquisition firmly positions CVTech
as a leading supplier of electrical services to North American industrial and
utility markets and strongly complements the operations of Thirau ltée
(formerly "Thiro ltée"), the Corporation's subsidiary in the electrical
services industry. The transaction took effect retroactively to July 1, 2009.
The purchase price amounts to $41.1 million and the acquisition and
financing-related costs approximate $1.5 million and $800,000, respectively.
On July 20, 2009, Thirau ltée was awarded a contract of more than $40
million by Hydro-Québec for the construction, maintenance and modification of
overhead distribution networks in the Montréal and Richelieu regions. The work
will begin in September 2009 and end in December 2011. Two renewal options of
one year each are provided at the end of the initial term.
As at August 11, 2009, the Corporation's order backlog, including the
aforementioned contract and the order backlog of Riggs Distler, exceeded $400
OVERVIEW OF THE CORPORATION
CVTech is a management corporation that operates in two major sectors.
Through Thirau ltée, and its subsidiary, Thirau LLC, the Corporation services
the electrical utility industry with the construction and maintenance of
transmission and distribution lines primarily in Quebec and the eastern United
States. Thirau ltee's subsidiary, J.J.L. Déboisement inc., specializes in
vegetation control surrounding the lines and clearing the lines' rights of
way. Thirau LLC also possesses a wholly-owned subsidiary, Riggs Distler and
Company Inc., an important provider of maintenance and construction services
to the utility and heavy industrial markets. Through CVTech-IBC Inc., the
Corporation services the vehicle industry through the design, manufacture and
sale of continuously variable power transmission systems, or CVTs. CVTech-AAB
specializes in rebuilding crankshafts and cylinders, as well as distributing
engine parts. CVTech currently has approximately 1,400 employees, distributed
as follows: 1,240 in the electricity segment and 160 in the CVT systems and
related products segment.
This document may contain forward-looking statements that reflect
management's current beliefs 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 has
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
and on the Corporation's website at: www.groupecvtech.com.
For further information:
For further information: André Laramée, MBA, President and Chief
Executive Officer, CVTech Group Inc., (819) 479-7771; Mario Trahan, CMA, Chief
Financial Officer, CVTech Group Inc., (819) 479-7771