DRUMMONDVILLE, QC, May 14 /CNW Telbec/ - CVTech Group Inc. ("CVTech" or "the Corporation") (TSX: CVT) today reported results for its first quarter ended March 31, 2010. All amounts are in Canadian dollars unless otherwise indicated.
Consolidated revenues were $77.3 million, an increase of $50.5 million or 188.6% from $26.8 million in the first quarter of 2009. The contribution from Riggs Distler was $24.1 million. Earnings before interest, taxes, depreciation and amortization ("EBITDA") were $6.1 million, or 7.9% of revenues, compared to $2.1 million, also 7.9% of revenues, in the corresponding quarter a year earlier. Net earnings were $2.2 million or $0.03 per diluted share, compared to $323,000 or $0.01 per diluted share a year earlier. On March 31, 2010, the Corporation's order backlog amounted to approximately $360 million.
EBITDA for the first quarter of 2010 included approximately $300,000 related to the portion of revenues from a large contract that the Corporation was unable to recognize in the fourth quarter of 2009, but for which the Corporation incurred costs. The Corporation is presently having discussions with the customer and considers that it will be able to record the balance of these revenues in fiscal 2010.
Financial highlights Quarters ended March 31
($ thousands except per-share data) 2010 2009
Revenues 77,274 26,772
EBITDA* 6,106 2,125
Net earnings for the period 2,247 323
Per share - basic ($) 0.03 0.01
Per share - diluted ($) 0.03 0.01
Weighted average number of shares outstanding
(diluted, thousands) 72,250 55,604
* Earnings before interest, taxes, depreciation and amortization
Revenues in the Energy segment more than tripled to $70.9 million in the first quarter of 2010 from $20.8 million in the first quarter of 2009. The increase includes contributions of $24.1 million from Riggs Distler operations and $7.1 million from the GLR-Thiro, G.P. consortium. The internal increase of $19.0 million, or 91.1%, reflects, in addition to the contribution of contracts obtained in 2009, winter storms that severely affected the U.S. northeast and resulted in revenues of approximately $8.8 million. Reflecting the increase in revenues and higher margins on revenues related to natural disasters, EBITDA for the Energy segment in the first quarter of 2010 was $4.5 million, or 6.3% of revenues, compared to $690,000, or 3.3% of revenues, in the corresponding quarter a year earlier.
Revenues in the CVT systems and related products segment were $6.4 million in the first quarter of 2010, compared to $6.0 million a year earlier. The target markets of this segment, though still affected by economic uncertainty, showed a slight gain in volume as business conditions gradually recovered from the recession bottom. The increase in revenues resulted in segment EBITDA of $1.6 million, or 25.4% of revenues, compared to $1.4 million, or 24.0% of revenues, a year earlier.
CVTech's balance sheet at March 31, 2010 remained sound, with cash of $3.2 million and long-term debt, including the current portion, of $40.6 million. The ratio of long-term debt to equity was 0.63 at March 31, 2010, compared to 0.53 at December 31, 2009. The increase is attributable mainly to new long-term borrowing of $10.7 million to repay short-term bank loans that served as bridge financing for part of the purchase price of the Riggs Distler acquisition in 2009. CVTech total debt was reduced by almost $900,000 during the quarter, to $48.5 million at March 31, 2010.
"Our first-quarter results are eloquent testimony to the growth potential of CVTech's business operations," said André Laramée, President and Chief Executive Officer of CVTech. "Most of our target markets did well during the quarter and the excellent reputation of our subsidiaries allows us to benefit promptly from a recovery of activity. Though some degree of economic uncertainty remains, CVTech is well-positioned to take advantage of the operational leverage afforded by the integration of our Energy segment business in the U.S. and the revival of demand for our products in the CVT systems and related products segment."
OVERVIEW OF THE CORPORATION
CVTech is a management company operating in two major sectors. Through Thirau ltée and its subsidiary Thirau LLC, the Corporation provides services to the electric power industry for the construction and maintenance of transmission and distribution lines primarily in Quebec and the eastern United States. Thirau ltée's subsidiary J.J.L. Déboisement inc. specializes in control of vegetation surrounding power lines and in clearing rights of way. Thirau LLC's wholly owned subsidiary Riggs Distler & Company, Inc. is a leading provider of maintenance and construction services to the utility and heavy industrial markets. In the CVT systems and related products segment, the Corporation, through CVTech-IBC Inc., designs, manufactures and sells continuously variable power transmission systems, or CVTs. CVTech-AAB specializes in rebuilding crankshafts and cylinders and in distributing engine parts. CVTech currently has approximately 1,445 employees, consisting of 1,300 in the Energy segment and 145 in the CVT systems and related products segment.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") represent a measure that has no standardized meaning prescribed by Canadian generally accepted accounting principles and is thus considered to be a non-GAAP measure. Therefore, this measure may not be comparable to similar measures presented by other issuers. This measure is described and presented 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 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.cvtech.ca.
SOURCE NAPEC Inc.
For further information: For further information: André Laramée, MBA, President and Chief Executive Officer, (819) 479-7771, firstname.lastname@example.org; Mario Trahan, CMA, Chief Financial Officer, (819) 479-7771, email@example.com; MaisonBrison: Martin Goulet, CFA, (514) 731-0000, firstname.lastname@example.org; Source: CVTech Group Inc.