Logistec announces 2016 year-end results

MONTRÉAL, March 17, 2017 /CNW Telbec/ - Logistec Corporation (TSX: LGT.A LGT.B), a marine and environmental services provider, today announced its financial results for the fourth quarter and the year ended December 31, 2016.

Consolidated revenue totalled $343.3 million in 2016, a decrease of $14.7 million or 4.1% over 2015. Revenue was affected by the increase in the U.S. dollar against the Canadian dollar. For the year, the positive impact on revenue was $3.1 million.

The marine services segment posted revenue of $186.0 million in 2016, representing lower sales compared with the $206.5 million reported in 2015. The decrease was mostly due to lower bulk activity. The environmental services segment delivered a good performance in 2016, as revenue increased by $5.8 million or 3.9% over 2015 to reach $157.3 million. Revenue growth came primarily from increased activity in site remediation and Aqua-Pipe in the USA, partially offset by reduced Aqua-Pipe installation in Canada.

In 2016, Logistec achieved a consolidated profit for the year of $18.5 million, of which $18.9 million was attributable to owners of the Company. This is lower than the 2015 consolidated profit of $32.9 million, of which $29.1 million was attributable to owners of the Company. This decline stemmed largely from lower cargo handling volumes for the marine services segment. The environmental services segment was also less profitable due to significantly lower sales in Aqua-Pipe installation services. The 2016 profit attributable to owners of the Company computes to total diluted earnings per share of $1.48, which corresponds to $1.41 attributable to Class A Common Shares and $1.56 attributable to Class B Subordinate Voting Shares. This compares to $2.34 in 2015, of which $2.25 was attributable to Class A Common Shares and $2.47 was attributable to Class B Subordinate Voting Shares.

During the fourth quarter of 2016, consolidated revenue totalled $95.7 million, up by $3.3 million over the same period of 2015. This increase is explained mainly by strong activity in the environmental services segment. The profit attributable to owners of the Company rose to $8.9 million ($7.9 million in 2015) for total diluted earnings per share of $0.71, of which $0.68 was attributable to Class A Common Shares and $0.74 was attributable to Class B Subordinate Voting Shares. For the same period of 2015, diluted earnings per share totalled $0.63, of which $0.61 was attributable to Class A Common Shares and $0.67 was attributable to Class B Subordinate Voting Shares.

Outlook

"Our development plan for cargo handling is focused on strengthening and growing our network of facilities in North America. Over the last few years, we have succeeded in growing organically by targeting very specific growth markets, namely mining, biomass and port logistics.

Unfortunately, with the significant drop in commodity prices, the landscape for mining development has been negatively affected and is just beginning to recover. The turnaround is expected to be gradual, and we should see development opportunities in the coming years. On a brighter note, we recently received a new concession for the handling of bulk at the Port of Cleveland (OH), where we expect to handle some 3-4 million tonnes of iron ore and other bulk cargoes on an annual basis.

In biomass, we have rebuilt our facilities damaged by the fire in Brunswick (GA) and can now get back to our growth plan. We will immediately resume handling of all outbound movements for our main long-term customer, with the capacity to also seek new ones.

In our container business, our growth will be concentrated on Montréal (QC), where we inaugurated our new Viau terminal in late 2016. The first phase of this facility has a capacity of 350,000 TEUs, and an additional 250,000 TEUs will be developed in line with demand growth. This new terminal will provide our joint venture Termont with a total capacity of 1.1 million TEUs at the Port of Montréal (QC).

Given the more difficult economic environment for the industries we serve, we turned our energy to identifying potential acquisition opportunities. We were pleased to add Logistec Gulf Coast LLC to our family in early 2017. This newly formed company, in which we have a 70% interest, acquired the assets of Gulf Coast Bulk Equipment, Inc. It operates two terminal concessions out of the ports of Tampa (FL) and Port Manatee (FL). It also offers stevedoring services to bulk cargo importers and exporters in various terminals in the U.S. Southeast and Gulf of Mexico region, including Texas, Florida, Louisiana and along the Mississippi River.

Sanexen enjoys a strong position in its three main markets. In site remediation, our traditional market, we are unquestionably the number one player in Eastern Canada. In 2016, we not only completed the site remediation of a former aluminium smelter in Shawinigan (QC) and the environmental dredging of Sandy Beach (QC) in Gaspésie, but also continued the decontamination of part of a refinery site in Varennes (QC), disposed of contaminated soil from the Turcot Interchange and Champlain Bridge construction sites in Montréal (QC), and carried out many other projects.

As for water main rehabilitation, despite the downturn observed in Québec, the market remained robust in Ontario, and we continued to advance our penetration in the U.S. market. On a global level, our Australian licensee experienced some setbacks, and its first installations should be performed in 2017. With regards to the manufacturing of woven hoses, Niedner had an excellent year, selling a record number of fire hoses to the U.S. Forest Service and continuing production and development of our Aqua-Pipe lining. In 2016, we acquired Excava-Tech Inc., our main subcontractor for Aqua-Pipe excavation work in Québec. This acquisition completes our vertical integration from inventor to manufacturer to installer.

As is the case for our marine services business, we will continue to pursue acquisitions to ensure our growth," indicated Madeleine Paquin, President and Chief Executive Officer of Logistec Corporation.

"Overall, we are committed and confident that we can continue to build our business based on our specialized services and expertise. Despite the continued difficult economic environment, our service offerings, our geographic diversity, and our ability to invest in growth opportunities should allow us to continue to increase our services in both the short and long term. Clearly, our success rests on the strength of our highly dynamic team of experts who are customer oriented and consistently bring value to an expanding customer base," concluded Madeleine Paquin.

About Logistec

Logistec Corporation is based in Montréal (QC) and provides specialized services to the marine community and industrial companies in the areas of bulk, break-bulk and container cargo handling in some 30 ports and 40 terminals located in eastern North America. Logistec also offers marine transportation services geared primarily to the Arctic coastal trade, short-line rail transportation services, as well as marine agency services to foreign shipowners and operators serving the Canadian market. Furthermore, the Company operates in the environmental sector where it provides services to industrial, municipal and other governmental customers for the trenchless structural rehabilitation of underground water mains, regulated materials management, site remediation, risk assessment, and manufacturing of woven hoses.

The Company has been profitable and has paid regular dividends since becoming public and payments have grown steadily over the years. A public company since 1969, Logistec's shares are listed on the Toronto Stock Exchange under the ticker symbols LGT.A and LGT.B. More information can be obtained on the Company's website at www.logistec.com.

Forward-Looking Statements

For the purpose of informing shareholders and potential investors about the Company's prospects, sections of this document may contain forward-looking statements, within the meaning of securities legislation, about the Company's activities, performance and financial situation and, in particular, hopes for the success of the Company's efforts in the development and growth of its business. These forward-looking statements express, as of the date of this document, the estimates, predictions, projections, expectations or opinions of the Company about future events or results. Although the Company believes that the expectations produced by these forward-looking statements are founded on valid and reasonable bases and assumptions, these forward-looking statements are inherently subject to important uncertainties and contingencies, many of which are beyond the Company's control, such that the Company's performance may differ significantly from the predicted performance expressed or presented in such forward-looking statements. The important risks and uncertainties that may cause the actual results and future events to differ significantly from the expectations currently expressed are examined under "Business Risks" in the Company's annual report and include (but are not limited to) the performances of domestic and international economies and their effect on shipping volumes, weather conditions, labour relations, pricing and competitors' marketing activities. The reader of this document is thus cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to update or revise these forward-looking statements, except as required by law.

Additional information relating to our Company can be found on SEDAR's website at www.sedar.com and on Logistec's website at www.logistec.com.

2016 Consolidated Financial Statements

 


Consolidated Statements of Earnings


years ended December 31
(in thousands of Canadian dollars, except for per share amounts)


2016

2015


$

$




Revenue

343,326

358,008




Employee benefits expense

(158,784)

(176,953)

Equipment and supplies expense

(102,636)

(91,000)

Rental expense

(28,899)

(29,062)

Other expenses

(15,230)

(14,673)

Depreciation and amortization expense

(14,288)

(12,328)

Share of profit of equity accounted investments

4,310

4,264

Other gains and losses

(345)

5,528

Operating profit

27,454

43,784




Finance expense

(1,894)

(936)

Finance income

194

313

Profit before income taxes

25,754

43,161




Income taxes

(7,268)

(10,288)

Profit for the year

18,486

32,873




Profit attributable to:






Owners of the Company

18,858

29,142




Non-controlling interests

(372)

3,731

Profit for the year

18,486

32,873




Basic earnings per Class A Common Share (1)

1.48

2.25

Basic earnings per Class B Subordinate Voting Share (2)

1.64

2.47




Diluted earnings per Class A share

1.41

2.25

Diluted earnings per Class B share

1.56

2.47

(1)

Class A Common Share ("Class A share")

(2)

Class B Subordinate Voting Share ("Class B share")

 






Consolidated Statements of Comprehensive Income







years ended December 31
(in thousands of Canadian dollars)






2016

2015





$

$







Profit for the year

18,486

32,873







Other comprehensive income (loss)




Items that are or may be reclassified to the consolidated statements of earnings






Currency translation differences arising on translation of foreign operations

(1,158)

6,275




Losses on derivatives designated as cash flow hedges

(187)




Transfer of losses on derivatives designated as cash flow hedges to the consolidated statements of earnings

167

80




Income taxes relating to derivatives designated as cash flow hedges

(45)

31


Total items that are or may be reclassified to the consolidated statements of earnings

(1,036)

6,199








Items that will not be reclassified to the consolidated statements of earnings






Remeasurement losses on benefit obligation

(44)

(239)




Return on retirement plan assets excluding amounts included in profit for the year

669

(199)




Income taxes on remeasurement losses on benefit obligation and return on retirement plan assets excluding amounts included in profit for the year

(168)

118


Total items that will not be reclassified to the consolidated statements of earnings

457

(320)








Share of other comprehensive income of equity accounted investments, net of income taxes






Items that are or may be reclassified to the consolidated statements of earnings

1

(7)




Items that will not be reclassified to the consolidated statements of earnings

12

(6)


Total share of other comprehensive income of equity accounted investments, net of income taxes

13

(13)







Other comprehensive income (loss) for the year, net of income taxes

(566)

5,866

Total comprehensive income for the year

17,920

38,739




Total comprehensive income (loss) attributable to:









Owners of the Company

18,292

35,008

Non-controlling interests

(372)

3,731

Total comprehensive income for the year

17,920

38,739

 





Consolidated Statements of Financial Position







(in thousands of Canadian dollars)





As at
December 31,
 2016

As at
December 31,
 2015



$

$





Assets



Current assets




Cash and cash equivalents

15,971

23,811


Investment in a service contract

865

1,157


Trade and other receivables

86,373

77,333


Work in progress

4,395

6,438


Current income tax assets

3,767

2,569


Other financial assets

1,014


Assets available for sale

330


Prepaid expenses

5,654

7,952


Inventories

7,506

6,553



125,875

125,813





Equity accounted investments

31,141

28,951

Property, plant and equipment

138,591

111,022

Goodwill

24,899

22,615

Other intangible assets

18,233

20,247

Other non-current assets

1,534

5,194

Post-employment benefit assets

706

522

Non-current financial assets

7,166

5,019

Deferred income tax assets

7,715

9,032

Total assets

355,860

328,415





Liabilities



Current liabilities




Trade and other payables

43,081

46,352


Deferred revenue

2,928

2,700


Current income tax liabilities

149

650


Dividends payable

947

967


Current portion of long-term debt

1,681

2,159


Provisions

1,344

1,268



50,130

54,096





Long-term debt

58,644

29,920

Provisions

800

766

Deferred income tax liabilities

13,382

12,433

Post-employment benefit obligations

13,076

12,955

Deferred revenue

4,133

4,533

Non-current financial liabilities

12,514

4,067

Total liabilities

152,679

118,770





Commitments, contingent liabilities and guarantees







Equity



Share capital

15,618

14,985

Share capital to be issued

24,898

Retained earnings

151,616

164,154

Accumulated other comprehensive income

9,251

10,274

Equity attributable to owners of the Company

201,383

189,413





Non-controlling interests

1,798

20,232

Total equity

203,181

209,645





Total liabilities and equity

355,860

328,415

 

On behalf of the Board




(signed) George R. Jones  

(signed) Madeleine Paquin


Director

Director


 

Consolidated Statements of Changes in Equity



(in thousands of Canadian dollars)





Attributable to owners of the Company






Accumulated 





other comprehensive income (loss)


Share
capital

Share
capital

to be
issued 

Cash

flow
hedges

Foreign
currency
translation

Retained
earnings

Total

Non-
controlling
interests

Total
equity


$

$

$

$

$

$

$

$










Balance as at January 1, 2016

14,985

(139)

10,413

164,154

189,413

20,232

209,645










Profit (loss) for the year

18,858

18,858

(372)

18,486










Other comprehensive income (loss)










Currency translation differences arising on translation of foreign operations

(1,158)

(1,158)

(1,158)


Remeasurement losses on benefit obligation and return on retirement plan assets excluding amounts included in profit for the year, net of income taxes

457

457

457


Cash flow hedges, net of income taxes

122

122

122


Share of other comprehensive income of equity accounted investments, net of income taxes

13

13

13

Total comprehensive income (loss) for the year

135

(1,158)

19,315

18,292

(372)

17,920










Repurchase of Class A shares

(16)

(953)

(969)

(969)

Issuance and repurchase of Class B shares

649

(8,957)

(8,308)

(8,308)

Repurchase of non-controlling interests

24,898

(18,148)

6,750

(18,062)

(11,312)

Dividends on Class A shares

(2,226)

(2,226)

(2,226)

Dividends on Class B shares

(1,569)

(1,569)

(1,569)

Balance as at December 31, 2016

15,618

24,898

(4)

9,255

151,616

201,383

1,798

203,181

 

 



Consolidated Statements of Changes in Equity (Continued)



(in thousands of Canadian dollars)



Attributable to owners of the Company






Accumulated other
comprehensive

income (loss)





Share capital

Cash flow hedges

Foreign
currency translation

Retained earnings

Total

Non-
controlling interests

Total equity



$

$

$

$

$

$

$










Balance as at January 1, 2015

14,906

(56)

4,138

144,513

163,501

15,923

179,424










Profit for the year

29,142

29,142

3,731

32,873










Other comprehensive income (loss)









Currency translation differences arising
on translation of foreign operations

6,275

6,275

6,275


Remeasurement losses on benefit obligation and
return on retirement plan assets excluding
amounts included in profit for the year, net of
income taxes

(320)

(320)

(320)


Cash flow hedges, net of income taxes

(76)

(76)

(76)


Share of other comprehensive income of equity accounted investments, net of income taxes

(7)

(6)

(13)

(13)

Total comprehensive income (loss) for the year

(83)

6,275

28,816

35,008

3,731

38,739










Repurchase of Class A shares

(16)

(974)

(990)

(990)

Issuance and repurchase of Class B shares

95

(4,641)

(4,546)

(4,546)

Investment received from a non-controlling interest

578

578

Dividends on Class A shares

(2,047)

(2,047)

(2,047)

Dividends on Class B shares

(1,513)

(1,513)

(1,513)

Balance as at December 31, 2015

14,985

(139)

10,413

164,154

189,413

20,232

209,645

 


Consolidated Statements of Cash Flows



years ended December 31

(in thousands of Canadian dollars)



2016

2015



$

$





Operating activities




Profit for the year

18,486

32,873


Impairment loss related to assets destroyed

6,066


Gain on insurance recovery of assets

(6,066)


Items not affecting cash and cash equivalents

29,787

27,310


Cash generated from operations

48,273

60,183


Dividends received from equity accounted investments

2,213

2,434


Contributions to defined benefit retirement plans

(866)

(1,119)


Settlement of provisions

(304)

(126)


Changes in non-cash working capital items

(15,028)

(11,765)


Income taxes paid

(7,473)

(8,842)



26,815

40,765





Financing activities




Issuance of long-term debt, net of transaction costs

53,852

12,642


Repayment of long-term debt

(29,909)

(9,945)


Interest paid

(1,867)

(913)


Issuance of Class B shares

607

113


Repurchase of Class A shares

(969)

(990)


Repurchase of Class B shares

(9,484)

(4,873)


Dividends paid on Class A shares

(2,227)

(1,956)


Dividends paid on Class B shares

(1,587)

(1,452)



8,416

(7,374)





Investing activities




Customer repayment of an investment in a service contract

292

209


Interest received

206

320


Cash acquired in a business acquisition

205


Business acquisitions

(5,262)


Investment in a joint venture

578


Repurchase of a non-controlling interest

(2,393)


Acquisition of property, plant and equipment

(32,198)

(26,118)


Proceeds from disposal of property, plant and equipment

363

704


Acquisition of other financial assets

(4,039)


Acquisition of intangible assets

(33)

(56)


Repayment of non-current financial assets

3


Increase of other non-current assets

(827)

(10,640)


Disposal of other non-current assets

68



(43,615)

(35,003)





Net change in cash and cash equivalents

(8,384)

(1,612)

Cash and cash equivalents, beginning of year

23,811

26,381

Effect of exchange rate on balances held in foreign currencies of foreign operations

544

(958)

Cash and cash equivalents, end of year

15,971

23,811

 

SOURCE Logistec Corporation

For further information: Jean-Claude Dugas, CPA, CA, Vice-President, Finance, Logistec Corporation, jdugas@logistec.com, (514) 985-2345

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