DRUMMONDVILLE, QC, May 14, 2013 /CNW Telbec/ - CVTech Group Inc. ("CVTech" or "the Corporation") (TSX: CVT) today reported results for the first quarter ended March 31, 2013. All amounts are in Canadian dollars unless otherwise indicated.
|Financial highlights||Three months ending March 31,|
|(in thousands of dollars, except per-share data)||2013||2012|
|Revenues from continuing operations||56,384||51,554|
|EBITDA from continuing operations||2,287||5,725|
|Net earnings (loss) from continuing operations||(23)||3,193|
|Per share - basic and diluted ($)||0.00||0.04|
|Net earnings (loss) from discontinued operations||0||(1,254)|
|Net earnings (loss)||(23)||1,939|
|Per share - basic and diluted ($)||0.00||0.03|
|Weighted average number of outstanding shares (basic, in thousands)||72,230|| 72,413
Revenues from continuing operations were $56.4 million, up 9.4% from $51.6 million in the first quarter of the previous year. The increase was mainly due to an increase in revenues from contracts for the construction, maintenance and repair of electricity distribution lines and from contracts related to industrial, commercial and institutional electricity projects. Revenues from work carried out in the U.S. rose 3.3% to $39.5 million, while revenues from contracts performed in Canada rose 26.9% to $16.9 million, including revenues of more than $900,000 from Ontario subsidiary Riggs Distler Inc.
EBITDA from continuing operations was $2.3 million, or 4.1% of revenues, in the first quarter of 2013, compared to $5.7 million, or 11.1% of revenues, in the first quarter of 2012. Of note, EBITDA in the first quarter of 2012 included a gain of $2.2 million from a life insurance settlement. Excluding this gain, EBITDA for the 2012 quarter was $3.5 million or 6.8% of revenues. The decrease in EBITDA, in both dollars and as a percentage of revenues, was essentially due to temporary inefficiencies in the execution of certain contracts in the United States, mainly as a result of harsh winter weather on the Atlantic seaboard and to the start-up of projects in new market segments.
The net loss from continuing operations in the first quarter of 2013 was $23,000, or $0.00 per diluted share, compared to net earnings of $3.2 million, or $0.04 per diluted share, in the first quarter of 2012. Excluding the gain from the life insurance settlement, net earnings for the first quarter of 2012 were $991,000, or $0.01 per diluted share.
"CVTech achieved solid revenue growth in the first quarter of 2013. We are encouraged by the progress made in Ontario in the first quarter and our presence in this major market has since expanded further with the acquisition in early April of B.G. High Voltage Systems Limited ("B.G. High Voltage"). Though temporary inefficiencies in the U.S. have affected our overall performance, we are satisfied with our steadily increasing penetration of our target markets," said André Laramée, President and Chief Executive Officer of CVTech.
At March 31, 2013, the Corporation had an order backlog of approximately $184.0 million.
REDUCTION OF LONG-TERM DEBT
During the first quarter of 2013, the Corporation repaid $2.6 million in long-term debt, reducing its long-term debt, including the current portion, to $23.0 million at March 31, 2013. At that date, CVTech held $4.9 million in cash. The ratio of long-term debt to equity was 0.28 at March 31, 2013, compared to 0.31 at December 31, 2012.
Reflecting the decrease in net earnings, cash flow from operations before changes in items of working capital was $2.5 million in the first quarter of 2013, compared to $6.1 million a year earlier. Including changes in items of working capital, cash flow from operations increased 33.7% to $5.4 million.
"The addition of B.G. High Voltage operations brings CVTech a critical mass in Ontario and significant cross-selling opportunities with our existing operations. This expansion of our network in eastern North America positions us advantageously to benefit from the massive investments that are projected for the construction and maintenance of electricity transmission and distribution networks. In addition, our solid financial position allows us to remain on the lookout for any further strategic acquisitions that would enhance our service offering, our expertise and our geographic reach," concluded Mr. Laramée.
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 electrical lines.
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.
SOURCE: CVTECH GROUP INC.
André Laramée, MBA
President and Chief
Mario Trahan, CPA, CMA
Executive Officer Chief Financial Officer
Martin Goulet, CFA