TerraVest announces record EBITDA for the three months and six months ended March 31, 2014 and declaration of quarterly dividend

VEGREVILLE, AB, May 12, 2014 /CNW/ - TerraVest Capital Inc. (TSX: TVK) a manufacturer of fuel containment and pressure vessels as well as an oil field service provider is pleased to announce record EBITDA for the three months ended March 31, 2014 as well as the declaration of its quarterly dividend.

This will also be TerraVest's first quarter incorporating the acquisition of Gestion Jerico, which was completed on February 15, 2014.  The results for Gestion Jerico are incorporated for the period from February 15, 2014 to March 31, 2014. The acquisition gives Gestion Jerico a platform to grow its sales in Western Canada, as well as provide manufacturing and supply chain synergies between TerraVest's portfolio companies.

"We continue to work towards garnering operational efficiencies between RJV and Gestion Jerico and on that front have ordered additional components from Gestion Jerico for RJV's end product. We are confident that we will be able to leverage Gestion Jerico's manufacturing capabilities for future growth opportunities in Western Canada" said Dale Laniuk, Chief Executive Officer and President of TerraVest.

"On a standalone basis, we are confident in Gestion Jerico's operating performance and cash contribution to TerraVest, however, we are excited about additional opportunities that may be garnered in other geographic regions" said Charles Pellerin, Executive Chairman of Gestion Jerico and Board member of TerraVest.


All amounts in this news release are stated in thousands of Canadian dollars, except per share data.

For the three and six months ended March 31st, 2014 TerraVest reported:

  Three months ended
March 31
Six months ended
March 31
EBITDA   2014   2013   2014   2013
Net income for the period $ 1,729 $ 2,500 $ 4,312 $ (789)
Add (subtract):                
      Income tax expense   827   854   1,615   5,913
      Financial expenses   499   188   604   388
      Impairment   431   -   431   299
      (Gain) loss on disposal of property, plant and equipment   9   -   (45)   58
      Depreciation and amortization   1,731   761   2,621   1,752
      Non-cash post acquisition employment expenses   386   -   386   -
EBITDA $ 5,612 $ 4,303 $ 9,924 $ 7,621
  Three months ended March 31
basic and
2013 Per share,
basic and
  $ $          $ $
Revenue 30,228   19,249  
EBITDA 5,612 0.42 4,303 0.34
Net income attributable to common shareholders for the period 1,589 0.12 2,357 0.19
Free Cash Flow 1,511 0.11 2,255 0.18
Dividends declared 1,438 0.10 1,000 0.08
Weighted average shares - basic and diluted 13,429,454   12,508,150  
  Six months ended March 31
  2014 Per share,
basic and
2013 Per share,
basic and
  $ $          $ $
Revenue 50,896   36,546  
EBITDA 9,924 0.77 7,621 0.61
Net income (loss) attributable to common shareholders for the period 3,998 0.31 (962) (0.08)
Free Cash Flow (2,602) (0.20) 3,725 0.30
Dividends declared 2,680 0.20 1,000 0.08
Weighted average shares - basic and diluted 12,901,879   12,511,756  

TerraVest's second quarter of fiscal 2014 saw increases in both revenues and EBITDA of 57% and 30% versus the prior comparable period due to heightened levels of activity in the oil and gas sector in Western Canada as well as a focus on increased customer dialogue, resulting in increased product orders at RJV and utilization rates Diamond. The inclusion of Gestion Jerico is only for the period of February 15 to March 31, 2014. The period of inclusion is one of Gestion Jerico's slower periods during the year, however, administration costs remain constant. Therefore management expects additional contribution from Gestion Jerico over the coming quarters, in line with a growing backlog and increased industry demand for tanks and pressure vessels.

Net income has declined primarily as a result of additional amortization and depreciation related to the increase in fair values in Gestion Jerico's identifiable assets on the acquisition date, acquisition transaction costs and impairment charges on property, plant related to a service rig retirement in the Service segment. Free Cash Flow declined as a result of increases in working capital associated with the growth in TerraVest's businesses.


All three of the Company's operating subsidiaries are performing well.  RJV and Diamond have experienced a meaningful uptick over the prior year due to heightened levels of activity in the oil and gas sector in western Canada and a focus on increasing customer dialogue.  Management anticipates this will continue through the remainder of 2014 as the level of optimism in the oil and gas sector remains high.  Poor weather conditions in the Northeast and a naturally slower second quarter for Gestion Jerico resulted in operating performance that is lower than expected going forward. Management is optimistic on the outlook for Gestion Jerico for the remainder of the year.  Product deliveries are picking-up and a delayed backlog are now coming into effect. Further, overall industry demand for tanks and pressure vessels is increasing as capacity utilization rates decline in conjunction with an increase in demand from the rail car manufacturing space (a space which Gestion Jerico does not participate in but can indirectly benefit from as the industry outlook improves).


TerraVest is also pleased to announce that The Board of Directors of TerraVest Capital Inc. (TSX:TVK) has today declared that a regular quarterly dividend of 10 cents per share upon the outstanding Common Shares in the capital stock of TerraVest Capital Inc. be payable on July 15, 2014 to shareholders of record as at the close of business on June 30, 2014. The ex-dividend date is June 26, 2014. The dividend is designated an "eligible dividend" for Canadian income tax purposes.

Additional information can be found in TerraVest's unaudited interim condensed consolidated financial statements and MD&A which are available on SEDAR at www.sedar.com.

NON-GAAP Financial measures

EBITDA, Free Cash Flow and Working Capital are not defined measures under IFRS and are therefore defined below. TerraVest's definitions may differ from those of other issuers and therefore may not be comparable to measures used by them.

NOTE 1 - EBITDA: is defined as income from continuing operations before financial expenses, income taxes, depreciation and amortization, impairment charges and loss on disposal of assets. EBITDA should not be used as an exclusive measure of cash flow since it does not account for the impact of working capital changes, capital expenditures, debt changes and other sources and uses of cash which are disclosed in the interim condensed consolidated statement of cash flows. Management uses EBITDA as part of its assessment of TerraVest's operating performance. There is no directly comparable IFRS measure for EBITDA.

Note 2 - Free Cash Flow: is defined as cash flow from operating activities from continuing operations less net capital expenditures from continuing operations. Free Cash Flow is a useful measure in that it provides Management and investors an indication of TerraVest's capacity to generate discretionary cash flows from operations. Free Cash Flow should not be an exclusive measure of cash flow since it does not necessarily reflect the cash flow in the period available for Management to use at its discretion, which may be affected by other sources and non-discretionary uses of cash such as scheduled debt repayments. There is no directly comparable IFRS measure for Free Cash Flow.

Caution Regarding Forward-Looking Statements

This news release contains forward-looking statements.  All statements other than statements of historical fact contained in this news release are forward-looking statements, including, without limitation, statements regarding our strategic direction and evaluation of the business segments and TerraVest as a whole, and other plans and objectives of or involving TerraVest. Readers can identify many of these statements by looking for words such as "expects" and "will" and similar words or the negative thereof. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

By their nature, forward-looking statements require us to make assumptions and, accordingly, forward looking statements are subject to inherent risks and uncertainties. There is significant risk that the forward-looking statements will not prove to be accurate. We caution readers of this news release not to place undue reliance on our forward-looking statements because a number of factors may cause actual future circumstances, results, conditions, actions or events to differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements and the assumptions underlying the forward-looking statements. 

Assumptions and analysis about the performance of TerraVest as a whole and its business segments, the markets in which the business segments compete and the prospects and values of the business segments are considered in setting the business plan for TerraVest, plans and/or ability to pay dividends, outlook for operations, financial position, results and cash flow, other plans and objectives and in making related forward-looking statements. Such assumptions include, without limitation, demand for products and services of the business segments in respect of the Canadian and other markets in which the businesses are active will be stable, and that input costs to business segments do not vary significantly from levels experienced historically. Should any of these factors or assumptions vary, actual results may differ materially from the forward-looking statements.

The information set forth under "Risk Factors" in the annual information form of TerraVest dated December 11, 2013 and under "Risk Factors" in the MD&A of TerraVest for the three and six months ended March 31, 2014, identifies risk factors that could affect the operating results and performance of TerraVest and its business segments and the values of the business segments and TerraVest as a whole. We caution that the lists of factors discussed in such information is not exhaustive and that, when relying on forward-looking statements to make decisions with respect to TerraVest, investors and others should carefully consider the factors discussed, as well as other uncertainties and potential events, and the inherent risks and uncertainties of forward-looking statements.  The forward-looking statements herein are made based on the assumption that TerraVest will not be affected by such risks, but that, if TerraVest is affected by such risks, the forward-looking statements may become inaccurate.

The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.  The forward-looking statements included in this news release are made as of the date of this news release.  Except as required by applicable securities laws, TerraVest does not undertake to update such forward-looking statements.

SOURCE: TerraVest Capital Inc.

For further information:

Dale Laniuk
TerraVest Capital Inc.
Chief Executive Officer
(780) 632 -7774


Paul A. Casey, CA
TerraVest Capital Inc.
Chief Financial Officer
(780) 632-2040


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