WesternOne Inc. Reports 2014 Q2 Results

VANCOUVER, Aug. 7, 2014 /CNW/ - WesternOne Inc. ("WesternOne") (Toronto Stock Exchange: WEQ, WEQ.DB and WEQ.DB.C) today announced the release of its financial results for the three and six months ended June 30, 2014.

The results, consisting of WesternOne's interim financial statements for the three and six months ended June 30, 2014 and Management's Discussion and Analysis ("MD&A") dated August 7, 2014, are available on SEDAR (www.sedar.com).

2014 Q2 financial highlights and recent events are as follows:

  • WesternOne recorded consolidated revenue of $112.1 million, gross profit of $22.9 million and adjusted EBITDA(1) of $10.5 million.

  • Excluding the Australia operations, WesternOne's North America operations recorded consolidated revenue of $98.7 million, gross profit of $23.7 million and adjusted EBITDA of $12.6 million.

  • WIS, WesternOne's infrastructure services division, recorded revenue of $18.9 million and adjusted EBITDA of $6.2 million, representing year-over-year organic growth of 13.3% and 11.0%, respectively. The growth was driven by higher rental rates and higher returns from incremental fleet investments which were deployed to WIS's major markets in British Columbia and Alberta.

  • Britco, WesternOne's modular construction and rental division, recorded revenue of $93.2 million and adjusted EBITDA of $5.9 million. Revenue grew 7.7% while adjusted EBITDA declined 44.9% year-over year. The revenue growth was due to (i) increase in site construction work; and (ii) higher production volume from Britco's operations in the United States. The decline in the adjusted EBITDA was due to (i) operating losses from APB; and (ii) lower modular construction margin in Canada due to sales product mix.

  • Excluding the Australia operations, Britco's North America operations recorded revenue of $79.8 million and adjusted EBITDA of $8.0 million. Adjusted EBITDA margin was 10.0% which sequentially improved from 7.6% in Q1 of 2014 and 6.5% in Q4 of 2013.  

  • Corporate overhead for adjusted EBITDA purposes was $1.6 million, compared with $1.5 million in Q2 of 2013.

  • During the quarter, WesternOne wrote off the remaining fixed assets, intangible assets and deferred tax assets in the Australia operations totaling $10.2 million, and incurred $1.4 million of restructuring costs relating to the downsizing of that operation.

  • Net loss attributable to shareholders was $9.1 million ($0.29 per share).

  • Operating cash flow was $6.2 million.

  • Q2 consolidated payout percentage(2) was 121.6%. Excluding the Australia operations, the Q2 consolidated payout percentage would have been 79.2%.

  • On July 29, 2014, WesternOne announced that it is winding-down its operations in Australia as a result of the enduring downturn in the Australia resource and energy sector.  In order to ensure an efficient wind-down process, the Australia operations have been placed into voluntary administration.  The Company is taking this action in order to focus both its management and its capital resources on significant opportunities in North America, including ongoing capital investments in Northern Alberta's oil and gas sector, new major investments in the shale oil and gas sector in the United States, and the liquefied natural gas (LNG) and related infrastructure projects proposed for British Columbia.  

  • On August 6, 2014, WesternOne announced that it has adopted a Premium DividendTM and Dividend Reinvestment Plan (the "Plan"). The Plan provides eligible shareholders of WesternOne with an opportunity to receive, by reinvesting the monthly cash dividends declared payable on their Shares, either:

(i) new Shares at a subscription price equal to a 3% discount to the  Average Market Price (as defined in the Plan); or

(ii) a premium cash payment equal to 102% of the amount of the reinvested cash dividends.

"Our second quarter financial results reflect a continuing robust construction and infrastructure market in North America. The decision to wind-down our operations in Australia was a result of a detailed strategic review process, in which we considered the challenging market conditions in Australia and identified the importance of focusing our management and capital resources on the tremendous opportunities in North America," said Mr. Rob King, Chief Executive Officer. "We believe this will help bolster WesternOne's competitiveness as we continue to execute our long-term strategic plan that is focused on growth in the primary markets in North America."  

TM Denotes trademark of Canaccord Genuity Corp.

Summary Financial Overview

Three months ended

 June 30,

Six months ended

June 30,

($ millions except per share amounts)






$     112.1

$    103.2

$    228.8

$   180.2

Gross Profit





Adjusted EBITDA (1) (2)





Adjusted Net Income (Loss) (1) (2)





Net Income (Loss) (2)





Earnings (Loss) per Share/Unit (2)

- Basic





- Fully Diluted





Distributable Cash Generated (1)





Dividends Declared





Distributable Cash per Share (4)





Dividends Declared per Share





Payout Percentage (3)





Payout Percentage (excl. APB)







"Adjusted EBITDA", "Adjust Net Income" and "Distributable Cash" are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS. "Adjusted EBITDA" refers to net income (loss) before interest, taxes, depreciation, amortization, gain/loss on financial derivatives relating to changes in the fair market value of the fixed interest rate swap, business acquisition costs, debenture issuance costs, gain/loss on debentures relating to changes in their fair values, share based compensation, foreign exchange gains/losses, restructuring costs, and write-down of capital assets, intangible assets and goodwill. "Adjusted Net Income" refers to net income (loss) excluding asset impairment and restructuring charges. "Distributable Cash" refers to cash available for paying dividend to the shareholders by WesternOne. For a full description of Adjusted EBITDA, Adjusted Net Income and Distributable Cash refer to "Non-IFRS Measures" in the MD&A dated August 7, 2014.


Represents amount attributable to shareholders.


Amounts calculated using distributable cash and dividends declared for the related period, not on per share amounts. Calculated as dividend declared divided by distributable cash generated.


Calculated based on basic weighted average number of shares.

Conference Call

Rob King, CEO of WesternOne and the management team will host a conference call at 4:30pm (Eastern time) or 1:30pm (Pacific time), on Thursday, August 7, 2014, to review the financial results and corporate developments for the three and six months ended June 30, 2014.

To participate in this conference call, please dial one of the following numbers approximately 10 minutes prior to the commencement of the call, and ask to join the WesternOne conference call.

Dial in numbers:         Toll Free......................................................... 1-888-390-0605
                                 International or Local Toronto........................... 1-416-764-8609

Conference Call Replay

If you cannot participate on August 7, 2014, a replay of the conference call will be available by dialing one of the following replay numbers. You will be able to dial in and listen to the conference two hours after the meeting end time, and the replay will be available until August 14, 2014. Please enter the Replay ID number 632629 followed by the # key.

Replay Dial-In:          Toll Free........................................................... 1-888-390-0541
                               International or Local Toronto...............................1-416-764-8677

Forward-looking Information

Certain statements in this press release may constitute "forward-looking" information that involves known and unknown risks, uncertainties and other factors, and it may cause actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information. Forward-looking information is identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. Such information includes, without limitation, statements with respect to: the winding-down of WesternOne's Australia operations, WesternOne's strategy of deploying management and capital resources, WesternOne's business prospects and competitiveness in North America, and the long-term strategic plan that WesternOne will implement. Actual events or results may differ materially.

Forward-looking information contained in this press release is based on certain key expectations and assumptions made by WesternOne, including, without limitation: the outlook of WesternOne's business and the economy in Western Canada, the US and Australia, the supply and demand for WesternOne's products and services and management's assessment of future plans and operations. Although the forward-looking information contained in this press release is based upon what the WesternOne's management believes to be reasonable assumptions, WesternOne cannot assure investors that actual results will be consistent with such information. Forward-looking information reflects current expectations of management regarding future events and operating performance as of the date of this press release. Such information involves significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information, and a description of these factors can be found under "Risk Factors" in WesternOne's Annual Information Form dated March 28, 2014 and Management's Discussion and Analysis dated August 7, 2014, which are available on SEDAR (www.sedar.com).

The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information reflects management's current beliefs and is based on information currently available to WesternOne. The forward-looking information is made as of the date of this press release and WesternOne assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.

About WesternOne

WesternOne seeks to acquire and grow businesses in the construction and infrastructure services sectors in order to generate stable and growing dividends to its shareholders and to achieve capital appreciation.

Additional Information

Additional information relating to WesternOne and other public filings, is available on SEDAR at www.sedar.com or on WesternOne's website at www.weq.ca.

Trading Symbols

Toronto Stock Exchange: WEQ, WEQ.DB and WEQ.DB.C


SOURCE: WesternOne Inc.

For further information: For more information about this press release, please contact: Carlos Yam, Chief Financial Officer, WesternOne Inc., Suite 910, 925 West Georgia Street, Vancouver, BC V6C 3L2, Phone: (604) 678-4042, E-mail: cyam@weq.ca; For investor relations information, please contact: Andrew Greig, Manager of Investor Relations, WesternOne Inc., Suite 910, 925 West Georgia Street, Vancouver, BC V6C 3L2, Phone: (604) 678-4042, E-mail: agreig@weq.ca



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