- Internal growth of almost 50% in Energy segment revenues
- EBITDA margins up in both business segments
- Strong balance sheet with $8.9 million in cash and a $4.4-million
reduction of total debt
- Order backlog of $430 million as at June 30, 2010
DRUMMONDVILLE, QC, Aug. 13 /CNW Telbec/ - CVTech Group Inc. ("CVTech" or "the Corporation") (TSX: CVT) today reported results for its second quarter ended June 30, 2010. All amounts are in Canadian dollars unless otherwise indicated.
Consolidated revenues were $57.4 million, an increase of $30.4 million or 112.6% from $27.0 million in the second quarter of 2009. The contribution from Riggs Distler was approximately $17.4 million. Consolidated earnings before interest, taxes, depreciation and amortization ("EBITDA") were $5.8 million, or 10.2% of revenues, compared to $2.2 million, or 8.2% of revenues, in the corresponding quarter a year earlier. Net earnings were $2.1 million or $0.03 per diluted share, compared to $925,000 or $0.02 per diluted share a year earlier. As at June 30, 2010, the Corporation's order backlog was approximately $430 million, up from $360 million as at March 31, 2010.
Financial highlights Quarters ended Six months ended
(in thousands of dollars, June 30 June 30
except per-share data) 2010 2009 2010 2009
Revenues 57,438 27,022 134,712 53,721
EBITDA* 5,838 2,211 11,944 4,325
Net earnings for the period 2,105 925 4,352 1,239
Per share - basic ($) 0.03 0.02 0.06 0.02
Per share - diluted ($) 0.03 0.02 0.06 0.02
Weighted average number of
shares outstanding (basic,
in thousands) 73,180 55,589 72,715 55,597
* Earnings before interest, taxes, depreciation and amortization
Revenues of the Energy segment more than doubled to $52.6 million in the second quarter of 2010 from $23.5 million in the second quarter of 2009. In addition to a $17.4-million contribution from Riggs Distler operations, segment revenues showed internal growth of $11.7 million or 49.7% as a result of numerous contracts obtained in recent quarters by subsidiaries in the Energy segment. Reflecting the increase in revenues, Energy segment EBITDA for the second quarter of 2010 was $5.1 million, or 9.8% of revenues, compared to $1.7 million, or 7.4% of revenues, in the corresponding quarter a year earlier.
Revenues of the CVT systems and related products segment were $4.8 million in the second quarter of 2010, compared to $3.5 million a year earlier. The increase was due to a slight gain in activity in target markets as a result of a gradual improvement in the economy and to the Corporation's success in increasing its market share after one of its largest U.S. competitor ceased operations. The increase in revenues resulted in segment EBITDA of $704,000, or 14.7% of revenues, compared to $462,000, or 13.1% of revenues, in the second quarter of 2009.
At June 30, 2010, CVTech's balance sheet remained sound, with cash of $8.9 million and long-term debt, including the current portion, of $41.4 million. The ratio of long-term debt to equity was 0.60 at June 30, 2010, compared to 0.63 at March 31, 2010. The Corporation's total debt was reduced by $4.4 million during the second quarter to $44.1 million at June 30, 2010.
"Both of CVTech's business segments performed strongly in the second quarter," said André Laramée, President and Chief Executive Officer of CVTech. "In the Energy segment, the dynamism and expertise of our subsidiaries in their respective markets brought us strong internal growth of almost 50%, even with a number of projects still waiting for financing related to the U.S. economic recovery program. We also take satisfaction in the strengthening of our competitive position in the CVT systems and related products segment. With the integration of Riggs Distler operations practically complete and our balance sheet steadily improving, CVTech is now in a position to consider eventual strategic acquisitions meeting its strict selection criteria."
For six months ended June 30, 2010, consolidated revenues were $134.7 million, up $81.0 million or 150.8% from $53.7 million in the six months ended June 30, 2009. Energy segment revenues were $123.5 million, including a $41.5-million contribution from Riggs Distler, compared to $44.2 million in the first six months of 2009. Revenues of the CVT systems and related products segment were $11.2 million, up 17.8% from a year earlier.
Consolidated EBITDA was $11.9 million, or 8.9% or revenues, up from $4.3 million, or 8.1% of revenues, in the year-earlier period. CVTech net earnings for the six months were $4.4 million, or $0.06 per diluted share, compared to net earnings of $1.2 million, or $0.02 per diluted share, a year earlier.
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.
EBITDA is 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 (www.sedar.com) 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, email@example.com; Mario Trahan, CMA, Chief Financial Officer, 819-479-7771, firstname.lastname@example.org; MaisonBrison: Martin Goulet, CFA, 514-731-0000, email@example.com; Source: CVTech Group Inc.