DRUMMONDVILLE, QC, Nov. 12 /CNW Telbec/ - CVTech Group Inc. ("CVTech" or "the Corporation") (TSX: CVT) today reported results for its third quarter ended September 30. The results reflect the conclusion on July 21, 2009 of the acquisition of all the issued and outstanding shares of Riggs Distler & Company, Inc. ("Riggs Distler"). All amounts are in Canadian dollars unless otherwise indicated.
Consolidated revenues in the third quarter of 2009 were $44.6 million, up $3.4 million or 8.2% from $41.2 million in the third quarter of 2008. The contribution from Riggs Distler was approximately $10.6 million. Earnings before interest, taxes, depreciation and amortization ("EBITDA") were $5.0 million, or 11.2% of revenues, compared to $6.4 million, or 15.6% of revenues, for the same period in 2008. Net earnings were $1.8 million or $0.03 per diluted share, compared to $2.8 million or $0.05 per diluted share for the same period in 2008.
Financial highlights Quarters ended Nine months ended
September 30 September 30
($ thousands except per-share data) 2009 2008 2009 2008
Revenues 44,556 41,180 98,390 108,602
EBITDA* 5,012 6,435 9,431 14,146
Net earnings for the period 1,821 2,810 3,100 5,261
Per share - basic ($) 0.03 0.05 0.05 0.10
Per share - diluted ($) 0.03 0.05 0.05 0.09
Weighted average number of shares
outstanding (diluted, thousands) 71,484 57,942 61,879 57,681
* Earnings before interest, taxes, depreciation and amortization
Revenues in the energy segment increased 15.4% to $40.8 million in the third quarter of 2009 from $35.4 million a year earlier. Excluding the Riggs Distler contribution of $10.6 million, the internal decrease reflects a considerable decline in revenues attributable to the absence of natural disasters in the United States. These revenues were negligible in third quarter 2009 after amounting to about $20.0 million in third quarter of 2008. Also, some projects continue to be delayed somewhat by economic uncertainty. It should be noted that Riggs Distler's revenues typically show a seasonal softness in the third quarter. Consequently about 57% of revenues in the third quarter 2009 were from work carried out in the U.S. versus 70% a year earlier. Reflecting the internal decrease in operating revenues and a less favourable revenue mix, the energy segment ended the third quarter of 2009 with net earnings of $1.7 million, down from $2.9 million a year earlier.
Revenues in the CVT and related products segment were $3.8 million in the third quarter of 2009, compared to $5.8 million in the same quarter of 2008. The decline was due essentially to the effect of economic uncertainty on demand for recreational vehicles. Reflecting previous cost-reduction measures, this sector had net earnings of $75,000 compared to a net loss of $72,000 a year earlier.
As at September 30, 2009, CVTech's balance sheet remained sound despite the Riggs Distler acquisition. The Corporation had cash and cash equivalents of $13.0 million and long-term debt, including the current portion, of $35.2 million. The ratio of long-term debt to equity was 0.55 compared to 0.51 three months earlier.
"We are satisfied with the results obtained despite the absence of high-margin revenues related to natural disasters in the energy sector," said André Laramée, President and Chief Executive Officer of CVTech Group. "The numerous contracts won by our subsidiaries in the energy sector in recent months attest to CVTech's enormous potential. The integration of Riggs Distler's operations is proceeding as planned and is key to realizing our objective of broadening our portfolio of services to customers in this sector. Though the CVT and related products segment continues to be affected by the precarious state of the economy, we are assiduously pursuing our discussions with Tata Motors for an agreement to manufacture CVT systems for its Nano car."
For the first nine months of 2009, consolidated revenues were $98.4 million, compared to $108.6 million in the same period in 2008. EBITDA was $9.4 million, or 9.6% of revenues, compared to $14.1 million, or 13.0% of revenues, a year earlier. Net income was $3.1 million or $0.05 per diluted share, compared to $5.3 million or $0.09 per diluted share last year.
ORDER BACKLOG INCREASES TO $500 MILLION
Including contracts totalling more than $100 million obtained since the end of the third quarter, the Corporation's order backlog as of November 11, 2009 stands at approximately $500 million. The backlog is up significantly from just over $400 million at the closing of the Riggs Distler acquisition.
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 vehicle 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. CVTech currently has approximately 1,120 employees, consisting of 960 in the energy segment and 160 in the CVT and related products segment.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") represent a measure that has no standardized meaning prescribed by Canadian generally accepted accounting principles; it is then considered to be a non-GAAP measure. Therefore, such measure may not be comparable to similar measures presented by other issuers. This measure is described and presented in this MD&A in order to provide additional information regarding the company's liquidity and 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 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, firstname.lastname@example.org; Mario Trahan, CMA, Chief Financial Officer, (819) 479-7771, email@example.com; MaisonBrison: Martin Goulet, CFA, (514) 731-0000, firstname.lastname@example.org; Source: CVTech Group Inc.