Highlights - Fiscal 2014 Q3 compared with Fiscal 2013 Q3
- Revenues of $158.6 million, up 9.0%;
- Normalized adjusted EBITDA of $5.1 million, up 11.3%;
- Goodwill and intangible asset impairment charge of $26.9 million ;
- Net loss attributable to shareholders of GLV Inc. of $26.7 million or $0.61 per share, basic and diluted;
- Normalized net earnings of $1.5 million or $0.03 per share, basic and diluted;
- Large $28.0 million contract for Ovivo in the Municipal North America market;
- Backlog of $429.1 million, up 9.5% from the September 30, 2013 level;
- Net debt of $31.2 million, down 14.8% from the September 30, 2013 level.
MONTREAL, Feb. 13, 2014 /CNW Telbec/ -
(All amounts are in Canadian dollars.)
For the third quarter of fiscal 2014, GLV Inc. (GLV Group or the Corporation) reported revenues $158.6 million and normalized adjusted EBITDA of $5.1 million, up 9.0% and 11.3%, respectively, from the third quarter of the previous fiscal year. However, the Corporation recorded a net loss attributable to shareholders of GLV Inc. of $26.7 million or $0.61 per share, basic and diluted, compared with net earnings from continuing operations of $3.1 million or $0.07 per share, basic and diluted, for the same quarter of the previous fiscal year. This loss is primarily related to an asset impairment charge of $26.9 million during the quarter at Ovivo arising mainly from lacklustre performance in the Municipal market in Europe, the Middle East and Africa (EMEA) and remeasurement of the value of the Energy segment. In Energy, the combination of delays in the awarding of certain contracts and unfavourable adjustments to cost forecasts for a large contract negatively impacted profitability.
"Despite the asset impairment charge, management of GLV Inc. is satisfied with revenue growth, particularly in Ovivo's four core segments, and is pleased with the increase in the backlog. We are confident about the prospects for our two operating groups and will continue our efforts to improve our profit margin," stated Richard Verreault, President and CEO of GLV Inc.
Ovivo's revenues rose 14.9% from the same quarter of the previous fiscal year, driven primarily by 21.3% growth in its four core segments (Municipal, Electronics and Metals, Energy, and Parts and Services). Revenues at GL&V Pulp and Paper were up slightly by 2.4% from the previous year due to higher sales in the Parts and Services market, partly offset by delays in the awarding of contracts for new equipment sales.
At Ovivo, the Electronics and Metals and the Municipal North America markets generated better operating results than in the same quarter of the previous fiscal year, bolstered by a favourable backlog and continuing effectiveness in contract performance and monitoring. The Parts and Services market experienced its best quarter for business volume since measures were implemented to develop this segment. However, profitability declined in the Municipal EMEA market, mainly in the U.K., related to a slowdown in order taking and unsatisfactory performance in the execution of certain contracts. Based on the results recorded in this market over several quarters, management implemented restructuring measures, mainly in this segment, and a restructuring charge of $1.3 million was recorded during the quarter. These measures are expected to generate annual savings of over $2.0 million.
Operating results at GL&V Pulp and Paper were higher than for the same quarter of the previous fiscal year, reflecting the completion of projects with lower margins that impacted results in the third quarter of fiscal 2013 and the significant contribution made by the Parts and Services market to group profitability.
For the third quarter of fiscal 2014, GLV Group's normalized net earnings are $1.5 million or $0.03 per share, basic and diluted, compared with $3.9 million or $0.09 per share, basic and diluted, for the third quarter of the previous fiscal year. This decline in profitability results mainly from higher income tax expense, partly offset by lower net financial expenses and favourable changes related to derivative instruments.
For the nine-month period ended December 31, 2013, the Corporation reported normalized net earnings of $5.6 million or $0.13 per share, basic and diluted, compared with a normalized net loss of $3.2 million or $0.07 per share, basic and diluted, for the same period of the previous fiscal year. This improvement in profitability is due mainly to significantly lower net financial expenses and favourable changes related to derivative instruments which offset the higher income tax expense.
Backlog and outlook
As at December 31, 2013, GLV Group's backlog stood at $429.1 million, its highest level in more than three years, compared with $391.9 million as at September 30, 2013.
Ovivo's higher backlog is primarily due to the Municipal North America market, where a large $28 million contract for an MBR system (membrane bioreactor), announced in October 2013, will be performed mainly during fiscal 2015 and 2016. The rise in backlog was also driven by the Parts and Services market, which stood at a historical high as at December 31, 2013. The backlog in the Electronics and Metals market, which increased significantly over the last 18 months, declined as expected due to the progress made on projects. The backlog in the Municipal EMEA market has been affected by lower order taking, following a significant slowdown in this segment over the last several quarters. In the Energy segment, slow bookings in the first two quarters of fiscal 2014 may have an adverse impact on our results in the upcoming quarters.
Given the backlog level, the ongoing plan to develop the Parts and Services market, implementation of the global procurement strategy and the efforts to continuously improve contract execution, management expects a gradual improvement in Ovivo's operational profitability over the coming quarters.
At GL&V Pulp and Paper, the backlog increased due to the level of order taking for new equipment in North America and in the Parts and Services market.
For fiscal 2014 as a whole, in light of the outlook in the segments serviced by each group, the Corporation continues to expect consolidated revenues to total between $600 million and $625 million.
This press release discusses the highlights for the third quarter ended December 31, 2013. For a detailed analysis, see the interim management's discussion and analysis and unaudited interim condensed consolidated financial statements, filed today on the websites of SEDAR (www.sedar.com) and the Corporation (www.glv.com). Note that non-IFRS financial measures were used to analyze performance, as management considers that they provide useful information for investors seeking to assess the Corporation's performance and financial position.
About GLV Group (GLV Inc.)
GLV Group is made up of international companies operating primarily in the water treatment (Ovivo) and pulp and paper (GL&V Pulp and Paper) industries that offer comprehensive technological solutions as well as services and equipment tailored to specific client needs. GLV Group's business units operate in more than 25 countries and have over 1,800 employees. GLV Inc. is a public company whose shares trade on the Toronto Stock Exchange under the ticker symbols GLV.A and GLV.B.
Notice regarding forward-looking statements
Certain statements in this press release and other public communications regarding management's objectives, projections, estimates, expectations or forecasts may constitute forward-looking statements within the meaning of applicable securities legislation. Forward-looking statements are recognized by the use of terms such as "forecast," "project," "could," "plan," "aim," "estimate" and other similar terms, possibly used in the future or conditional, particularly with regard to certain assumptions. The management of GLV would like to point out that forward-looking statements involve a number of uncertainties and known and unknown risks such that the actual and future results of GLV could differ considerably from those stated. There can be no assurance as to the materialization of the results, performance or achievements as expressed in or underlying the forward-looking statements. The forward-looking statements included in this press release were made as of the date hereof, and unless required to do so pursuant to applicable securities legislation, management of GLV assumes no obligation to update them.
Additional information about the risk factors to which GLV Inc. is exposed is provided under section 10, "Risks and uncertainties," of the management's discussion and analysis for the fiscal year ended March 31, 2013 available on SEDAR (www.sedar.com) and the Corporation's website (www.glv.com).
| CONFERENCE CALL
Date and time: Thursday, February 13, 2014 at 2:00 p.m. (EST)
1-888-231-8191 (North America)
An audio webcast of the conference call will be streamed live on www.glv.com. An audio recording will be accessible on demand from 5:00 p.m. (EST), February 13, 2014 until midnight Thursday, February 20, 2014 at 1-855-859-2056 (1-416-849-0833-International), access code: 35224986#.
SOURCE: GLV Inc.
For further information:
Chief Financial Officer
Tel.: +1 514-842-7236
Global Director, Communications
Tel.: +1 514-845-7233