Special Crops Earned Adjusted EBITDA1 of $5.9 million
Pacific Coast Canola (PCC) crushed 71% of capacity amidst very low crush margin environment
Consolidated Adjusted EBITDA1 was $3.5 million
WINNIPEG, May 14, 2015 /CNW/ - Legumex Walker Inc. (TSX: LWP) (the "Company") today reported its financial results for the three months ended March 31, 2015. All figures are in Canadian dollars unless otherwise stated.
Highlights for Quarter ended March 31, 2015 (all comparative metrics are relative to the first quarter of 2014, unless otherwise stated):
Special Crops Segment
- Revenue decreased $11.8 million to $82.6 million from $94.4 million based on a 15% decrease in tonnes sold (89,900 tonnes from 105,500 tonnes).
- Adjusted gross profit1 decreased to $8.4 million from $8.9 million; this was an increase of $3.9 million (or 87%) over the $4.5 million earned in Q4 2014.
- Adjusted EBITDA1 decreased to $5.9 million from $6.4 million in Q1 of 2014, but quadrupled compared to $1.4 million earned in Q4 2014. Higher commodity margins in the Q1 2015 of $156 per tonne compared to $141 in Q1 2014 and $110 in Q4 2014.
Oilseed Processing (Canola) Segment
- Tonnes crushed increased 19% to 67,100 (or 70.7% of capacity) from 56,400 (or 59.4% of capacity);
- Non-GMO tonnes crushed were 10% of total tonnes crushed compared to 1% in Q1 2014.
- Adjusted gross profit1 was $107,000 compared to $62,000 for the same period in 2014.
- Adjusted EBITDA1 improved slightly to negative $805,000 from negative $1.1 million. The increase in tonnes crushed was offset by some of the lowest board crush margins since the PCC plant was commissioned in early 2013.
- Consolidated revenues decreased 33% to $85.8 million from $128.5 million reflecting the recognition of revenue earned by the Oilseed segment on a net basis since November 2014 in connection with the Scoular Processing Agreement.
- Adjusted gross profit1 decreased to $8.5 million from $9.0 million, primarily reflecting higher commodity margins per tonne in Special Crops, which was offset by the very low board crush margins in the oilseed division.
- Adjusted EBITDA1 decreased to $3.5 million from $3.8 million, but increased by $3.5 million compared to the fourth quarter of 2014.
- Net loss attributable to shareholders increased to $8.7 million from $6.1 million
"Overall company performance was steady from Q1 2014 to Q1 2015 but improved significantly over the last quarter. Our Special Crops team delivered a great Q1 with higher commodity margins per tonne of $156. This allowed us to earn an Adjusted EBITDA1 of $5.9 million from our Special Crops division, a substantial increase over the fourth quarter 2014. Pacific Coast Canola crushed 71% of capacity amidst a board crush margin environment that reached some of the lowest points since early 2013," said Joel Horn, President and Chief Executive Officer, Legumex Walker Inc. "Our consolidated Adjusted EBITDA1 for the quarter was $3.5 million, substantially better than the negative $31,000 in the fourth quarter 2014 but still considerably less than what we believe we can achieve. PCC continues to work to improve its financial performance when additional non-GMO and local canola seed should be available with the new crop in September."
Although the Company has initiated a strategic review process, there is no certainty that any transaction or alternative will be undertaken. The Company has not set a definitive schedule to complete its evaluation and no decision on any particular alternative has been reached at this time. The Company does not intend to make further announcements or disclose developments with respect to this process unless the evaluation has been completed and the Board has approved a definitive transaction and the Company has entered into a definitive agreement or unless otherwise required by law or regulation or disclosure of which is deemed appropriate.
This news release contains references to "Adjusted Gross Profit" and "Adjusted EBITDA". Adjusted Gross Profit is defined for the purposes of this news release as gross profit before depreciation and amortization. Adjusted EBITDA is defined for the purposes of this news release as earnings (loss) from operations before other income and expenses, depreciation and amortization, financing costs, and income taxes. Management believes that Adjusted Gross Profit, and Adjusted EBITDA are useful supplemental measures of cash flow prior to finance costs, capital expenditures, income taxes and other non-cash items included in earnings. Management uses Adjusted Gross Profit or Loss as financial measures of liquidity. Adjusted EBITDA, Adjusted Gross Profit or Loss are not recognized earnings measures under Canadian Generally Accepted Accounting Principles or IFRS (collectively referred to herein as "Canadian GAAP") and do not have standardized meanings prescribed by Canadian GAAP. Therefore, Adjusted Gross Profit, and Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Investors are cautioned that Adjusted Gross Profit and Adjusted EBITDA should not be construed as an alternative to net earnings or loss (which are determined in accordance with Canadian GAAP) as an indicator of the performance of the Company or as a measure of liquidity and cash flows. The Company believes that Adjusted Gross Profit and Adjusted EBITDA are useful supplemental measures of cash flow prior to debt service, investing and financing activities and income taxes. The Company's method of calculating Adjusted Gross Profit and Adjusted EBITDA may differ materially from the methods used by other public companies and, accordingly, may not be comparable to similarly titled measures used by other public companies. A reconciliation of Adjusted EBITDA to Net Earnings (loss) is set out in section 12 of the MD&A (as defined below).
Financial Statements and MD&A
Legumex Walker's Financial Statements and Management's Discussion and Analysis ("MD&A") for the period ended March 31, 2015 are available on the Company's website at www.legumexwalker.com in the "Investors" section.
Legumex Walker will host a conference call on Friday, May 15, 2015 at 10:00 a.m. ET to discuss its fourth quarter and fiscal year 2014 financial results. To access the conference call by telephone, dial (647) 427-7450 or (888) 231-8191. Please connect approximately 10 minutes prior to the start of the call to ensure access.
A recording of the conference call will be archived for replay by telephone until Friday, May 22, 2015 at midnight. To access the archived conference call, dial 1-855-859-2056 and enter the reservation number 32380869.
A live audio webcast of the conference call will be available at http://www.legumexwalker.com/investors-presentations.php. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast.
About Legumex Walker Inc.
LWI is a growth-oriented processor and merchandiser of pulses and other special crops, and with the completion of the PCC canola seed processing facility in Washington State, canola products. The Company derives its revenue from sourcing, processing, marketing and distributing special crops, canola products and associated healthy, specialty food ingredients to a global customer base. The Company operates processing facilities in the Canadian Prairies, American Midwest, the Pacific Northwest, and China. LWI has an 84 percent interest in Pacific Coast Canola LLC ("PCC"), a canola oilseed processing facility in the State of Washington, the largest commercial-scale canola oilseed processing facility west of the Rocky Mountains.
Cautionary Note on Forward-looking Statements
This press release contains "forward-looking information" within the meaning of Canadian securities laws which may include, but are not limited to, statements relating to the Company's strategic review process, improvements in PCC's financial performance and the expected availability of non GMO and local new canola seed in September 2015. Such forward-looking information reflects the Company's views with respect to future events and is subject to risks, uncertainties and assumptions, including the risk that the PCC plant will not continue to operate at current levels of production, the risk that the volume of non GMO and local new canola seed available in September 2015 will not reach anticipated levels, the risk that no strategic transaction will be undertaken by the Company and the risk that the financial performance of Oilseeds Division will not improve in 2015 as a result of various factors, including as a result of crush margins (being the difference between the sale price of oil and meal and the cost of canola seed) decreasing or not improving in future periods, problems related to the operation of the PCC Plant, weather related risks, availability of feedstock, the demand for and availability of rail, port and other transportation services, the actual results of harvests, fluctuations in the price of pulses and other crops and canola oil prices, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes, as well as those factors referred to in the section entitled "Risk Factors" in the Company's Management's Discussion and Analysis for the period ended December 31, 2014 and in the MD&A which are available on SEDAR at www.sedar.com and should be reviewed in conjunction with this document. The statements relating to the non GMO and local new crop assume that the crop will indeed be available in increased quantities as compared to 2014. The statements with respect to improvements of the Oilseed's financial performance assume increased revenue and/or margins for the balance of 2015 for the Oilseeds Division. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Although the Company believes the assumptions inherent in forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this press release. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.
SOURCE Legumex Walker Inc.