The Water Treatment Group further improves its profitability while the Pulp and Paper Group remains affected by the economic slowdown ------------------------------------------------------------------------- - Consolidated revenues of $104.0 M, posting a 30.7% decrease (at constant exchange rates) from the same quarter of the previous year, primarily attributable to the Pulp and Paper Group; - Gross margin representing 26.4% of revenues versus 20.8% last year, this improvement stemming from the Water Treatment Group's increased profitability, mainly due to efficient contract execution, and from the larger proportion of sales generated by the aftermarket in the revenues of both groups; - Non-recurring costs of $1.0 M consisting mainly of severance pay related, notably, to the closing of one of the Water Treatment Group's operating units, whose manufacturing activities were transferred to outsourcing partners; - Consolidated normalized EBITDA(1) of $4.7 M, posting a 37.5% decrease exclusively attributable to the Pulp and Paper Group, as the Water Treatment Group's normalized EBITDA rose by 31.3%; - Consolidated normalized EBITDA margin of 4.5% (vs. 5.0% the previous year), of which a 7.5% margin (vs. 5.2%) for the Water Treatment Group and a 5.7% margin (vs. 8.0%) for the Pulp and Paper Group; - Consolidated normalized net earnings(3) of $1.8 M or $0.06 per share (basic and diluted), compared with $2.9 M or $0.11 per share (basic and diluted) the previous year; - Free cash flows of $1.1 M or $0.03 per share; - As a result of the $36.2 M net proceeds from a share issuance and sound liquidity management, GLV posted a cash surplus of $2.9 M over its total debt as at September 30, 2009; - Order backlog of $225.4 M as at September 30, 2009, a level comparable to June 30, 2009 (at constant exchange rates); - For the first six months of fiscal 2010, GLV posted normalized net earnings of $2.9 M or $0.10 per share (basic and diluted), compared with $5.0 M or $0.19 per share the previous year, due to a significant decline in the Pulp and Paper Group's revenues which was, however, partially offset by an improvement in GLV's gross profit margin attributable to both groups. -------------------------------------------------------------------------
Consolidated Results --------------------
Second-quarter consolidated revenues totalled
Excluding non-recurring items, second-quarter normalized EBITDA(1) amounted to
GLV closed the second quarter with normalized net earnings(3) of
On
Results and Outlook for the Water Treatment Group -------------------------------------------------
At constant exchange rates, this group's quarterly revenues decreased by 8.4% to
In the municipal segment, the Water Treatment Group recorded solid activity during the first half of fiscal 2010 in regard to the upgrading of existing infrastructures in the
The group's second-quarter normalized EBITDA(1) increased to
For information purposes, this graph presents the Water Treatment Group's normalized EBITDA and normalized EBITDA margin for the full 12-month periods ended on the indicated dates. The Water Treatment Group's normalized EBITDA margin for the 12-month period ended
As at
Results and Outlook for the Pulp and Paper Group ------------------------------------------------
During the second quarter, the Pulp and Paper Group's revenues decreased by 48,7% (at constant exchange rates) to
The Pulp and Paper Group's normalized EBITDA(1) amounted to
For information purposes, this graph presents the Pulp and Paper Group's normalized EBITDA and normalized EBITDA margin for the full 12-month periods ended on the indicated dates. For the 12-month period ended
As at
Overall Outlook for GLV -----------------------
As at
The acquisition of CWT, which management hopes to close in the third quarter, and its combination with EWT will contribute additional revenues of approximately
Planned Acquisition of Christ Water Technology AG - Update ----------------------------------------------------------
On
On
On
The Offer documentation and previously published press releases are available on GLV's website (www.glv.com).
About GLV Inc. --------------
GLV is a leading global provider of technological solutions used in water treatment, recycling and purification, as well as in pulp and paper production. The Water Treatment Group (also known worldwide as "Eimco Water Technologies") specializes in the design and international marketing of solutions and high-performance, economical and eco-friendly processes for the treatment and recycling of municipal and industrial wastewater and water used in various industrial processes. It also offers water intake screening solutions for power stations, refineries and desalination plants. With its extensive technological portfolio, the group is positioned to provide comprehensive solutions for the filtration, clarification, treatment and purification of water that will either be returned into the environment, or be re-used in various industrial processes or for domestic purposes. The Pulp and Paper Group specializes in the design and global marketing of equipment and systems used in various stages of pulp and paper production, notably chemical pulping, pulp preparation and sheet formation and finishing. This group ranks among the foremost players in its industry and is a recognized leader in rebuilding, upgrading and optimization services for existing equipment, as well as the sale of spare parts. It also stands apart for the superior performance of several of its key products and technologies, notably in terms of energy savings. GLV is present in some 30 countries and has approximately 1,500 employees.
------------------------------------------------------------------------- The Interim Management's Report for the three and six-month periods ended September 30, 2009, along with the interim consolidated financial statements (unaudited) and accompanying notes, are being filed today on SEDAR's website (www.sedar.com) and the Company's website (www.glv.com). ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONFERENCE CALL WITH INVESTORS ON FINANCIAL RESULTS FOR THE SECOND QUARTER OF FISCAL 2010 Thursday, November 12, 2009, at 2:00 p.m. (Montreal time) To participate in the conference call, please dial 1-877-974-0453 a few minutes before the start of the call. For those unable to participate, a taped re-broadcast will be available starting Thursday, November 12, 2009 from 4:00 p.m. to midnight, November 19, 2009, by dialing 1-877-289-8525; access code 4180009#. THE CONFERENCE CALL (AUDIO) AND A POWER POINT PRESENTATION WILL BE AVAILABLE AT WWW.GLV.COM. Members of the media are invited to listen in. ------------------------------------------------------------------------- Consolidated and Segmented Results, Cash Flows and Balance Sheet ------------------------------------------------------------------------- ------------------------------------------------------------------------- Change (in thousands of $, except Three months 2009 percentages, per share data ended versus and number of shares) September 30, 2008 ------------------------------------------------------------------------- 2009 2008 % ------------------------------------------------------------------------- Revenues: Water Treatment 61,392 67,137 (8.6%) Pulp and Paper 40,612 78,340 (48.2%) Other and eliminations 2,012 4,082 (50.7%) ------------------------------------------------------------------------- Total 104,016 149,559 (30.5%) ------------------------------------------------------------------------- Gross margin 27,512 31,047 (11.4%) Selling and administrative expenses 22,828 23,556 (3.1%) EBITDA 3,724 7,491 (50.3%) Restructuring costs Water Treatment 595 - - Pulp and Paper 239 - - Other and eliminations 126 - - ------------------------------------------------------------------------- Total 960 - - ------------------------------------------------------------------------- Normalized EBITDA(1): Water Treatment 4,589 3,495 31.3% Pulp and Paper 2,314 6,301 (63.3%) Other and eliminations (2,219) (2,305) (3.7%) ------------------------------------------------------------------------- Total 4,684 7,491 (37.5%) ------------------------------------------------------------------------- Depreciation and amortization: Water Treatment 987 1,400 (29.5%) Pulp and Paper 701 709 (1.1%) Other and eliminations 1,183 815 45.2% ------------------------------------------------------------------------- Total 2,871 2,924 (1.8%) ------------------------------------------------------------------------- Normalized EBIT(2): Water Treatment 3,602 2,095 71.9% Pulp and Paper 1,613 5,592 (71.2%) Other and eliminations (3,402) (3,120) 9.0% ------------------------------------------------------------------------- Total 1,813 4,567 (60.3%) ------------------------------------------------------------------------- Financial expenses (424) 1,224 - Income taxes 283 419 (32.5%) Effective tax rate 22.2% 12.5% 9.7% pts ------------------------------------------------------------------------- Net earnings 994 2,924 (66.0%) per share (basic and diluted) 0.03 0.11 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Normalized net earnings(3) 1,762 2,924 (39.7%) per share (basic and diluted) 0.06 0.11 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of participating shares outstanding (in thousands): basic and diluted 31,776 26,543 19.7% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Margins as a percentage of revenues: Gross margin 26.4% 20.8% Normalized EBITDA 4.5% 5.0% Normalized EBIT 1.7% 3.1% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Free cash flow(4) 1,073 6,413 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Order backlogs: Sept. 30, June 30, March 31, 2009 2009 2009 ------------------------------------------------------------------------- Water Treatment 165,111 179,501 191,640 Pulp and Paper 54,253 57,980 74,157 Manufacturing Unit 6,045 6,983 6,882 ------------------------------------------------------------------------- Total 225,409 244,464 272,679 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Change (in thousands of $, except Six months 2009 percentages, per share data ended versus and number of shares) September 30, 2008 ------------------------------------------------------------------------- 2009 2008 % ------------------------------------------------------------------------- Revenues: Water Treatment 125,189 133,690 (6.4%) Pulp and Paper 87,273 153,921 (43.3%) Other and eliminations 4,889 7,438 (34.3%) ------------------------------------------------------------------------- Total 217,351 295,049 (26.3%) ------------------------------------------------------------------------- Gross margin 54,682 64,095 (14.7%) Selling and administrative expenses 46,264 49,293 (6.1%) EBITDA 7,050 14,802 (52.4%) Restructuring costs Water Treatment 611 - - Pulp and Paper 631 - - Other and eliminations 126 - - ------------------------------------------------------------------------- Total 1,368 - - ------------------------------------------------------------------------- Normalized EBITDA(1): Water Treatment 9,189 6,160 49.2% Pulp and Paper 4,359 13,510 (67.7%) Other and eliminations (5,130) (4,868) 5.4% ------------------------------------------------------------------------- Total 8,418 14,802 (43.1%) ------------------------------------------------------------------------- Depreciation and amortization: Water Treatment 1,950 2,971 (34.4%) Pulp and Paper 1,530 1,464 4.5% Other and eliminations 2,508 1,560 60.8% ------------------------------------------------------------------------- Total 5,988 5,995 (0.1%) ------------------------------------------------------------------------- Normalized EBIT(2): Water Treatment 7,239 3,189 127.0% Pulp and Paper 2,829 12,046 (76.5%) Other and eliminations (7,638) (6,428) 18.8% ------------------------------------------------------------------------- Total 2,430 8,807 (72.4%) ------------------------------------------------------------------------- Financial expenses (1,217) 2,704 - Income taxes 487 1,074 (54.7%) Effective tax rate 21.4% 17.6% 3.8% pts ------------------------------------------------------------------------- Net earnings 1,792 5,029 (64.4%) per share (basic and diluted) 0.06 0.19 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Normalized net earnings(3) 2,886 5,029 (42.6%) per share (basic and diluted) 0.10 0.19 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of participating shares outstanding (in thousands): basic and diluted 29,174 26,473 10.2% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Margins as a percentage of revenues: Gross margin 25.2% 21.7% Normalized EBITDA 3.9% 5.0% Normalized EBIT 1.1% 3.0% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Free cash flow(4) 2,409 11,451 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Order backlogs: Dec. 31, Sept. 30, 2008 2008 --------------------------------------------------------- Water Treatment 192,293 202,243 Pulp and Paper 88,152 123,791 Manufacturing Unit 10,521 9,616 --------------------------------------------------------- Total 290,966 335,650 --------------------------------------------------------- --------------------------------------------------------- (1) According to the reporting periods, earnings before depreciation and amortization, financial expenses, income taxes and items recorded outside the normal course of business, including restructuring costs. (2) According to the reporting periods, earnings before financial expenses, income taxes and items recorded outside the normal course of business, including restructuring costs. (3) According to the reporting periods, net earnings before items recorded outside the normal course of business, including restructuring costs (less related taxes). (4) Cash flows from operating activities excluding net changes in non-cash balances related to operations, less property, plant and equipment acquisitions (net of disposals).
EBITDA, EBIT, normalized net earnings and free cash flows are not performance measures consistent with Canadian generally accepted accounting principles ("GAAP"). The information regarding measures not consistent with Canadian GAAP is contained in the Company's Management's Report filed on SEDAR and on the Company's website (www.glv.com) effective today.
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Notice Regarding Forward-Looking Statements:
Certain statements included in this press release may constitute, within the meaning of applicable securities legislation, forward-looking statements relating to the Company's future growth trends, operating results and performance. Forward-looking statements concern analyses and other information based on forecasted future results and the estimate of amounts that cannot yet be determined. These may be observations concerning, among others, strategies, expectations, objectives, projections, estimates, predictions, planned activities or future actions. 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, notably in regard to certain assumptions. The purpose of the forward-looking statements included herein is to assist the reader in understanding the nature and the importance of the changes and trends, as well as the risks and uncertainties associated with the Company's operations and financial position, and may not be appropriate for other purposes.
The Company's management would like to point out that forward-looking statements involve a number of risks and uncertainties such that the Company's actual and future results could differ materially from the conclusions, assumptions or projections reflected in these forward-looking statements. Factors of uncertainty and risk that might result in such material differences include trends in the demand for the Company's products and services and cost of its raw materials, fluctuations in the value of various currencies, tightening of credit markets, pressures exerted on prices by the competition and general changes in economic conditions. The Company cautions readers that the foregoing list of risk factors is not exhaustive. Although the Company believes these assumptions to be reasonable and appropriate based on the information in its possession, there can be no assurance as to the materialization of the results, performance or achievements as expressed in or underlying the forward-looking statements. In addition, unless otherwise indicated, the forward-looking statements included in this Interim Management's Report were set forth at the date hereof, and unless required to do so pursuant to applicable securities legislation, management assumes no obligation as to the updating or revision of the forward-looking statements as a result of new information, future events or other changes.
For further information about the various factors that might affect the Company's future results, the reader is referred to the Company's filings with Canadian securities regulatory authorities, including Section V, "Risk Management" of the Management's Report for the fiscal year ended
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For further information: Marc Barbeau, CA, Executive Vice-President and Chief Financial Officer, (514) 284-2224, [email protected]; www.glv.com
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