TerraVest Announces First Quarter Results for Fiscal 2019

TORONTO, Feb. 13, 2019 /CNW/ - TerraVest Industries Inc, (TSX: TVK) ("TerraVest" or the "Company") announces its results for the first quarter ended December 31, 2018. The Company's financial results for the first quarter ended December 31, 2018 represent an improvement over the comparable period of fiscal 2018.

FIRST QUARTER RESULTS AND OUTLOOK

Business Performance

Management believes that there are certain non‐IFRS financial measures that can be used to assist shareholders in analyzing the performance of the Company. The table below highlights certain financial results and reconciles net income to EBITDA, EBITDA to Adjusted EBITDA and Adjusted EBITDA to Cash Available for Distribution for the first quarter ended December 31, 2018 and the comparative period in fiscal 2018.

	First quarters ended
	Dec. 31, 2018	Dec. 31, 2017
	$	$
Sales	79,031	62,603
Net income	6,139	5,147
Add:
Income tax expenses	2,490	1,941
Financing costs	1,514	1,077
Depreciation and amortization	3,036	2,467
EBITDA	13,179	10,632
Change in fair value of derivative financial instruments	1,747	177
(Gain) loss on disposal of property, plant and equipment	(128)	45
Adjusted EBITDA	14,798	10,854
Maintenance Capital Expenditures	(1,551)	(813)
Income taxes paid	(3,927)	(1,424)
Interest paid	(1,423)	(1,197)
Cash Available for Distribution	7,897	7,420
Dividends Paid in the Period	1,763	1,842
Dividend Payout Ratio	22%	25%

Sales for the quarter ended December 31, 2018 were $79,031 compared to $62,603 for the prior comparable period, representing an increase of 26%. This increase is a result of the addition of MaXfield Group Inc. ("MaXfield"), which did not contribute in the prior comparable period, as well as increased levels of business activity in the Fuel Containment and Processing Equipment segments.

Adjusted EBITDA for the quarter ended December 31, 2018 was $14,798 compared to $10,854 for the prior comparable period. This represents an increase of 36%, which is a result of the reasons explained above.

Maintenance Capital Expenditures were $1,551 for the quarter versus $813 for the prior comparable period. The difference is related to timing of capital expenditures during the year. During the period, the Company's total purchase of property, plant and equipment was $5,114 of which $3,563 is considered growth capital. This growth capital includes additions to the Company's desanding rental equipment fleet, as well as manufacturing equipment to support capacity expansions and process improvements in several of its businesses.

Income taxes paid increased from $1,424 to $3,927. This is a result of increased profitability in the first quarter ended December 31, 2018 compared to the prior comparable period as well as timing of installment payments.

Cash Available for Distribution increased 6% quarter over quarter. This increase is largely explained from the recent acquisition and increased business activity in Fuel Containment and Processing Equipment partially offset by higher maintenance capital expenditures and income taxes.

Outlook

TerraVest saw improved results this quarter versus the prior comparable quarter due to contributions from recently acquired businesses and newly added product lines, as well as a general increase in business activity. The Fuel Containment segment continues to see increased demand for most of its products and throughout the remainder of the year management expects to realize the full benefits of recently added products lines and growth capital expenditures aimed at capacity expansion and efficiency improvements. Management's expectations for the Processing Equipment segment are positive as this segment will benefit from a full year of contribution from the recently acquired MaXfield. However, recent volatility in commodity pricing could have a negative impact moving forward. The outlook for the Service segment is not materially different than the prior year. Pricing pressure has been a major challenge for this segment. Management expects this to persist until commodity pricing improves.

DIVIDEND

TerraVest is also pleased to announce that The Board of Directors has declared its quarterly dividend of 10 cents per Common share payable on April 10, 2019 to shareholders of record as at the close of business on March 29, 2019. The dividend is designated an "eligible dividend" for Canadian income tax purposes.

Additional information can be found in TerraVest's interim condensed consolidated financial statements and MD&A which are available on SEDAR at www.sedar.com.

Caution Regarding Forward-Looking Statements

This news release contains forward-looking statements.  All statements other than statements of historical fact contained in this news release are forward-looking statements, including, without limitation, statements regarding our strategic direction and evaluation of the business segments and TerraVest as a whole, and other plans and objectives of or involving TerraVest. Readers can identify many of these statements by looking for words such as "expects" and "will" and similar words or the negative thereof. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

By their nature, forward-looking statements require us to make assumptions and, accordingly, forward looking statements are subject to inherent risks and uncertainties. There is significant risk that the forward-looking statements will not prove to be accurate. We caution readers of this news release not to place undue reliance on our forward-looking statements because a number of factors may cause actual future circumstances, results, conditions, actions or events to differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements and the assumptions underlying the forward-looking statements. 

Assumptions and analysis about the performance of TerraVest as a whole and its business segments, the markets in which the business segments compete and the prospects and values of the business segments are considered in setting the business plan for TerraVest, plans and/or ability to pay dividends, outlook for operations, financial position, results and cash flow, other plans and objectives and in making related forward-looking statements. Such assumptions include, without limitation, demand for products and services of the business segments in respect of the Canadian and other markets in which the businesses are active will be stable, and that input costs to business segments do not vary significantly from levels experienced historically. Should any of these factors or assumptions vary, actual results may differ materially from the forward-looking statements.

SOURCE TerraVest Industries Inc.

For further information: Dustin Haw, TerraVest Industries Inc., Chief Executive Officer, [phone], [email protected]

Related Links

https://www.terravestcapital.com/