During 2013, TerraVest Capital Inc. ("TerraVest") changed its fiscal year end from December 31 to September 30 and as such, the three-month period ended December 31, 2013 represents the first quarter of the fiscal year ending September 30, 2014.
All amounts in this news release are stated in thousands of Canadian dollars, except per share data.
For the three months ended December 31, 2013 TerraVest reported:
|FINANCIAL PERFORMANCE||Three months ended|
|December 31, 2013||December 31, 2012|
|EBITDA (Note 1)||4,326||3,318|
|Income (loss) attributable to common shares for the period||2,409||(3,319)|
|Free Cash Flow (Note 1)||(4,113)||1,370|
|Income per share, basic and diluted||$||0.19||$||(0.26)|
|FINANCIAL POSITION||December 31, 2013||September 30, 2013|
|Working capital (Note 1)||$||9,961||$||9,162|
|Property, plant and equipment||33,922||32,965|
|Non-current portion of long-term debt||2,674||3,014|
Note 1: Refer to Management Discussion and Analysis dated February 5, 2014 for definitions of these non-GAAP measures.
TerraVest's first quarter of fiscal 2014 saw improvements in both revenues which were up 19% and EBITDA which was up 30% from the first quarter of 2013 as both the Fabrication and Service divisions benefited from stronger activity in the oil and natural gas industry. While revenue and EBITDA improved, Free Cash Flow declined as a result of significant increases in: a) working capital investments, primarily accounts receivable; and b) capital expenditures during the period. Net capital expenditures during the period were $1,759 compared to $1,064 in the three month period ended December 31, 2012. Included in capital expenditures is $1,000 for acquisition of land by the Fabrication segment for future development of a new manufacturing plant.
On January 30, 2014, TerraVest announced it has entered into an agreement to acquire all the issued and outstanding shares of Gestion Jerico Inc. ("Gestion"), a private company based in Quebec. The major shareholder of Gestion is also a significant TerraVest shareholder. Gestion is primarily focused on manufacturing high quality commercial and residential tanks as well dispensers for a variety of industries in North America. Gestion is expected to make significant contributions to TerraVest's EBITDA and Free Cash Flow available for distribution to shareholders. The acquisition is valued at an enterprise value of $54,000 and will be financed by maintain Gestion's existing debt in place, a three year promissory note for $24,915 with a coupon rate of 6.5% and issuance of 1,866,293 common shares of TerraVest in full satisfaction of the purchase price. The acquisition is expected to close on or about February 15, 2014.
TerraVest is also pleased to announce that the Board of Directors of TerraVest Capital Inc. (TSX:TVK) has today declared that a regular quarterly dividend of 10 cents per share upon the outstanding common shares will be payable on February 28, 2014 to shareholders of record as at the close of business on February 20, 2014. The ex-dividend date is February 18, 2014. The dividend is designated an "eligible dividend" for Canadian income tax purposes.
Additional information can be found in TerraVest's unaudited 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 expectations for the closing date and the financial contributions of Gestion. 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 Gestion's business will continue substantially in its current state and that TerraVest will be successful both in closing the acquisition and in integrating Gestion's business. Should any of these factors or assumptions vary, actual results may differ materially from the forward-looking statements.
The information set forth under "Risk Factors" in the annual information form of TerraVest dated December 11, 2013 and under "Risk Factors" in the MD&A of TerraVest for the three months ended December 31, 2013, identifies risk factors that could affect the operating results and performance of TerraVest and its business segments and the values of the business segments and TerraVest as a whole. We caution that the lists of factors discussed in such information is not exhaustive and that, when relying on forward-looking statements to make decisions with respect to TerraVest, investors and others should carefully consider the factors discussed, as well as other uncertainties and potential events, and the inherent risks and uncertainties of forward-looking statements. The forward-looking statements herein are made based on the assumption that TerraVest will not be affected by such risks, but that, if TerraVest is affected by such risks, the forward-looking statements may become inaccurate.
The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this news release are made as of the date of this news release. Except as required by applicable securities laws, TerraVest does not undertake to update such forward-looking statements.
SOURCE: TerraVest Capital Inc.
For further information:
TerraVest Capital Inc.
Chief Executive Officer
(780) 632 -7774
Paul A. Casey, CA
TerraVest Capital Inc.
Chief Financial Officer