The Acquisition of Christ Water Technology AG Contributes to Double GLV's Order Backlog
------------------------------------------------------------------------- - Consolidated revenues of $139.7 M, compared with $154.0 M the previous year, including a 24.9% organic decrease (at constant exchange rates) partly mitigated by the one-month contribution of Christ Water Technology AG ("CWT"); - Gross margin representing 23.7% of revenues versus 23.0% last year, notably due to the larger proportion of aftermarket sales in the revenue mix; - Reversal of a special provision of $1.0 M for doubtful accounts in the Pulp and Paper Group due to a customer's improved situation and the negotiations underway to recover the receivable; - Consolidated normalized EBITDA(1) of $7.5 M, up 7.7% at constant exchange rates; - Consolidated normalized EBITDA margin of 5.4% (vs. 5.2% the previous year), including a 6.7% margin for the Water Treatment Group and a 6.4% margin for the Pulp and Paper Group; - Excluding the expenses incurred by two EWT technological start-up units, which have not yet started to generate revenues, the Water Treatment Group's normalized EBITDA margin for the three and nine-month periods ended December 31, 2009 would have stood at 7.1% and 7.7% respectively; - Consolidated normalized net earnings(3) of $1.6 M or $0.05 per share (basic and diluted), compared with $4.7 M or $0.18 per share (basic and diluted) the previous year; - Order backlog of $442.4 M as at December 31, 2009, up 98,7% (at constant exchange rates) over September 30, 2009, primarily reflecting the addition of CWT. -------------------------------------------------------------------------
Consolidated Results --------------------
Consolidated revenues for the third quarter amounted to
Despite the addition of CWT, total selling and administrative expenses decreased by
Excluding these non-recurring items, third-quarter normalized EBITDA(1) amounted to
As at
For the fiscal year that will end on
Since the acquisition of CWT occurred only one month prior to the close of the third quarter ended
Results and Outlook for the Water Treatment Group -------------------------------------------------
The group's quarterly revenues grew by 33.1% (at constant exchange rates) to
The group's normalized EBITDA(1) increased by 22.0% (at constant exchange rates) to
As at
Results and Outlook for the Pulp and Paper Group ------------------------------------------------
This group's quarterly revenues decreased by 36.5% (at constant exchange rates) to
Normalized EBITDA(1) decreased by 45.4% (at constant exchange rates) to
As at
The Company has initiated its annual goodwill impairment test. Management is currently reviewing the Pulp and Paper Group's strategic plan and operating budget in order to finalize the annual impairment test during the fourth quarter of the current fiscal year. Should goodwill impairment be recognized in the Pulp and Paper Group, it would be recognized in the financial results for the fourth quarter and fiscal year ending
Purchase of CWT's Shares - Update ---------------------------------
In addition to the 80.5% of CWT's outstanding shares acquired by GLV in
Reporting by CWT of Preliminary Figures for its Fiscal Year Ended December 31, 2009 -----------------------------------------------------------------
Concurrently with the release of GLV's results for the third quarter ended
About GLV Inc. --------------
GLV is a leading global provider of technological solutions used in water treatment as well as in pulp and paper production. The Water Treatment Group specializes in the design and international marketing of solutions and high-performance, economical and eco-friendly processes for the treatment, ultrapurification and recycling of municipal and industrial wastewater and water used in various industrial processes. It notably offers solutions for power stations and seawater desalination plants, while also meeting the specific needs of the microelectronics, food and beverage processing, petrochemicals, pulp and paper, metal processing and certain other industries. With its extensive technological portfolio, the group is positioned to provide comprehensive solutions for the filtration, clarification, treatment purification and recycling 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 around the world and has approximately 2,350 employees.
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) December 31, 2008 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 2009 2008 % ------------------------------------------------------------------------- Revenues: Water Treatment 94,782 75,897 24.9% Pulp and Paper 42,247 72,994 (42.1%) Other and eliminations 2,685 5,069 (47.0%) ------------------------------------------------------------------------- Total 139,714 153,960 (9.3%) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Gross margin 33,176 35,382 (6.2%) Selling and administrative expenses 25,640 27,385 (6.4%) EBITDA 7,886 2,293 243.9% Normalized items: Water Treatment - 236 - Pulp and Paper (1,000) 5,468 - Other and eliminations 650 - - ------------------------------------------------------------------------- Total (350) 5,704 - ------------------------------------------------------------------------- Normalized EBITDA(1): Water Treatment 6,306 5,690 10.8% Pulp and Paper 2,697 5,448 (50.5%) Other and eliminations (1,467) (3,141) (53.3%) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total 7,536 7,997 (5.8%) ------------------------------------------------------------------------- Depreciation and amortization: Water Treatment 1,860 1,434 29.7% Pulp and Paper 689 747 (7.8%) Other and eliminations 1,217 711 71.2% ------------------------------------------------------------------------- Total 3,766 2,892 30.2% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Normalized EBIT(2): Water Treatment 4,446 4,256 4.5% Pulp and Paper 2,008 4,701 (57.3%) Other and eliminations (2,684) (3,852) (30.3%) ------------------------------------------------------------------------- Total 3,770 5,105 (26.2%) ------------------------------------------------------------------------- Financial expenses 2,226 (1,304) - Income taxes 155 241 (35.7%) Effective tax rate 8.2% 34.2% -26.0% pts ------------------------------------------------------------------------- Net earnings 1,858 464 300.4% per share (basic and diluted) 0.05 0.02 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Normalized net earnings(3) 1,578 4,744 (66.7%) per share (basic and diluted) 0.05 0.18 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of participating shares outstanding (in thousands): basic and diluted 34,953 26,544 31.7% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Margins as a percentage of revenues: Gross margin 23.7% 23.0% Normalized EBITDA 5.4% 5.2% Normalized EBIT 2.7% 3.3% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Free cash flow(4) 4,548 4,839 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Order backlogs: Dec. 31, Sept. 30, June 30, 2009 2009 2009 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Water Treatment 391,147 165,111 179,501 Pulp and Paper 46,915 54,253 57,980 Manufacturing Unit 4,358 6,045 6,983 ------------------------------------------------------------------------- Total 442,420 225,409 244,464 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Change (in thousands of $, except Nine months 2009 percentages, per share data ended versus and number of shares) December 31, 2008 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 2009 2008 % ------------------------------------------------------------------------- Revenues: Water Treatment 219,971 209,587 5.0% Pulp and Paper 129,520 226,915 (42.9%) Other and eliminations 7,574 12,507 (39.4%) ------------------------------------------------------------------------- Total 357,065 449,009 (20.5%) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Gross margin 87,858 99,477 (11.7%) Selling and administrative expenses 71,904 76,678 (6.2%) EBITDA 14,936 17,095 (12.6%) Normalized items: Water Treatment 611 236 158.9% Pulp and Paper (369) 5,468 - Other and eliminations 776 - - ------------------------------------------------------------------------- Total 1,018 5,704 (82.2%) ------------------------------------------------------------------------- Normalized EBITDA(1): Water Treatment 15,495 11,850 30.8% Pulp and Paper 7,056 18,958 (62.8%) Other and eliminations (6,597) (8,009) (17.6%) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total 15,954 22,799 (30.0%) ------------------------------------------------------------------------- Depreciation and amortization: Water Treatment 3,810 4,405 (13.5%) Pulp and Paper 2,219 2,211 0.4% Other and eliminations 3,725 2,271 64.0% ------------------------------------------------------------------------- Total 9,754 8,887 9.8% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Normalized EBIT(2): Water Treatment 11,685 7,445 57.0% Pulp and Paper 4,837 16,747 (71.1%) Other and eliminations (10,322) (10,280) 0.4% ------------------------------------------------------------------------- Total 6,200 13,912 (55.4%) ------------------------------------------------------------------------- Financial expenses 1,009 1,400 (27.9%) Income taxes 642 1,315 (51.2%) Effective tax rate 15.4% 19.3% -3.9% pts ------------------------------------------------------------------------- Net earnings 3,650 5,493 (33.6%) per share (basic and diluted) 0.12 0.21 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Normalized net earnings(3) 4,464 9,773 (54.3%) per share (basic and diluted) 0.14 0.37 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of participating shares outstanding (in thousands): basic and diluted 31,108 26,501 17.4% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Margins as a percentage of revenues: Gross margin 24.6% 22.2% Normalized EBITDA 4.5% 5.1% Normalized EBIT 1.7% 3.1% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Free cash flow(4) 6,957 16,290 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Order backlogs: March 31, Dec. 31, 2009 2008 ---------------------------------------------------------- ---------------------------------------------------------- Water Treatment 191,640 192,293 Pulp and Paper 74,157 88,152 Manufacturing Unit 6,882 10,521 ---------------------------------------------------------- Total 272,679 290,966 ---------------------------------------------------------- ---------------------------------------------------------- (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, special doubtful accounts amounts and special compensation amounts. (2) According to the reporting periods, earnings before financial expenses, income taxes and items recorded outside the normal course of business, including restructuring costs, special doubtful accounts amounts and special compensation amounts. (3) According to the reporting periods, net earnings before items recorded outside the normal course of business, including restructuring costs, special doubtful accounts amounts and special compensation amounts (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
------------------------------------------------------------------------- The Interim Management's Report for the three and nine-month periods ended December 31,2009, 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 THIRD QUARTER OF FISCAL 2010 Thursday, February 11, 2010, at 2:00 p.m. (Montreal time) Participants should dial 1-888-231-8191 a few minutes before the start of the call. For those unable to participate, a taped rebroadcast will be available starting Thursday, February 11, 2010 from 5:00 p.m. to midnight, Thursday, February 18, 2010, by dialing 1-800-642-1687; access code 52687961. THE CONFERENCE CALL (AUDIO) WILL BE AVAILABLE AT WWW.GLV.COM. Members of the media are invited to listen in. -------------------------------------------------------------------------
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Notice Regarding Forward-Looking Statements: --------------------------------------------
Certain statements included in this Interim Management's Report 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 the "Risk Management" section of the Interim Management's Report for the three-month period 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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