OAKVILLE, ON, March 7, 2012 /CNW/ - Vicwest Inc. (the "Company") (TSX: VIC, VIC.DB) today reported strong revenue and EBITDA1 growth for the three and twelve months ended December 31, 2011 and a positive outlook for 2012.
Fourth Quarter Consolidated Results Summary
- Revenue increased 24.1% to $108.8 million from $87.7 million a year ago.
- Gross profit was $17.0 million (15.6% gross margin) compared to $15.9 million (18.2% gross margin) a year ago.
- EBITDA1 was $6.2 million, 14.6% above the prior year's EBITDA1 of $5.4 million.
- EBT2 was $2.8 million compared to a loss of $0.3 million a year ago.
- Net income was $1.8 million ($0.09 per share basic and diluted) compared to $2.3 million ($0.13 per share basic and diluted) a year ago. Net income was negatively impacted by a year over year increase in income taxes due primarily to the conversion from an income trust to a corporation.
Fourth Quarter Divisional Results
- Vicwest Building Product's revenue was $75.1 million, 19.2% higher than a year ago primarily due to the contribution of All Weather Insulated Panels ("All Weather") and modest increases noted in both light commercial and ICI markets. EBITDA1 was $2.0 million compared to $3.8 million in the prior year; this decrease is a reflection of a less favourable product sales mix and one-time costs related to the launch of the new SAP enterprise resource planning system.
- Westeel Storage Solution's revenue increased 36.4% to $33.7 million from $24.7 million in the fourth quarter of 2010 on higher liquid storage product shipments and sales of domestic agricultural products. EBITDA1 more than doubled to $4.3 million compared to $1.7 million a year ago on higher sales and lower operating costs relative to sales.
"We achieved strong revenue growth throughout 2011 due to the strategic expansion of our product lines and geographic scope," said Colin Osborne, President and Chief Executive Officer. "The Company had very positive sales trend in both divisions and the organic growth at All Weather exceeded our expectations. From a margin perspective, in building products we have not yet achieved full recovery of input costs; however we expect to see margin expansion through 2012 as we continue to focus on cost control and begin to benefit from recovering construction activity."
Annual Consolidated Results
- Revenue increased 16.9% to a record $417.3 million from $357.0 million in 2010.
- Gross profit was $67.7 million (16.2% gross margin) compared to $62.1 million (17.4% gross margin) a year ago.
- EBITDA1 excluding business development and restructuring expenses increased 23.0% to $28.3 million compared to $23.0 million (6.4% EBITDA1 margin) a year ago. On an unadjusted basis, EBITDA1 increased 7.6% to $24.7 million (5.9% EBITDA1 margin).
- Net income was $12.5 million ($0.67 per share basic, $0.53 per share diluted) or $11.4 million excluding the effect of the gain on the embedded derivative revaluation, restructuring and business development expenses compared to $12.4 million ($0.71 per share basic and diluted) a year ago.
- Vicwest Inc. declared $0.96 per share in dividends in 2011, inclusive of the most recent $0.15 per share dividend declared November 9, 2011 and paid on January 13, 2012.
At year end, the Company had net debt of $85.4 million compared to $85.9 million at September 30, 2011 and $54.6 million at year end 2010. The year-over-year increase primarily reflects borrowings to support year end steel procurement strategies. At December 31, 2011, senior debt to EBITDA1 was 1.4 and there was $25.2 million available under the revolving credit facility.
Both divisions expect to generate strong revenue growth in 2012. Vicwest Building Products year end 2011 order backlog was 39% higher than at the end of 2010, reflecting increasing market penetration for insulated metal panels ("IMP"). Demand for IMP as an architectural feature in leading-edge building design plays to one of Vicwest Building Product's growing strengths and supports construction of our third IMP plant for the North American market, which is set to commence operations in Little Rock, Arkansas in the fourth quarter of 2012.
Westeel's year end 2011 order backlog was 20% higher than at the end of 2010. Westeel will use 2012 as a staging year for its growth strategies in the United States and Europe. In the U.S. through its partnership with Buhler Industries, Westeel's product lines will be introduced in key territories not previously served. From Madrid, where it recently established its first direct European application engineering and sales office, Westeel will build closer relationships with buying groups across Europe, the Former Soviet Union, the Middle East and North Africa.
Despite positive revenue expectations, the Company's outlook assumes challenging market conditions and therefore margin pressure from high steel costs and competitive pressures are expected to prevail for much of 2012, though we do expect margin improvement year over year. Steel costs have also risen since year end, but remain below the 2011 peak.
"Our performance and ability to manage the effects of input costs on margins will remain dependent on product line expansion, deeper penetration of targeted global markets, higher productivity and disciplined cost control across the board," said Mr. Osborne. "Fortunately, we are better positioned to meet market challenges due to aggressive steps taken to create more comprehensive product offerings, sales partnerships, and cost control programs. As well, we went live on our new SAP enterprise resource planning system in the Vicwest Building Products segment on January 3rd, 2012, and we look forward to leveraging this system to improve business efficiency. These activities put us in the best possible position to drive profitable growth in 2012 and give us, on balance, a positive outlook."
Fourth Quarter Conference Call and Webcast
Vicwest Inc. will host its fourth quarter 2011 conference call and webcast on Thursday March 8, 2012 beginning at 11 am ET. To participate in the teleconference, the numbers are 416-644-3417 or 1-877-974-0447. To participate in the webcast, please visit Vicwest's website at www.vicwestinc.com (News & Events section). To participate in the teleconference, the numbers are 416-644-3417 or 1-877-974-0447.
ABOUT VICWEST INC.
Vicwest Inc. is a leading manufacturer and distributor of building construction products, and steel containment products for agricultural grain, fertilizer and liquid storage. Through its Vicwest Building Products division, the Company fabricates and markets metal roofing, siding and other metal building products under the trade names Vicwest, Mercury Metals, Valley Truss & Metal, RCA Metal and AWIP-Vicwest USA. The Company's Westeel Storage Solutions division manufactures storage solutions for agricultural grain and fertilizer, as well as liquid storage tanks and accessories. These products are manufactured and distributed under the trade names Westeel, Northern Steel Industries and NSI. Through a global alliance, Westeel distributes Buhler Industries-manufactured grain handling equipment in Canada under the Westeel brand while Buhler Industries markets and sells Westeel-manufactured products through its US distribution network. Westeel's European branch serves the growing international demand for agricultural grain storage and handling equipment. In Canada, Westeel also represents Skandia, Europe's most advanced elevator and conveyor grain handling systems. With approximately 1,200 dedicated employees and strategically located manufacturing facilities, the Company delivers superior quality products and excellent service to customers in chosen markets. Vicwest Inc. is a member of the S&P/TSX SmallCap Index. For more information, visit www.vicwestinc.com.
Certain statements in this press release constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include, but are not limited to, management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by such statements. Readers are encouraged to review the most recently filed Management's Discussion and Analysis and other disclosure documents filed by the Company with Canadian securities regulatory agencies and commissions. Readers are cautioned not to place undue reliance on the Company's forward-looking statements. The forward-looking statements contained herein are made as of the date of this press release and except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
1 Earnings before finance expense, taxes (other than capital taxes), depreciation and amortization and fair value adjustments to financial instruments. EBITDA and EBITDA margin are non-IFRS measures.
2 Earnings before income taxes.
For further information:
President & Chief Executive Officer
Tel: (905) 469-5700
Fax: (905) 825-1090
Chief Financial Officer
Tel: (905) 469-5706
Fax: (905) 825-1090