Highest EBITDA1 in 11 Quarters
OAKVILLE, ON, Aug. 8, 2012 /CNW/ - Vicwest Inc. (the "Company") (TSX: VIC) (VIC.DB) today reported its financial results for the three months ended June 30, 2012 including strong growth in profitability on higher product sales to agriculture and oil and gas markets and lower costs.
Second Quarter Consolidated Results Summary
- Revenue was $107.7 million, 0.7% or $0.8 million lower than a year ago.
- Gross profit increased 11.3% to $19.1 million (17.7% gross margin) compared to $17.2 million (15.8% gross margin) a year ago.
- EBITDA1 was $9.5 million, 56.2% higher than $6.1 million a year ago.
- Net income was $6.7 million ($0.37 per share basic), 88.3% higher than $3.5 million ($0.19 per share basic) a year ago while net income excluding the change in fair value of the embedded derivative2 was $3.9 million ($0.22 per share basic) compared to $1.6 million ($0.08 per share basic) a year ago.
"Strong profit growth this quarter reflected our ongoing focus on driving value-added product sales within chosen markets coupled with active cost and raw material supply management," said Colin Osborne, President and CEO.
In addition to making important reinvestments in new plant capacity and automation, the Company also succeeded in "significantly strengthening our balance sheet and improving financial capacity during the first half of 2012," said Kent Harris, Chief Financial Officer. "As a result, we have a better foundation to pursue our growth strategies."
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 Net income excluding the change in fair value of the embedded derivative is a non-IFRS measure.
On August 7, 2012 the Board declared a third quarter dividend of $0.15 per share, payable on October 15, 2012 for shareholders of record on September 28, 2012. This is consistent with the quarterly dividend declared and paid in respect of the first and second quarters of 2012.
Second Quarter Divisional Results
- Westeel's revenue increased 14.2% to $44.0 million from $38.5 million on higher liquid storage product shipments and sales of agricultural products to domestic markets. Divisional net income was $6.3 million compared to $2.0 million a year ago. Bottom line performance reflected higher sales and lower steel costs.
- Vicwest Building Product's revenue was $63.7 million, 8.9% or $6.3 million lower than a year ago due to weak construction market demand in Eastern and Central Canada partially offset by solid contribution from All Weather. Divisional net income was $0.9 million compared to $2.2 million a year ago.
Six Month Consolidated Results
- Revenue was $195.2 million, 2.4% or $4.6 million ahead of the same period of 2011.
- Gross profit increased 7.8% to $35.6 million (18.3% gross margin) compared to $33.0 million (17.3% gross margin) a year ago.
- EBITDA1 increased 27.5% to $14.6 million from $11.4 million a year ago.
- Net income excluding the change in fair value of the embedded derivative2 was $4.5 million ($0.25 per share basic) compared to $4.6 million ($0.25 per share basic) a year ago, while net income was $4.7 million ($0.26 cents per share basic) compared to $6.3 million ($0.35 cents per share basic) a year ago.
At June 30, 2012, senior debt to EBITDA1 improved to 1.6 to 1 compared to 2.0 to 1 at March 31, 2012. At period end, the Company had net debt of $90.1 million compared to $100.4 million at March 31, 2012 and $54.8 million of unused availability under its new $100 million senior revolving credit facility secured February 27, 2012.
The Company continues to have a positive outlook on 2012, and expects ongoing improvement in financial performance compared to the prior year. This outlook factors in the current steel price environment, recent changes in crop conditions in the U.S., the resultant crop price environment, a more muted forecast for construction activity, and current growth and cost-reduction initiatives.
"Immediate term market prospects are on balance still favourable for us," said Mr. Osborne. "Even the drought conditions in the U.S. will have a net positive impact, increasing crop prices in the face of a projected strong harvest in Canada. As such, we are driving ahead aggressively with our key strategic initiatives. At Westeel, this includes the automation of grain silo component production, which when complete in the fourth quarter will shorten lead times and lower costs. At Vicwest Building Products, the year's key growth initiative is the construction of our latest insulated metal panel plant in Little Rock, Arkansas. When it opens in the fourth quarter, this will position us as one of three key suppliers in this growing segment of the North American building product market."
Second Quarter Conference Call and Webcast
Vicwest Inc. will host its second quarter 2012 conference call and webcast on webcast on Thursday, August 9, 2012 at 11:00 a.m. (ET). To participate in the teleconference, the numbers are 416-644-3414 or 1-800-814-4859. Callers are advised to call in at least 10 minutes in advance. To participate in the webcast, please visit Vicwest's website at www.vicwestinc.com (News & Events section).
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 news 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.
SOURCE: Vicwest Inc.
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