OAKVILLE, ON, Nov. 9, 2011 /CNW/ - Vicwest Inc. (the "Company") (TSX: VIC, VIC.DB) today reported its results for the three and nine months ended
September 30, 2011 and declared a dividend of $0.15 per common share
for the fourth quarter, representing a yield to investors of over 7.0%.
The dividend will be paid on January 13, 2012 to shareholders of record
December 30, 2011.
While lower than the third quarter amount of $0.27 per share, the new
dividend reaffirms the Company's commitment to provide sustainable
income to shareholders over the business cycle, while balancing the
opportunity to reinvest for growth and the commitment to maintain
prudent leverage during current uncertain economic times. The Company's
yield (as a percentage of current share price) will remain among the
best in Canada among TSX-listed companies.
"We continue to generate positive earnings from both business segments,
are well in compliance with all banking covenants, have no immediate
debt repayment needs, and have substantial room on our credit lines,"
said Colin Osborne, President and CEO, "so the reduction in our
dividend was not driven by structural need. Instead, our Board has
chosen to make this change proactively, recognizing that until we see a
more sustained recovery in key markets like construction, paying out a
lower proportion of cash generated will allow us to manage with
conservative leverage and aggressively pursue the many growth
opportunities available to us."
The Board will continue to review the dividend regularly taking into
account improving market conditions, growth opportunities and the
Company's financial condition.
Third Quarter Consolidated Results Summary
Revenue increased 18.9% to $117.9 million from $99.2 million a year ago.
Gross profit was $17.7 million (15.0% gross margin) compared to $15.9
million (16.0% gross margin) a year ago.
EBITDA1 was $8.6 million excluding a non-recurring one time business development
expense, 30% above the prior year's EBITDA1 of $6.6 million. Including the one-time expense, EBITDA1 was $7.1 million.
Net income was $4.5 million ($0.24 per share basic, $0.13 per share
diluted) compared to $3.8 million ($0.22 per share basic and diluted) a
year ago due to higher gross profit and a fair value adjustment gain on
embedded derivatives, partially offset by higher business development
expenses and a higher number of diluted shares outstanding. Excluding
business development and the impact of accounting for derivatives, net
income was $3.5 million.
"In light of challenging conditions, our performance in the quarter was
relatively strong as we made the most of available growth opportunities
in each of our operating businesses," said Mr. Osborne. "For Vicwest
Building Products, we are delighted with our recent growth in insulated
metal panel markets. These product lines hold tremendous promise for us
and continue to grow at high double digit rates, even in the current
market. At Westeel, sales momentum increased in the Canadian oil and
gas industry and this was complemented by higher shipments of grain
storage solutions in Canada and internationally. Profitability also
increased on improved efficiencies and lower normal course operating
expenses but, as expected, gross margin did not keep pace with revenue
growth due to the impact of higher steel costs."
Third Quarter Divisional Results
Vicwest Building Products revenue was a third quarter record of $85.1
million, 22.1% higher than a year ago primarily due to the contribution
of All Weather Insulated Panels ("All Weather"). Net income before
interest expense, income taxes and change in fair value of embedded
derivatives was $4.0 million compared to $4.2 million in the prior year
primarily due to the impact of higher steel costs on margins and less
favourable product mix.
Westeel Storage Solutions revenue increased 11.2% to $32.8 million from
$29.5 million in the third quarter of 2010 primarily due to higher
sales of liquid storage tanks to the Canadian oil and gas industry. Net
income before interest expense, income taxes and change in fair value
of embedded derivatives doubled to $1.2 million from $0.6 million a
year on improved efficiencies and favourable foreign exchange rates.
As a result of normal seasonal working capital requirements, which peak
in the third quarter, the Company had net debt of $85.9 million at
September 30, 2011 compared to $85.8 million at June 30, 2011. At the end of the
quarter, the ratio of senior debt to EBITDA stood at 1.5 and there was
$38.5 million available under the revolving credit facility.
Nine Month Consolidated Results
Revenue increased 14.6% to a record $308.5 million from $269.3 million a
Gross profit was $50.7 million (16.4% gross margin) compared to $46.1
million (17.1% gross margin) a year ago.
EBITDA1 was $22.0 million excluding business development and restructuring
expenses (7.0% EBITDA1 margin), compared to $17.5 million (6.5% EBITDA1 margin) a year ago. EBITDA1 , as reported in Management's Discussion and Analysis was 18.5 million
(6.0% EBITDA1 margin).
Net income was $10.7 million ($0.58 per share basic, $0.42 per share
diluted) or $13.4 million excluding business development and
restructuring expenses, compared to $10.1 million ($0.58 per share
basic and diluted) a year ago.
1 Earnings before interest, taxes (other than capital taxes),
depreciation and amortization and fair value adjustments to financial
instruments. EBITDA and EBITDA margin are non-IFRS measures.
While the economic recovery in its markets has yet to fully materialize,
Vicwest BP is on track to generate record revenues in 2011, based upon
the contribution of All Weather acquired in November 2011 and healthy
backlogs in Canada. Opening backlogs in the fourth quarter are 37%
higher than at the same time a year ago. Despite a positive sales
outlook, and somewhat lower priced steel in inventory, divisional
profit margin will remain under pressure for the remainder of 2011 due
to high steel costs compared to a year ago, and the current market's
resistance to steel price pass through; a situation that is expected to
improve as construction market activity improves. Management expects
to gain pricing leverage and return to more normal margins, but not
until there are further signs of market recovery, which are currently
forecast to occur no earlier than mid to late 2012.
Westeel backlogs entering Q4 are in line with the prior year, despite
flooding in Western Canada and parts of the northern U.S. Westeel's
outlook for Q4 is positive as a result of low inventory in the retail
chain, and order intake from fall buying events which is above the
prior year. Westeel's outlook for 2012 is also positive, supported by
expectations of growth in sales through the division's Buhler
Industries partnership, and increased activity in the EMEA resulting
from the recent creation of a sales and application engineering
presence in Europe.
"We continue to manage our business assuming the market recovery will be
modest in the near term," said Mr. Osborne, "And knowing that our
activities today will position us to lead the most promising segments
in 2012 and beyond. Recent examples include Westeel's first overseas
office in Spain which will coordinate our growth in Europe and the
Middle East, the announcement of Vicwest BP's third IMP plant in
Arkansas, which will be operational by Q4 of 2012, as well as a
substantial automation investment in Westeel's Winnipeg facility.
Through deliberate steps, including day-to-day expense controls and
active steel procurement strategies, we will continue to overcome
economic hurdles and add to our competitive advantages."
Third Quarter Conference Call and Webcast
Vicwest Inc. will host its third quarter 2011 conference call and
webcast on November 10, 2011 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).
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. In
Canada, Westeel also represents Skandia, Europe's most advanced
elevator and conveyor grain handling systems. With approximately 1,100
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.
SOURCE Vicwest Inc.
For further information:
| Colin Osborne |
President & Chief Executive Officer
Tel: (905) 469-5700
Fax: (905) 825-1090
| || || || || Edward (Ted) A. Mahood, CA |
Chief Financial Officer
Tel: (905) 469-5706
Fax: (905) 825-1090