OAKVILLE, ON, Nov. 6, 2013 /CNW/ - Vicwest Inc. (the "Company") (TSX: VIC, VIC.DB) today reported its financial results for the three and nine months ended September 30, 2013, including a strong recovery in performance following market and weather-related disruptions earlier in 2013.
Consolidated Year over Year Performance Summary1
Three months ended September 30, |
Nine months ended September 30, |
|||
($ millions except per share) | 2013 | 2012 | 2013 | 2012 |
Revenue | 119.8 | 113.4 | 289.8 | 308.6 |
Gross profit | 22.5 | 21.4 | 46.0 | 57.0 |
Gross profit margin | 18.8% | 18.9% | 15.9% | 18.5% |
EBITDA2 | 10.8 | 11.0 | 11.8 | 25.5 |
EBITDA Margin2 | 9.0% | 9.7% | 4.1% | 8.3% |
Net income (loss) | 3.5 | 4.1 | (1.4) | 8.7 |
Net income (loss) per share (basic) | 0.19 | 0.20 | (0.10) | 0.46 |
Net income (loss) excluding change in fair value of embedded derivative and other expenses3 |
4.2 | 4.9 | (1.4) | 9.3 |
Net income (loss) per share excluding change in fair value of embedded derivative and other expenses3 |
0.22 | 0.24 | (0.10) | 0.49 |
"We regained substantial momentum in the third quarter as demand and earnings returned to more normal levels," said Colin Osborne, President and CEO. "The main beneficiary was Westeel, which achieved record third quarter sales driven by a 70% year-over-year increase in sales of its grain storage and handling systems. This performance reflects receipt of some domestic sales that were deferred from earlier this year and continued momentum in our U.S and overseas sales. We are also pleased to note that in the quarter, Vicwest Building Products achieved a 7.7% year-over-year increase in North American sales of Insulated Metal Panels ("IMP"), which continued to offset a sluggish domestic construction market and, in particular historically low project business in the resource sector. Our building products' business remained profitable, even as it completed its regional restructuring plan, and absorbed $1.1 million of facility restructuring costs to optimize Canadian operations."
Sequential Results
Normalized market conditions are also reflected in improved performance
between the second and third quarters of 2013. Third quarter revenue
grew 23.4% and EBITDA2 increased 125% compared to the second quarter of 2013. This reflected
sequential revenue growth of 22.6% at Vicwest Building Products
("Vicwest BP") and 24.9% at Westeel.
Divisional Results
Three months ended September 30, |
Nine months ended September 30, |
|||
($ millions) | 2013 | 2012 | 2013 | 2012 |
Revenue | ||||
Vicwest Building Products | 78.7 | 80.7 | 185.9 | 189.6 |
Westeel | 41.1 | 32.7 | 103.9 | 119.0 |
Net income (loss)4 | ||||
Vicwest Building Products | 4.5 | 7.3 | (1.2) | 2.5 |
Westeel | 2.8 | 1.3 | 4.2 | 15.8 |
In spite of higher year-over-year IMP sales from its three dedicated IMP plants, Vicwest BP's revenue for the third quarter was 2.5% lower than a year ago, reflecting reduced sales volumes in Canadian non-residential construction, where market activity was down 20% year to date on both a dollar and volume basis. Vicwest BP's divisional net income for the third quarter declined year over year by 38.4% due to the absorption of restructuring costs, lower domestic sales volume, and higher SG&A expenses associated with its U.S IMP. expansion.
Westeel's third quarter revenue increased 25.7% year over year on the back of record grain storage and handling system shipments. Shipment levels reflected the receipt of some deferred domestic orders from earlier in the year, higher U.S. and international sales, and the backdrop of projected record crop yields in Western Canada and the U.S.. Westeel's net income for the third quarter increased 115.4% year-over-year due primarily to higher activity levels and lower input costs.
Dividend and Dividend Reinvestment Plan
The Board of Directors declared a third quarter dividend of $0.15 per
share, payable on January 15, 2014 for shareholders of record on
December 31, 2013. This is consistent with the quarterly dividends
declared and paid in 2012.
The Company also announced today, by way of a separate news release, that it has introduced a Dividend Reinvestment Plan ("DRIP") to allow eligible shareholders to reinvest their dividends in common shares of the Company on an efficient and cost-effective basis. Additional information on the DRIP is available at www.vicwestinc.com.
Financial Position
The Company continues to have the necessary resources to fund its growth
strategies as unused availability under its senior revolving credit
facility at September 30, 2013 amounted to $52.5 million versus $42.2
million at June 30, 2013. The Company had net debt of $88.5 million at
September 30, 2013 compared to $101.3 million at June 30, 2013 as a
result of operational performance improvements during the most recent
three-month period. Senior net-debt-to-EBITDA2 was also improved to 1.6 to 1 at September 30, 2013 from 2.2 to 1 at
June 30, 2013.
Outlook
Management believes that the trends driving long-term demand for the
Company's products are positive and that the business will benefit from
these trends because of its competitive advantages including strong
customer relationships, extensive distribution networks, well
recognized brands, and efficient operations. These trends include: i)
the growing global need for grain storage due to increased crop yields,
changes in diet and population growth, ii) higher and more volatile
crop pricing, which improves the return on investment for grain
storage, iii) a construction sector in North America which is in the
early stages of recovery, and iv) increasing demand for energy
efficient building materials such as insulated metal panels that can be
installed at low cost. The combination of the Company's inherent
strengths, unique product offerings and exposure to global markets
provide positive fundamentals to support long-term growth.
Management expects the fourth quarter to show continued positive momentum as the Company takes advantage of a more normalized market environment, recent product expansions and efficiency gains. This expectation is based on a number of factors including: i) a significant increase in activity level and backlog at Westeel which occurred at the end of the third quarter and has carried into the fourth quarter, ii) record crop yields in both Western Canada and the U.S. which have increased demand for grain storage products, iii) continued momentum in North American IMP sales supported by the additional capacity of the new Little Rock, Arkansas manufacturing facility and iv) the inclusion of PTM Technology, acquired on May 23, 2013, which extends Westeel's product reach into grain handling systems, enhancing Westeel's market opportunities and providing it with a manufacturing presence in Europe.
"Vicwest Building Products expects to see a continuation of the trends of the last few quarters," said Mr. Osborne. "The forecast for domestic construction in the last quarter of 2013 is lower compared to prior year however this will continue to offset by IMP momentum and a positive outlook for U.S. non-residential construction activity. As well, the rationalization of our operations in Canada is now complete, which significantly reduces the negative drag of restructuring costs going forward, and gives us better operational leverage as volume increases"
"At Westeel, even with record shipments in the quarter, the period ending backlog was 20.3% above the prior year and booking momentum has continued into the fourth quarter at well above last year's pace." said Mr. Osborne. "In addition, the division continues to develop its U.S. Westeel dealer network and is beginning to realize the benefits of recent investments in dedicated sales and application engineering capabilities in Europe and India. The acquisition of PTM in the second quarter of 2013 has enhanced our competitiveness in bidding on full turn-key storage and handling projects. The successful completion of Westeel's ERP implementation earlier this year is also providing improved analytics that we are using to enhance operational effectiveness."
Third Quarter Conference Call and Webcast
Vicwest Inc. will host its third quarter 2013 conference call and
webcast on November 7, 2013 at 11 am (EST). To participate in the
teleconference, the numbers are 416-644-3416 or 800-814-4860. Callers are advised to call in five minutes in advance. To participate
in the webcast, please visit www.vicwestinc.com.
About Vicwest Inc.
Vicwest Inc. is a leading manufacturer and distributor of engineered
storage and handling systems for grain, fertilizer and liquid storage
as well as building construction products for agriculture, commercial,
industrial and residential markets. We operate through two
strategically aligned divisions: Vicwest Building Products and
Westeel. With approximately 7,000 customers, 1,200 dedicated employees
and 34 business partners, we are positioned for growth in domestic and
international markets. Vicwest Inc. is a member of the S&P/TSX
SmallCap Index. For more information, visit www.vicwestinc.com.
Forward-Looking Statements
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.
1Prior period numbers have been re-stated due to the retrospective
application of the IFRS pronouncements adopted in the first quarter of
2013.
2EBITDA is calculated as earnings before finance expense, income taxes,
depreciation, amortization, change in fair value of embedded derivative
and other expenses. EBITDA and EBITDA margin are non-IFRS measures.
3 Net income (loss) excluding change in fair value of embedded derivative
and other expenses and net income (loss) per share excluding change in
fair value of the embedded derivative and other expenses are non-IFRS
measures.
4 Net income (loss) before finance expense (net), income taxes and change
in fair value of embedded derivative. This is a non-IFRS measure.
SOURCE: Vicwest Inc.
For further information:
Colin Osborne
President & Chief Executive Officer
Vicwest Inc.
Tel: (905) 469-5700
ir@vicwestinc.com
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