TORONTO, May 17, 2012 /CNW/ - Wheels Group Inc. ("Wheels" or the "Company") (TSXV: WGI) today announced results for the fourth quarter and year ended January 31, 2012. The results reflect the completion on December 31, 2011 of a reverse takeover transaction ("RTO") in connection with the completion of private placements of 18.1 million common shares for gross proceeds of $18.1 million. Concurrently with the closing of the private placements and pursuant to share exchange agreements with Wheels Holdco Inc. ("Holdco") and Logistics Holdings International Inc. ("Logistics"), a third party logistics provider, the Company acquired all of the issued and outstanding shares of Holdco and Logistics in exchange for shares of the Company and cash consideration. The former shareholders of Holdco became the controlling shareholders of the Company. The results for the fourth quarter and the year include the contribution from Logistics for the month of January 2012 and the comparative information presented is that of Wheels.
|Financial Highlights||For the quarter ended||For the year ended|
| (in millions of dollars, except per share data and
number of shares outstanding)
| January 31,
| January 31,
| January 31,
| January 31,
|Gross margin for the period||7.7||6.5||28.7||27.2|
|Comprehensive income (loss) for the period||(5.0)||0.4||(4.4)||3.5|
|Earnings (loss) per share 2||- Basic||(0.69)||5.01||(0.63)||43.68|
|Adjusted EBITDA 1||1.8||1.7||6.4||7.3|
|Adjusted EBITDA per share 1, 2||0.24||21.91||0.88||96.86|
| Weighted average number of common
1 See Adjusted EBITDA below.
2 Based on weighted average number of common shares outstanding.
For the year ended January 31, 2012 revenue was $245.9 million, up 9.4% over $224.7 million in 2011 as a result of increased volumes with existing customers, growth in customers and increased fuel surcharge in both the US and Canada. Comprehensive loss for the year ended January 31, 2012 was $4.4 million or $0.63 per share compared with comprehensive income in the prior year of $3.5 million or $43.68 per share. Comprehensive loss in fiscal 2012 was primarily due expenses incurred in connection with the RTO, including one-time non-recurring expenses of $5.4 million, non-cash income tax expense of $2.4 million and share-based compensation expense of $0.9 million partially offset by the recovery of discontinued operations' income taxes and lower net finance costs.
Gross margin increased to $28.7 million from $27.2 million due to the increase in revenue. This was offset by increases in personnel expenses including additional investment in sales personnel and sales related activities to support future sales growth resulting in adjusted EBITDA for the year ended January 31, 2012 of $6.4 million or $0.87 per share compared to $7.3 million or $96.86 per share in the prior year.
Revenue for the fourth quarter of 2012 was $64.2 million, up 17.9% over the prior year quarter of $54.4 million as favourable economic conditions along with increased investment in sales contributed to an increase in volumes with existing customers. The Canadian segment also included the contribution from the acquisition for the last month of the quarter. Gross margin increased to $7.7 million from $6.5 million due to increased revenue and adjusted EBITDA for the fourth quarter of 2012 was $1.8 million compared with $1.7 million for the fourth quarter of 2011.
Doug Tozer, CEO of Wheels commented: "Growth through continued investment in people and information systems along with strategic acquisitions, including US based Wheels Clipper in 2006, have contributed to Wheels becoming one of the largest Canadian based non-asset providers of logistics and transportation services. The full year contribution from the recent acquisition and our strengthened balance sheet positions Wheels for continued growth, both organically and through acquisitions."
The term adjusted EBITDA is used to describe earnings before any deduction for income taxes, net finance cost, depreciation, amortization, one-time non-recurring expenses, discontinued operations overhead adjustment and share-based compensation. EBITDA and adjusted EBITDA is a metric used by many investors and analysts to compare organizations on the basis of ability to generate cash from operations. Management considers adjusted EBITDA (as defined) to be an indirect measure of operating cash flows, which is a significant indicator of the success of any business. EBITDA and adjusted EBITDA are not intended to be representative of cash flow from operations or results of operations determined in accordance with IFRS.
EBITDA and adjusted EBITDA are not recognized measures under IFRS. Wheels' method of calculating EBITDA and adjusted EBITDA may differ from methods used by other companies, and accordingly may not be comparable to similar measures presented by other companies.
Caution Regarding Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking statements within the meaning of Canadian securities laws. Forward-looking statements can be generally identified by the use of words such as "anticipate", "continue", "estimate", "expect", "expected", "intend", "may", "will", "project", "plan", "should", "believe", and similar expressions. Specifically, forward looking statements in this news release include statements respecting certain future expectations about: prices and demand for services and capital expenditures. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation the risks and uncertainties detailed under the "RISK FACTORS" section of the Company's latest Annual Information Form and the "RISKS AND UNCERTAINTIES" section of the Company's most recent Management Discussion and Analysis.
Although the Company believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results may be consistent with such forward-looking statements, and they should not be unduly relied upon. With respect to the forward-looking statements contained in this news release, the Company has made assumptions regarding: there being no significant disruptions affecting the Company's operations whether due to labour disruptions, power disruptions, transportation disruptions, damage to equipment, adverse weather conditions or otherwise, the ability of the Company to obtain equipment, transportation, services and supplies in a timely manner to carry outs its activities and at prices consistent with current levels or in line with the Company's expectations, the ability of the Company to respond to competitive pressures in the marketplace, including the entry of new competitors, direct marketing efforts by railroads or marketing efforts of asset-based carriers, the ability of the Company to successfully protect its data from cyber-attack; the ability of the Company to maintain or enhance its information technology systems, fuel shortages or fluctuations in fuel prices, the ability of the Company to access tax losses and tax attributes, the ability of the Company to obtain financing on acceptable terms, currency, exchange and interest rates being consistent with current levels or in line with the Company's expectations; and global economic performance, including the financial condition of its customers, particularly, in the retail, consumer products and durable goods sectors.
The Company disclaims any intention or obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.
Further information can be found in the disclosure documents filed by Wheels Group Inc. with the securities regulatory authorities, available under the profile of the Company at www.SEDAR.com.
Founded in 1988, Wheels Group Inc. is a leading North American 3PL, supply chain logistics provider. As a non-asset provider, the Company develops advanced supply chain solutions delivered through its qualified partner network of over 5,000 truck, rail, air, and ocean carriers. Wheels Group Inc. serves consumer goods, food and beverage, manufacturing and retail clients through 20 offices throughout the US and Canada. Wheels Group Inc. has been named one of Canada's 50 Best Managed Companies since 1997, Platinum since 2003. Wheels Group has been named one of North America's Top 100 third-party logistics ("3PL"), one of the Top 100 Food 3PL's and one of the Top Five IMC's (intermodal marketing companies).
Neither the TSX Venture Exchange, nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.
For further information:
Chief Executive Officer
Edward R. (Ted) Irwin
Chief Financial Officer
Tel: (905) 602-2700