Revenue Up 5.7%, Gross Margin Up 20.8%, EBITDA Up 13.5% In Shortened Eleven Month Period
TORONTO, April 11, 2013 /CNW/ - Wheels Group Inc. ("Wheels" or the "Company") (TSXV: WGI) today announced its results for the fourth quarter and year ended December 31, 2012.
As part of an internal corporate reorganization, the Company changed its fiscal year end to December 31 from January 31. This change was made in order to simplify and streamline financial reporting and tax planning. As a result of this change in fiscal year end, the current reporting periods addressed are the periods of two months and eleven months ended December 31, 2012, compared to the prior year reporting periods of three and twelve months ended January 31, 2012. However, to assist in assessing the Company's results, comparison has been provided with unaudited figures for the two months and eleven months ended December 31, 2011, where appropriate.
These results reflect the acquisition of Wheels MSM ("MSM"), completed on October 1, 2012 and Wheels Logistics ("Logistics") completed on December 31, 2011.
|Financial Highlights||For the quarter||For the year|
| (in millions of dollars, except per share data and number
of shares outstanding)
| Two months
Dec 31, 2012
| Three months
Jan 31, 2012
| Eleven months
| Twelve months
Jan 31, 2012
|Comprehensive income (loss)||0.9||(5.0)||0.1||(4.4)|
|Earnings per share 1|
|Adjusted EBITDA 2||2.1||1.8||7.3||6.4|
|Adjusted EBITDA per share 1, 2||0.02||0.24||0.08||0.88|
| Weighted average number of common shares
| 1 Based on weighted average number of common shares outstanding
2 See adjusted EBITDA below
Revenue for the eleven months ended December 31, 2012 was $260.0 million, an increase of $14.1 million or 5.7% over the $245.9 million reported in the prior twelve months ended January 31, 2012. Revenue for the eleven months ended December 31, 2012 increased $34.6 million, or 15.3%, over the comparable unaudited eleven month period ended December 31, 2011, consisting of $25.1 million in revenue from Logistics and MSM, as well as a $9.5 million or 4.2% increase in revenue from existing customers and new customers from the non-MSM/Logistic operations of the Company ("Existing & New Customers"). In the Canadian segment, revenue for the eleven months ended December 31, 2012 was $119.3 million, an increase of $24.9 million or 26.4%, over the comparable eleven month period ended December 31, 2011. Revenue from Logistics and MSM contributed $19.2 million, while revenue increased $5.7 million, or 6.0%, from Existing & New Customers. In the US segment, revenue for the eleven months ended December 31, 2012 increased $9.4 million or 7.1% to $141.6 million over the comparable eleven month period ended December 31, 2011. Revenue from MSM contributed $5.8 million while revenue from Existing & New Customers grew $3.6 million or 2.7%.
Consolidated gross margin for the eleven months ended December 31, 2012 increased $6.0 million or 20.8% to $34.7 million compared to the twelve months ended January 31, 2012. Gross margin for the eleven months ended December 31, 2012 increased $8.7 million or 33.7% over the comparable eleven month period ended December 31, 2011. Logistics and MSM contributed $7.9 million while gross margin grew 3.3% from Existing and New Customers.
Adjusted EBITDA for the eleven months ended December 31, 2012 increased 13.5% to $7.3 million compared to $6.4 million for the twelve months ended January 31, 2012, primarily due to the increase in gross margin partially offset by increased investment in acquisition, sales and business development functions to support strategic growth plans.
Revenue for the two months ended December 31, 2012 was $56.0 million, compared to $64.2 million for the three months ended January 31, 2012. Revenue for the two months ended December 31, 2012 increased $12.2 million, or 27.9%, over the comparable two month period ended December 31, 2011, with revenue from Logistics and MSM contributing $10.9 million and a $1.3 million or 2.9% increase in revenue from Existing & New Customers. In the Canadian segment, revenue was $27.6 million, an increase of $9.7 million or 54.2%, over the comparable two month period ended December 31, 2011. Revenue from Logistics and MSM was $7.2 million, while revenue from Existing & New Customers increased $2.5 million or 14.0%. In the US segment, revenue for the two months ended December 31, 2012 was $28.8 million, an increase of $2.8 million or 10.7%, over the comparable two months ended December 31, 2011. Revenue from MSM was $3.7 million while revenue from Existing & New Customers declined $0.9 million or 3.6% due to competitive market pressures. Consolidated gross margin for the two months ended December 31, 2012 increased $0.3 million, or 3.4%, to $8 million compared to the three months ended January 31, 2012. Gross margin for the two months ended December 31, 2012 increased $3.0 million, or 61.0%, over the comparable two month period ended December 31, 2011, due to $2.8 million in gross margin from Logistics and MSM, along with $0.2 or 3.7% increase from Existing & New Customers.
Adjusted EBITDA for the two months ended December 31, 2012 was $2.1 million up from $1.8 for the three months ended January 31, 2012, an increase of $0.3 million or 18.6%.
"2012 was a year of significant milestones for the Company," said Doug Tozer, Chief Executive Officer of Wheels. Mr. Tozer added, "as Wheels marked its 25th year of operations and first year as a public company, we integrated two acquisitions, strengthened our senior leadership team with key hires and made significant investments in sales and business development in both Canada and the US. The Company demonstrated solid growth in 2012 despite a shorter reporting period, with MSM and Logistics contributing positively to our results. While general economic conditions remain uncertain, the Company continued to see signs of recovery in the first quarter. Further benefits from our acquisitions combined with investments made in 2012 position Wheels well for double digit revenue growth in 2013."
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 International Financial Reporting Standards (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 on SEDAR at www.sedar.com.
Founded in 1988, Wheels is a leading North American third party logistics (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 6,000 truck, rail, air and ocean carriers. Wheels serves consumer goods, food and beverage, manufacturing and retail clients through 26 offices throughout the US and Canada. Wheels has been named one of Canada's 50 Best Managed Companies since 1997, Platinum since 2003. Wheels has been named one of North America's Top 100 3PL Companies, 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.
SOURCE: Wheels Group Inc.
For further information:
Patrick J Marshall
VP Corporate Development & Investor Relations
Tel: (905) 602-2700