DRUMMONDVILLE, QC, March 27, 2014 /CNW Telbec/ - CVTech Group Inc. ("CVTech" or "the Corporation") (TSX: CVT) today reported results for its fourth quarter and fiscal year ended December 31, 2013. All amounts are in Canadian dollars unless otherwise indicated.
| Financial highlights | Three months ended December 31 | Years ended December 31 | |||
| (in thousands of dollars, except per-share data) | 2013 | 2012 | 2013 | 2012 | |
| Revenues | 70,832 | 82,572 | 239,829 | 249,201 | |
| EBITDA from continuing operations | 3,364 | 8,108 | 7,110 | 25,236 | |
| Net earnings from continuing operations | 528 | 3,885 | (1,754) | 12,117 | |
| Per share - basic and diluted ($) | 0.01 | 0.05 | (0.02) | 0.17 | |
| Net earnings from discontinued operations | 0 | (68) | 0 | (1,939) | |
| Net earnings | 528 | 3,817 | (1,754) | 10,178 | |
| Per share - basic and diluted ($) | 0.01 | 0.05 | (0.02) | 0.14 | |
| Weighted average number of shares outstanding (basic, in thousands) | 71,579 | 72,420 | 71,902 | 72,418 | |
FOURTH-QUARTER RESULTS
Revenues from continuing operations were $70.8 million, down from $82.6 million in the corresponding quarter of the previous year. The decrease of $11.8 million reflects lower revenues related to natural disasters in the fourth quarter of 2013 ($4.1 million) relative to the fourth quarter of 2012 ($34.7 million). Excluding this factor, revenues were up approximately $18.8 million. The increase was due essentially to higher revenues from industrial, commercial and institutional electric power projects in the United States and to increased business volume in Ontario.
Earnings before interest, income taxes, depreciation and amortization ("EBITDA") from continuing operations were $3.4 million, or 4.7% of revenues, in the fourth quarter of 2013, compared to $8.1 million, or 9.8% of revenues, in the fourth quarter of 2012. The decrease, in both dollars and percentage of revenues, was due to lower revenues in connection with natural disasters, to a less favourable revenue mix between the two periods compared, to the start-up of projects in new market segments, to the establishment of new places of business and to an unprofitable contract in the United States. The Corporation is presently attempting to renegotiate the terms of this contract up to its conclusion.
Net earnings from continuing operations in the fourth quarter of 2013 were $528,000, or $0.01 per diluted share, compared to $3.9 million, or $0.05 per diluted share, in the fourth quarter of 2012.
At December 31, 2013, the value of the Corporation's order book was $216.0 million (including certain contracts awarded in 2013 announced by press release on March 20, 2014), up from $162.0 million at the end of the previous quarter.
"In the fourth quarter of 2013, our order backlog increased appreciably and we continued to sequentially improve our operating profitability. Though the results remain shy of the full potential of our network, we are confident that our recently announced initiatives to adopt a new corporate structure will improve profitability progressively beginning in the 2014 year", said André Laramée, President and Chief Executive Officer of CVTech.
FISCAL 2013 RESULTS
For fiscal 2013, revenues from continuing operations were $239.8 million, down 3.8% from $249.2 million in 2012. The decrease of $9.4 million was due mainly to a $29.6-million reduction in revenues from public utility contracts (transmission, distribution and substations), resulting from factors including lower revenues related to natural disasters in 2013 than in 2012. This reduction was offset in part by a $15.2-million increase in revenues from industrial, commercial and institutional electric power projects and a $4.4-million increase in revenues from mechanical business in the United States.
Reflecting the lower revenues related to natural disasters, revenues from work performed in the United States were $161.9 million in 2013, compared to $176.9 million in 2012. Revenues from Canadian operations were $78.0 million, compared to $72.2 million a year earlier. The increase was due to higher revenues from the Ontario operations, which reached $11.7 million in 2013 compared to $1.4 million in 2012.
EBITDA from continuing operations was $7.1 million, compared to $25.2 million a year earlier. EBITDA for 2012 included a $2.2-million gain from a life insurance settlement. Excluding this gain, EBITDA for 2012 was $23.0 million. For 2013, the Corporation recorded a net loss from continuing operations of $1.8 million, or $0.02 per diluted share, compared to net earnings from continuing operations of $12.1 million, or $0.17 per diluted share, in 2012. With discontinued operations taken into account, net earnings in 2012 were $10.2 million, or $0.14 per diluted share.
FINANCIAL POSITION
During the 2013 year, the Corporation reduced its long-term debt which, including the current portion, was $18.7 million as at December 31, 2013, compared to $25.2 million at the beginning of the year. Consequently the ratio of long-term debt to equity was 0.23 at December 31, 2013, down from 0.31 a year earlier. Also at December 31, 2013, CVTech held a cash position of $3.1 million and had $32.1 million in bank credit outstanding.
OUTLOOK
"In 2014, CVTech intends to leverage its new organizational structure to consolidate its operations in existing markets, expand its business in new territories and maximize opportunities for cross-selling across its network. The unification of U.S. operations under the Riggs Distler & Company banner, with its very high brand recognition, will enhance our efficiency and will result in recurring cost savings. These savings, mainly in overhead and workforce, together with expected synergy gains, will be felt increasingly over the current year and, over time, should amount to more than $2.0 million annually", concluded Mr. Laramée.
OVERVIEW OF THE CORPORATION
CVTech is a company operating in the energy sector. The Corporation is a leading provider of construction and maintenance services to the public utility and heavy industrial markets mainly in Quebec, Ontario and the eastern United States. Through its subsidiaries, the Corporation provides maintenance and construction services for electricity transmission and distribution networks, substations and electrical power houses, as well as the control of vegetation on rights-of-way for electrical lines.
NON-IFRS MEASURE
EBITDA is a measure that has no standardized meaning prescribed by IFRS and is thus considered to be a non-IFRS measure. Therefore, this measure may not be comparable to similar measures presented by other issuers. This measure is presented and described in this release in order to provide additional information regarding the Corporation's liquidity and its ability to generate funds to finance its operations.
FORWARD-LOOKING STATEMENTS
This document may contain forward-looking statements that reflect management's current expectations regarding future events. Forward-looking statements are based on a number of factors and include risks and uncertainties. Actual results may differ from forecast results. Management has no obligation beyond what is required under the law to update or revise forward-looking statements pursuant to new information or future events.
Further information regarding CVTech is available in the SEDAR database (www.sedar.com) and on the Corporation's website at www.cvtech.ca.
SOURCE: CVTECH GROUP INC.
Contacts:
André Laramée, MBA
President and Chief Executive Officer
819-479-7771
[email protected]
Mario Trahan, CPA, CMA
Chief Financial Officer
819-479-7771
[email protected]
MaisonBrison Communications
Martin Goulet, CFA
514-731-0000
[email protected]
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