DRUMMONDVILLE, QC, Aug. 14, 2013 /CNW Telbec/ - CVTech Group Inc. ("CVTech" or "the Corporation") (TSX: CVT) today reported results for the second quarter ended June 30, 2013. All amounts are in Canadian dollars unless otherwise indicated.
| Financial highlights | Three months ended June 30 | Six months ended June 30 | |||||||
| (in thousands of dollars, except per-share data) | 2013 | 2012 | 2013 | 2012 | |||||
| Revenues from continuing operations | 55,289 | 55,725 | 111,673 | 107,279 | |||||
| EBITDA from continuing operations | (16) | 4,893 | 2,271 | 10,618 | |||||
| Net earnings (loss) from continuing operations | (1,755) | 1,999 | (1,778) | 5,192 | |||||
| Per share - basic and diluted ($) | (0.02) | 0.03 | (0.02) | 0.07 | |||||
| Net earnings (loss) from discontinued operations | 0 | (156) | 0 | (1,410) | |||||
| Net earnings (loss) | (1,755) | 1,843 | (1,778) | 3,782 | |||||
| Per share - basic and diluted ($) | (0.02) | 0.03 | (0.02) | 0.05 | |||||
| Weighted average number of shares outstanding (basic, in thousands) | 72,008 | 72,420 | 72,119 | 72,417 | |||||
SECOND-QUARTER RESULTS
Revenues from continuing operations were $55.3 million, down 0.8% from $55.7 million in the same period last year. The variation was due mainly to a decrease in revenues from contracts for the construction, maintenance and repair of electricity transmission lines, offset in part by a rise in revenues in Ontario. Potentially some revenues related to a contract, within a U.S. subsidiary's division, could not be fully recognized in the quarter ended June 30 2013. The source of the delay has been identified and is being corrected. However, the Corporation recognized the costs associated with this contract during the period. Consequently, the unrecognized revenues as of June 30, 2013 resulting from that delay will be recognized in the subsequent periods.
Revenues from work carried out in the U.S. were up 4.4% to $38.6 million, while revenues from contracts performed in Canada were down 11.0% to $16.7 million. The Ontario subsidiaries B.G. High Voltage Systems Limited, acquired April 1, 2013, and Riggs Distler Inc. generated revenues of approximately $2.6 million.
Earnings from continuing operations before interest, taxes, depreciation and amortization ("EBITDA") were a negative $16,000 in the second quarter of 2013, compared to positive EBITDA of $4.9 million in the second quarter of 2012. The decrease in EBITDA is attributable essentially to the items noted above, to the start-up of projects in new market segments and to a less favourable product mix. The net loss from continuing operations in the second quarter of 2013 was $1.8 million, or $0.02 per diluted share, compared to net earnings of $2.0 million, or $0.03 per diluted share, in the second quarter of 2012.
"We are disappointed with these results, which mask a recovery in our main U.S. target markets and our steadily increasing penetration in Ontario," said André Laramée, President and Chief Executive Officer of CVTech.
At June 30, 2013, the Corporation had an order backlog of approximately $222.0 million, up from $184.0 million at the end of the previous quarter.
SIX-MONTH RESULTS
Revenues from continuing operations in the six months ended June 30, 2013 were $111.7 million, up 4.1% from $107.3 million in the corresponding period of 2012. EBITDA from continuing operations was $2.3 million, compared to $10.6 million a year earlier. Note that EBITDA for the 2012 period included a gain of $2.2 million on settlement of a life insurance claim. Excluding this gain, EBITDA for the period was $8.4 million. The net loss from continuing operations in the first six months of 2013 was $1.8 million, or $0.02 per diluted share, versus net earnings of $5.2 million, or $0.07 per diluted share, in the same period a year earlier. Excluding the gain noted above, net earnings for the 2012 period were $3.0 million, or $0.04 per diluted share.
REDUCTION OF LONG-TERM DEBT
During the second quarter of 2013, the Corporation repaid $2.1 million in long-term debt, reducing its long-term debt, including the current portion, to $21.6 million at June 30, 2013. At that date, CVTech held $2.2 million in cash. However, the items noted above entailed a temporary increased recourse to bank credit, for which the outstanding balance was $23.5 million at the end of the second quarter. The ratio of long-term debt to equity was 0.26 at June 30, 2013, compared to 0.28 three months earlier.
OUTLOOK
"Our immediate priority is to achieve an adequate operating profitability even more so since the source of the delay in revenue recognition has been identified and is in the process of being corrected. CVTech's steadily growing presence in its target markets positions it very advantageously to benefit from the massive investments that are projected for the construction and maintenance of electricity transmission and distribution networks in North America. Our geographic reach, our expertise and our service offering are poised to grow still further with our signature, announced July 31, of a letter of intent to acquire a U.S. provider of electrical services. Beyond this potential expansion, CVTech remains on the lookout for any further strategic acquisition that would create value for its shareholders," Mr. Laramée concluded.
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 assumes 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.
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]
Share this article