RECORD RESULTS IN TERMS OF REVENUES, EBITDA AND NET EARNINGS
- Revenues from continuing operations of $249.2 million, up 6.8% from 2011
- EBITDA from continuing operations up 38.0% to $25.2 million, or 10.1% of revenues
- Net earnings from continuing operations of $12.1 million or $0.17 per share, almost double net earnings of 2011
DRUMMONDVILLE, QC, March 28, 2013 /CNW Telbec/ - CVTech Group Inc. ("CVTech" or "the Corporation") (TSX: CVT) today reported results for its fourth quarter and fiscal year ended December 31, 2012. On October 16, 2012, the Corporation announced the sale of its operations in the CVT systems and related products segment. Consequently the results of this segment are presented as discontinued operations and the results of the previous year have been restated accordingly. All amounts are in Canadian dollars unless otherwise indicated.
"2012 was a highly rewarding year for CVTech. First, our continuing operations set new records in revenues, earnings before interest, taxes, depreciation and amortization ("EBITDA") and net earnings, and we ended the year with an excellent financial situation. We also achieved important strategic breakthroughs by pursuing our geographic expansion in Ontario and the leadership of our subsidiaries in their respective markets won them numerous contracts. Moreover, the fourth quarter was vigorous, as our teams were called upon in response to natural disasters in the northeastern U.S.," said André Laramée, President and Chief Executive Officer of CVTech.
| Financial highlights | Three months ended December 31 | Years ended December 31 | ||||||
| (in thousands of dollars, except per-share data) | 2012 | 2011 | 2012 | 2011 | ||||
| Revenues | 82,572 | 66,685 | 249,201 | 233,237 | ||||
| EBITDA from continuing operations | 8,108 | 5,205 | 25,236 | 18,293 | ||||
| Net earnings from continuing operations | 3,885 | 1,909 | 12,117 | 6,188 | ||||
| Per share - basic and diluted ($) | 0.05 | 0.03 | 0.17 | 0.09 | ||||
| Net earnings from discontinued operations | (68) | (3,350) | (1,939) | (3,097) | ||||
| Net earnings | 3,817 | (1,441) | 10,178 | 3,091 | ||||
| Per share - basic and diluted ($) | 0.05 | (0.02) | 0.14 | 0.04 | ||||
| Weighted average number of shares outstanding (basic, in thousands) | 72,420 | 72,400 | 72,418 | 72,541 | ||||
FOURTH-QUARTER RESULTS
Revenues from continuing operations were up 23.8% to $82.6 million from $66.7 million in the fourth quarter of the previous year. The increase reflects revenues of $34.7 million related to natural disasters in the fourth quarter of 2012, compared to revenues of $11.4 million in the corresponding quarter of 2011. The execution of this emergency work required temporary reassignment of some workers and postponement of work on regular contracts. The Corporation estimates that recognition of approximately $8.0 million in revenues was accordingly deferred from the fourth quarter of 2012 to subsequent periods. Excluding these items, revenues were relatively stable.
EBITDA from continuing operations was $8.1 million, or 9.8% of revenues, in the fourth quarter of 2012, compared to $5.2 million or 7.8% of revenues in the fourth quarter of 2011. The increase in EBITDA, in both dollars and percentage of revenues, was due to the increase in sales volume and to a more favourable revenue mix between the two periods compared.
Net earnings from continuing operations were $3.9 million, or $0.05 per diluted share, in the fourth quarter of 2012, compared to $1.9 million, or $0.03 per diluted share, in the fourth quarter of 2011. For discontinued operations, a net loss of $68,000 was recorded, compared to a net loss of $3.4 million a year earlier, when a goodwill impairment charge of $2.9 million was recorded. As a result, net earnings in the fourth quarter of 2012 were $3.8 million, or $0.05 per diluted share, compared to a net loss of $1.4 million, or $0.02 per diluted share, a year earlier.
At December 31, 2012, the Corporation had an order backlog of approximately $217.0 million.
FISCAL 2012 RESULTS
For the year ended December 31, 2012, revenues from continuing operations were $249.2 million, up 6.8% from $233.2 million in 2011. The increase of $16.0 million is attributable essentially to higher revenues related to natural disasters in the fourth quarter of 2012 relative to the corresponding period of 2011, offset by the postponement of revenue recognition to subsequent periods. Excluding these items, revenues were relatively stable.
EBITDA from continuing operations was $25.2 million, or 10.1% of revenues, compared to $18.3 million or 7.8% of revenues in 2011. EBITDA for 2012 includes a $2.2-million life insurance settlement, offset by non-recurring charges totalling $2.0 million related to a proxy fight with regard to the acceptance of a circular from a dissenting shareholder, the strategic alternatives review process, a provision for bad debts and the reimbursement of legal fees related to a judgment.
Net earnings from continuing operations in 2012 were $12.1 million, or $0.17 per diluted share, almost double the net earnings of $6.2 million, or $0.09 per diluted share, recorded in 2011. With discontinued operations taken into account, net earnings in 2012 were $10.2 million, or $0.14 per diluted share, compared to $3.1 million, or $0.04 per diluted share, in 2011.
SOLID CASH FLOW AND DEBT REDUCTION
Reflecting the rise in net earnings, cash flow from operations before changes in working capital items was $24.3 million in 2012, compared to $18.9 million in 2011.
This strong cash flow, combined with the disposal of the CVT systems and related products segment, enabled the Corporation to improve its financial position considerably in 2012. At December 31, 2012, CVTech had $14.3 million in cash and long-term debt, including the current portion, was $25.2 million. The ratio of long-term debt to equity was 0.31 at December 31, 2012, compared to 0.48 a year earlier.
OUTLOOK
"The year's accomplishments, both in the improvement of our operating profitability and in the broadening of our service offering, signal the beginning of a new era for the Corporation. With massive investment in the construction and maintenance of transmission and distribution networks projected for the coming years, our ever-increasing presence in eastern North America positions us favourably to profit from the resulting business opportunities. Beyond the projected acquisition of B.G. High Voltage Systems Limited, which we expect to complete shortly, we remain on the lookout for potential strategic acquisitions that will enhance our service offering, our expertise and our geographic reach," concluded Mr. Laramée.
OVERVIEW OF THE CORPORATION
CVTech is a company operating in the energy sector. Through Thirau ltée and its subsidiaries Riggs Distler Inc. and Thirau LLC, the Corporation provides services to the electric power industry for the maintenance of transmission and distribution lines, primarily in Quebec, Ontario and the eastern United States. Another Thirau ltée subsidiary, J.J.L. Déboisement inc., specializes in control of vegetation surrounding power lines and in clearing rights of way. Thirau LLC's wholly owned subsidiary Riggs Distler & Company, Inc. is a leading provider of maintenance and construction services to the utility and heavy industrial markets.
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]
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