Logistec announces 2015 year-end results

MONTRÉAL, March 22, 2016 /CNW Telbec/ - Logistec Corporation (TSX: LGT.A LGT.B), a marine and environmental services provider, today announced its financial results for the fourth quarter and the year ended December 31, 2015.

Consolidated revenue totalled $358.0 million in 2015, an increase of $35.8 million or 11.1% over 2014. Revenue was affected by the increase in the U.S. dollar against the Canadian dollar. For the year, the positive impact amounted to $15.3 million.

Activity in the marine services segment was similar to that of 2014, with a slight decrease in bulk activity, offset by an increase in break-bulk activity. The environmental services segment delivered a good performance in 2015, as revenue increased by $23.9 million or 18.7% over 2014 to reach $151.5 million. Revenue growth came primarily from increased activity in Aqua-Pipe and from site remediation.

In 2015, Logistec achieved a consolidated profit for the year of $32.9 million, of which $29.1 million was attributable to owners of the Company. This is lower than the 2014 consolidated profit of $34.5 million, of which $31.0 million was attributable to owners of the Company. This decline stemmed largely from additional cargo-handling costs due to flooding at our terminal in Virginia, a fire at our terminal in Georgia, and the start-up of our new container terminal in Montréal (QC). This was partially offset by greater profitability in our environmental services segment. The 2015 profit attributable to owners of the Company computes to total basic and diluted earnings per share of $2.34, which corresponds to $2.25 attributable to Class A Common Shares and $2.47 attributable to Class B Subordinate Voting Shares.This compares to total basic and diluted earnings per share of $2.46 in 2014, of which $2.37 was attributable to Class A Common Shares and $2.59 was attributable to Class B Subordinate Voting Shares.

During the fourth quarter of 2015, consolidated revenue totalled $92.4 million, up by $5.5 million over the same period of 2014. This increase is explained by strong activity in the marine services segment. The profit attributable to owners of the Company amounted to $7.9 million for total basic and diluted earnings per share of $0.63, of which $0.61 was attributable to Class A Common Shares and $0.67 was attributable to Class B Subordinate Voting Shares. For the same period of 2014, basic and diluted earnings per share totalled $0.58, of which $0.56 was attributable to Class A Common Shares and $0.61 was attributable to Class B Subordinate Voting Shares.

Outlook

"Our development plan is focused on strengthening and growing our footprint of cargo-handling services in North America. Over the last few years, we have succeeded in growing organically by targeting very specific growth markets, namely mining, biomass and port logistics.

Unfortunately, with the significant drop in commodity prices, the landscape for mining development has been negatively affected and we need to moderate our expectations for significant growth. However, we still believe there will be opportunities, particularly in Québec, and we will seize these opportunities as they arise.

In biomass, we are rebuilding the capacity damaged by the fire in Georgia. We have also completed an expansion that will be coming on stream in the next quarter for a different customer. That will allow for some volume expansion in 2016.

Our container business should also see some growth in 2016. Although the economic environment is very difficult, with GDP growth at very low levels, we should be able to strengthen our Canadian gateway with new U.S. cargoes while also extending our geographic reach through the hub-and-spoke model of our customer, Mediterranean Shipping Company, S.A. This allows them to competitively transload cargoes between North America and the world using the Montréal (QC) and Saint John (NB) gateways.

Our port logistics business in Montréal-Est (QC) is developing well. We were able to offer transloading services within our new warehouse via rail/container/truck for the first time in 2015, and our services were well received by our customers. We expect continued growth of this business in 2016. In Virginia, flooding severely affected our business in 2015 and we are looking to diversify our customer base and develop our services, based on the success and the growth of the Port of Virginia as an international container port in North America.

The difficult economic environment may also present acquisition opportunities and we are actively reaching out to companies that would fit well with our development plan. We are seeking to strengthen and expand our port network and to facilitate trade through market-driven cargo-handling opportunities in North America.

We are also committed to developing our environmental services segment. Sanexen should have another good year in 2016. The order book is strong and its two main markets, traditional environmental services and the rehabilitation of water mains, hold significant growth potential. In Canada, we are well positioned to capitalize on the aqueduct infrastructure projects that are at the heart of the government's strategy. In the USA, the recovery is tangible and underground infrastructure rehabilitation needs are enormous. Finally, after being established for four years in France, our activities are seeing sustained growth, particularly in regulated materials management.

Sanexen enjoys an enviable position in its main markets. To add to its service offering in 2016, we will open the first fully-enclosed contaminated soils bioremediation centre in Canada. In addition, as of March 8, 2016, the Company acquired a business for $5.6 million. This acquisition represents a vertical integration for the environmental services segment.

In our Aqua-Pipe business, we expect to advance our growth in the U.S. market. Furthermore, Ventia, our licensee in Australia, will be performing its first installations in 2016. The Australian market represents a good potential due to new regulations affecting water mains made of asbestos cement.

As is the case for our marine services business, we will continue to pursue growth opportunities, both internally and externally, in 2016," indicated Madeleine Paquin, President and Chief Executive Officer of Logistec Corporation.

"Overall, we are committed and confident that we can continue to build our business based on the specialized services where we have developed our expertise with a solid customer base. Despite the more difficult economic environment, our service offerings, our geographic diversity, and our ability to invest in growth opportunities should allow us to continue to increase our services in both the short and long term. Clearly, our success rests on the strength of our highly dynamic team of experts who are customer oriented and consistently bring value to an expanding customer base," concluded Madeleine Paquin.

About Logistec

Logistec Corporation is based in Montréal (QC) and provides specialized services to the marine community and industrial companies in the areas of bulk, break-bulk and container cargo handling in some 30 ports and 40 terminals in eastern North America. Logistec also offers marine transportation services geared primarily to the Arctic coastal trade, short-line rail transportation services, and marine agency services to foreign shipowners and operators serving the Canadian market. Furthermore, the Company operates in the environmental sector where it provides services to industrial, municipal and other governmental customers for the trenchless structural rehabilitation of underground water mains, regulated materials management, site remediation, risk assessment, and woven-hose manufacturing.

The Company has been profitable and has paid regular dividends since becoming public and payments have grown steadily over the years. A public company since 1969, Logistec's shares are listed on the Toronto Stock Exchange under the ticker symbols LGT.A and LGT.B. More information can be obtained on the Company's website at www.logistec.com.

Forward-Looking Statements

For the purpose of informing shareholders and potential investors about the Company's prospects, sections of this document may contain forward-looking statements, within the meaning of securities legislation, about the Company's activities, performance and financial situation and, in particular, hopes for the success of the Company's efforts in the development and growth of its business. These forward-looking statements express, as of the date of this document, the estimates, predictions, projections, expectations or opinions of the Company about future events or results. Although the Company believes that the expectations produced by these forward-looking statements are founded on valid and reasonable bases and assumptions, these forward-looking statements are inherently subject to important uncertainties and contingencies, many of which are beyond the Company's control, such that the Company's performance may differ significantly from the predicted performance expressed or presented in such forward-looking statements. The important risks and uncertainties that may cause the actual results and future events to differ significantly from the expectations currently expressed are examined under "Business Risks" in the Company's annual report and include (but are not limited to) the performances of domestic and international economies and their effect on shipping volumes, weather conditions, labour relations, pricing and competitors' marketing activities. The reader of this document is thus cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to update or revise these forward-looking statements, except as required by law.

Additional information relating to our Company can be found on SEDAR's website at www.sedar.com and on Logistec's website at www.logistec.com.

2015 Consolidated Financial Statements

Consolidated Statements of Earnings
years ended December 31 (in thousands of Canadian dollars, except for per share amounts)
	2015	2014
	$	$
Revenue	358,008	322,220
Employee benefits expense	(176,953)	(151,942)
Equipment and supplies expense	(91,000)	(86,021)
Rental expense	(29,062)	(26,820)
Other expenses	(14,673)	(11,507)
Depreciation and amortization expense	(12,328)	(10,246)
Share of profit of equity accounted investments	4,264	6,403
Other gains and losses	5,528	2,525
Operating profit	43,784	44,612
Finance expense	(936)	(693)
Finance income	313	468
Profit before income taxes	43,161	44,387
Income taxes	(10,288)	(9,870)
Profit for the year	32,873	34,517
Profit attributable to:
Owners of the Company	29,142	31,037
Non-controlling interests	3,731	3,480
Profit for the year	32,873	34,517
Basic and diluted earnings per Class A Common Share ^(1)	2.25	2.37
Basic and diluted earnings per Class B Subordinate Voting Share ^(2)	2.47	2.59

^(1)	Class A Common Share ("Class A share")
^(2)	Class B Subordinate Voting Share ("Class B share")

Consolidated Statements of Comprehensive Income
years ended December 31 (in thousands of Canadian dollars)
			2015	2014
			$	$
Profit for the year			32,873	34,517
Other comprehensive income
	Items that are or may be reclassified to the consolidated statements of earnings
		Currency translation differences arising on translation of foreign operations	6,275	2,796
		Losses on derivatives designated as cash flow hedges	(187)	(63)
		Transfer of losses on derivatives designated as cash flow hedges to the consolidated statements of earnings	80	9
		Income taxes relating to derivatives designated as cash flow hedges	31	17
		Share of other comprehensive income of equity accounted investments, net of income taxes	(7)	14
	Total items that are or may be reclassified to the consolidated statements of earnings		6,192	2,773
	Items that will not be reclassified to the consolidated statements of earnings
		Remeasurement losses on benefit obligation	(239)	(2,861)
		Return on retirement plan assets excluding amounts included in profit for the year	(199)	1,430
		Income taxes on remeasurement losses on benefit obligation and return on retirement plan assets excluding amounts included in profit for the year	118	385
		Share of other comprehensive income of equity accounted investments, net of income taxes	(6)	28
	Total items that will not be reclassified to the consolidated statements of earnings		(326)	(1,018)
Other comprehensive income for the year, net of income taxes			5,866	1,755
Total comprehensive income for the year			38,739	36,272
Total comprehensive income attributable to:
Owners of the Company			35,008	32,792
Non-controlling interests			3,731	3,480
Total comprehensive income for the year			38,739	36,272

Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
		As at December 31,  2015	As at December 31, 2014
		$	$
Assets
Current assets
	Cash and cash equivalents	23,811	26,381
	Investment in a service contract	1,157	1,366
	Trade and other receivables	77,333	67,052
	Work in progress	6,438	1,027
	Current income tax assets	2,569	2,638
	Prepaid expenses	7,952	3,106
	Inventories	6,553	4,585
		125,813	106,155
Equity accounted investments		28,951	27,123
Property, plant and equipment		111,022	99,663
Goodwill		22,615	21,407
Other intangible assets		20,247	18,286
Other non-current assets		5,194	1,704
Post-employment benefit assets		522	768
Non-current financial assets		5,019	3,432
Deferred income tax assets		9,032	8,449
Total assets		328,415	286,987
Liabilities
Current liabilities
	Trade and other payables	46,352	40,452
	Deferred revenue	2,700	2,475
	Current income tax liabilities	650	1,159
	Dividends payable	967	815
	Current portion of long-term debt	2,159	1,261
	Provisions	1,268	1,001
		54,096	47,163
Long-term debt		29,920	28,007
Provisions		766	644
Deferred income tax liabilities		12,433	9,380
Post-employment benefit obligations		12,955	12,453
Deferred revenue		4,533	4,933
Non-current financial liabilities		4,067	4,983
Total liabilities		118,770	107,563
Commitments, contingent liabilities and guarantees
Equity
Share capital		14,985	14,906
Retained earnings		164,154	144,513
Accumulated other comprehensive income		10,274	4,082
Equity attributable to owners of the Company		189,413	163,501
Non-controlling interests		20,232	15,923
Total equity		209,645	179,424
Total liabilities and equity		328,415	286,987

On behalf of the Board
		(signed) David M. Mann		(signed) Madeleine Paquin
		Director		Director

Consolidated Statements of Changes in Equity
(in thousands of Canadian dollars)
		Attributable to owners of the Company
			Accumulated other comprehensive income (loss)
		Share capital	Cash flow hedges	Foreign currency translation	Retained earnings	Total	Non- controlling interests	Total equity
		$	$	$	$	$	$	$
Balance as at January 1, 2015		14,906	(56)	4,138	144,513	163,501	15,923	179,424
Profit for the year		-	-	-	29,142	29,142	3,731	32,873
Other comprehensive income (loss)
	Currency translation differences arising on translation of foreign operations	-	-	6,275	-	6,275	-	6,275
	Remeasurement losses on benefit obligation and return on retirement plan assets excluding amounts included in profit for the year, net of income taxes	-	-	-	(320)	(320)	-	(320)
	Cash flow hedges, net of income taxes	-	(76)	-	-	(76)	-	(76)
	Share of other comprehensive income of equity accounted investments, net of income taxes	-	(7)	-	(6)	(13)	-	(13)
Total comprehensive income (loss) for the year		-	(83)	6,275	28,816	35,008	3,731	38,739
Repurchase of Class A shares		(16)	-	-	(974)	(990)	-	(990)
Issuance and repurchase of Class B shares		95	-	-	(4,641)	(4,546)	-	(4,546)
Investment received from a non-controlling interest		-	-	-	-	-	578	578
Dividends on Class A shares		-	-	-	(2,047)	(2,047)	-	(2,047)
Dividends on Class B shares		-	-	-	(1,513)	(1,513)	-	(1,513)
Balance as at December 31, 2015		14,985	(139)	10,413	164,154	189,413	20,232	209,645
Balance as at January 1, 2014		15,030	(33)	1,342	135,552	151,891	11,791	163,682
Profit for the year		-	-	-	31,037	31,037	3,480	34,517
Other comprehensive income (loss)
	Currency translation differences arising on translation of foreign operations	-	-	2,796	-	2,796	-	2,796
	Remeasurement losses on benefit obligation and return on retirement plan assets excluding amounts included in profit for the year, net of income taxes	-	-	-	(1,046)	(1,046)	-	(1,046)
	Cash flow hedges, net of income taxes	-	(37)	-	-	(37)	-	(37)
	Share of other comprehensive income of equity accounted investments, net of income taxes	-	14	-	28	42	-	42
Total comprehensive income (loss) for the year		-	(23)	2,796	30,019	32,792	3,480	36,272
Repurchase of Class A shares		(8)	-	-	(425)	(433)	-	(433)
Issuance and repurchase of Class B shares		(116)	-	-	(7,602)	(7,718)	-	(7,718)
Non-controlling interest arising on a business acquisition		-	-	-	-	-	1,475	1,475
Repurchase of share capital by a subsidiary		-	-	-	(167)	(167)	(823)	(990)
Dividends on Class A shares		-	-	-	(7,314)	(7,314)	-	(7,314)
Dividends on Class B shares		-	-	-	(5,550)	(5,550)	-	(5,550)
Balance as at December 31, 2014		14,906	(56)	4,138	144,513	163,501	15,923	179,424

Consolidated Statements of Cash Flows
years ended December 31 (in thousands of Canadian dollars)
		2015	2014
		$	$
Operating activities
	Profit for the year	32,873	34,517
	Impairment loss related to assets destroyed	6,066	─
	Gain on insurance recovery of assets	(6,066)	─
	Items not affecting cash and cash equivalents	27,310	23,579
	Cash generated from operations	60,183	58,096
	Dividends received from equity accounted investments	2,434	5,646
	Contributions to defined benefit retirement plans	(1,119)	(1,607)
	Settlement of provisions	(126)	(45)
	Changes in non-cash working capital items	(11,765)	2,182
	Income taxes paid	(8,842)	(15,164)
		40,765	49,108
Financing activities
	Net change in short-term bank loans	-	(2,087)
	Issuance of long-term debt, net of transaction costs	12,642	36,000
	Repayment of long-term debt	(9,945)	(13,613)
	Interest paid	(913)	(705)
	Issuance of Class B shares	113	145
	Repurchase of share capital by a subsidiary	-	(990)
	Repurchase of Class A shares	(990)	(433)
	Repurchase of Class B shares	(4,873)	(8,100)
	Dividends paid on Class A shares	(1,956)	(7,240)
	Dividends paid on Class B shares	(1,452)	(5,508)
		(7,374)	(2,531)
Investing activities
	Customer repayment of an investment in a service contract	209	231
	Interest received	320	613
	Cash acquired in business acquisitions	-	1,622
	Business acquisitions	-	(5,752)
	Investment in a joint venture	578	(100)
	Acquisition of property, plant and equipment	(26,118)	(40,049)
	Proceeds from disposal of property, plant and equipment	704	1,071
	Acquisition of intangible assets	(56)	(211)
	Repayment of non-current financial assets	-	3,288
	Acquisition of other non-current assets	(10,640)	(298)
	Disposal of other non-current assets	-	6
		(35,003)	(39,579)
Net change in cash and cash equivalents		(1,612)	6,998
Cash and cash equivalents, beginning of year		26,381	19,638
Effect of exchange rate on balances held in foreign currencies of foreign operations		(958)	(255)
Cash and cash equivalents, end of year		23,811	26,381

SOURCE Logistec Corporation

Jean-Claude Dugas, CPA, CA, Vice-President, Finance, Logistec Corporation, [email protected], [phone]