Logistec announces 2016 year-end results

MONTRÉAL, March 17, 2017 /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, 2016.

Consolidated revenue totalled $343.3 million in 2016, a decrease of $14.7 million or 4.1% over 2015. Revenue was affected by the increase in the U.S. dollar against the Canadian dollar. For the year, the positive impact on revenue was $3.1 million.

The marine services segment posted revenue of $186.0 million in 2016, representing lower sales compared with the $206.5 million reported in 2015. The decrease was mostly due to lower bulk activity. The environmental services segment delivered a good performance in 2016, as revenue increased by $5.8 million or 3.9% over 2015 to reach $157.3 million. Revenue growth came primarily from increased activity in site remediation and Aqua-Pipe in the USA, partially offset by reduced Aqua-Pipe installation in Canada.

In 2016, Logistec achieved a consolidated profit for the year of $18.5 million, of which $18.9 million was attributable to owners of the Company. This is lower than the 2015 consolidated profit of $32.9 million, of which $29.1 million was attributable to owners of the Company. This decline stemmed largely from lower cargo handling volumes for the marine services segment. The environmental services segment was also less profitable due to significantly lower sales in Aqua-Pipe installation services. The 2016 profit attributable to owners of the Company computes to total diluted earnings per share of $1.48, which corresponds to $1.41 attributable to Class A Common Shares and $1.56 attributable to Class B Subordinate Voting Shares. This compares to $2.34 in 2015, of which $2.25 was attributable to Class A Common Shares and $2.47 was attributable to Class B Subordinate Voting Shares.

During the fourth quarter of 2016, consolidated revenue totalled $95.7 million, up by $3.3 million over the same period of 2015. This increase is explained mainly by strong activity in the environmental services segment. The profit attributable to owners of the Company rose to $8.9 million ($7.9 million in 2015) for total diluted earnings per share of $0.71, of which $0.68 was attributable to Class A Common Shares and $0.74 was attributable to Class B Subordinate Voting Shares. For the same period of 2015, diluted earnings per share totalled $0.63, of which $0.61 was attributable to Class A Common Shares and $0.67 was attributable to Class B Subordinate Voting Shares.

Outlook

"Our development plan for cargo handling is focused on strengthening and growing our network of facilities 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 is just beginning to recover. The turnaround is expected to be gradual, and we should see development opportunities in the coming years. On a brighter note, we recently received a new concession for the handling of bulk at the Port of Cleveland (OH), where we expect to handle some 3-4 million tonnes of iron ore and other bulk cargoes on an annual basis.

In biomass, we have rebuilt our facilities damaged by the fire in Brunswick (GA) and can now get back to our growth plan. We will immediately resume handling of all outbound movements for our main long-term customer, with the capacity to also seek new ones.

In our container business, our growth will be concentrated on Montréal (QC), where we inaugurated our new Viau terminal in late 2016. The first phase of this facility has a capacity of 350,000 TEUs, and an additional 250,000 TEUs will be developed in line with demand growth. This new terminal will provide our joint venture Termont with a total capacity of 1.1 million TEUs at the Port of Montréal (QC).

Given the more difficult economic environment for the industries we serve, we turned our energy to identifying potential acquisition opportunities. We were pleased to add Logistec Gulf Coast LLC to our family in early 2017. This newly formed company, in which we have a 70% interest, acquired the assets of Gulf Coast Bulk Equipment, Inc. It operates two terminal concessions out of the ports of Tampa (FL) and Port Manatee (FL). It also offers stevedoring services to bulk cargo importers and exporters in various terminals in the U.S. Southeast and Gulf of Mexico region, including Texas, Florida, Louisiana and along the Mississippi River.

Sanexen enjoys a strong position in its three main markets. In site remediation, our traditional market, we are unquestionably the number one player in Eastern Canada. In 2016, we not only completed the site remediation of a former aluminium smelter in Shawinigan (QC) and the environmental dredging of Sandy Beach (QC) in Gaspésie, but also continued the decontamination of part of a refinery site in Varennes (QC), disposed of contaminated soil from the Turcot Interchange and Champlain Bridge construction sites in Montréal (QC), and carried out many other projects.

As for water main rehabilitation, despite the downturn observed in Québec, the market remained robust in Ontario, and we continued to advance our penetration in the U.S. market. On a global level, our Australian licensee experienced some setbacks, and its first installations should be performed in 2017. With regards to the manufacturing of woven hoses, Niedner had an excellent year, selling a record number of fire hoses to the U.S. Forest Service and continuing production and development of our Aqua-Pipe lining. In 2016, we acquired Excava-Tech Inc., our main subcontractor for Aqua-Pipe excavation work in Québec. This acquisition completes our vertical integration from inventor to manufacturer to installer.

As is the case for our marine services business, we will continue to pursue acquisitions to ensure our growth," 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 our specialized services and expertise. Despite the continued 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 located in eastern North America. Logistec also offers marine transportation services geared primarily to the Arctic coastal trade, short-line rail transportation services, as well as 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 manufacturing of woven hoses.

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.

2016 Consolidated Financial Statements

Consolidated Statements of Earnings
years ended December 31 (in thousands of Canadian dollars, except for per share amounts)
	2016	2015
	$	$
Revenue	343,326	358,008
Employee benefits expense	(158,784)	(176,953)
Equipment and supplies expense	(102,636)	(91,000)
Rental expense	(28,899)	(29,062)
Other expenses	(15,230)	(14,673)
Depreciation and amortization expense	(14,288)	(12,328)
Share of profit of equity accounted investments	4,310	4,264
Other gains and losses	(345)	5,528
Operating profit	27,454	43,784
Finance expense	(1,894)	(936)
Finance income	194	313
Profit before income taxes	25,754	43,161
Income taxes	(7,268)	(10,288)
Profit for the year	18,486	32,873
Profit attributable to:
Owners of the Company	18,858	29,142
Non-controlling interests	(372)	3,731
Profit for the year	18,486	32,873
Basic earnings per Class A Common Share ^(1)	1.48	2.25
Basic earnings per Class B Subordinate Voting Share ^(2)	1.64	2.47
Diluted earnings per Class A share	1.41	2.25
Diluted earnings per Class B share	1.56	2.47

^(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)
				2016	2015
				$	$
Profit for the year				18,486	32,873
Other comprehensive income (loss)
	Items that are or may be reclassified to the consolidated statements of earnings
			Currency translation differences arising on translation of foreign operations	(1,158)	6,275
			Losses on derivatives designated as cash flow hedges	–	(187)
			Transfer of losses on derivatives designated as cash flow hedges to the consolidated statements of earnings	167	80
			Income taxes relating to derivatives designated as cash flow hedges	(45)	31
	Total items that are or may be reclassified to the consolidated statements of earnings			(1,036)	6,199
	Items that will not be reclassified to the consolidated statements of earnings
			Remeasurement losses on benefit obligation	(44)	(239)
			Return on retirement plan assets excluding amounts included in profit for the year	669	(199)
			Income taxes on remeasurement losses on benefit obligation and return on retirement plan assets excluding amounts included in profit for the year	(168)	118
	Total items that will not be reclassified to the consolidated statements of earnings			457	(320)
	Share of other comprehensive income of equity accounted investments, net of income taxes
			Items that are or may be reclassified to the consolidated statements of earnings	1	(7)
			Items that will not be reclassified to the consolidated statements of earnings	12	(6)
	Total share of other comprehensive income of equity accounted investments, net of income taxes			13	(13)
Other comprehensive income (loss) for the year, net of income taxes				(566)	5,866
Total comprehensive income for the year				17,920	38,739
Total comprehensive income (loss) attributable to:
Owners of the Company				18,292	35,008
Non-controlling interests				(372)	3,731
Total comprehensive income for the year				17,920	38,739

Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
		As at December 31,  2016	As at December 31,  2015
		$	$
Assets
Current assets
	Cash and cash equivalents	15,971	23,811
	Investment in a service contract	865	1,157
	Trade and other receivables	86,373	77,333
	Work in progress	4,395	6,438
	Current income tax assets	3,767	2,569
	Other financial assets	1,014	─
	Assets available for sale	330	─
	Prepaid expenses	5,654	7,952
	Inventories	7,506	6,553
		125,875	125,813
Equity accounted investments		31,141	28,951
Property, plant and equipment		138,591	111,022
Goodwill		24,899	22,615
Other intangible assets		18,233	20,247
Other non-current assets		1,534	5,194
Post-employment benefit assets		706	522
Non-current financial assets		7,166	5,019
Deferred income tax assets		7,715	9,032
Total assets		355,860	328,415
Liabilities
Current liabilities
	Trade and other payables	43,081	46,352
	Deferred revenue	2,928	2,700
	Current income tax liabilities	149	650
	Dividends payable	947	967
	Current portion of long-term debt	1,681	2,159
	Provisions	1,344	1,268
		50,130	54,096
Long-term debt		58,644	29,920
Provisions		800	766
Deferred income tax liabilities		13,382	12,433
Post-employment benefit obligations		13,076	12,955
Deferred revenue		4,133	4,533
Non-current financial liabilities		12,514	4,067
Total liabilities		152,679	118,770
Commitments, contingent liabilities and guarantees
Equity
Share capital		15,618	14,985
Share capital to be issued		24,898	─
Retained earnings		151,616	164,154
Accumulated other comprehensive income		9,251	10,274
Equity attributable to owners of the Company		201,383	189,413
Non-controlling interests		1,798	20,232
Total equity		203,181	209,645
Total liabilities and equity		355,860	328,415

On behalf of the Board
	(signed) George R. Jones	(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	Share capital to be issued	Cash flow hedges	Foreign currency translation	Retained earnings	Total			Non- controlling interests	Total equity
				$	$	$	$	$	$			$	$
Balance as at January 1, 2016				14,985	–	(139)	10,413	164,154	189,413			20,232	209,645
Profit (loss) for the year				–	–	–	–	18,858	18,858			(372)	18,486
Other comprehensive income (loss)
	Currency translation differences arising on translation of foreign operations			–	–	–	(1,158)	─	(1,158)			–	(1,158)
	Remeasurement losses on benefit obligation and return on retirement plan assets excluding amounts included in profit for the year, net of income taxes			–	–	–	–	457	457			–	457
	Cash flow hedges, net of income taxes			–	–	122	–	–	122			–	122
	Share of other comprehensive income of equity accounted investments, net of income taxes			–	–	13	–	–	13			–	13
Total comprehensive income (loss) for the year				–	–	135	(1,158)	19,315	18,292			(372)	17,920
Repurchase of Class A shares				(16)	–	–	–	(953)	(969)			–	(969)
Issuance and repurchase of Class B shares				649	–	–	–	(8,957)	(8,308)			–	(8,308)
Repurchase of non-controlling interests				–	24,898	–	–	(18,148)	6,750			(18,062)	(11,312)
Dividends on Class A shares				–	–	–	–	(2,226)	(2,226)			–	(2,226)
Dividends on Class B shares				–	–	–	–	(1,569)	(1,569)			–	(1,569)
Balance as at December 31, 2016				15,618	24,898	(4)	9,255	151,616	201,383			1,798	203,181

Consolidated Statements of Changes in Equity (Continued)
(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

Consolidated Statements of Cash Flows
years ended December 31 (in thousands of Canadian dollars)
		2016	2015
		$	$
Operating activities
	Profit for the year	18,486	32,873
	Impairment loss related to assets destroyed	–	6,066
	Gain on insurance recovery of assets	–	(6,066)
	Items not affecting cash and cash equivalents	29,787	27,310
	Cash generated from operations	48,273	60,183
	Dividends received from equity accounted investments	2,213	2,434
	Contributions to defined benefit retirement plans	(866)	(1,119)
	Settlement of provisions	(304)	(126)
	Changes in non-cash working capital items	(15,028)	(11,765)
	Income taxes paid	(7,473)	(8,842)
		26,815	40,765
Financing activities
	Issuance of long-term debt, net of transaction costs	53,852	12,642
	Repayment of long-term debt	(29,909)	(9,945)
	Interest paid	(1,867)	(913)
	Issuance of Class B shares	607	113
	Repurchase of Class A shares	(969)	(990)
	Repurchase of Class B shares	(9,484)	(4,873)
	Dividends paid on Class A shares	(2,227)	(1,956)
	Dividends paid on Class B shares	(1,587)	(1,452)
		8,416	(7,374)
Investing activities
	Customer repayment of an investment in a service contract	292	209
	Interest received	206	320
	Cash acquired in a business acquisition	205	–
	Business acquisitions	(5,262)	–
	Investment in a joint venture	–	578
	Repurchase of a non-controlling interest	(2,393)	–
	Acquisition of property, plant and equipment	(32,198)	(26,118)
	Proceeds from disposal of property, plant and equipment	363	704
	Acquisition of other financial assets	(4,039)	–
	Acquisition of intangible assets	(33)	(56)
	Repayment of non-current financial assets	3	–
	Increase of other non-current assets	(827)	(10,640)
	Disposal of other non-current assets	68	–
		(43,615)	(35,003)
Net change in cash and cash equivalents		(8,384)	(1,612)
Cash and cash equivalents, beginning of year		23,811	26,381
Effect of exchange rate on balances held in foreign currencies of foreign operations		544	(958)
Cash and cash equivalents, end of year		15,971	23,811

SOURCE Logistec Corporation

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

Related Links

http://www.logistec.com/