Logistec announces 2018 year-end results

MONTRÉAL, March 15, 2019 /CNW Telbec/ - LOGISTEC Corporation (TSX: LGT.A) (TSX: LGT.B), a marine and environmental services provider, today announced its financial results for the fourth quarter and the year ended December 31, 2018.

Consolidated revenue totalled $584.9 million in 2018, an increase of $109.1 million or 22.9% over 2017. The marine services segment posted revenue of $340.8 million in 2018, representing higher sales compared with $205.3 million in 2017.  This increase stems from two factors: a general volume increase in our bulk and break-bulk terminals, which saw more activity this year than in 2017, and the business combinations of Gulf Stream Marine, Inc. ("GSM") and Pate Stevedore Company, Inc. ("Pate"), which contributed an additional $102.4 million in sales during the year. Revenue from the environmental services segment totalled $244.1 million, compared with $270.5 million in 2017, a decrease of $26.3 million. This decrease is mainly due to lower revenue generated by FER-PAL Construction Ltd. ("FER-PAL") and lower activity in our site remediation services compared to last year.

In 2018, LOGISTEC achieved a consolidated profit attributable to owners of the Company of $18.1 million, which is lower than the $27.4 million posted in 2017. The variation mainly stems from a decrease in our environmental services segment, due to a lower performance from FER-PAL as well as financial and transformational charges. In our marine services segment, we had good operating results, but were negatively affected by an impairment charge against our port logistics activities. Our EBITDA closed at $64.2 million, down from last year's $74.7 million.

The 2018 profit attributable to owners of the Company computes to total diluted earnings per share of $1.38, which corresponds to $1.32 attributable to Class A shares and $1.45 attributable to Class B shares.

During the fourth quarter of 2018, consolidated revenue totalled $168.7 million, an increase of $23.2 million or 16.0% over 2017. This increase is mainly due to strong activity in the environmental services segment during the fourth quarter of 2018 and to the business combinations of GSM and Pate. The profit attributable to owners of the Company stood at $3.4 million ($13.2 million in 2017) for diluted earnings per share of $0.26, of which $0.25 was attributable to Class A Common Shares and $0.27 was attributable to Class B Subordinate Voting Shares. The quarterly results were negatively affected by the same elements as discussed above, mostly a lower performance from FER-PAL as well as transaction, integration, financial, transformational charges and an impairment charge. For the same period of 2017, basic and diluted earnings per share totalled $1.01, of which $0.97 was attributable to Class A Common Shares and $1.06 was attributable to Class B Subordinate Voting Shares.

Outlook

"As we mark our 50^th year as a public company, I am extremely proud of the resiliency of our organization. Over fifty years ago, we were a Québec company with 100% of our revenue generated in the marine industry in Québec. Today, we are a true North American player with an ideal mix of businesses and expanding markets. Exciting times lie ahead. With a clear strategic agenda, driven by a dynamic leadership team, I am confident that we will continue to solidify and build on our unique position," indicated Madeleine Paquin, President and Chief Executive Officer of LOGISTEC Corporation.

"In the marine services segment, the solid revenue performance of 2018 should continue in 2019, and we should benefit from a full year's impact of our 2018 business combinations. We also intend to review our port logistics activities to streamline and improve their returns.

In our environmental services segment, we expect both our Aqua-Pipe operations and traditional environmental activities at Sanexen to maintain their level of activity. We are addressing FER-PAL's poor performance in 2018 and expect better results in 2019 and beyond. The combined backlog for Sanexen and FER-PAL stands at some $100 million, which bodes well for 2019. We are also excited about our new exclusive Neofit technology for our drinking water infrastructure. This technology allows us to line lead drinking water pipes, thereby safeguarding residual drinking water. It has been estimated that over 500,000 lead service lines in the USA will need to be lined or replaced in the coming years.

Finally, with regard to business development, we remain very active in our research and analysis of investment opportunities in both our business segments, our objective being to maintain and improve our high quality of service and ensure the growth of our Company, for the benefit of our business partners and shareholders," 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 37 ports and 61 terminals located in North America. LOGISTEC also offers marine transportation services geared primarily to the Arctic coastal trade 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.  

2018 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statements of Earnings
Years ended December 31 (in thousands of Canadian dollars, except for per share amounts)
	2018	2017
	$	$
Revenue	584,878	475,743
Employee benefits expense	(299,682)	(235,247)
Equipment and supplies expense	(156,859)	(122,651)
Rental expense	(46,028)	(33,799)
Other expenses	(29,839)	(21,997)
Depreciation and amortization expense	(28,580)	(33,859)
Share of profit of equity accounted investments	8,111	6,952
Other gains and losses	3,596	4,875
Impairment charge	(6,821)	(2,917)
Operating profit	28,776	37,100
Finance expense	(8,046)	(3,937)
Finance income	572	404
Profit before income taxes	21,302	33,567
Income taxes	(3,308)	(6,211)
Profit for the year	17,994	27,356
Profit attributable to:
Owners of the Company	18,060	27,426
Non-controlling interest	(66)	(70)
Profit for the year	17,994	27,356
Basic earnings per Class A Common Share ^(1)	1.37	2.14
Basic earnings per Class B Subordinate Voting Share ^(2)	1.51	2.35
Diluted earnings per Class A share	1.32	2.02
Diluted earnings per Class B share	1.45	2.22

⁽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)
	2018	2017
	$	$
Profit for the year	17,994	27,356
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	9,871	(2,787)
Unrealized loss on translating debt designated as hedging item of the net investment in foreign operations	(4,377)	—
Gains (losses) on derivatives designated as cash flow hedges	(5)	151
Income taxes relating to derivatives designated as cash flow hedges	2	(41)
Total items that are or may be reclassified to the consolidated statements of earnings	5,491	(2,677)
Items that will not be reclassified to the consolidated statements of earnings
Remeasurement gains (losses) on benefit obligation	1,850	(1,515)
Variation on retirement plan assets excluding amounts included in profit for the year	(1,637)	830
Income taxes on remeasurement losses (gains) on benefit obligation and variation on retirement plan assets excluding amounts included in profit for the year	(41)	151
Total items that will not be reclassified to the consolidated statements of earnings	172	(534)
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	—	32
Items that will not be reclassified to the consolidated statements of earnings	118	(133)
Total share of other comprehensive income (loss) of equity accounted investments, net of income taxes	118	(101)
Other comprehensive income (loss) for the year, net of income taxes	5,781	(3,312)
Total comprehensive income for the year	23,775	24,044
Total comprehensive income (loss) attributable to:
Owners of the Company	23,805	24,114
Non-controlling interest	(30)	(70)
Total comprehensive income for the year	23,775	24,044

Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
	As at December 31,  2018	As at December 31,  2017
	$	$
Assets
Current assets
Cash and cash equivalents	15,393	3,963
Trade and other receivables	160,252	153,342
Work in progress	14,282	5,306
Current income tax assets	2,964	494
Other financial assets	416	1,055
Prepaid expenses	4,483	2,775
Inventories	10,711	11,550
	208,501	178,485
Equity accounted investments	38,005	34,350
Property, plant and equipment	179,225	160,717
Goodwill	150,498	105,618
Intangible assets	41,054	14,903
Non-current assets	2,173	1,658
Post-employment benefit assets	—	606
Non-current financial assets	6,328	7,984
Deferred income tax assets	11,319	9,218
Total assets	637,103	513,539
Liabilities
Current liabilities
Short-term bank loans	13,577	9,829
Trade and other payables	97,845	85,174
Deferred revenue	5,225	2,252
Current income tax liabilities	3,480	3,699
Dividends payable	1,973	1,075
Current portion of long-term debt	3,294	5,447
Provisions	823	813
	126,217	108,289
Long-term debt	160,003	77,957
Provisions	790	771
Deferred income tax liabilities	21,465	15,575
Post-employment benefit obligations	14,716	14,778
Deferred revenue	3,333	3,733
Non-current liabilities	46,190	61,641
Total liabilities	372,714	282,744
Equity
Share capital	35,016	29,019
Share capital to be issued	14,717	19,820
Retained earnings	200,404	173,129
Accumulated other comprehensive income	12,061	6,606
Equity attributable to owners of the Company	262,198	228,574
Non-controlling interest	2,191	2,221
Total equity	264,389	230,795
Total liabilities and equity	637,103	513,539

                                

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
		Share capital	Share capital to be issued	Cash flow hedges	Foreign currency translation	Retained earnings	Total	Non- controlling interest	Total equity
		$	$	$	$	$	$	$	$
Balance as at January 1, 2018		29,019	19,820	138	6,468	173,129	228,574	2,221	230,795
Profit (loss) for the year		—	—	—	—	18,060	18,060	(66)	17,994
Other comprehensive income (loss)
Currency translation differences arising on translation of foreign operation		—	—	—	9,835	—	9,835	36	9,871
Unrealized loss on translating debt designated as hedging item of the net investment in foreign operations		—	—	—	(4,377)	—	(4,377)	—	(4,377)
Remeasurement gains on benefit obligation and variation on retirement plan assets excluding amounts included in profit for the year, net of income taxes		—	—	—	—	172	172	—	172
Cash flow hedges, net of income taxes		—	—	(3)	—	—	(3)	—	(3)
Share of other comprehensive income of equity accounted investments, net of income taxes		—	—	—	—	118	118	—	118
Total comprehensive income (loss) for the year		—	—	(3)	5,458	18,350	23,805	(30)	23,775
Put option liability		—	—	—	—	15,644	15,644	—	15,644
Repurchase of Class A shares		(10)	—	—	—	(174)	(184)	—	(184)
Issuance and repurchase of Class B shares		904	—	—	—	(1,195)	(291)	—	(291)
Issuance of Class B shares capital to a subsidiary shareholder		5,103	(5,103)	—	—	—	—	—	—
Other dividend		—	—	—	—	(776)	(776)	—	(776)
Dividends on Class A shares		—	—	—	—	(2,565)	(2,565)	—	(2,565)
Dividends on Class B shares		—	—	—	—	(2,009)	(2,009)	—	(2,009)
Balance as at December 31, 2018		35,016	14,717	135	11,926	200,404	262,198	2,191	264,389
Balance as at January 1, 2017		15,618	24,898	(4)	9,255	151,616	201,383	1,798	203,181
Profit (loss) for the year		—	—	—	—	27,426	27,426	(70)	27,356
Other comprehensive income (loss)
Currency translation differences arising on translation of foreign operations		—	—	—	(2,787)	—	(2,787)	—	(2,787)
Remeasurement losses on benefit obligation and variation on retirement plan assets excluding amounts included in profit for the year, net of income taxes		—	—	—	—	(534)	(534)	—	(534)
Cash flow hedges, net of income taxes		—	—	142	—	—	142	—	142
Share of other comprehensive income of equity accounted investments, net of income taxes		—	—	—	—	(133)	(133)	—	(133)
Total comprehensive income (loss) for the year		—	—	142	(2,787)	26,759	24,114	(70)	24,044
Repurchase of Class A shares		(4)	—	—	—	(243)	(247)	—	(247)
Issuance and repurchase of Class B shares		327	—	—	—	(959)	(632)	—	(632)
Issuance of Class B shares related to a business combination		8,000	—	—	—	—	8,000	—	8,000
Long-term liability for the obligation to repurchase a non-controlling interest		—	—	—	—	—	—	(50,089)	(50,089)
Non-controlling interest arising on a business combination		—	—	—	—	—	—	50,582	50,582
Issuance of Class B shares capital to a subsidiary shareholder		5,078	(5,078)	—	—	—	—	—	—
Dividends on Class A shares		—	—	—	—	(2,334)	(2,334)	—	(2,334)
Dividends on Class B shares		—	—	—	—	(1,710)	(1,710)	—	(1,710)
Balance as at December 31, 2017		29,019	19,820	138	6,468	173,129	228,574	2,221	230,795

Consolidated Statements of Cash Flows
Years ended December 31 (in thousands of Canadian dollars)
	2018	2017
	$	$
Operating activities
Profit for the year	17,994	27,356
Items not affecting cash and cash equivalents	43,823	43,899
Cash generated from operations	61,817	71,255
Dividends received from equity accounted investments	4,596	3,637
Contributions to defined benefit retirement plans	(1,049)	(1,036)
Settlement of provisions	(359)	(154)
Changes in non-cash working capital items	4,119	(23,885)
Income taxes paid	(10,037)	(6,021)
	59,087	43,796
Financing activities
Net change in short-term bank loans	3,747	1,579
Issuance of long-term debt, net of transaction costs	134,653	90,014
Repayment of long-term debt	(62,382)	(70,829)
Interest paid	(7,241)	(2,822)
Issuance of Class B shares	562	201
Repurchase of Class A shares	(177)	(248)
Repurchase of Class B shares	(1,349)	(1,043)
Dividends paid on Class A shares	(2,505)	(2,279)
Dividends paid on Class B shares	(1,947)	(1,638)
	63,361	12,935
Investing activities
Customer repayment of an investment in a service contract	—	865
Interest received	539	403
Cash acquired in a business combination	2,501	—
Business combinations	(97,998)	(48,038)
Repurchase of a non-controlling interest	—	(2,880)
Investment in a joint venture	(157)	—
Acquisition of property, plant and equipment	(16,131)	(21,965)
Proceeds from disposal of property, plant and equipment	1,416	2,473
Acquisition of intangible assets	(208)	(45)
Repayment of non-current financial assets	211	104
Increase of non-current assets	(286)	(805)
Disposal of non-current assets	215	191
	(109,898)	(69,697)
Net change in cash and cash equivalents	12,550	(12,966)
Cash and cash equivalents, beginning of year	3,963	15,971
Effect of exchange rate on balances held in foreign currencies of foreign operations	(1,120)	958
Cash and cash equivalents, end of year	15,393	3,963

SOURCE Logistec Corporation

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

Related Links

http://www.logistec.com