LOGISTEC announces its results for the first quarter of 2019

MONTRÉAL, May 9, 2019 /CNW Telbec/ - LOGISTEC Corporation (TSX: LGT.A) (TSX: LGT.B) (the "Company"), a marine and environmental services provider, today announced its financial results for the first quarter ended March 30, 2019.

First quarter financial highlights

• Consolidated revenue up $32.3 million or 39.2% to $114.7 million
• Adjusted EBITDA ⁽¹⁾ closed at $1.2 million
• Loss attributable to owners of the Company reduced to $8.9 million

⁽¹⁾ Please refer to section entitled Non-IFRS measure

Results for the first quarter of 2019

During the first quarter of 2019, consolidated revenue totalled $114.7 million, an increase of $32.3 million or 39.2% over the same period in 2018. Revenue from the marine services segment rose by 44.0%, from $63.3 million to $91.1 million. Cargo handling activities were very strong in the first quarter. We also benefitted from two additional months of Gulf Stream Marine Inc. in 2019, our new Gulf terminals purchased in early March 2018, and, to a lesser extent, the results of Pate Stevedore Company, Inc., our new Florida terminals purchased in May 2018. Our teams have integrated well, and we are confident that we will achieve positive synergies going forward. Revenue from the environmental services segment amounted to $23.6 million, an increase of $4.4 million or 23.2% over the first quarter of 2018.

The first quarter of 2019 closed with a consolidated loss attributable to owners of the Company of $8.9 million, compared with a loss of $9.5 million in the first quarter of 2018. Loss from the marine services segment amounted to $1.0 million in the first quarter of 2019, $3.1 million less than the $2.1 million profit reported for the same quarter of 2018. However, cargo handling performance was in line with 2018 if we exclude higher professional fees, increased finance expense to support the business combinations, and the incremental expenses related to the transition to IFRS 16 that were recorded in Q1 2019. Loss from the environmental services segment amounted to $11.3 million in the first quarter of 2019, $0.9 million less than the $12.2 million loss reported for the same quarter of 2018. This segment is particularly affected by weather conditions in winter months since most of its operations, Aqua-Pipe or site remediation, require soil excavation and manipulation.

The loss attributable to owners of the Company translated to a total basic and diluted loss per share of $0.70, of which $0.67 was attributable to Class A Common Shares and $0.74 to Class B Subordinate Voting Shares.

Outlook

"We are cautiously optimistic about the outlook for the remainder of the year. We expect a good performance from our marine services, where we have recently added two break-bulk terminals in Cleveland (OH) to our network. We also expect a strong year with our Arctic transportation business, where we were successful in winning larger contracts from the government of Nunavut and have taken the opportunity to modernize our fleet. We replaced two vessels with younger, larger ships.

The outlook for our environmental services is also good. Although we foresee lower revenue for our Aqua-Pipe business in Québec, we are very excited about the increasing demand for the Neofit^®+Plus technology, a water pipe liner that prevents lead from seeping into the drinking water. We are also focused on improving the performance of FER-PAL, our subsidiary based in Toronto (ON), that installs Aqua-Pipe in Canada and the Midwest.

As well as pursuing margin improvement, we also continue to seek new growth opportunities in both our marine and environmental services segments", indicated Madeleine Paquin, President and Chief Executive Officer of LOGISTEC Corporation.

Dividends

On May 9, 2019, the Board of Directors declared dividends of $0.09075 per Class A Common Share and $0.099825 per Class B Subordinate Voting Share, for a total consideration of $1.2 million. These dividends will be paid on July 5, 2019, to shareholders of record as of June 21, 2019.

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 36 ports and 62 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.

Non-IFRS measure

In this press release, the Company uses a measure that is not in accordance with IFRS. Adjusted earnings before interest expense, income taxes, depreciation and amortization expense ("adjusted EBITDA") is not defined by IFRS and cannot be formally presented in the unaudited condensed consolidated interim financial statements. The definition of adjusted EBITDA used by the Company may differ from those used by other companies. Even though adjusted EBITDA is a non-IFRS measure, it is used by managers, analysts, investors and other financial stakeholders to analyze and assess the Company's performance and management from a financial and operational standpoint. Refer to Non-IFRS Measure of the Company's management's discussion and analysis of the period for the definition of this indicator and the reconciliation to profit (loss) for the period.

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 position 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.

Q1 2019 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(unaudited)

Condensed Consolidated Interim Statements of Earnings
(in thousands of Canadian dollars, except for per share amounts and number of shares)
	For the three months ended
	March 30, 2019	March 31, 2018
	$	$
Revenue	114,748	82,442
Employee benefits expense	(58,377)	(46,366)
Equipment and supplies expense	(34,364)	(24,338)
Rental expense	(9,455)	(9,061)
Other expenses	(10,676)	(6,146)
Depreciation and amortization expense	(10,834)	(6,083)
Share of profit of equity accounted investments	562	70
Other (losses) gains	(1,270)	215
Operating loss	(9,666)	(9,267)
Finance expense	(2,890)	(887)
Finance income	338	83
Loss before income taxes	(12,218)	(10,071)
Income taxes	3,287	1,745
Loss for the period	(8,931)	(8,326)
Profit (loss) attributable to:
Owners of the Company	(8,890)	(9,477)
Non-controlling interests	(41)	1,151
Loss for the period	(8,931)	(8,326)
Basic and diluted earnings per Class A Common Share ^(1)	(0.67)	(0.72)
Basic and diluted earnings per Class B Subordinate Voting Share ^(2)	(0.74)	(0.80)
Weighted average number of Class A shares outstanding, basic and diluted	7,392,722	7,405,922
Weighted average number of Class B shares outstanding, basic and diluted	5,315,890	5,163,331

⁽¹⁾ Class A Common Share ("Class A share")

⁽²⁾ Class B Subordinate Voting Share ("Class B share")

Condensed Consolidated Interim Statements of Comprehensive Income
(in thousands of Canadian dollars)
	For the three months ended
	March 30, 2019	March 31, 2018
	$	$
Loss for the period	(8,931)	(8,326)
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	(2,323)	1,977
Unrealized gain on translating debt designated as hedging item of the net investment in foreign operations	1,778	—
Gains (losses) on derivatives financial instruments designated as cash flow hedges	(146)	4
Income taxes relating to derivatives financial instruments designated as cash flow hedges	39	(1)
Total items that are or may be reclassified to the consolidated statements of earnings	(652)	1,980
Items that will not be reclassified to the consolidated statements of earnings
Remeasurement losses on benefit obligation	(33)	—
Return on retirement plan assets excluding amounts included in profit for the period	(352)	(186)
Income taxes on remeasurement losses on benefit obligation and return on retirement plan assets excluding amounts included in profit for the period	103	49
Total items that will not be reclassified to the consolidated statements of earnings	(282)	(137)
Other comprehensive income (loss) for the period, net of income taxes	(934)	1,843
Total comprehensive loss for the period	(9,865)	(6,483)
Total comprehensive income (loss) attributable to:
Owners of the Company	(9,814)	(7,646)
Non-controlling interests	(51)	1,163
Total comprehensive loss for the period	(9,865)	(6,483)

Condensed Consolidated Interim Statements of Financial Position
(in thousands of Canadian dollars)
	As at March 30,  2019	As at December 31,  2018
	$	$
Assets
Current assets
Cash and cash equivalents	5,566	15,393
Trade and other receivables	126,300	160,067
Contract assets	8,004	14,282
Current income tax assets	7,305	2,964
Prepaid expenses and other	5,793	4,899
Inventories	11,403	10,711
	164,371	208,316
Equity accounted investments	38,308	38,005
Property, plant and equipment	263,443	181,284
Goodwill	141,795	142,672
Intangible assets	44,458	47,006
Non-current assets	2,378	2,173
Non-current financial assets	4,626	6,328
Deferred income tax assets	12,711	11,319
Total assets	672,090	637,103
Liabilities
Current liabilities
Short-term bank loans	14,509	13,577
Trade and other payables	68,819	98,668
Contract liabilities	5,204	5,225
Current income tax liabilities	699	3,480
Dividends payable	1,987	1,973
Current portion of long-term debt	13,036	3,294
	104,254	126,217
Long-term debt	228,331	160,003
Deferred income tax liabilities	20,798	21,465
Post-employment benefit obligations	15,303	14,716
Contract liabilities	3,233	3,333
Non-current liabilities	47,448	46,980
Total liabilities	419,367	372,714
Equity
Share capital	39,856	35,016
Share capital to be issued	9,811	14,717
Retained earnings	189,497	200,404
Accumulated other comprehensive income	11,419	12,061
Equity attributable to owners of the Company	250,583	262,198
Non-controlling interest	2,140	2,191
Total equity	252,723	264,389
Total liabilities and equity	672,090	637,103

Condensed Consolidated Interim 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 interests	Total equity
	$	$	$	$	$	$	$	$
Balance as at January 1, 2019	35,016	14,717	135	11,926	200,404	262,198	2,191	264,389
Loss for the period	-	-	-	-	(8,890)	(8,890)	(41)	(8,931)
Other comprehensive income (loss)
Currency translation differences arising on translation of foreign operations	-	-	-	(2,313)	-	(2,313)	(10)	(2,323)
Unrealized gain on translating debt designated as hedging item of the net investment in foreign operations	-	-	-	1,778	-	1,778	-	1,778
Remeasurement losses on benefit obligation and return on retirement plan assets excluding amounts included in profit for the period, net of income taxes	-	-	-	-	(282)	(282)	-	(282)
Cash flow hedges, net of income taxes	-	-	(107)	-	-	(107)	-	(107)
Total comprehensive loss for the period	-	-	(107)	(535)	(9,172)	(9,814)	(51)	(9,865)
Put option liabilities	-	-	-	-	(86)	(86)	–	(86)
Repurchase of Class B shares	(66)	-	-	-	(438)	(504)	-	(504)
Issue of Class B shares	4,906	(4,906)	-	-	-	-	-	-
Dividends on Class A shares	-	-	-	-	(671)	(671)	-	(671)
Dividends on Class B shares	-	-	-	-	(540)	(540)	-	(540)
Balance as at March 30, 2019	39,856	9,811	28	11,391	189,497	250,583	2,140	252,723
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 period	–	–	–	–	(9,477)	(9,477)	1,151	(8,326)
Other comprehensive income (loss)
Currency translation differences arising on translation of foreign operations	-	-	-	1,965	-	1,965	12	1,977
Remeasurement losses on benefit obligation and return on retirement plan assets excluding amounts included in profit for the period, net of income taxes	-	-	-	-	(137)	(137)	-	(137)
Cash flow hedges, net of income taxes	-	-	3	-	-	3	-	3
Total comprehensive income (loss) for the period	–	–	3	1,965	(9,614)	(7,646)	1,163	(6,483)
Repurchase of Class A shares	-	-	-	-	(32)	(32)	-	(32)
Issue and repurchase of Class B shares	(15)	-	-	-	(127)	(142)	-	(142)
Issuance and repurchase of share capital	5,103	(5,103)	-	-	-	-	-	-
Dividends on Class A shares	-	-	-	-	(611)	(611)	-	(611)
Dividends on Class B shares	-	-	-	-	(478)	(478)	-	(478)
Balance as at March 31, 2018	34,107	14,717	141	8,433	162,267	219,665	3,384	223,049

Condensed Consolidated Interim Statements of Cash Flows
(in thousands of Canadian dollars)
	For the three months ended
	March 30, 2019	March 31, 2018
	$	$
Operating activities
Loss for the period	(8,931)	(8,326)
Items not affecting cash and cash equivalents	10,382	6,640
Cash generated from operations	1,451	(1,686)
Dividends received from equity accounted investments	245	2,346
Contributions to defined benefit retirement plans	(232)	(294)
Settlement of provisions	(2)	(43)
Changes in non-cash working capital items	13,700	25,328
Income taxes paid	(5,607)	(6,833)
	9,555	18,818
Financing activities
Net change in short-term bank loans	932	(763)
Issuance of long-term debt	16,269	90,958
Repayment of long-term debt	(15,582)	(11,972)
Repayment of lease liabilities	(2,538)	-
Interest paid	(2,857)	(795)
Repurchase of Class A shares	-	(32)
Repurchase of Class B shares	(504)	(142)
Dividends paid on Class A shares	(671)	(611)
Dividends paid on Class B shares	(526)	(464)
	(5,477)	76,179
Investing activities
Interest received	282	86
Repayment of due to shareholders	(5,386)	(157)
Business combination	-	(85,634)
Cash acquired in a business combination	-	2,377
Issuance of note receivable	-	(5,067)
Acquisition of property, plant and equipment	(9,419)	(4,673)
Acquisition of intangible assets	(27)	(3)
Proceeds from disposal of property, plant and equipment	123	25
Repayment of other non-current financial assets	52	52
Repayment of other non-current liabilities	(86)	-
Acquisition of other non-current assets	(271)	(280)
Disposal of other non-current assets	63	106
	(14,669)	(93,168)
Net change in cash and cash equivalents	(10,591)	1,829
Cash and cash equivalents, beginning of period	15,393	3,963
Effect of exchange rate on balances held in foreign currencies of foreign operations	764	(643)
Cash and cash equivalents, end of period	5,566	5,149
Additional information
Acquisition of property, plant and equipment included in trade and other payables	2,627	295

SOURCE Logistec Corporation

Jean-Claude Dugas, cpa, ca, Chief Financial Officer, Logistec Corporation, [email protected], [phone]

Related Links

http://www.logistec.com