LOGISTEC Announces Its Results for the First Quarter of 2023

MONTRÉAL, May 3, 2023 /CNW/ - LOGISTEC Corporation ("LOGISTEC") (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 25, 2023. As part of its strategic plan, LOGISTEC expanded its network of port terminals and marine services with the announcement of an important acquisition, bringing its total to 90 terminals and 60 ports across North America.

Highlights From the First Quarter of 2023

• Consolidated revenue reached $158.9 million, up $17.5 million or 12.3%;
• Adjusted EBITDA ⁽¹⁾ reached $7.9 million, up $0.1 million;
• Total basic loss per share closed at $0.71;
• Finalization of acquisition of Fednav's Federal Marine Terminals, Inc. and Fednav Direct, its logistics division, (collectively, "FMT");
• Start of major environmental remediation project of the former Rayrock mine in Northern Canada.

"LOGISTEC completed the acquisition of FMT, expanding our network of ports across North America and allowing us to gain a significant foothold in key markets," said Madeleine Paquin, President and Chief Executive Officer of LOGISTEC.  "We will leverage the strength of our terminal reach to support reliable supply chains for our customers and continue to drive growth. In our environmental services segment, the year started strong with the major environmental remediation project of the former Rayrock uranium mine in Northern Canada, contributing directly to a sustainable future."

"LOGISTEC reported revenue growth for the quarter, a continuation of the momentum gained in 2022. During the quarter, we invested resources to finalize the largest acquisition in our history, a strategic move for our marine services segment," added Carl Delisle, Chief Financial Officer and Treasurer of LOGISTEC. "Strong volumes in our cargo handling activities in the U.S. Gulf Coast region contributed to increased revenue. Our environmental services segment is capitalizing on key imperatives and market trends, and has a solid order book of over $192.9 million for the upcoming season. Both segments are well positioned for growth."

Results From the First Quarter of 2023

During the first quarter of 2023, consolidated revenue totalled $158.9 million, an increase of $17.5 million or 12.3% over the same period in 2022. Revenue from the marine services segment reached $121.5 million in 2023, up $9.8 million or 8.7% compared with $111.7 million for the comparative period of 2022. Revenue from the environmental services segment was $37.4 million, up $7.7 million or 25.8% in the first quarter of 2023.

Adjusted EBITDA ⁽¹⁾ for the quarter reached $7.9 million, an increase of $0.1 million compared with $7.8 million recorded in the comparative period. Adjusted EBITDA ⁽¹⁾ was impacted by professional fees incurred in relation with the acquisition of FMT and costs incurred to analyze other business development opportunities. Loss attributable to owners of the Company for the first quarter amounted to $9.1 million, higher than last year's loss of $6.0 million. The loss attributable to owners of the Company translated into a total basic and diluted loss per share of $0.71, of which $0.68 was attributable to Class A Common Shares and $0.75 to Class B Subordinate Voting Shares.

⁽¹⁾ Adjusted EBITDA is a non-IFRS measure, please refer to the non-IFRS measure section.

Marine Services

Our marine services segment continued to see strong demand in the energy sector in the U.S. Gulf Coast region, which compensated for the slower start to the year in other ports. In terms of containers, our terminals suffered from lower volumes, which can be explained by significant inventories in the retail market. These are largely being depleted and we do expect volumes to resume at more normal levels in the coming quarters. With respect to bulk and general cargoes, we are confident with the remainder of the year given the diverse nature of the products we handle and the breadth of our network reach, we are able to adjust to market fluctuations and are optimistic about sales volumes going forward. With 11 additional terminals from our FMT acquisition, we are well prepared to deliver operational excellence to marine shippers across North America.

Environmental Services

Our environmental services segment performed better than expected, with a strong project backlog on hand. Additional contracts have been secured and we forecast a positive outlook for the balance of the year. We announced major remediation projects, including the former Rayrock mine and Aleris industrial site rehabilitation. Our team of experts deployed our robust and effective polyfluoroalkyl substances ("PFAS") concentration and removal technology, partnering with Waste Connections to remove PFAS from landfill leachates in North America. Our high-performing teams are positioned to accelerate profitable growth.

Outlook

"The outlook for 2023 is positive with good momentum for both our marine and environmental segments," indicated Madeleine Paquin. "We will be focusing on a smooth integration of our FMT acquisition, while offering new options to customers and connecting them to broader markets. As mentioned, although we are seeing a slowdown in containers during the first quarter, we do expect volumes to return to more stable levels, albeit with substantially reduced storage revenue.  The strength of our activities in the U.S. Gulf is expected to continue, and should make up for some expected shortfalls in other general cargo and bulk terminals.  In our environmental services segment, we expect to execute on a strong book of business in 2023, in both site remediation and ALTRA Water Technologies.  Furthermore, we have obtained outstanding results from our pilots using our ALTRA PFAS solution and expect to launch several multiyear contracts in 2023. All of these factors combined give us a high level of confidence for the year ahead."

Dividends

On May 3, 2023, the Board of Directors declared a dividend of $0.11782 per Class A Common Share and $0.12959 per Class B Subordinate Voting Share, for a total consideration of $1.6 million. These dividends will be paid on July 7, 2023, to shareholders of record as of June 22, 2023.

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 60 ports and 90 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 shipowners and operators serving the Canadian market. Furthermore, the Company operates in the environmental industry where it provides services to industrial, municipal and other governmental customers for the renewal of underground water mains, dredging, dewatering, contaminated soils and materials management, site remediation, risk assessment, and manufacturing of fluid transportation products.

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

Adjusted earnings before interest expense, income taxes, depreciation and amortization expense ("adjusted EBITDA") is not defined by IFRS and cannot be formally presented in financial statements. The definition of adjusted EBITDA excludes the configuration and customization costs related to the implementation of an Enterprise Resource Planning ("ERP") system. 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.

The following table provides a reconciliation of profit for the year to adjusted EBITDA:

For the three months ended
(in thousands of dollars)	March 25, 2023 $	March 26, 2022 $
Loss for the period	(8,937)	(5,898)
PLUS:
Depreciation and amortization expense	14,454	12,797
Net finance expense	4,427	2,829
Income taxes	(3,207)	(2,410)
Configuration and customization costs in a cloud computing arrangement	1,136	483
Adjusted EBITDA	7,873	7,801

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 2022 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.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF EARNINGS

(in thousands of Canadian dollars, except per share amounts and number of shares)
		For the three months ended
		March 25, 2023 $	March 26, 2022 $
Revenue		158,881	141,442
Employee benefits expense		(78,723)	(74,272)
Equipment and supplies expense		(44,113)	(40,522)
Operating expense		(17,155)	(12,092)
Other expenses		(11,990)	(7,255)
Depreciation and amortization expense		(14,454)	(12,797)
Share of profit of equity accounted investments		585	947
Other losses		(748)	(930)
Operating loss		(7,717)	(5,479)
Finance expense		(4,679)	(2,941)
Finance income		252	112
Loss before income taxes		(12,144)	(8,308)
Income taxes		3,207	2,410
Loss for the period		(8,937)	(5,898)
(Loss) profit attributable to:
Owners of the Company		(9,052)	(6,018)
Non-controlling interest		115	120
Loss for the period		(8,937)	(5,898)
Basic and diluted loss per Class A Common Share ^(1)		(0.68)	(0.44)
Basic and diluted loss per Class B Subordinate Voting Share ^(2)		(0.75)	(0.49)
Weighted average number of Class A Shares outstanding, basic and diluted		7,361,022	7,377,022
Weighted average number of Class B Shares outstanding, basic and diluted		5,455,591	5,680,669

⁽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 25, 2023 $	March 26, 2022 $
Loss for the period		(8,937)	(5,898)
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		3,137	(2,489)
Unrealized (loss) gain on translating debt designated as hedging item of the net investment in foreign operations		(1,139)	845
Income taxes relating to unrealized gain on translating debt designated as hedging item of the net investment in foreign operations		—	(112)
(Losses) gains on derivatives designated as cash flow hedges		(62)	476
Income taxes relating to derivatives designated as cash flow hedges		100	(306)
Total items that are or may be reclassified to the consolidated statements of earnings		2,036	(1,586)
Items that will not be reclassified to the consolidated statements of earnings
Remeasurement (losses) gains on benefit obligation		(714)	4,597
Return on retirement plan assets		551	(1,453)
Income taxes on remeasurement of benefit obligation and return on retirement plan assets		43	(834)
Total items that will not be reclassified to the consolidated statements of earnings		(120)	2,310
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	—
Other comprehensive income for the period, net of income taxes		1,948	724
Total comprehensive loss for the period		(6,989)	(5,174)
Total comprehensive (loss) income attributable to:
Owners of the Company		(7,129)	(5,277)
Non-controlling interest		140	103
Total comprehensive loss for the period		(6,989)	(5,174)

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

(in thousands of Canadian dollars)
		As at  March 25, 2023 $	As at  December 31, 2022 $
Assets
Current assets
Cash and cash equivalents		28,558	36,043
Trade and other receivables		174,069	198,247
Contract assets		14,019	14,912
Current income tax assets		19,402	11,245
Inventories		23,601	20,000
Prepaid expenses and other		9,997	8,756
		269,646	289,203
Equity accounted investments		46,758	46,140
Property, plant and equipment		244,431	234,602
Right-of-use assets		171,231	167,274
Goodwill		188,624	187,430
Intangible assets		35,922	36,807
Non-current assets		1,755	2,030
Post-employment benefit assets		1,398	1,264
Non-current financial assets		6,161	6,114
Deferred income tax assets		13,700	12,808
Total assets		979,626	983,672
Liabilities
Current liabilities
Trade and other payables		148,831	128,019
Contract liabilities		10,442	11,107
Current income tax liabilities		6,324	5,095
Dividends payable		1,574	1,574
Current portion of lease liabilities		21,801	18,662
Current portion of long-term debt		10,200	10,925
		199,172	175,382
Lease liabilities		158,936	157,500
Long-term debt		204,111	224,110
Deferred income tax liabilities		25,059	24,604
Post-employment benefit obligations		14,026	13,690
Contract liabilities		1,633	1,733
Non-current liabilities		25,381	25,562
Total liabilities		628,318	622,581
Equity
Share capital		49,443	49,443
Retained earnings		278,807	290,773
Accumulated other comprehensive income		21,314	19,271
Equity attributable to owners of the Company		349,564	359,487
Non-controlling interest		1,744	1,604
Total equity		351,308	361,091
Total liabilities and equity		979,626	983,672

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY

(in thousands of Canadian dollars)
	Attributable to owners of the Company
	Share capital issued $	Retained earnings $	Accumulated other comprehensive income $	Total $	Non- controlling interest $	Total equity $
Balance as at January 1, 2023	49,443	290,773	19,271	359,487	1,604	361,091
(Loss) profit for the period	—	(9,052)	—	(9,052)	115	(8,937)
Other comprehensive income (loss)
Currency translation differences arising on translation of foreign operations	—	—	3,112	3,112	25	3,137
Unrealized loss on translating debt designated as hedging item of the net investment in foreign operations, net of income taxes	—	—	(1,139)	(1,139)	—	(1,139)
Remeasurement losses on benefit obligation and return on retirement plan assets, net of income taxes	—	(120)	—	(120)	—	(120)
Share of other comprehensive income of equity accounted investments, net of income taxes	—	—	32	32	—	32
Cash flow hedges, net of income taxes	—	—	38	38	—	38
Total comprehensive income for the period	—	(9,172)	2,043	(7,129)	140	(6,989)
Net remeasurement of written put option liability	—	(1,359)	—	(1,359)	—	(1,359)
Class B shares to be issued under the Executive Stock Option Plan	—	139	—	139	—	139
Dividends on Class A shares	—	(867)	—	(867)	—	(867)
Dividends on Class B shares	—	(707)	—	(707)	—	(707)
Balance as at March 25, 2023	49,443	278,807	21,314	349,564	1,744	351,308

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (CONTINUED)

(in thousands of Canadian dollars)
	Attributable to owners of the Company
	Share capital issued $	Retained earnings $	Accumulated other comprehensive income $	Total $		Non- controlling interest $		Total equity $
Balance as at January 1, 2022	50,889	254,621	9,051	314,561		1,048		315,609
(Loss) profit for the period	—	(6,018)	—	(6,018)		120		(5,898)
Other comprehensive (loss) income
Currency translation differences arising on translation of foreign operations	—	—	(2,472)	(2,472)		(17)		(2,489)
Unrealized gain on translating debt designated as hedging item of the net investment in foreign operations, net of income taxes	—	—	733	733		—		733
Remeasurement gains on benefit obligation and return on retirement plan assets, net of income taxes	—	2,310	—	2,310		—		2,310
Cash flow hedges, net of income taxes	—	—	170	170		—		170
Total comprehensive (loss) income for the period	—	(3,708)	(1,569)	(5,277)		103		(5,174)
Net remeasurement of written put option liability	—	(943)	—	(943)		—		(943)
Repurchase of Class B shares	(46)	(205)	—	(251)		—		(251)
Class B shares to be issued under the Executive Stock Option Plan	—	130	—	130		—		130
Dividends on Class A shares	—	(725)	—	(725)		—		(725)
Dividends on Class B shares	—	(613)	—	(613)		—		(613)
Balance as at March 26, 2022	50,843	248,557	7,482	306,882		1,151		308,033

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(in thousands of Canadian dollars)
		For the three months ended
		March 25, 2023 $	March 26, 2022 $
Operating activities
Loss for the period		(8,937)	(5,898)
Items not affecting cash and cash equivalents		16,473	13,017
Cash generated from operations		7,536	7,119
Dividends received from equity accounted investments		—	2,875
Contributions to defined benefit retirement plans		(235)	(210)
Settlement of provisions		(44)	(124)
Changes in non-cash working capital items		36,378	16,047
Income taxes paid		(3,634)	(7,292)
		40,001	18,415
Financing activities
Net change in short-term bank loans		—	(5,723)
Issuance of long-term debt, net of transaction costs		—	15,383
Repayment of long-term debt		(23,170)	(16,086)
Repayment of lease liabilities		(4,542)	(3,736)
Interest paid		(4,715)	(2,920)
Repurchase of Class B shares		—	(251)
Dividends paid on Class A shares		(867)	(724)
Dividends paid on Class B shares		(707)	(614)
		(34,001)	(14,671)
Investing activities
Dividends paid to a non-controlling interest		—	(8,699)
Acquisition of property, plant and equipment		(14,656)	(8,423)
Proceeds from disposal of property, plant and equipment		441	47
Acquisition of intangible assets		(25)	—
Interest received		166	9
Acquisition of other non-current assets		(26)	(198)
Proceeds from disposal of other non-current assets		14	27
Cash receipts from other non-current financial assets		63	292
		(14,023)	(16,945)
Net change in cash and cash equivalents		(8,023)	(13,201)
Cash and cash equivalents, beginning of year		36,043	37,530
Effect of exchange rate on balances held in foreign currencies of foreign operations		538	(344)
Cash and cash equivalents, end of period		28,558	23,985
Additional information Acquisition of property, plant and equipment included in trade and other payables		2,695	4,553

SOURCE Logistec Corporation

Carl Delisle, cpa auditor, Chief Financial Officer and Treasurer, Logistec Corporation, [email protected], [phone]