LOGISTEC Announces its Results for the Second Quarter of 2019

MONTRÉAL, Aug. 7, 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 second quarter ended June 29, 2019.

Highlights from the second quarter

• Consolidated revenue up $7.0 million (4.7%) to $156.2 million;
• Adjusted EBITDA ⁽¹⁾ closed at $21.7 million;
• Total basic profit per share up $0.32 to $0.46;
• LOGISTEC and Waterson Terminal Services join forces to support ProvPort, Rhode Island;
• Inauguration of two newer and larger vessels at our Arctic transportation business.

Highlights from the six-month period

• Consolidated revenue up $39.3 million (17.0%) to $270.9 million;
• Adjusted EBITDA ⁽¹⁾ closed at $22.9 million;
• Total basic loss per share from ($0.60) to ($0.23).

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

Results of the period

The strong performance of the first half of 2019 stems from the two new business combinations made in the course of last year. In the second quarter of 2019, Pate Stevedore Company, Inc. ("Pate"), our new Florida terminals purchased on May 25, 2018 and Gulf Stream Marine, Inc. ("GSM") which performs cargo handling operations in the U.S. Gulf Coast, acquired March 1, 2018, contributed a combined $5.4 million in additional sales when compared to Q2 2018. For the first half of 2019, the additional combined sales from these business combinations amount to $30.7 million, when compared to the same period last year.

The second quarter of 2019 closed with a consolidated profit attributable to owners of the Company of $5.9 million, compared with a profit of $1.9 million for the second quarter of 2018. The profit attributable to owners of the Company translated to a total basic profit per share of $0.46, of which $0.44 was attributable to Class A Common Shares and $0.49 was attributable to Class B Subordinate Voting Shares. These higher results stem primarily from the good performance of Pate and GSM, and higher levels of activity throughout our network, partially offset by the unrealized exchange losses on translating net working capital denominated in U.S. dollars, given the weakened Canadian dollar.

Outlook

"The outlook remains positive for the remainder of the year. We expect continued organic growth from our marine services, where we have entered into a cargo-handling operational agreement with Waterson Terminal Services at the Port of Providence's ProvPort, New England's premiere deepwater facility. Also, our Arctic transportation business has invested in modern Canadian flag vessels to enhance our cargo capacity and improve the overall customer sealift experience.

Our environmental services should also have a good year. Although Aqua-Pipe contracts in Québec will be lower this year, we are seeing increased activity for our lead removal services and we expect a stronger year for our traditional environmental services based on a firm order book.

We are proud of the above achievements, as they are in line with our goals to provide our customers with forward-thinking marine and environmental solutions. We strive to go beyond and connect with our partners and communities and seize the right opportunities. Our commitment and passion make the difference", indicated Madeleine Paquin, President and Chief Executive Officer of LOGISTEC Corporation.

Dividends

On August 7, 2019, the Board of Directors elected to increase the dividend payment by 3.0% and declared dividends of $0.0935 per Class A Common Share and $0.10285 per Class B Subordinate Voting Share, for a total consideration of $1.2 million. These dividends will be paid on October 11, 2019, to shareholders of record as of September 27, 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 some 37 ports and 63 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 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.

Q2 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		For the six months ended
	June 29, 2019	June 30, 2018	June 29, 2019	June 30, 2018
	$	$	$	$
Revenue	156,175	149,182	270,923	231,624
Employee benefits expense	(78,715)	(77,284)	(137,092)	(123,650)
Equipment and supplies expense	(39,254)	(39,292)	(73,618)	(63,630)
Rental expense	(10,133)	(11,777)	(19,588)	(20,838)
Other expenses	(6,001)	(7,812)	(16,677)	(13,958)
Depreciation and amortization expense	(10,728)	(6,485)	(21,562)	(12,568)
Share of profit of equity accounted investments	930	962	1,492	1,032
Other gains (losses)	(1,258)	941	(2,528)	1,156
Operating profit (loss)	11,016	8,435	1,350	(832)
Finance expense	(2,884)	(2,760)	(5,641)	(3,647)
Finance income	80	15	285	98
Profit (loss) before income taxes	8,212	5,690	(4,006)	(4,381)
Income taxes	(2,106)	(2,630)	1,181	(885)
Profit (loss) for the period	6,106	3,060	(2,825)	(5,266)
Profit (loss) attributable to:
Owners of the Company	5,927	1,868	(2,963)	(7,609)
Non-controlling interests	179	1,192	138	2,343
Profit (loss) for the period	6,106	3,060	(2,825)	(5,266)
Basic earnings (loss) per Class A Common Share ^(1)	0.44	0.14	(0.22)	(0.58)
Basic earnings (loss) per Class B Subordinate Voting Share ^(2)	0.49	0.16	(0.25)	(0.64)
Diluted earnings (loss) per Class A share	0.43	0.14	(0.22)	(0.58)
Diluted earnings (loss) per Class B share	0.48	0.15	(0.25)	(0.64)
Weighted average number of Class A shares outstanding, basic and diluted	7,389,155	7,405,455	7,390,939	7,405,689
Weighted average number of Class B shares outstanding, basic	5,409,868	5,271,167	5,362,879	5,217,249
Weighted average number of Class B shares outstanding, diluted	5,717,038	5,726,904	5,719,571	5,724,496

⁽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		For the six months ended
	June 29, 2019	June 30, 2018	June 29, 2019	June 30, 2018
	$	$	$	$
Profit (loss) for the period	6,106	3,060	(2,825)	(5,266)
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	(2,627)	3,004	(4,950)	4,981
Unrealized gain on translating debt designated as hedging item of the net investment in foreign operations	1,380	—	3,158	—
Gain (loss) on derivatives financial instruments designated as cash flow hedges	(39)	—	(185)	4
Income taxes relating to derivatives financial instruments designated as cash flow hedges	11	—	50	(1)
Total items that are or may be reclassified to the consolidated statements of earnings	(1,275)	3,004	(1,927)	4,984
Items that will not be reclassified to the consolidated statements of earnings
Remeasurement gain (loss) on benefit obligation	(1,047)	1,171	(1,080)	1,171
Return on retirement plan assets excluding amounts included in profit for the period	(1,363)	153	(1,715)	(33)
Income taxes on remeasurement gain (loss) on benefit obligation and return on retirement plan assets excluding amounts included in profit for the period	649	(354)	752	(305)
Total items that will not be reclassified to the consolidated statements of earnings	(1,761)	970	(2,043)	833
Other comprehensive income (loss) for the period, net of income taxes	(3,036)	3,974	(3,970)	5,817
Total comprehensive income (loss) for the period	3,070	7,034	(6,795)	551
Total comprehensive income (loss) attributable to:
Owners of the Company	2,902	5,832	(6,912)	(1,814)
Non-controlling interests	168	1,202	117	2,365
Total comprehensive income (loss) for the period	3,070	7,034	(6,795)	551

Condensed Consolidated Interim Statements of Financial Position
(in thousands of Canadian dollars)
	As at June 29,  2019	As at December 31,  2018
	$	$
Assets
Current assets
Cash and cash equivalents	7,416	15,393
Trade and other receivables	139,167	160,067
Contract assets	26,355	14,282
Current income tax assets	9,185	2,964
Prepaid expenses and other	6,833	4,899
Inventories	13,758	10,711
	202,714	208,316
Equity accounted investments	37,959	38,005
Property, plant and equipment	277,380	181,284
Goodwill	140,928	142,672
Intangible assets	42,129	47,006
Non-current assets	2,215	2,173
Non-current financial assets	4,403	6,328
Deferred income tax assets	13,122	11,319
Total assets	720,850	637,103
Liabilities
Current liabilities
Short-term bank loans	—	13,577
Trade and other payables	77,346	98,668
Contract liabilities	5,713	5,225
Current income tax liabilities	911	3,480
Dividends payable	1,986	1,973
Current portion of long-term debt	18,556	3,294
	104,512	126,217
Long-term debt	267,150	160,003
Deferred income tax liabilities	21,241	21,465
Post-employment benefit obligations	17,924	14,716
Contract liabilities	3,133	3,333
Non-current liabilities	52,691	46,980
Total liabilities	466,651	372,714
Equity
Share capital	40,351	35,016
Share capital to be issued	9,811	14,717
Retained earnings	191,574	200,404
Accumulated other comprehensive income	10,155	12,061
Equity attributable to owners of the Company	251,891	262,198
Non-controlling interest	2,308	2,191
Total equity	254,199	264,389
Total liabilities and equity	720,850	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
Profit (loss) for the period	—	—	—	—	(2,963)	(2,963)	138		(2,825)
Other comprehensive income (loss)
Currency translation differences arising on translation of foreign operations	—	—	—	(4,929)	—	(4,929)	(21)		(4,950)
Unrealized gain on translating debt designated as hedging item of the net investment in foreign operations	—	—	—	3,158	—	3,158	—		3,158
Remeasurement losses on benefit obligation and return on retirement plan assets excluding amounts included in profit for the period, net of income taxes	—	—	—	—	(2,043)	(2,043)	—		(2,043)
Cash flow hedges, net of income taxes	—	—	(135)	—	—	(135)	—		(135)
Total comprehensive income (loss) for the period	—	—	(135)	(1,771)	(5,006)	(6,912)	117		(6,795)
Remeasurement of written put option liability	—	—	—	—	(390)	(390)	—		(390)
Repurchase of Class A shares	(4)	—	—	—	(274)	(278)	—		(278)
Issuance and repurchase of Class B shares	433	—	—	—	(739)	(306)	—		(306)
Issuance of Class B shares capital to a subsidiary shareholder	4,906	(4,906)	—	—	—	—	—		—
Dividends on Class A shares	—	—	—	—	(1,341)	(1,341)	—		(1,341)
Dividends on Class B shares	—	—	—	—	(1,080)	(1,080)	—		(1,080)
Balance as at June 29, 2019	40,351	9,811	—	10,155	191,574	251,891	2,308		254,199
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	—	—	—	—	(7,609)	(7,609)		2,343	(5,266)
Other comprehensive income (loss)
Currency translation differences arising on translation of foreign operations	—	—	—	4,959	—	4,959		22	4,981
Remeasurement gain on benefit obligation and return on retirement plan assets excluding amounts included in profit for the period, net of income taxes	—	—	—	—	833	833		—	833
Cash flow hedges, net of income taxes	—	—	3	—	—	3		—	3
Total comprehensive income (loss) for the period	—	—	3	4,959	(6,776)	(1,814)		2,365	551
Remeasurement of written put option liability	—	—	—	—	(900)	(900)		—	(900)
Repurchase of Class A shares	—	—	—	—	(32)	(32)		—	(32)
Issuance and repurchase of Class B shares	1,027	—	—	—	(196)	831		—	831
Issuance of Class B shares capital to a subsidiary shareholder	5,103	(5,103)	—	—	—	—		—	—
Dividends on Class A shares	—	—	—	—	(1,220)	(1,220)		—	(1,220)
Dividends on Class B shares	—	—	—	—	(957)	(957)		—	(957)
Balance as at June 30, 2018	35,149	14,717	141	11,427	163,048	224,482		4,586	229,068

Condensed Consolidated Interim Statements of Cash Flows
(in thousands of Canadian dollars)
	For the six months ended
	June 29, 2019	June 30, 2018
	$	$
Operating activities
Loss for the period	(2,825)	(5,266)
Items not affecting cash and cash equivalents	30,577	20,334
Cash generated from operations	27,752	15,068
Dividends received from equity accounted investments	1,520	3,346
Contributions to defined benefit retirement plans	(502)	(595)
Settlement of provisions	(65)	(165)
Changes in non-cash working capital items	(11,137)	5,808
Income taxes paid	(7,868)	(7,998)
	9,700	15,464
Financing activities
Net change in short-term bank loans	(13,577)	3,989
Issuance of long-term debt	62,298	117,226
Repayment of long-term debt	(26,992)	(16,425)
Issuance of Class B shares	258	562
Repayment of lease liabilities	(4,830)	—
Interest paid	(5,349)	(1,844)
Repurchase of Class A shares	(278)	(32)
Repurchase of Class B shares	(862)	(220)
Dividends paid on Class A shares	(1,341)	(1,222)
Dividends paid on Class B shares	(1,067)	(942)
	8,260	101,092
Investing activities
Acquisition of property, plant and equipment	(21,886)	(10,144)
Acquisition of intangible assets	(39)	(93)
Proceeds from disposal of property, plant and equipment	297	290
Business combinations	—	(97,998)
Cash acquired in a business combination	—	2,585
Repayment of due to shareholders	(5,386)	—
Issuance of notes receivable	—	(5,067)
Interest received	163	108
Cash paid to a minority interest	—	(157)
Repayment of other non-current financial assets	104	101
Repayment of other non-current liabilities	(190)	—
Acquisition of other non-current assets	(271)	(285)
Disposal of other non-current assets	90	150
	(27,118)	(110,510)
Net change in cash and cash equivalents	(9,158)	6,046
Cash and cash equivalents, beginning of period	15,393	3,963
Effect of exchange rate on balances held in foreign currencies of foreign operations	1,181	(1,032)
Cash and cash equivalents, end of period	7,416	8,977
Additional information
Acquisition of property, plant and equipment included in trade and other payables	2,627	253
Issuance of Class B shares under the Employee Stock Purchase Plan for non-interest-bearing loans	298	489

SOURCE Logistec Corporation

Jean-Claude Dugas, CPA, CA, Chief Financial Officer, Logistec Corporation, [email protected], [phone]

Related Links

http://www.logistec.com