Logistec announces its results for the third quarter of 2016

MONTRÉAL, Nov. 1, 2016 /CNW Telbec/ - Logistec Corporation (TSX: LGT.A LGT.B), a marine and environmental services provider, today announced its financial results for the third quarter and first nine months ended September 24, 2016.

During the third quarter of 2016, consolidated revenue totalled $103.1 million, a decrease of $12.8 million or 11.1% over the same period in 2015. Revenue from the marine services segment revenue was down by $7.6 million or 15.1% to $42.9 million for the third quarter of 2016, while revenue from the environmental services segment amounted to $60.2 million, down by $5.2 million or 8.0% from the third quarter of 2015. The revenue decrease in the marine services segment stems from reduced bulk and break-bulk cargo volumes, whereas the revenue decrease in the environmental services segment was due to lower Aqua-Pipe activity. The third quarter of 2016 closed with a consolidated profit attributable to owners of the Company of $9.2 million, down by $2.9 million over the same period in 2015. The profit attributable to owners of the Company translated into total diluted earnings per share of $0.71, of which $0.67 was attributable to Class A Common Shares and $0.75 was attributable to Class B Subordinate Voting Shares. The profit attributable to owners of the Company was positively affected by $0.5 million non-operating gains versus a gain of $3.7 million in 2015. The gain in 2015 came from foreign exchange as well as settlement on an operating contract where the customer-guaranteed tonnage never materialized.

For the nine-month period ended September 24, 2016, consolidated revenue totalled $247.6 million, down by $18.0 million over $265.6 million for the same period in 2015. The profit attributable to owners of the Company amounted to $10.0 million for total diluted earnings per share of $0.78, of which $0.73 was attributable to Class A Common Shares and $0.82 was attributable to Class B Subordinate Voting Shares. For the same period in 2015, basic and diluted earnings per share totalled $1.71, of which $1.64 was attributable to Class A Common Shares and $1.81 was attributable to Class B Subordinate Voting Shares. This profit attributable to owners of the Company of $10.0 million includes a non-operating loss of $1.3 million versus a non-operating gain of $4.7 million last year.

Outlook

"Year-to-date results remain below our expectations. In the marine services segment, we continue to experience a weak market for bulk cargo handling, particularly with respect to mining activity and biomass. In the environmental services segment, results are lower due to fewer aqueduct contracts in our local market this year, combined with higher costs as we invest and build our new marketplace in the USA. We are confident these short-term penetration costs will pay off in the long run. Our traditional environmental services had a good quarter," indicated Madeleine Paquin, President and Chief Executive Officer of Logistec Corporation.

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.

(in thousands of Canadian dollars, except for per share amounts and number of shares) (unaudited and not reviewed by the independent auditor)
Logistec Corporation
Condensed Consolidated Interim Statements of Earnings
	For the three months ended		For the nine months ended
	September 24, 2016	September 26, 2015	September 24, 2016	September 26, 2015
	$	$	$	$
Revenue	103,093	115,933	247,568	265,567
Employee benefits expense	(45,860)	(56,452)	(115,987)	(130,491)
Equipment and supplies expense	(33,433)	(31,203)	(76,572)	(68,450)
Rental expense	(7,035)	(7,210)	(20,777)	(21,276)
Other expenses	(3,978)	(3,799)	(11,244)	(10,707)
Depreciation and amortization expense	(3,661)	(3,128)	(10,147)	(8,720)
Share of profit of equity accounted investments	2,473	1,758	2,764	2,555
Other gains and losses	488	3,712	(1,300)	4,654
Operating profit	12,087	19,611	14,305	33,132
Finance expense	(660)	(245)	(1,374)	(710)
Finance income	54	359	161	481
Profit before income taxes	11,481	19,725	13,092	32,903
Income taxes	(2,319)	(5,090)	(3,493)	(8,513)
Profit for the period	9,162	14,635	9,599	24,390
Profit (loss) attributable to:
Owners of the Company	9,153	12,102	9,966	21,288
Non-controlling interests	9	2,533	(367)	3,102
Profit for the period	9,162	14,635	9,599	24,390
Basic earnings per Class A Common Share ^(1)	0.72	0.94	0.78	1.64
Basic earnings per Class B Subordinate Voting Share ^(2)	0.80	1.03	0.87	1.81
Diluted earnings per Class A share	0.67	0.94	0.73	1.64
Diluted earnings per Class B share	0.75	1.03	0.82	1.81
Weighted average number of Class A shares outstanding, basic and diluted	7,414,789	7,443,589	7,422,089	7,449,178
Weighted average number of Class B shares outstanding, basic	4,763,900	4,998,300	4,784,856	5,024,856
Weighted average number of Class B shares outstanding, diluted	5,517,915	4,998,300	5,295,910	5,024,856

^(1)	Class A Common Share ("Class A share")
^(2)	Class B Subordinate Voting Share ("Class B share")

(in thousands of Canadian dollars) (unaudited and not reviewed by the independent auditor)
Logistec Corporation
Condensed Consolidated Interim Statements of Comprehensive Income
			For the three months ended		For the nine months ended
			September 24, 2016	September 26, 2015	September 24, 2016	September 26, 2015
			$	$	$	$
Profit for the period			9,162	14,635	9,599	24,390
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	461	2,789	(1,836)	4,810
		Gains (losses) on derivatives designated as cash flow hedges	(7)	(99)	2	(217)
		Transfer of losses on derivatives designated as cash flow hedges to the consolidated statements of earnings	18	21	49	50
		Income taxes relating to derivatives designated as cash flow hedges	(4)	15	(14)	39
Total items that are or may be reclassified to the consolidated statements of earnings			468	2,726	(1,799)	4,682
Items that will not be reclassified to the consolidated statements of earnings
		Remeasurement gains (losses) on benefit obligation	(1,014)	969	(3,028)	978
		Return on retirement plan assets excluding amounts included in profit for the period	820	(787)	867	(524)
		Income taxes on remeasurement gains (losses) on benefit obligation and return on retirement plan assets excluding amounts included in profit for the period	52	(48)	582	(122)
		Total items that will not be reclassified to the consolidated statements of earnings	(142)	134	(1,579)	332
	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	57	─	(49)	─
		Items that will not be reclassified to the consolidated statements of earnings	─	─	─	8
	Total share of other comprehensive income of equity accounted investments, net of income taxes		57	─	(49)	8
	Other comprehensive income (loss) for the period, net of income taxes		383	2,860	(3,427)	5,022
Total comprehensive income for the period			9,545	17,495	6,172	29,412
Total comprehensive income (loss) attributable to:
Owners of the Company			9,536	14,962	6,539	26,310
Non-controlling interests			9	2,533	(367)	3,102
Total comprehensive income for the period			9,545	17,495	6,172	29,412

(in thousands of Canadian dollars) (unaudited and not reviewed by the independent auditor)
Logistec Corporation
Condensed Consolidated Interim Statements of Financial Position
		As at September 24,  2016	As at December 31,  2015
		$	$
Assets
Current assets
	Cash and cash equivalents	10,906	23,811
	Investment in a service contract	941	1,157
	Trade and other receivables	97,129	77,333
	Work in progress	20,464	6,438
	Current income tax assets	5,492	2,569
	Other financial assets	52	–
	Prepaid expenses	6,865	7,952
	Inventories	6,582	6,553
		148,431	125,813
Equity accounted investments		29,566	28,951
Property, plant and equipment		125,428	111,022
Goodwill		24,531	22,615
Other intangible assets		18,243	20,247
Other non-current assets		2,141	5,194
Post-employment benefit assets		369	522
Non-current financial assets		2,916	5,019
Deferred income tax assets		9,397	9,032
Total assets		361,022	328,415
Liabilities
Current liabilities
	Trade and other payables	48,946	46,352
	Deferred revenue	3,145	2,700
	Current income tax liabilities	722	650
	Dividends payable	949	967
	Current portion of long-term debt	1,800	2,159
	Provisions	1,270	1,268
		56,832	54,096
Long-term debt		65,682	29,920
Provisions		784	766
Deferred income tax liabilities		12,328	12,433
Post-employment benefit obligations		15,508	12,955
Deferred revenue		4,233	4,533
Non-current financial liabilities		12,529	4,067
Total liabilities		167,896	118,770
Equity
Share capital		15,667	14,985
Share capital to be issued		24,898	–
Retained earnings		142,332	164,154
Accumulated other comprehensive income		8,426	10,274
Equity attributable to owners of the Company		191,323	189,413
Non-controlling interests		1,803	20,232
Total equity		193,126	209,645
Total liabilities and equity		361,022	328,415

(in thousands of Canadian dollars) (unaudited and not reviewed by the independent auditor)
Logistec Corporation
Condensed Consolidated Interim Statements of Changes in Equity
		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, 2016		14,985	–	(139)	10,413	164,154	189,413	20,232	209,645
Profit (loss) for the period		–	–	–	–	9,966	9,966	(367)	9,599
Other comprehensive income (loss)
	Currency translation differences arising on translation of foreign operations	–	–	–	(1,836)	─	(1,836)	–	(1,836)
	Remeasurement losses on benefit obligation and return on retirement plan assets excluding amounts included in profit for the period, net of income taxes	–	–	–	–	(1,579)	(1,579)	–	(1,579)
	Cash flow hedges, net of income taxes	–	–	37	–	–	37	–	37
	Share of other comprehensive income of equity accounted investments, net of income taxes	–	–	(49)	–	–	(49)	–	(49)
Total comprehensive income (loss) for the period		–	–	(12)	(1,836)	8,387	6,539	(367)	6,172
Repurchase of Class A shares		(15)	–	–	–	(907)	(922)	–	(922)
Issuance and repurchase of Class B shares		697	–	–	–	(8,308)	(7,611)	–	(7,611)
Repurchase of non-controlling interests		–	24,898	–	–	(18,148)	6,750	(18,062)	(11,312)
Dividends on Class A shares		–	–	–	–	(1,671)	(1,671)	–	(1,671)
Dividends on Class B shares		–	–	–	–	(1,175)	(1,175)	–	(1,175)
Balance as at September 24, 2016		15,667	24,898	(151)	8,577	142,332	191,323	1,803	193,126
Balance as at January 1, 2015		14,906	–	(56)	4,138	144,513	163,501	15,923	179,424
Profit for the period		–	–	–	–	21,288	21,288	3,102	24,390
Other comprehensive income (loss)
	Currency translation differences arising on translation of foreign operations	–	–	–	4,810	–	4,810	–	4,810
	Remeasurement losses on benefit obligation and return on retirement plan assets excluding amounts included in profit for the period, net of income taxes	–	–	–	–	332	332	–	332
	Cash flow hedges, net of income taxes	–	–	(96)	–	–	(96)	–	(96)
Share of other comprehensive income of equity accounted investments, net of income taxes		–	–	(32)	–	8	(24)	–	(24)
Total comprehensive income (loss) for the period		–	–	(128)	4,810	21,628	26,310	3,102	29,412
Repurchase of Class A shares		(14)	–	─	─	(770)	(784)	─	(784)
Issuance and repurchase of Class B shares		147	–	─	─	(3,693)	(3,546)	─	(3,546)
Investment received from non-controlling interests		–	–	–	–	–	–	578	578
Dividends on Class A shares		–	–	–	–	(1,490)	(1,490)	─	(1,490)
Dividends on Class B shares		–	–	–	–	(1,103)	(1,103)	─	(1,103)
Balance as at September 26, 2015		15,039	–	(184)	8,948	159,085	182,888	19,603	202,491

(in thousands of Canadian dollars) (unaudited and not reviewed by the independent auditor)
Logistec Corporation
Condensed Consolidated Interim Statements of Cash Flows
		For the nine months ended
		September 24, 2016	September 26, 2015
		$	$
Operating activities
	Profit for the period	9,599	24,390
	Impairment loss related to assets destroyed	─	9,729
	Gain on insurance recovery of assets	─	(9,729)
	Other items not affecting cash and cash equivalents	22,251	20,630
	Cash generated from operations	31,850	45,020
	Dividends received from equity accounted investments	2,143	2,361
	Contributions to defined benefit retirement plans	(713)	(940)
	Settlement of provisions	(134)	(117)
	Changes in non-cash working capital items	(33,908)	(22,554)
	Income taxes paid	(5,900)	(6,500)
		(6,662)	17,270
Financing activities
	Net change in short-term bank loans	–	3,874
	Issuance of long-term debt, net of transaction cost	51,164	10,642
	Repayment of long-term debt	(18,848)	(7,146)
	Interest paid	(1,426)	(663)
	Repurchase of Class A shares	(922)	(784)
	Issuance of Class B shares	607	113
	Repurchase of Class B shares	(8,781)	(3,873)
	Dividends paid on Class A shares	(1,671)	(1,398)
	Dividends paid on Class B shares	(1,194)	(1,040)
		18,929	(275)
Investing activities
	Customer repayment of an investment in a service contract	216	189
	Interest received	161	247
	Repurchase of non-controlling interests	(2,393)	-
	Business acquisition	(4,562)	-
	Cash acquired in a business acquisition	197	-
	Cash received from a non-controlling interest	-	578
	Acquisition of property, plant and equipment	(18,561)	(20,133)
	Proceeds from disposal of property, plant and equipment	119	336
	Acquisition of intangible assets	(30)	(46)
	Acquisition of non-current financial assets	(27)	-
	Repayment of non-current assets	28	-
	Acquisition of other non-current assets	(761)	(10,287)
		(25,613)	(29,116)
Net change in cash and cash equivalents		(13,346)	(12,121)
Cash and cash equivalents, beginning of period		23,811	26,381
Effect of exchange rate on balances held in foreign currencies of foreign operations		441	(953)
Cash and cash equivalents, end of period		10,906	13,307
Additional information
Acquisition of property, plant and equipment included in trade and other payables		3,153	4,070

SOURCE Logistec Corporation

Jean-Claude Dugas, cpa, ca, Vice-President, Finance, Logistec Corporation, [email protected], [phone]