LOGISTEC announces its results for the third quarter of 2018

MONTRÉAL, Nov. 7, 2018 /CNW Telbec/ - LOGISTEC Corporation (TSX: LGT.A) (TSX: LGT.B), a marine and environmental services provider, today announced its financial results for the third quarter and first nine months ended September 29, 2018.

In the third quarter of 2018, consolidated revenue totalled $184.5 million, an increase of $16.2 million or 9.6% over the same period in 2017. Revenue from the marine services segment rose by 79.4% from $53.7 million to $96.4 million, while revenue from the environmental services segment amounted to $88.1 million, a decrease of $26.5 million or 23.1% from the third quarter of 2017. The third quarter of 2018 closed with a consolidated profit attributable to owners of the Company of $22.3 million, compared with a profit of $11.0 million for the third quarter of 2017. The profit attributable to owners of the Company translated to total diluted earnings per share of $1.69, of which $1.62 was attributable to Class A Common Shares and $1.78 to Class B Subordinate Voting Shares.

This strong performance is attributable in large part to the marine services segment, with revenue close to $100 million for the quarter and a profit before income taxes of $13.3 million. Furthermore, the acquisitions we made in this segment over the last two years, namely Logistec Gulf Coast, Gulf Stream Marine, and Pate Stevedore, were solid contributors to these results. In the environmental services segment, the profit before income taxes for this quarter improved compared to the same period last year, but performance was nonetheless lower than expected. This decrease can be explained by a lower activity level at FER-PAL compared to its record 2017 results. That being said, the combined backlog of Sanexen and FER-PAL totalled some $150 million as at the end of September 2018, a relatively high number for this time of year. This means that we will likely start 2019 with a substantial backlog, hence the positive forecast for our environmental services segment.

During the first nine months of 2018, consolidated revenue increased to $416.2 million, compared with $330.2 million for the same period in 2017. The profit attributable to owners of the Company amounted to $14.6 million, compared with a profit of $14.2 million for the same period last year. This translated into total diluted earnings per share of $1.12 of which $1.07 was attributable to Class A Common Shares and $1.17 to Class B Subordinate Voting Shares. For the same period in 2017, diluted earnings per share totalled $1.10, of which $1.05 was attributable to Class A Common Shares and $1.16 to Class B Subordinate Voting Shares.

Outlook

"The outlook remains positive. Both our marine and environmental services segments are expected to have a strong finish, and we continue to look for new growth opportunities", 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 37 ports and 61 terminals across North America. LOGISTEC also offers marine transportation services geared primarily to the Arctic coastal trade and marine agency services to foreign shipowners and operators serving the Canadian market. Furthermore, the Company operates in the environmental services segment 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.

Q3 2018 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(in thousands of Canadian dollars, except for per share amounts and number of shares)
(unaudited and not reviewed by the independent auditor)

Condensed Consolidated Interim Statements of Earnings
	For the three months ended			For the nine months ended
	September 29, 2018	September 30, 2017		September 29, 2018	September 30, 2017
	$	$		$	$
Revenue	184,537	168,314		416,161	330,246
Employee benefits expense	(87,718)	(83,326)		(211,369)	(163,558)
Equipment and supplies expense	(47,204)	(41,255)		(110,833)	(87,642)
Rental expense	(12,784)	(9,068)		(33,623)	(24,186)
Other expenses	(7,859)	(7,589)		(21,816)	(16,194)
Depreciation and amortization expense	(7,385)	(12,419)		(19,953)	(20,668)
Share of profit of equity accounted investments	4,575	4,137		5,606	5,371
Other gains and losses	(400)	(2,226)		755	(555)
Operating profit	25,762	16,568		24,928	22,814
Finance expense	(2,272)	(889)		(5,918)	(1,779)
Finance income	414	98		512	279
Profit before income taxes	23,904	15,777		19,522	21,314
Income taxes	(4,081)	(3,610)		(4,966)	(5,925)
Profit for the period	19,823	12,167		14,556	15,389
Profit attributable to:
Owners of the Company	22,256	10,955		14,647	14,214
Non-controlling interests	(2,433)	1,212		(91)	1,175
Profit for the period	19,823	12,167		14,556	15,389
Basic earnings per Class A Common Share ^(1)	1.68	0.84		1.11	1.12
Basic earnings per Class B Subordinate Voting Share ^(2)	1.85	0.93		1.22	1.23
Diluted earnings per Class A share	1.62	0.80		1.07	1.05
Diluted earnings per Class B share	1.78	0.88		1.17	1.16
Weighted average number of Class A shares outstanding, basic and diluted	7,405,022	7,410,122		7,405,466	7,411,100
Weighted average number of Class B shares outstanding, basic	5,286,167	5,062,472		5,240,222	4,845,939
Weighted average number of Class B shares outstanding, diluted	5,741,904	5,720,654		5,730,299	5,565,206
^(1)   Class A Common Share ("Class A share")
^(2)   Class B Subordinate Voting Share ("Class B share")

Condensed Consolidated Interim Statements of Comprehensive Income
	For the three months ended		For the nine months ended
	September 29, 2018	September 30, 2017	September 29, 2018	September 30, 2017
	$	$	$	$
Profit for the period	19,823	12,167	14,556	15,389
Other comprehensive income
Items that are or may be reclassified to the consolidated statements of earnings
Currency translation differences arising on translation of foreign operations	(2,141)	(2,281)	2,841	(2,810)
Gain on derivatives	—	87	4	87
Income tax related	—	(24)	(1)	(24)
Total items that are or may be reclassified to the consolidated statements of earnings	(2,141)	(2,218)	2,844	(2,747)
Items that will not be reclassified to the consolidated statements of earnings
Remeasurement gain (loss) on benefit obligation	1,155	1,436	2,326	(1,075)
Return on retirement plan assets excluding amounts included in profit for the period	19	535	(14)	676
Income taxes on remeasurement gain (loss) on benefit obligation and return on retirement plan assets excluding amounts included in profit for the period	(308)	(530)	(613)	107
Total items that will not be reclassified to the consolidated statements of earnings	866	1,441	1,699	(292)
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	—	24	—	24
Total share of other comprehensive income of equity accounted investments, net of income taxes	—	24	—	24
Other comprehensive income for the period, net of income taxes	(1,275)	(753)	4,543	(3,015)
Total comprehensive income for the period	18,548	11,414	19,099	12,374
Total comprehensive income attributable to:
Owners of the Company	20,990	10,202	19,176	11,199
Non-controlling interests	(2,442)	1,212	(77)	1,175
Total comprehensive income for the period	18,548	11,414	19,099	12,374

Condensed Consolidated Interim Statements of Financial Position
	As at September 29,  2018	As at December 31,  2017
	$	$
Assets
Current assets
Cash and cash equivalents	1,866	3,963
Trade and other receivables	148,774	153,342
Work in progress	29,863	5,306
Current income tax assets	2,965	494
Other financial assets	208	1,055
Prepaid expenses	5,981	2,775
Inventories	10,137	11,550
	199,794	178,485
Equity accounted investments	36,640	34,350
Property, plant and equipment	178,098	160,717
Goodwill	161,304	105,618
Other intangible assets	41,134	14,903
Other non-current assets	1,762	1,658
Post-employment benefit assets	—	606
Non-current financial assets	6,997	7,984
Deferred income tax assets	10,063	9,218
Total assets	635,792	513,539
Liabilities
Current liabilities
Short-term bank loans	11,609	9,829
Trade and other payables	95,851	85,174
Deferred revenue	4,655	2,252
Current income tax liabilities	3,013	3,699
Dividends payable	1,976	1,075
Current portion of long-term debt	4,652	5,447
Provisions	881	813
	122,637	108,289
Long-term debt	162,058	77,957
Provisions	1,956	771
Deferred income tax liabilities	26,540	15,575
Post-employment benefit obligations	12,433	14,778
Deferred revenue	3,434	3,733
Non-current financial liabilities	61,602	61,641
Total liabilities	390,660	282,744
Equity
Share capital	35,143	29,019
Share capital to be issued	14,717	19,820
Retained earnings	183,692	173,129
Accumulated other comprehensive income	9,436	6,606
Equity attributable to owners of the Company	242,988	228,574
Non-controlling interests	2,144	2,221
Total equity	245,132	230,795
Total liabilities and equity	635,792	513,539

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, 2018	29,019	19,820	138	6,468	173,129	228,574	2,221	230,795
Profit (loss) for the period	—	—	—	—	14,647	14,647	(91)	14,556
Other comprehensive income
Currency translation differences arising on translation of foreign operations	—	—	—	2,827	—	2,827	14	2,841
Remeasurement gain on benefit obligation and return on retirement plan assets excluding amounts included in profit for the period, net of income taxes	—	—	—	—	1,699	1,699	—	1,699
Cash flow hedges, net of income taxes	—	—	3	—	—	3	—	3
Total comprehensive income (loss) for the period	—	—	3	2,827	16,346	19,176	(77)	19,099
Remeasurement of written put option liability	—	—	—	—	(1,356)	(1,356)	—	(1,356)
Repurchase of Class A shares	—	—	—	—	(32)	(32)	—	(32)
Issuance and repurchase of Class B shares	1,021	—	—	—	(242)	779	—	779
Issuance of Class B share capital to a subsidiary shareholder upon the exercise of put options	5,103	(5,103)	—	—	—	—	—	—
Dividends on Class A shares	—	—	—	—	(1,894)	(1,894)	—	(1,894)
Dividends on Class B shares	—	—	—	—	(1,483)	(1,483)	—	(1,483)
Other dividends	—	—	—	—	(776)	(776)	—	(776)
Balance as at September 29, 2018	35,143	14,717	141	9,295	183,692	242,988	2,144	245,132
Balance as at January 1, 2017	15,618	24,898	(4)	9,255	151,616	201,383	1,798	203,181
Profit for the period	—	—	—	—	14,214	14,214	1,175	15,389
Other comprehensive income (loss)
Currency translation differences arising on translation of foreign operations	—	—	—	(2,810)	—	(2,810)	—	(2,810)
Remeasurement losses on benefit obligation and return on retirement plan assets excluding amounts included in profit for the period, net of income taxes	—	—	—	—	(292)	(292)	—	(292)
Cash flow hedges, net of income taxes	—	—	87	—	—	87	—	87
Total comprehensive income (loss) for the period	—	—	87	(2,810)	13,922	11,199	1,175	12,374
Repurchase of Class A shares	(2)	—	—	—	(91)	(93)	—	(93)
Issuance and repurchase of Class B shares	8,359	—	—	—	(697)	7,662	—	7,662
Non-controlling interests arising from business acquisitions	—	—	—	—	—	—	50,593	50,593
Long-term liability for the obligation to repurchase the non-controlling interests	—	—	—	—	—	—	(50,089)	(50,089)
Issuance of Class B share capital to a subsidiary shareholder upon the exercise of put options	5,078	(5,078)	—	—	—	—	—	—
Dividends on Class A shares	—	—	—	—	(1,723)	(1,723)	—	(1,723)
Dividends on Class B shares	—	—	—	—	(1,232)	(1,232)	—	(1,232)
Balance as at September 30, 2017	29,053	19,820	83	6,445	161,795	217,196	3,477	220,673

Condensed Consolidated Interim Statements of Cash Flows
	For the nine months ended
	September 29, 2018	September 30, 2017
	$	$
Operating activities
Profit for the period	14,556	15,389
Items not affecting cash and cash equivalents	29,588	25,547
Cash generated from operations	44,144	40,936
Dividends received from equity accounted investments	3,346	3,600
Contributions to defined benefit retirement plans	(816)	(850)
Settlement of provisions	(251)	(92)
Changes in non-cash working capital items	(5,019)	(14,565)
Income taxes paid	(9,127)	(1,702)
	32,277	27,327
Financing activities
Net change in short-term bank loans	1,780	498
Issuance of long-term debt	127,447	88,251
Repayment of long-term debt	(47,100)	(53,508)
Interest paid	(5,087)	(1,745)
Issuance of Class B shares	561	201
Repurchase of Class A shares	(32)	(93)
Repurchase of Class B shares	(272)	(751)
Dividends paid on Class A shares	(1,833)	(1,667)
Dividends paid on Class B shares	(1,419)	(1,173)
	74,045	30,013
Investing activities
Customer repayment of an investment in a service contract	—	865
Interest received	394	297
Business acquisitions	(97,998)	(48,037)
Cash acquired in a business acquisition	2,501	—
Cash paid to minority interest	(157)	(2,214)
Acquisition of property, plant and equipment	(13,488)	(21,230)
Proceeds from disposal of property, plant and equipment	961	2,511
Repayment of other non-current assets	193	142
Acquisition of intangible assets	(172)	(39)
Acquisition of other non-current assets	—	(692)
Increase of other non current-assets	(286)	—
Repayment of other non-current financial assets	159	72
	(107,893)	(68,325)
Net change in cash and cash equivalents	(1,571)	(10,985)
Cash and cash equivalents, beginning of period	3,963	15,971
Effect of exchange rate on balances held in foreign currencies of foreign operations	(526)	1,331
Cash and cash equivalents, end of period	1,866	6,317
Additional information
Acquisition of property, plant and equipment included in trade and other payables	391	1,914

SOURCE Logistec Corporation

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

Related Links

https://www.logistec.com