LOGISTEC Announces its Results for the Third Quarter of 2019

MONTRÉAL, Nov. 6, 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 third quarter ended September 28, 2019.

Highlights from the third quarter

• Consolidated revenue up $10.8 million (5.8%) to $195.3 million;
• Adjusted EBITDA ⁽¹⁾ closed at $36.1 million;
• Total diluted profit per share of $1.33;
• On August 7, 2019, the Company's Board of Directors elected to increase the dividend payment by 3.0%.

Highlights from the nine-month period

• Consolidated revenue up $50.0 million (12.0%) to $466.2 million;
• Adjusted EBITDA ⁽¹⁾ closed at $59.0 million;
• Total diluted profit per share of $1.10.

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

Results of the period

The third quarter of 2019 closed with a consolidated profit attributable to owners of the Company of $17.4 million, compared to $22.3 million for the same quarter of 2018. The profit attributable to owners of the Company translated into a total diluted profit per share of $1.33, of which $1.27 was attributable to Class A Common Shares and $1.40 to Class B Subordinate Voting Shares.

The lower profit attributable to owners of the Company in the third quarter of 2019, when compared to the same period last year, stems mostly from a different distribution of the non-controlling interests, an overall effective tax rate which reflects our geographical distribution, increased business in more labour-intensive activities, and higher accretion costs based on the application of IFRS 16.

Year-to-date profit attributable to owners of the Company for the period are in line with 2018, despite the increased costs resulting from the application of IFRS 16. Essentially, comparative operating profit was $2.0 million higher than last year. As in all years, our services incurred highs and lows, and, in the end, they balanced each other out during the quarter. These fluctuations include better performance on bulk and break-bulk in our marine services segment, as well as soil management in Sanexen and Aqua-Pipe installation by FER-PAL. Offsetting these, we realized lower container volumes as well as reduced Aqua-Pipe in Québec and lower activity in our woven-hose manufacturing facility.

Outlook

"We view the outlook for the remainder of the year with optimism. We expect our marine services to perform well and our environmental services will be very active as site remediations progress for the coming months. Our dedicated focus on the operations of FER-PAL should also help improve performance, as their results are better than last year.

On August 7, 2019, our Board of Directors elected to increase the dividend payment by 3.0%, which shows their confidence in our commitment to sustainable long-term growth," 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 34 ports and 60 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.

Q3 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 nine months ended
	September 28, 2019	September 29, 2018	September 28, 2019	September 29, 2018
	$	$	$	$
Revenue	195,293	184,537	466,216	416,161
Employee benefits expense	(95,261)	(87,718)	(232,353)	(211,369)
Equipment and supplies expense	(50,756)	(47,204)	(124,374)	(110,833)
Rental expense	(11,290)	(12,784)	(30,878)	(33,623)
Other expenses	(7,059)	(7,859)	(23,736)	(21,816)
Depreciation and amortization expense	(10,497)	(7,385)	(32,059)	(19,953)
Share of profit of equity accounted investments	4,162	4,575	5,654	5,606
Other gains (losses)	951	(400)	(1,577)	755
Operating profit	25,543	25,762	26,893	24,928
Finance expense	(2,733)	(2,272)	(8,374)	(5,918)
Finance income	71	414	356	512
Profit before income taxes	22,881	23,904	18,875	19,522
Income taxes	(5,403)	(4,081)	(4,222)	(4,966)
Profit for the period	17,478	19,823	14,653	14,556
Profit (loss) attributable to:
Owners of the Company	17,393	22,256	14,430	14,647
Non-controlling interests	85	(2,433)	223	(91)
Profit for the period	17,478	19,823	14,653	14,556
Basic earnings per Class A Common Share ^(1)	1.31	1.68	1.09	1.11
Basic earnings per Class B Subordinate Voting Share ^(2)	1.44	1.85	1.19	1.22
Diluted earnings per Class A share	1.27	1.62	1.06	1.07
Diluted earnings per Class B share	1.40	1.78	1.16	1.17
Weighted average number of Class A shares outstanding, basic and diluted	7,385,989	7,405,022	7,389,289	7,405,466
Weighted average number of Class B shares outstanding, basic	5,407,301	5,286,167	5,377,686	5,240,222
Weighted average number of Class B shares outstanding, diluted	5,714,471	5,741,904	5,717,871	5,730,299

^(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 nine months ended
	September 28, 2019	September 29, 2018	September 28, 2019	September 29, 2018
	$	$	$	$
Profit for the period	17,478	19,823	14,653	14,556
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	1,591	(2,141)	(3,359)	2,841
Unrealized (loss) gain on translating debt designated as hedging item of the net investment in foreign operations	(810)	—	2,348	—
Gain (loss) on derivatives financial instruments designated as cash flow hedges	18	—	(167)	4
Income taxes relating to derivatives financial instruments designated as cash flow hedges	(5)	—	45	(1)
Total items that are or may be reclassified to the consolidated statements of earnings	794	(2,141)	(1,133)	2,844
Items that will not be reclassified to the consolidated statements of earnings
Remeasurement (loss) gain on benefit obligation	(1,056)	1,155	(2,136)	2,326
Return on retirement plan assets excluding amounts included in profit for the period	2,254	19	539	(14)
Income taxes on remeasurement (loss) gain on benefit obligation and return on retirement plan assets excluding amounts included in profit for the period	(323)	(308)	429	(613)
Total items that will not be reclassified to the consolidated statements of earnings	875	866	(1,168)	1,699
Other comprehensive income (loss) for the period, net of income taxes	1,669	(1,275)	(2,301)	4,543
Total comprehensive income for the period	19,147	18,548	12,352	19,099
Total comprehensive income (loss) attributable to:
Owners of the Company	19,054	20,990	12,142	19,176
Non-controlling interests	93	(2,442)	210	(77)
Total comprehensive income (loss) for the period	19,147	18,548	12,352	19,099

Condensed Consolidated Interim Statements of Financial Position
(in thousands of Canadian dollars)
	As at September 28,  2019	As at December 31,  2018
	$	$
Assets
Current assets
Cash and cash equivalents	16,102	15,393
Trade and other receivables	162,965	160,067
Contract assets	33,669	14,282
Current income tax assets	5,384	2,964
Prepaid expenses and other	6,052	4,899
Inventories	13,421	10,711
	237,593	208,316
Equity accounted investments	39,869	38,005
Property, plant and equipment	187,954	181,284
Right-of-use assets	90,065	—
Goodwill	141,437	142,672
Intangible assets	41,805	47,006
Non-current assets	2,141	2,173
Non-current financial assets	5,197	6,328
Deferred income tax assets	13,022	11,319
Total assets	759,083	637,103
Liabilities
Current liabilities
Short-term bank loans	—	13,577
Trade and other payables	97,464	98,668
Contract liabilities	9,834	5,225
Current income tax liabilities	951	3,480
Dividends payable	2,023	1,973
Current portion of lease liabilities	9,810	—
Current portion of long-term debt	5,221	3,294
	125,303	126,217
Lease liabilities	81,836	—
Long-term debt	186,765	160,003
Deferred income tax liabilities	21,112	21,465
Post-employment benefit obligations	17,023	14,716
Contract liabilities	3,033	3,333
Non-current liabilities	52,719	46,980
Total liabilities	487,791	372,714
Equity
Share capital	40,269	35,016
Share capital to be issued	9,811	14,717
Retained earnings	207,870	200,404
Accumulated other comprehensive income	10,941	12,061
Equity attributable to owners of the Company	268,891	262,198
Non-controlling interest	2,401	2,191
Total equity	271,292	264,389
Total liabilities and equity	759,083	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	—	—	—	—	14,430	14,430	223	14,653
Other comprehensive income (loss)
Currency translation differences arising on translation of foreign operations	—	—	—	(3,346)	—	(3,346)	(13)	(3,359)
Unrealized gain on translating debt designated as hedging item of the net investment in foreign operations	—	—	—	2,348	—	2,348	—	2,348
Remeasurement losses on benefit obligation and return on retirement plan assets excluding amounts included in profit for the period, net of income taxes	—	—	—	—	(1,168)	(1,168)	—	(1,168)
Cash flow hedges, net of income taxes	—	—	(122)	—	—	(122)	—	(122)
Total comprehensive income (loss) for the period	—	—	(122)	(998)	13,262	12,142	210	12,352
Remeasurement of written put option liability	—	—	—	—	(697)	(697)	—	(697)
Repurchase of Class A shares	(5)	—	—	—	(286)	(291)	—	(291)
Issuance and repurchase of Class B shares	352	—	—	—	(1,146)	(794)	—	(794)
Issuance of Class B shares capital to a subsidiary shareholder	4,906	(4,906)	—	—	—	—	—	—
Dividends on Class A shares	—	—	—	—	(2,032)	(2,032)	—	(2,032)
Dividends on Class B shares	—	—	—	—	(1,635)	(1,635)	—	(1,635)
Balance as at September 28, 2019	40,269	9,811	13	10,928	207,870	268,891	2,401	271,292
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 (loss)
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 shares capital to a subsidiary shareholder	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

Condensed Consolidated Interim Statements of Cash Flows
(in thousands of Canadian dollars)
	For the nine months ended
	September 28, 2019	September 29, 2018
	$	$
Operating activities
Profit for the period	14,653	14,556
Items not affecting cash and cash equivalents	45,293	29,588
Cash generated from operations	59,946	44,144
Dividends received from equity accounted investments	3,770	3,346
Contributions to defined benefit retirement plans	(698)	(816)
Settlement of provisions	(217)	(251)
Changes in non-cash working capital items	(16,333)	(5,019)
Income taxes paid	(9,857)	(9,127)
	36,611	32,277
Financing activities
Net change in short-term bank loans	(13,577)	1,780
Issuance of long-term debt	81,969	127,447
Repayment of long-term debt	(50,607)	(47,100)
Repayment of lease liabilities	(7,374)	—
Interest paid	(8,635)	(5,087)
Issuance of Class B shares	258	561
Repurchase of Class A shares	(291)	(32)
Repurchase of Class B shares	(1,350)	(272)
Dividends paid on Class A shares	(2,012)	(1,833)
Dividends paid on Class B shares	(1,606)	(1,419)
	(3,225)	74,045
Investing activities
Acquisition of property, plant and equipment	(29,919)	(13,488)
Acquisition of intangible assets	(53)	(172)
Proceeds from disposal of property, plant and equipment	1,676	961
Business combinations	—	(97,998)
Cash acquired in a business combination	—	2,501
Repayment of due to shareholders	(5,386)	—
Interest received	226	394
Cash paid to a minority interest	—	(157)
Repayment of other non-current financial assets	157	159
Repayment of other non-current liabilities	(310)	—
Acquisition of other non-current assets	(276)	(286)
Disposal of other non-current assets	123	193
	(33,762)	(107,893)
Net change in cash and cash equivalents	(376)	(1,571)
Cash and cash equivalents, beginning of period	15,393	3,963
Effect of exchange rate on balances held in foreign currencies of foreign operations	1,085	(526)
Cash and cash equivalents, end of period	16,102	1,866
Additional information
Acquisition of property, plant and equipment included in trade and other payables	645	391
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