LOGISTEC Announces its Results the First Quarter of 2020

MONTRÉAL, May 6, 2020 /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 first quarter ended March 28, 2020.

Highlights for the first quarter of 2020

Results for the first quarter of 2020

• Consolidated revenue down $5.3 million or 4.6% to $109.4 million;
• Adjusted EBITDA ⁽¹⁾ up $6.3 million to $7.5 million;
• Cash flows from operating activities up $14.3 million to $23.9 million;
• Total loss per share improved from $0.70 to $0.42

During the first quarter of 2020, consolidated revenue totalled $109.4 million, a decrease of $5.3 million or 4.6% over the same period in 2019. Revenue from the marine services segment was lower at $90.3 million compared to $91.1 million in the comparative period.

The adjusted EBITDA ⁽¹⁾ for the quarter closed at $7.5 million, an increase of $6.3 million over the comparative period. This increase stemmed mainly from the unrealized exchange gains and lower professional fees incurred in 2020 compared to 2019, to support business integration and to analyze business development opportunities. The increase was partially offset by lower revenue as explained above.

Cash flows from operating activities totalled $23.9 million for the first quarter of 2020, up $14.3 million from $9.6 million for the same period in 2019. The increase stemmed mainly from a reduced loss for the period and a better monetization of working capital.

As in previous first quarters, our Company showed a loss in the first quarter. This is due to the high seasonality of its environmental services, as well as marine navigation to the Arctic, and the lack of cargo-handling activities in the Great Lakes, which are closed to navigation during this period. Loss attributable to the owners of the Company for the first quarter amounted to $5.4 million, substantially better than last year's loss of $8.9 million. The improvement can largely be attributed to a gain in foreign exchange as mentioned above, but it is important to note that our non-seasonal operating activities also performed well. The loss attributable to owners of the Company translated to a total basic and diluted loss per share of $0.42, of which $0.41 was attributable to Class A Common Shares and $0.45 to Class B Subordinate Voting Shares.

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

COVID-19

During March 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization. The situation is constantly evolving, and the measures put in place have numerous economic repercussions on the global and national levels. These measures, which include travel bans, solitary confinement or quarantine, whether voluntary or not, and social distancing, have caused significant disruption in the United States and Canada, where the Company operates.

LOGISTEC has rolled out its business continuity plan for its operations that are deemed essential services by the government authorities in Canada and the United States. More precisely, the Company's marine operations are considered essential services and, as such, our terminal operations across our North American network remain open and functional. In addition, our manufacturing of woven hoses, which is essential in providing communities with drinking water and fighting forest fires, remain operational.

On the environmental side, we are, as every year, affected by the seasonality of our operations and most activities cannot be performed in the winter season. This includes site remediation and rehabilitation of water mains. COVID-19 has nonetheless affected some of these activities, causing delays in certain projects. However, as we perform crucial services to maintain and upgrade critical infrastructure, we expect to move forward with a number of them in the weeks to come.

Outlook

"We want to thank all of our people, both on the front lines and those working remotely, for their dedication and resilience in these trying times. Since we rolled out our business continuity plan for our operations that are deemed essential services by the government authorities in Canada and the United States, they have demonstrated resilience and agility to provide reliable services to our customers, our partners, and the communities in which we operate. Our business diversity and our essential services bring us some financial stability, which we believe will position us favourably in the coming months," indicated Madeleine Paquin, President and Chief Executive Officer of LOGISTEC Corporation.

Dividends

On May 6, 2020, the Board of Directors declared a dividend of $0.09350 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 July 3, 2020 to shareholders of record as of June 19, 2020.

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 34 ports and 59 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 other governmental customers for the rehabilitation of underground water mains, soils and 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 consolidated 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 Company's management's discussion and analysis of the period for further information and its Non-IFRS Measure section 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.

Q1 2020 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
	March 28, 2020	March 30, 2019
	$	$
Revenue	109,431	114,748
Employee benefits expense	(56,877)	(58,377)
Equipment and supplies expense	(32,039)	(34,364)
Operating expense	(11,274)	(9,455)
Other expenses	(6,444)	(10,676)
Depreciation and amortization expense	(10,776)	(10,834)
Share of profit of equity accounted investments	(151)	562
Other gains (losses)	4,827	(1,270)
Operating loss	(3,303)	(9,666)
Finance expense	(3,136)	(2,890)
Finance income	130	338
Loss before income taxes	(6,309)	(12,218)
Income taxes	1,079	3,287
Loss for the period	(5,230)	(8,931)
Profit (loss) attributable to:
Owners of the Company	(5,421)	(8,890)
Non-controlling interests	191	(41)
Loss for the period	(5,230)	(8,931)
Basic and diluted earnings per Class A Common Share ^(1)	(0.41)	(0.67)
Basic and diluted earnings per Class B Subordinate Voting Share ^(2)	(0.45)	(0.74)
Weighted average number of Class A shares outstanding, basic and diluted	7,382,055	7,392,722
Weighted average number of Class B shares outstanding, basic and diluted	5,437,724	5,315,890

^(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 28,  2020	March 30, 2019
	$	$
Loss for the period	(5,230)	(8,931)
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	9,852	(2,323)
Unrealized (loss) gain on translating debt designated as hedging item of the net investment in foreign operations	(5,340)	1,778
Losses on derivatives financial instruments designated as cash flow hedges	—	(146)
Income taxes relating to derivatives financial instruments designated as cash flow hedges	—	39
Total items that are or may be reclassified to the consolidated statements of earnings	4,512	(652)
Items that will not be reclassified to the consolidated statements of earnings
Remeasurement gains (losses) on benefit obligation	3,717	(33)
Return on retirement plan assets	(1,402)	(352)
Income taxes on remeasurement losses on benefit obligation and return on retirement plan assets	(613)	103
Total items that will not be reclassified to the consolidated statements of earnings	1,702	(282)
Other comprehensive income (loss) for the period, net of income taxes	6,214	(934)
Total comprehensive income (loss) for the period	984	(9,865)
Total comprehensive income (loss) attributable to:
Owners of the Company	735	(9,814)
Non-controlling interests	249	(51)
Total comprehensive income (loss) for the period	984	(9,865)

Condensed Consolidated Interim Statements of Financial Position
(in thousands of Canadian dollars)
	As at March 28,  2020	As at December 31,  2019
	$	$
Assets
Current assets
Cash and cash equivalents	19,096	22,608
Trade and other receivables	123,232	156,228
Contract assets	4,222	10,593
Current income tax assets	10,827	6,028
Inventories	12,286	12,569
Prepaid expenses and other	6,081	5,129
	175,744	213,155
Equity accounted investments	41,424	42,349
Property, plant and equipment	188,376	184,304
Right-of-use assets	113,029	89,581
Goodwill	143,973	140,617
Intangible assets	43,147	40,735
Non-current assets	2,422	2,417
Non-current financial assets	7,513	8,829
Deferred income tax assets	12,365	12,751
Total assets	727,993	734,738
Liabilities
Current liabilities
Trade and other payables	66,231	86,217
Contract liabilities	5,387	5,356
Current income tax liabilities	4,026	3,131
Dividends payable	1,259	1,245
Current portion of lease liabilities	11,902	9,820
Current portion of long-term debt	4,182	9,390
	92,987	115,159
Lease liabilities	103,460	81,495
Long-term debt	164,028	168,510
Deferred income tax liabilities	21,855	21,156
Post-employment benefit obligations	16,437	18,383
Contract liabilities	2,833	2,933
Non-current liabilities	46,613	46,088
Total liabilities	448,213	453,724
Equity
Share capital	45,007	40,222
Share capital to be issued	4,906	9,811
Retained earnings	214,824	220,641
Accumulated other comprehensive income	14,151	9,697
Equity attributable to owners of the Company	278,888	280,371
Non-controlling interest	892	643
Total equity	279,780	281,014
Total liabilities and equity	727,993	734,738

Condensed Consolidated Interim Statements of Changes in Equity
(in thousands of Canadian dollars)
	Attributable to owners of the Company
	Share capital	Share capital to be issued	Accumulated other comprehensive income	Retained earnings	Total	Non- controlling interests	Total equity
	$	$	$	$	$	$	$
Balance as at January 1, 2020	40,222	9,811	9,697	220,641	280,371	643	281,014
(Loss) profit for the period	-	-	-	(5,421)	(5,421)	191	(5,230)
Other comprehensive income (loss)
Currency translation differences arising on translation of foreign operations	-	-	9,794	-	9,794	58	9,852
Unrealized loss on translating debt designated as hedging item of the net investment in foreign operations	-	-	(5,340)	-	(5,340)	-	(5,340)
Remeasurement gains on benefit obligation and return on retirement plan assets, net of income taxes	-	-	-	1,702	1,702	-	1,702
Total comprehensive income (loss) for the period	-	-	4,454	(3,719)	735	249	984
Remeasurement of written put option liabilities	-	-	-	(270)	(270)	-	(270)
Repurchase of Class A shares	(2)	-	-	(117)	(119)	-	(119)
Repurchase of Class B shares	(118)	-	-	(452)	(570)	-	(570)
Issuance of Class B shares capital to a subsidiary shareholder	4,905	(4,905)	-	-	-	-	-
Dividends on Class A shares	-	-	-	(690)	(690)	-	(690)
Dividends on Class B shares	-	-	-	(569)	(569)	-	(569)
Balance as at March 28, 2020	45,007	4,906	14,151	214,824	278,888	892	279,780
Balance as at January 1, 2019	35,016	14,717	12,061	200,404	262,198	2,191	264,389
Loss for the period	-	-	-	(8,890)	(8,890)	(41)	(8,931)
Other comprehensive income (loss)
Currency translation differences arising on translation of foreign operations	-	-	(2,313)	-	(2,313)	(10)	(2,323)
Unrealized gain on translating debt designated as hedging item of the net investment in foreign operations	-	-	1,778	-	1,778	-	1,778
Remeasurement losses on benefit obligation and return on retirement plan assets, net of income taxes	-	-	-	(282)	(282)	-	(282)
Cash flow hedges, net of income taxes	-	-	(107)	-	(107)	-	(107)
Total comprehensive loss for the period	-	-	(642)	(9,172)	(9,814)	(51)	(9,865)
Remeasurement of written put option liabilities	-	-	-	(86)	(86)	-	(86)
Repurchase of Class B shares	(66)	-	-	(438)	(504)	-	(504)
Issuance of Class B share capital to a subsidiary shareholder	4,906	(4,906)	-	-	-	-	-
Dividends on Class A shares	-	-	-	(671)	(671)	-	(671)
Dividends on Class B shares	-	-	-	(540)	(540)	-	(540)
Balance as at March 30, 2019	39,856	9,811	11,419	189,497	250,583	2,140	252,723

Condensed Consolidated Interim Statements of Cash Flows
(in thousands of Canadian dollars)
	For the three months ended
	March 28, 2020	March 30, 2019
	$	$
Operating activities
Loss for the period	(5,230)	(8,931)
Items not affecting cash and cash equivalents	13,930	10,382
Cash generated from operations	8,700	1,451
Dividends received from equity accounted investments	750	245
Contributions to defined benefit retirement plans	(218)	(232)
Settlement of provisions	(50)	(2)
Changes in non-cash working capital items	18,043	13,700
Income taxes paid	(3,363)	(5,607)
	23,862	9,555
Financing activities
Net change in short-term bank loans	—	932
Issuance of long-term debt, net of transaction cost	141	16,269
Repayment of long-term debt	(15,408)	(15,582)
Repayment of lease liabilities	(2,511)	(2,538)
Interest paid	(2,985)	(2,857)
Repurchase of Class A shares	(119)	—
Repurchase of Class B shares	(570)	(504)
Dividends paid on Class A shares	(690)	(671)
Dividends paid on Class B shares	(555)	(526)
	(22,697)	(5,477)
Investing activities
Acquisition of property, plant and equipment	(3,232)	(9,419)
Acquisition of intangible assets	(69)	(27)
Acquisition of other non-current assets	—	(271)
Proceeds from disposal of property, plant and equipment	43	123
Repayment of other non-current financial assets	54	52
Repayment of other non-current liabilities	(69)	(86)
Proceed from disposal of other non-current assets	26	63
Interest received	65	282
Cash paid to non-controlling interest	—	(5,386)
	(3,182)	(14,669)
Net change in cash and cash equivalents	(2,017)	(10,591)
Cash and cash equivalents, beginning of period	22,608	15,393
Effect of exchange rate on balances held in foreign currencies of foreign operations	(1,495)	764
Cash and cash equivalents, end of period	19,096	5,566
Additional information
Acquisition of property, plant and equipment included in trade and other payables	645	2,627

SOURCE Logistec Corporation

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

Related Links

http://www.logistec.com