DRUMMONDVILLE, QC, Nov. 10, 2014 /CNW Telbec/ - NAPEC Inc. ("NAPEC" or "the Corporation", formerly CVTech Group Inc.) (TSX: NPC) today reported results for the third quarter ended September 30, 2014. All amounts are in Canadian dollars unless otherwise indicated.
| Financial highlights | Three months ended Sept. 30 | Nine months ended Sept. 30 | |||||
| (in thousands of dollars, except per-share data) | 2014 | 2013 | 2014 | 2013 | |||
| Revenues | 69,958 | 57,324 | 219,066 | 168,997 | |||
| EBITDA | 1,184 | 1,475 | 7,558 | 3,746 | |||
| Net earnings | (2,965) | (504) | (2,239) | (2,282) | |||
| Per share - basic and diluted ($) | (0.04) | (0.01) | (0.03) | (0.03) | |||
| Weighted average number of shares outstanding (basic, in thousands) | 71,533 | 71,789 | 71,533 | 72,009 | |||
"The solid revenue growth of the third quarter illustrates NAPEC's growing presence in its principal markets. In this regard, U.S. operations performed strongly in most business segments and the gradual implementation of our new business model is beginning to bear fruit. In Ontario, the execution of an unprofitable contract in a new market segment has affected profitability. Moreover, in Quebec, NAPEC is a very active bidder and we are confident of winning large-scale contracts on the strength of the quality and the solid reputation of our team. Finally, we are continuing our efforts to reduce operating costs as part of our internal strategic review", said Pierre L. Gauthier, President and Chief Executive Officer of NAPEC.
THIRD-QUARTER RESULTS
Revenues were $70.0 million, up 22.0% from the third quarter of 2013. The increase was due mainly to higher revenues derived from contracts related to the construction, maintenance and repair of underground lines and substations, as well as from contracts associated with electrical energy projects for industrial, commercial and institutional customers. In addition, the conversion effect resulting from fluctuations in the value of the Canadian dollar increased the value of U.S.-dollar-denominated revenues for the quarter ended September 30, 2014 by approximately $2.3 million relative to the same period in 2013. However, revenues from contracts related to the construction, maintenance and repair of electricity distribution lines were lower.
Revenues from work carried out in the U.S. increased 31.4% to $48.9 million, while revenues from contracts performed in Canada increased 4.7% to $21.1 million. NAPEC's Ontario revenues once again grew strongly, to $11.0 million in the third quarter of 2014, compared to $3.0 million a year earlier.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") were $1.2 million, or 1.7% of revenues, compared to $1.5 million, or 2.6% of revenues, in the third quarter of 2013. The decrease, both in dollars and as a percentage of revenues, is attributable mainly to an unprofitable contract in a new market segment in Ontario and to the unfavourable effect of a decrease in business volume in Quebec. These factors were partially offset by the favourable effect of the increase in U.S. business volume. In addition, the Corporation incurred non-recurring expenses totalling $867,000 related to severance pay.
During the period, as part of the implementation of its new organizational structure, the Corporation recognized an impairment of $2.2 million on a building located in the United States. A deferred tax recovery of $860,000 has been accounted for in connection with this impairment. As a result, the Corporation recorded a net loss of $3.0 million, or $0.04 per basic and diluted share, in the third quarter of 2014, compared to a net loss of $504,000, or $0.01 per basic and diluted share, in the third quarter of 2013.
At September 30, 2014, the value of the Corporation's order backlog was approximately $228.0 million, compared to $176.0 million at the end of the previous quarter. This variation reflects in part the renewal of existing contracts and the award of new contracts for a total amount of US$36.3 million (Cdn $41.5 million) by certain subsidiaries of an important utility service provider in the United States. Certain contracts are spread over a three-year period, while their extent spans most of NAPEC's service offering.
NINE-MONTH RESULTS
Revenues for the nine months ended September 30, 2014 were $219.1 million, up 29.6% from $169.0 million for the nine months ended September 30, 2013. The currency-conversion effect increased the value of U.S.-dollar-denominated revenues for the nine months ended September 30, 2014 by approximately $9.3 million relative to the same period a year earlier. Revenues from work carried out in the U.S. were up 24.4% to $143.4 million, while revenues from contracts performed in Canada were up 40.8% to $75.6 million.
EBITDA for the first nine months of 2014 was $7.6 million, or 3.5% of revenues, up from $3.7 million, or 2.2% of revenues, a year earlier. Given the aforementioned impairment, the Corporation recorded a net loss of $2.2 million, or $0.03 per basic and diluted share, for the period, compared to a net loss of $2.3 million, or $0.03 per basic and diluted share, a year earlier.
FINANCIAL POSITION
At September 30, 2014, the long-term debt, including the current portion, was $31.7 million, versus $27.4 million three months earlier. The ratio of long-term debt to equity was 0.38, versus 0.33 three months earlier. The balance of bank loans outstanding was stable at $23.2 million at September 30, 2014, while the Corporation held $1.8 million in cash at that date.
NON-IFRS MEASURE
EBITDA is a measure that has no standardized meaning prescribed by IFRS and is thus considered to be a non-IFRS measure. Therefore, this measure may not be comparable to similar measures presented by other issuers. This measure is presented and described in this release in order to provide additional information regarding the Corporation's liquidity and its ability to generate funds to finance its operations.
FORWARD-LOOKING STATEMENTS
This document may contain forward-looking statements that reflect management's current expectations regarding future events. Forward-looking statements are based on a number of factors and include risks and uncertainties. Actual results may differ from forecast results. Management assumes no obligation beyond what is required under the law to update or revise forward-looking statements pursuant to new information or future events.
OVERVIEW OF THE CORPORATION
NAPEC is a company operating in the energy sector. The Corporation is a leading provider of construction and maintenance services to the public utility and heavy industrial markets mainly in Quebec, Ontario, and the eastern United States. Through its subsidiaries, the Corporation provides maintenance and construction services for electricity transmission and distribution networks, substations and electrical power houses, as well as the control of vegetation on rights-of-way for electrical lines.
Further information regarding NAPEC is available in the SEDAR database (www.sedar.com and on the Corporation's website at www.napec.ca.
SOURCE: NAPEC Inc
Pierre L. Gauthier
President and Chief Executive Officer
819-479-7771
[email protected]
Mario Trahan, CPA, CMA
Chief Financial Officer
819-479-7771
[email protected]
MaisonBrison
Martin Goulet, CFA
514-731-0000
[email protected]
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