VEGREVILLE, AB, May 4, 2017 /CNW/ - TerraVest Capital Inc. (TSX: TVK) ("TerraVest" or the "Company") is pleased to announce its results for the three and six months ended March 31, 2017.
TerraVest's Fabrication and Service segments are experiencing the benefits of increasing levels of activity in Western Canada, although pricing pressure continues to affect profitability. TerraVest's non-oil and gas exposed business segment, the Fuel Containment division, experienced a decline over the comparable period in fiscal 2016 as a result of softer demand for propane related products. From an operational perspective, TerraVest continues to reinvest in the business in order to garner additional operating efficiencies that will benefit shareholders over the long term.
Highlights for the quarter include:
- Revenues of $46,565 for the quarter, up by 7% from the comparable period in fiscal 2016;
- Second quarter Adjusted EBITDA of $4,911, which is an increase of 2% over the comparable period in fiscal 2016;
- Free cash flow for the quarter of $4,474, which represents a decrease of $9,559 over the second quarter of fiscal 2016;
- Earnings per share and diluted earnings per share of $0.24 and $0.24, respectively for the six months ended March 31, 2017 compared to earnings per share and diluted earnings per share of $0.33 and $0.32, respectively in the comparable period in fiscal 2016; and
- Closed the acquisition of the Vilco group of companies for $8,250.
"Our results this quarter were mixed. The Fabrication and Service segments experienced increased utilization, while the Fuel Containment segment continued to experience soft demand for certain propane product lines following the second consecutive unseasonably warm winter. We are continuing to identify and invest in new growth opportunities for our businesses." said Dustin Haw, Chief Executive Officer of TerraVest.
| Three months ended March 31 |
Six months ended March 31 |
|||
| 2017 |
2016 |
2017 |
2016 |
|
| $ |
$ |
$ |
$ |
|
| Sales |
46,565 |
43,415 |
94,843 |
99,177 |
| Cost of sales |
36,495 |
34,479 |
72,685 |
76,705 |
| Gross profit |
10,070 |
8,936 |
22,158 |
22,472 |
| General and administration expenses |
6,592 |
5,236 |
11,239 |
9,940 |
| Selling expenses |
1,203 |
1,130 |
2,639 |
2,270 |
| Financing costs |
962 |
853 |
1,849 |
1,750 |
| Net income before tax |
1,313 |
1,717 |
6,431 |
8,512 |
| Income taxes |
658 |
479 |
2,035 |
2,340 |
| Net Income |
655 |
1,238 |
4,396 |
6,172 |
| Allocated to non‐controlling interest |
(43) |
(29) |
(78) |
67 |
| Net income available to common shareholders |
698 |
1,267 |
4,474 |
6,105 |
| Weighted average shares outstanding ‐ Basic |
18,323,073 |
18,240,759 |
18,323,801 |
18,260,072 |
| Weighted average shares outstanding – Diluted |
18,488,561 |
18,270,346 |
21,203,879 |
22,122,004 |
| Earnings per share – Basic |
0.04 |
0.07 |
0.24 |
0.33 |
| Earnings per share – Diluted |
0.04 |
0.07 |
0.24 |
0.32 |
TerraVest's Second quarter ended March 31, 2017 saw increase in revenue and Adjusted EBITDA of approximately 7% and 2%, respectively, versus the comparable period ended March 31, 2016. The increase in revenue is attributable to the increased activity in the Fabrication and Services segments.
Outlook
TerraVest's Fuel Containment segment continues to see continuing demand for its residential and commercial oil tanks and related furnace product lines. Demand has been mixed for this segment's propane products with strong demand for storage tanks and persistently weak demand for its trailer and bobtail product lines relating to unseasonably warm temperature over the past winter.
TerraVest's Fabrication segment has experienced an increase in business activity compared to the prior year's comparable period. Backlogs in this segment are stronger than the prior year. However, pricing pressure continues to squeeze margin for this segment.
The Service segment is experiencing a similar situation to that of the Fabrication segment. Rig utilization has increased compared to the prior year, but pricing continues to weigh on profitability.
Overall management is expecting a stronger year for the Company compared to last, as Fuel Containment will see contributions from the recently acquired Vilco Group, and Fabrication and Service segments are experiencing the benefits of increased business activity in Western Canada.
Dividend
TerraVest is also pleased to announce that The Board of Directors has declared its quarterly dividend of 10 cents per share upon the outstanding Common Shares in the capital stock of the Company being payable on July 11, 2017 to shareholders of record as at the close of business on June 30, 2017. The ex-dividend date is June 28, 2017. The dividend is designated an "eligible dividend" for Canadian income tax purposes.
Additional information can be found in TerraVest's unaudited interim condensed consolidated financial statements and MD&A which are available on SEDAR at www.sedar.com.
Caution Regarding Forward-Looking Statements
This news release contains forward-looking statements. All statements other than statements of historical fact contained in this news release are forward-looking statements, including, without limitation, statements regarding our strategic direction and evaluation of the business segments and TerraVest as a whole, and other plans, objectives and expectations of or involving TerraVest. Readers can identify many of these statements by looking for words such as "believe", "expects", "will", "intends", "projects", "anticipates", "estimates", "continues" and similar words or the negative thereof. Although management of the Company ("Management") believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Forward-looking statements are used to describe Management expectations and plans and to assist shareholders in understanding the financial position of the Company, as a whole, and its business segments. Readers are cautioned that this information may not be appropriate for other purposes.
By their nature, forward-looking statements require us to make assumptions and, accordingly, forward-looking statements are subject to inherent risks and uncertainties. There is significant risk that the forward-looking statements will not prove to be accurate. TerraVest cautions readers of this news release not to place undue reliance on our forward-looking statements because a number of factors may cause actual future circumstances, results, conditions, actions or events to differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements and the assumptions underlying the forward-looking statements.
Assumptions and analysis about the performance of TerraVest, as a whole, and its business segments, the markets in which the business segments compete and the prospects and values of the business segments are considered in setting the business plan for TerraVest, in evaluating and forecasting availability of credit, outlook for operations, financial position, results and cash flow, ability to pay dividends, other plans and objectives and in making related forward-looking statements. In respect of the business segments, key assumptions are that, other than as specifically identified herein, demand for products and services of the business segments in respect of the Canadian and other markets in which the businesses are active will be stable, and that the input costs to the business segments do not vary significantly from the levels experienced historically. Should any of these factors or assumptions vary, actual results may differ materially from the forward-looking statements.
The information set forth under "Risk Factors" in the annual information form of TerraVest dated December 7, 2016 and under "Financial instruments" in the MD&A of TerraVest for the three and six months ended March 31, 2017, identifies risk factors that could affect the operating results and performance of TerraVest and its business segments and the values of the business segments and TerraVest as a whole. We caution that the lists of factors discussed under "Risk Factors" in the annual information form of TerraVest dated December 7, 2016 is not exhaustive and that, when relying on forward-looking statements to make decisions with respect to TerraVest, investors and others should carefully consider the factors discussed, as well as other uncertainties and potential events, and the inherent risks and uncertainties of forward-looking statements. The forward-looking statements herein are made based on the assumption that TerraVest will not be affected by such risks, but that, if TerraVest is affected by such risks, the forward-looking statements may become inaccurate.
The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this news release are made as of the date of this news release. Except as required by applicable securities laws, TerraVest does not undertake to update such forward-looking statements.
Non-GAAP Financial Measures
For Non-GAAP financial measures, please refer to the definitions outlined the TerraVest Management's Discussion and Analysis dated May 3, 2017.
SOURCE TerraVest Capital Inc.
Dustin Haw, TerraVest Capital Inc., Chief Executive Officer, (416) 855-1928, [email protected]
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