VANCOUVER, Feb. 11, 2015 /PRNewswire/ - WesternOne Inc.
("WesternOne" or the "Company") (Toronto Stock
Exchange: WEQ, WEQ.DB and WEQ.DB.C) today announced an update to
its capital allocation strategy following a meeting of its Board of
Directors. This new strategy is discussed below in the context of
WesternOne's 2015 outlook and is intended to provide a prudent and
conservative approach to enhancing the Company's financial
flexibility to deploy capital.
Update to Capital Allocation Strategy
The rapid and unexpected decline in global crude oil prices in
recent months has impacted capital spending budgets among many
participants in the oil and gas and related support industries,
which has contributed to a softer economic environment for
companies throughout North
America.
Although a majority of WesternOne's revenues is not directly
tied to the oil and gas sector, recent forecasts for a potentially
protracted period of lower crude oil prices have created lingering
uncertainty across many business areas in which WesternOne
operates, including the construction and infrastructure sector in
Western Canada and industries
which support the shale oil and gas markets of the continental
USA.
Consequently, WesternOne believes it is fiscally prudent to
enact immediate changes to its 2015 capital allocation strategy,
which include suspending the Company's monthly dividend in order to
maintain its financial flexibility to deploy capital. The Premium
DividendTM and Dividend Reinvestment Plan will therefore
also be suspended.
Future decisions over reinstating a dividend will be based on a
number of factors that will be carefully weighed, including but not
limited to, evolving market conditions and the financial and
operational performance of the Company and each of its business
platforms.
|
___________________________________
TM
Denotes trademark of Canaccord Genuity Corp.
|
2015 Outlook
Preservation of cash flow from sustainable operations, cost
management, and orderly servicing and repayment of debt are
WesternOne's main goals for 2015. Management expects to achieve
these goals through redeploying existing capital to opportunities
that deliver higher returns.
"We will continue to assess WesternOne's operating performance
and its business environment, and implement appropriate capital
allocation, financial and operational strategies as we navigate the
current business environment," said Peter
Blake, Chief Executive Officer. "We believe the prudent and
conservative steps we are announcing today are in the best
long-term interests of our shareholders and investors. We also
believe that over the coming years, the Western Canadian energy,
construction and infrastructure industries, in particular, continue
to represent an exceptional growth opportunity for WesternOne".
WesternOne Infrastructure Services ("WIS")
Management intends to take steps within WIS to ensure that
existing capital in the business is deployed effectively and
efficiently to deliver designed returns, including, as part of its
ordinary course of business, redeployment of rental assets to
markets in which higher utilization and demand presently exist.
Management expects to deploy minimal new growth capital
expenditures on rental equipment in 2015, although it will continue
to assess the market conditions and adjust the level of fleet
disposals and capital expenditures as necessary to optimize
utilization and to maintain and grow market share in specific
markets.
Management expects WIS to continue to operate in 2015 in a
business environment with: (i) ongoing general construction
activities in its major markets; (ii) organic growth from recently
launched branches in Terrace and
Fort St. John, BC and in
Grande Prairie and Fort McMurray, Alberta; and (iii) the movie
and TV production sector supported by a more favourable foreign
exchange rate.
WIS's oil and gas related heat business is expected to continue
to be stable as its heat and power services primarily support
maintenance and production operations at existing, mature
producers.
Britco – Western Canadian Operations
To better balance workload to capacity, Britco recently reduced
its workforce in its Penticton, BC
plant by 30 workers, representing 16% of the manufacturing staff at
this facility. Britco expects to have a solid start to 2015 at its
three manufacturing facilities in BC and Alberta, as it executes on the balance of the
construction of modular work camp units for the Manitoba Hydro and
Devon workforce accommodations projects. Other than the completion
of the manufacturing component of these two projects sometime in
mid 2015, the completion of the related installations for these
projects which is likely to run through the end of 2015 and the
relatively steady modular building leasing activity anticipated for
2015, management believes that Britco is entering a period of lower
revenue predictability for large construction projects.
Britco – USA Operations
("Britco USA")
In light of realigned capital spending plans by many of Britco
USA's customers related to the
shale oil and gas industries, management has undertaken cost
alignment measures by recently reducing plant headcount by 125
workers, representing 46% of the manufacturing staff.
Management will continue to monitor activity in both its Western
Canadian and US businesses and adjust production levels to meet the
demands of the energy and other potential markets throughout
2015.
2014 Annual Financial Information
Management expects to release its financial results for the year
ended December 31, 2014 by
March 12, 2015. Conference call
details will be contained in a subsequent press release.
Forward-looking Information
Certain statements in this press release may constitute
"forward-looking" information that involves known and unknown
risks, uncertainties and other factors, and it may cause actual
results, performance or achievements or industry results, to be
materially different from any future results, performance or
achievements or industry results expressed or implied by such
forward-looking information. Forward-looking information is
identified by the use of terms and phrases such as "anticipate",
"believe", "could", "estimate", "expect", "intend", "may", "plan",
"predict", "project", "will", "would", and similar terms and
phrases, including references to assumptions. Such information
includes, without limitation, statements with respect to: future
decisions regarding WesternOne's dividend; management's goals of
preserving cash flow from sustainable operations, cost management,
and orderly servicing and repayment of debt through redeploying
existing capital to opportunities that deliver higher returns; the
future growth opportunity for WesternOne provided by the Western
Canadian energy, construction and infrastructure industries; steps
to be taken by WIS to ensure effective and efficient deployment of
capital; management's expectation of deployment for growth capital
expenditures for WIS during 2015; management's expectation of the
business environment for WIS in 2015; Britco's expected
manufacturing activities in 2015; the anticipated completion date
of the manufacturing and installation components of the Manitoba
Hydro and Devon workforce accommodation project; management's
belief that Britco is entering into a period of lower revenue
predictability for large construction projects; management's
intention to monitor activity in Britco's Western Canadian and US
businesses to adjust production levels to meet the demands of
markets throughout 2015; and the expected timing of the release of
WesternOne's financial results for the year ended December 31, 2014. Actual events or results may
differ materially.
Forward-looking information contained in this press release is
based on certain key expectations and assumptions made by
WesternOne, including, without limitation: the outlook of
WesternOne's business and the economy in Western Canada and the US, the supply and
demand for WesternOne's products and services, a protracted period
of lower crude oil prices and management's assessment of future
plans and operations. Although the forward-looking information
contained in this press release is based upon what the WesternOne's
management believes to be reasonable assumptions, WesternOne cannot
assure investors that actual results will be consistent with such
information. Forward-looking information reflects current
expectations of management regarding future events and operating
performance as of the date of this press release. Such information
involves significant risks and uncertainties, should not be read as
guarantees of future performance or results, and will not
necessarily be accurate indications of whether or not such results
will be achieved. A number of factors could cause actual results to
differ materially from the results discussed in the forward-looking
information, and a description of these factors can be found under
"Risk Factors" in WesternOne's Annual Information Form dated
March 28, 2014 and Management's
Discussion and Analysis dated November 13,
2014, which are available on SEDAR (www.sedar.com).
The forward-looking information contained herein is expressly
qualified in its entirety by this cautionary statement.
Forward-looking information reflects management's current beliefs
and is based on information currently available to WesternOne. The
forward-looking information is made as of the date of this press
release and WesternOne assumes no obligation to update or revise
such information to reflect new events or circumstances, except as
may be required by applicable law.
About WesternOne
WesternOne seeks to acquire and grow businesses in the
construction and infrastructure services sectors in order to
generate value for its shareholders.
Additional Information
Additional information relating to WesternOne and other public
filings, is available on SEDAR at www.sedar.com or on WesternOne's
website at www.weq.ca.
Trading Symbols
Toronto Stock Exchange: WEQ, WEQ.DB and WEQ.DB.C
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT
ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS
RELEASE.
SOURCE WesternOne Inc.