VANCOUVER, March 9, 2018 /CNW/ - WesternOne Inc.
("WesternOne") (Toronto Stock Exchange: WEQ and WEQ.DB)
today announced the release of its financial results for the
three-month period and year ended December
31, 2017.
The results, consisting of WesternOne's audited financial
statements for the year ended December 31,
2017 and Management's Discussion and Analysis
("MD&A") dated March 9,
2018, are available on SEDAR (www.sedar.com).
2017 Q4 financial summary:
- Consolidated revenue from continuing operations increased 28.7%
to $26.7 million from $20.7 million in the prior year period. The
growth was primarily due to increased activity in the construction
sector and a comparatively colder winter in Alberta. OEC on rent(1) increased
15.0% and dollar utilization(2) increased to 62.1% from
53.2% in the prior year period, reflecting a general increase in
rental activity levels and revenue on fleet capital in major
heat-related markets including Calgary, Edmonton and Major Projects locations in
Northern Alberta.
- Rental and related services revenue increased 19.8% to
$17.9 million from $15.0 million in the prior year period primarily
due to increased rental demand for heat-related equipment. Fuel and
other product sales increased 52.2% to $8.7
million from $5.7 million in
the prior year period primarily due to a 25.9% growth in fuel sales
volume and generally higher commodity price levels.
- Gross profit increased 32.6% to $8.9
million from $6.7 million in
the prior year period primarily due to an increased revenue base
driven by higher rental volumes. Gross margin was 33.4% and
increased from 32.4% in the prior year period. Improvements in the
gross margin due to higher rental volumes and cost containment
measures were partially offset by compressed fuel margins as a
result of higher commodity input costs and competition, and lower
profit contribution from a reduced level of fleet disposals to
preserve fleet available on hand.
- Adjusted EBITDA (as defined below) increased 67.2% to
$5.2 million from $3.1 million in the prior year period and
adjusted EBITDA margin increased to 19.3% from 14.9% due to the
factors described above.
- Net cash from operating activities of continuing operations was
negative $3.1 million, compared to
negative $3.4 million in the prior
year period. The cash outflow from operating activities was due to
seasonal working capital deployment in relation to the construction
heat operations. Net change in cash position from continuing
operations was negative $1.2 million,
compared to negative $7.2 million in
the prior year period. Other major factors leading to the net
change in cash position included ordinary fleet capital
expenditures, debt repayments and related interest.
- Net loss from continuing operations attributable to
shareholders was $1.2 million
($0.07 per share), compared to
$31.9 million ($1.87 per share) in the prior year period.
Included in net loss were non-cash finance expenses relating to
changes in the fair value of convertible debentures at period-end.
In Q4 of 2016, WesternOne also recorded non-cash impairment charges
on goodwill and intangible assets of $18.5
million. Excluding the related non-cash effects of these
items on an after-tax basis, net loss would have been $0.3 million ($0.02
per share), compared to net loss of $13.6
million ($0.80 per share) in
the prior year period.
_____________________________
|
(1)
|
Represents the
average original equipment costs ("OEC") of fleet that were
on rent for the period.
|
(2)
|
Calculated as
annualized rental and related service revenue divided by the
average total OEC fleet value for the period.
|
Summary Financial
Overview
($ millions except per share
amounts)
|
Three months
ended
December
31,
|
Year
ended
December
31,
|
|
2017
|
2016
|
2017
|
2016
|
Revenue from
Continuing Operations
|
$
|
26.7
|
$
|
20.7
|
$
|
79.6
|
$
|
68.9
|
Gross Profit from
Continuing Operations
|
8.9
|
6.7
|
23.4
|
22.4
|
|
|
|
|
|
Adjusted
EBITDA (1)(2)
|
5.2
|
3.1
|
7.8
|
8.0
|
|
|
|
|
|
Net Loss from
Continuing Operations (2)
|
(1.2)
|
(31.9)
|
(22.4)
|
(62.7)
|
Net Loss from
Discontinued Operations (2)
|
(0.1)
|
(10.6)
|
(1.8)
|
(20.1)
|
Net
Loss
|
(1.3)
|
(42.5)
|
(24.2)
|
(82.8)
|
|
|
|
|
|
Loss per share from
Continuing Operations (2)(3)
|
(0.07)
|
(1.87)
|
(1.32)
|
(8.25)
|
Loss per share
(2)(3)
|
(0.08)
|
(2.50)
|
(1.43)
|
(10.90)
|
_____________________________
|
(1)
|
"Adjusted
EBITDA" is not a recognized measure under IFRS and does not
have a standardized meaning prescribed by IFRS. "Adjusted
EBITDA" refers to net income or loss from continuing operations
before interest, taxes, depreciation and amortization, and other
specified items that would impact comparability including, where
applicable, non-operational income and expenses, securities-based
compensation and other gains or losses. The use of the term
"non-operational income and expenses" is defined by WesternOne as
those that do not impact operating decisions taken by WesternOne's
management as well as items of an unusual nature that do not
reflect WesternOne's ongoing operations. For a full description of
adjusted EBITDA, refer to "Non-IFRS Measures" in the MD&A dated
March 9, 2018.
|
(2)
|
Represents amount
attributable to shareholders.
|
(3)
|
Loss per share for
prior periods have been adjusted on a retroactive basis to reflect
the consolidation of WesternOne's issued and outstanding common
shares on the basis of one post-consolidation common share for
every 35 pre-consolidation common shares (the
"Consolidation"). The Consolidation was completed on October
31, 2016.
|
"We are very pleased to report strong year-over-year growth in
Q4 as it reflects the ongoing favourable trend in rental activity
levels in Western Canada,
supported by the region's gradual economic recovery. While the
improving business environment and cold weather in Alberta played a factor, the growth in the Q4
operating results was also attributable to our team's continuing
focus on executing our business strategy including optimizing
rental rates where opportunities exist, managing costs, and
leveraging our WEDGE environmental monitoring technology to grow
the Major Projects business within the heat division," said
Peter Blake, CEO of WesternOne. "We
strive to maintain this positive momentum in the evolving business
environment through managing our invested capital, including
investments in new and replacement fleet and further potential
acquisitions, as opportunities arise."
Conference Call
Peter Blake, CEO, and the
management team will host a conference call at 11:00am (Eastern time) or 8:00am (Pacific time), on Monday, March 12, 2018 to review the financial
results and corporate developments for the three-month period and
year ended December 31, 2017.
To participate in this conference call, please dial one of the
following numbers approximately 10 minutes prior to the
commencement of the call and ask to join the WesternOne conference
call.
Dial in
numbers:
|
Toll
Free..........................................................
1-888-390-0546
|
|
International or
Local Toronto........................ 1-416-764-8688
|
Conference Call Replay
If you cannot participate on March 12,
2018, a replay of the conference call will be available on
WesternOne's website at www.weq.ca or by dialing one of the
following replay numbers. Please enter the Replay ID number 093277
followed by the # key.
Replay
Dial-In:
|
Toll
Free..........................................................
1-888-390-0541
|
|
International or
Local Toronto........................ 1-416-764-8677
|
Forward-looking Information
Certain statements in this news 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:
WesternOne's intention to maintain the positive momentum in the
evolving business environment through managing invested capital,
including investments in new and replacement fleet and further
potential acquisitions, as opportunities arise. Actual events or
results may differ materially.
Forward-looking information contained in this news release is
based on certain key expectations and assumptions made by
WesternOne, including, without limitation: net receivables are
collectible and payments to suppliers will continue under current
terms, the stability of the economy in Western Canada; the impact of the current
economic climate in Western Canada
on WesternOne's operations will remain consistent with WesternOne's
current expectations; the increased competitive environment in
which WesternOne and its business units operate; a protracted
period of lower crude oil prices; rental rates will be subject to
supply-related and competitive pressure in 2018; the supply and
demand for WesternOne's products and services and the related
impact on the pricing on such products and services will remain
consistent with WesternOne's current expectations; management's
assessment of future plans and operations; WesternOne will be able
to purchase and cancel common shares pursuant to WesternOne's
normal course issuer bid (the "NCIB"); WesternOne will have
adequate cash to conduct the NCIB as contemplated; purchases made
under the NCIB will be advantageous to shareholders; WesternOne
will be able to grow through acquisitions and organic expansion;
WesternOne will be able to: (i) fund debt maturities and to meet
current and future obligations; (ii) collect net receivables; (iii)
integrate newly acquired businesses; (iv) maintain payments to
suppliers under current terms; and (v) expand its product offering
and customer base; critical accounting estimates; WesternOne will
be able to discharge its liabilities; the impact from the wind-down
of WesternOne's Australian operations will remain consistent with
WesternOne's current expectations; no principal repayments will be
required under WesternOne's $35.0
million secured asset-based revolving credit facility (the
"ABL Facility") prior to maturity; the impact on rental
rates from supply-related and competitive pressure will remain
consistent with the WesternOne's current expectations; rental
activity levels are expected to continue its moderate growth trend;
and the contractual requirements of WesternOne under the ABL
facility are met. Although the forward-looking information
contained in this news release is based upon what 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 news 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 30, 2017 and MD&A dated
March 9, 2018, which are both
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 news
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 and WEQ.DB
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT
ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS
RELEASE.
SOURCE WesternOne Inc.