VANCOUVER, Aug. 9, 2018 /CNW/ - WesternOne Inc.
("WesternOne") (Toronto Stock Exchange: WEQ and WEQ.DB)
today announced the release of its financial results for the three
and six months ended June 30,
2018.
The results, consisting of WesternOne's unaudited interim
financial statements for the three and six months ended
June 30, 2018 and Management's
Discussion and Analysis ("MD&A") dated August 9, 2018, are available on SEDAR
(www.sedar.com).
2018 Q2 financial summary:
- Consolidated revenue from continuing operations increased 26.7%
to $17.9 million from $14.1 million in the prior year period. The
growth was primarily attributable to higher rental activity levels,
improved rental rates in certain markets and fleet categories,
volume-induced increase in service and delivery revenues, and
higher heat and power related rentals and fuel sales from the
Alberta markets at the beginning
of the quarter due to comparatively cooler spring conditions.
- Dollar utilization(1) increased to 42.3% from 37.8%
in the prior year period while OEC on rent(2) increased
2.4% year-over-year, reflecting growth in both revenue on fleet
capital and rental activity levels.
- Gross profit increased 100.3% to $4.2
million from $2.1 million in
the prior year period and gross margin increased to 23.6% from
14.9% in the prior year period. The growth was primarily due to
higher operating efficiencies derived from a larger revenue base
which was driven by higher rental activity levels, improved rental
rates, increased service and delivery revenues and higher heat and
power related rentals and fuel sales as mentioned above.
- Adjusted EBITDA (as defined below) improved to negative
$0.6 million from negative
$1.8 million in the prior year period
due to the factors described above.
- Net cash from operating activities of continuing operations
increased 99.4% to $11.1 million from
$5.6 million in the prior year
primarily due to collection of significantly larger accounts
receivable generated from the previous construction heat season as
a result of increased heat-related business activity levels. Net
change in cash position from continuing operations increased 40.7%
to $5.6 million from $4.0 million. Other major factors leading to the
net change in cash position included ordinary fleet capital
expenditures, loan advances (net of repayments) and related
interest, and repayment of finance lease obligations.
- Net loss from continuing operations attributable to
shareholders was $6.9 million
($0.42 per share), compared to net
loss of $9.8 million ($0.58 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.
Excluding the related non-cash effects on an after-tax basis, net
loss would have been $6.0 million
($0.36 per share), compared to net
loss of $6.8 million ($0.40 per share) in the prior year period.
Summary Financial
Overview
($ millions except per share
amounts)
|
Three months
ended
June
30,
|
Six months
ended
June 30,
|
|
2018
|
2017
|
2018
|
2017
|
Revenue from
Continuing Operations
|
$
17.9
|
$
14.1
|
$
52.2
|
$
40.2
|
Gross Profit from
Continuing Operations
|
4.2
|
2.1
|
18.8
|
12.8
|
|
|
|
|
|
Adjusted
EBITDA (1) (2)
|
(0.6)
|
(1.8)
|
9.4
|
4.4
|
|
|
|
|
|
Net Loss
from Continuing Operations
|
(6.9)
|
(9.8)
|
(2.8)
|
(14.6)
|
Net Loss from
Discontinued Operations
|
(0.3)
|
(2.4)
|
(0.4)
|
(2.6)
|
Net
Loss
|
(7.2)
|
(12.2)
|
(3.2)
|
(17.2)
|
|
|
|
|
|
Loss per share from
Continuing Operations (2)
|
(0.42)
|
(0.58)
|
(0.17)
|
(0.86)
|
Loss per share
(2)
|
(0.44)
|
(0.74)
|
(0.19)
|
(1.03)
|
|
|
|
|
|
|
|
|
|
|
(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 August 9,
2018.
|
(2)
|
Represents amount
attributable to shareholders.
|
"We are encouraged with the continued positive trending in
rental demand from the major industrial sectors in Western Canada. Our Q2 operating results were
supported by the improving business environment, in particular the
construction sector in Alberta,
giving rise to improvements in rental rates in some markets and
higher operating margins," said Peter
Blake, CEO of WesternOne. "We strive to maintain this
positive momentum and increase shareholder value through
effectively managing fleet capital for enhanced returns and
expanding our WEDGE remote monitoring capability for a wider market
appeal."
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 Friday, August 10, 2018 to review the financial
results and corporate developments for the three and six months
ended June 30, 2018.
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 August 10,
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 205592
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 strategy to manage fleet capital for enhanced returns
and expand its WEDGE remote monitoring capability for a wider
market appeal. 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 27, 2018 and MD&A dated
August 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.
(1)
|
Calculated as
annualized rental and related services revenue divided by the
average total OEC fleet value for the period.
|
(2)
|
Represents the
average original equipment costs ("OEC") of fleet that were
on rent for the period
|
SOURCE WesternOne Inc.