VANCOUVER, Nov. 6, 2018 /CNW/ - WesternOne Inc.
("WesternOne") (Toronto Stock Exchange: WEQ and WEQ.DB)
today announced the release of its financial results for the three
and nine months ended September 30,
2018.
The results, consisting of WesternOne's unaudited interim
financial statements for the three and nine months ended
September 30, 2018 and Management's
Discussion and Analysis ("MD&A") dated November 6, 2018, are available on SEDAR
(www.sedar.com).
2018 Q3 financial summary:
- Consolidated revenue from continuing operations increased 14.2%
to $14.6 million from $12.8 million in the prior year period. The
growth was primarily attributable to higher rental activity levels
particularly in the Vancouver Island markets, higher fuel sales
from the Alberta markets, and a
general increase in service and delivery revenues.
- Dollar utilization(1) remained consistent at 36.1%
compared to 36.0% in the prior year period. OEC on
rent(2) increased 1.4% year-over-year, reflecting
increased rental activity levels of aerial equipment in the
Vancouver Island markets but partially offset by general decreases
in heat equipment rentals due to temperature variations in
Alberta during the quarter.
- Gross profit increased 62.8% to $2.7
million from $1.7 million in
the prior year period and gross margin increased to 18.7% from
13.2% in the prior year period. The growth was in part due to
higher operating efficiencies derived from a larger revenue base
which was mainly driven by higher rental activity levels and
related service and delivery revenues.
- Adjusted EBITDA (as defined below) of the WesternOne
Infrastructure Services division ("WIS") was negative
$0.6 million, compared to negative
$1.0 million in the prior year period
due to the factors described above. Consolidated adjusted EBITDA
was negative $1.9 million, compared
to negative $1.7 million in the prior
year period. The change was mainly due to higher corporate overhead
and professional fees relating to the agreement to sell the
business of WIS and substantially all of the related assets as
announced by WesternOne on October 22,
2018, which is subject to various conditions (the "WIS
Sale"). The WIS Sale is anticipated to be completed on or about
November 30, 2018 and in any event no
later than December 31, 2018.
- Net cash from operating activities of continuing operations was
$1.6 million, compared to negative
$1.3 million in the prior year
primarily due to collection of accounts receivable from an
increased revenue base and timing of accounts payable payments. Net
change in cash position from continuing operations was negative
$4.0 million, compared to negative
$7.0 million in the prior year
period. 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 $7.3 million
($0.44 per share), compared to net
loss of $6.7 million ($0.39 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 $7.1 million
($0.43 per share), compared to net
loss of $6.8 million ($0.40 per share) in the prior year period.
________________________
|
(1)
|
Calculated as
annualized rental and related services revenue divided by the
average total original equipment costs ("OEC") fleet
value for the period.
|
(2)
|
Represents the OEC of
fleet that were on rent for the period.
|
Summary Financial
Overview
|
|
Three months
ended September
30,
|
Nine months
ended
September 30,
|
($ millions
except per share amounts)
|
|
|
|
2018
|
2017
|
2018
|
2017
|
Revenue from
Continuing Operations
|
|
$
|
14.6
|
$
|
12.8
|
$
|
66.8
|
$
|
52.9
|
Gross Profit from
Continuing Operations
|
|
2.7
|
1.7
|
21.5
|
14.5
|
|
|
|
|
|
|
Adjusted
EBITDA (1) (2)
|
|
(1.9)
|
(1.7)
|
7.5
|
2.6
|
|
|
|
|
|
|
Net Loss
from Continuing Operations
|
|
(7.3)
|
(6.7)
|
(10.0)
|
(21.3)
|
Income/(Loss) from
Discontinued Operations
|
|
0.3
|
1.2
|
(0.1)
|
(1.4)
|
Net
Loss
|
|
(7.0)
|
(5.5)
|
(10.1)
|
(22.7)
|
|
|
|
|
|
|
Loss per share from
Continuing Operations (2)
|
|
(0.44)
|
(0.39)
|
(0.60)
|
(1.25)
|
Loss per share
(2)
|
|
(0.42)
|
(0.32)
|
(0.61)
|
(1.35)
|
__________________
|
(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
November 6, 2018.
|
(2)
|
Represents amount
attributable to shareholders.
|
The completion of the WIS Sale will allow WesternOne to wind-up
its operations and return to its shareholders the net proceeds of
the sale, after repayment of all bank debt and other liabilities
including its outstanding debentures, taxes and transaction related
expenses as part of a Court approved liquidation process. Following
the completion of the sale, the common shares and its outstanding
debentures are expected to cease trading and, pursuant to a
voluntary application to be made to the Toronto Stock Exchange
("TSX"), be delisted.
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: the
estimated completion date of the WIS Sale; the repayment of all of
WesternOne's obligations; WesternOne's intention to wind-up its
operations following closing of the WIS Sale; and WesternOne's
intention to make application to the TSX for the voluntary
delisting of its common shares and debentures in connection with
the WIS sale and proposed wind-up. 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: (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 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 its $35.0
million secured asset-based revolving credit facility are
met, the WIS Sale will be completed in accordance with the terms of
the agreement and with the timing currently anticipated; and all
conditions under the agreement to the completion of the transaction
will be obtained. 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
November 6, 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.