OKOTOKS, AB, Dec. 8, 2021 /PRNewswire/ - (TSX: MTL)
Mullen Group Ltd. ("Mullen Group", "We",
"Our" and/or the "Corporation") announced
today the business plan for 2022 has been approved by the Board of
Directors ("Board").
"Recent events have highlighted
just how important the supply chain is to a well functioning
economy, to the timely delivery of everything including the most
basic items consumers rely upon everyday, as well as to price
stability. In 2022 we anticipate some of the disruptions that
have plagued the supply chain ecosystem to be resolved.
However, the current reality is that manufacturing,
production, and freight distribution remains very tight, primarily
due to robust demand. But this does not in itself explain the
entire supply chain story. When strong demand is accompanied
by lower productivity, due to issues such as new regulations, port
bottlenecks, labour shortages and production problems of many
critical parts, like computer chips for example, the economy
suffers, and inflationary pressures build. Today's supply
chain is very complex where shippers and producers operate within a
worldwide integrated system. As such, regardless of where the
disruption occurs, the entire system can become compromised.
At the Mullen Group, we are on the front lines of the supply chain
overseeing a large network of best in class independently managed
Business Units providing critical transportation, logistics and
warehousing solutions to customers throughout North America.
Like others, we have encountered our share of challenges, but we
have persevered and adapted. In fact, I can categorically
attribute the majority of our success to the stellar performance of
our Business Units and dedicated front line workers," commented
Mr. Murray K. Mullen, Chairman and
Chief Executive Officer.
"I fully expect 2022 to be
another busy year, in fact a record revenue year for our company.
And because we have a disciplined approach to profit
expectation, the business will continue to generate excess free
cash, which we will return to shareholders via a combination of
share buybacks and an increase in the dividend.
In March of 2020 we outlined a COVID-19 Action Plan in
response to the onset of the pandemic including asking shareholders
to share in the pain many of our people were experiencing.
But that was yesterday. Today we have a good paying job for
every employee that wants to work and today we are returning our
annual dividend to $0.60 per Common
Share, payable in monthly instalments of $0.05 per Common Share starting in January.
Aligning returns to shareholders with that of our employees has
been an important part of the long-term success of our
organization. In 2022 we will continue to ensure this
alignment is maintained despite the emergence of inflationary
pressures. To address this issue, the plan is to reward our
employees with pay increases. Shareholders can expect the
same," added Mr. Mullen.
HIGHLIGHTS OF 2022 BUSINESS PLAN
Today the Board conducted its annual budget meeting. The
annual process encompassed an extensive review of a wide range of
issues including: the current state of the North American economy,
expectations for the economy, the impact COVID-19 may have on
consumer demand, the recent trends in commodity prices, as well as
the balance sheet of Mullen Group and expected cash flows.
Financial Expectations
We expect revenue for 2022 to be in the $1.6 billion to $1.7
billion range, exclusive of any potential acquisitions made
in 2022. We base this expectation on the continued economic
recovery and stable consumer spending. As such, our
expectation is that operating income before depreciation and
amortization will be in the $260.0
million range.
Capital Expenditures
The Board approved a net capital budget of $70.0 million for 2022, exclusive of corporate
acquisitions or investment in facilities, land and buildings, with
$60.0 million allocated towards
maintenance capital primarily to invest in trucks, trailers,
specialized equipment and technology to improve the operations of
the Business Units. In addition, we will allocate
$10.0 million to invest specifically
towards sustainability initiatives.
Shareholder Allocation
One of the main components of our strategic plan is returning
free cash flow to shareholders. This disciplined approach to
capital deployment and focused growth has allowed Mullen Group to
generate excess cash from operations for multiple years, resulting
in over $1.44 billion distributed to
shareholders since 2000, an average of $65.6
million per year. In 2022 Mullen Group expects to
generate $100.0 million of free cash
from operations, funds that will be allocated to dividends and/or
share repurchases. Based upon the current valuation investors
attribute to Mullen Group's business, the Board has determined that
the appropriate allocation of the expected free cash will be as
follows:
Dividend Increase
We are pleased to announce that
the Board has approved an increase in the annual dividend to
shareholders from $0.48 per Common
Share to $0.60 per Common
Share. Such dividend will continue to be paid on a monthly
basis, subject to Board approval.
Share Buyback
Early in 2020, we announced a plan
to allocate $100.0 million over the
course of three years to repurchase Common Shares in Mullen Group
via an authorized share buyback program. In 2020 we
repurchased 7,972,926 Common Shares for $53.4 million, the maximum allowed by the Toronto
Stock Exchange ("TSX"). In 2021, for the eleven month
period ending November 30, 2021, we
repurchased 3,130,073 Common Shares for $40.4 million. In April 2022, we intend on requesting approvals
from the TSX to renew a share buyback program.
Acquisitions
We maintain a well structured balance sheet with ample liquidity
as of today's date, funds that will be used to pursue strategic
acquisitions. Our focus will continue to be in the consumer
part of the economy where we see growth opportunities going
forward.
About Mullen Group Ltd.
Mullen Group is a company that owns a network of
independently operated businesses. The Corporation is
recognized as one of the leading suppliers of trucking and
logistics services in North
America providing a wide range of service offerings
including less-than-truckload, truckload, warehousing, logistics,
transload, oversized and specialized hauling transportation.
In addition, we provide a diverse set of specialized services
related to the oil and natural gas industry in western Canada, water management, fluid hauling and
environmental reclamation. The corporate
office provides the capital and financial
expertise, legal support, technology and systems support,
shared services and strategic planning to its independent
businesses.
Mullen Group is a publicly traded corporation listed on the
Toronto Stock Exchange under the symbol "MTL".
Additional information is available on our website at
www.mullen-group.com or on SEDAR at
www.sedar.com.
Contact Information
Mr. Murray K. Mullen
- Chairman of the Board, Chief
Executive Officer and President
Mr. P.
Stephen Clark - Chief
Financial Officer
Mr. Richard J.
Maloney - Senior Vice President
Ms.
Joanna K. Scott - Corporate
Secretary & Vice President, Corporate Services
121A - 31 Southridge
Drive
Okotoks, Alberta,
Canada T1S 2N3
Telephone:
403-995-5200
Fax: 403-995-5296
Disclaimer
This news release may contain forward-looking information that
is subject to risk factors associated with the overall economy and
the oil and natural gas business. This information relates to
future events and Mullen Group's future performance. All
information and statements contained herein that are not clearly
historical in nature constitute forward-looking information, and
the words "may", "will", "should", "could", "expect", "plan",
"intend", "anticipate", "believe", "estimate", "propose",
"predict", "potential", "continue", "aim", or the negative of these
terms or other comparable terminology are generally intended to
identify forward-looking information. Such information
represents Mullen Group's internal projections, estimates,
expectations, beliefs, plans, objectives, assumptions, intentions
or statements about future events or performance. This
information involves known or unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
information. Mullen Group believes that the expectations
reflected in this forward-looking information are reasonable;
however, undue reliance should not be placed on this
forward-looking information, as there can be no assurance that the
plans, intentions or expectations upon which they are based will
occur. In particular, forward-looking information and
statements include but are not limited to the following: (i) our
financial goals and expectations for 2022; (ii) our capital
expenditure plans for 2022; (iii) our strategic initiatives for
2022 including but not limited to potential acquisitions; (iv)
anticipated 2022 dividend payments; and our plan to renew our
normal course issuer bid. This forward-looking information
and statements are based on certain assumptions and analysis made
by Mullen Group in light of our experience and our perception of
historical trends, current conditions, expected future developments
and other factors we believe are appropriate under the
circumstances. These assumptions include but are not limited
to the following: (i) Mullen Group will generate sufficient cash in
excess of our financial obligations to support the dividend; (ii)
Mullen Group's Business Units will require capital to support their
ongoing operations and growth opportunities and that we will
generate sufficient cash in excess of our financial obligations to
support the capital expenditures; (iii) Mullen Group's expectation
as to how our current Business Units will perform in 2022; (iv)
that the macro environment stabilizes including but not limited to
economic recovery, stable customer spending and resolution of
supply chain disruptions; (v) we have a well structured balance
sheet with ample liquidity to pursue acquisitions; and (vi) Mullen
Group's plan to renew its normal course issuer bid will be approved
by regulatory authorities. For further information on any
strategic, financial, operational and other outlook on Mullen
Group's business please refer to Mullen Group's Management's
Discussion and Analysis available for viewing on SEDAR at
www.sedar.com. Additional information on risks that could affect
the operations or financial results of Mullen Group may be found
under the heading "Principal Risks and Uncertainties" starting on
page 64 of the 2020 Annual Financial Review as well as in reports
on file with applicable securities regulatory authorities and may
be accessed through the SEDAR website at www.sedar.com. The
forward-looking information contained in this news release is
expressly qualified by this cautionary statement. The
forward-looking information contained herein is made as of the date
of this news release and Mullen Group disclaims any intent or
obligation to update publicly any such forward-looking information,
whether as a result of new information, future events or results or
otherwise, other than as required by applicable Canadian securities
laws. Mullen Group relies on litigation protection for
"forward-looking" statements.
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SOURCE Mullen Group Ltd.