TSX Symbol: WJX
Expanded Relationship with Hitachi, and
Continued Growth in Industrial Parts and Engineered Repair
Services, Drive 17.4% Year-Over-Year Revenue Increase
TORONTO, May 1, 2023
/CNW/ - Wajax Corporation ("Wajax" or the
"Corporation") today announced its 2023 first quarter
results. All monetary amounts are in Canadian dollars unless
otherwise noted.
Selected Highlights for the First Quarter
- First quarter revenue of $516.1
million, up 17.4% over 2022;
- First quarter adjusted EBITDA of $43.0
million, up 9.5% over 2022(1);
- First quarter adjusted net earnings of $17.8 million, up 13.2% over 2022(1);
and
- Ended the quarter with backlog of $530.8
million, up 13.2% from December 31,
2022.(1)
"Our improved top line performance this quarter was driven by
strong customer demand across all regions, including continued
positive momentum in central Canada", said Iggy
Domagalski, President and Chief Executive Officer. "Solid
year-over-year growth in equipment sales was complemented by even
stronger year-over-year growth in industrial parts and engineered
repair services revenue, and we saw adjusted diluted earnings per
share grow 13.1% to $0.80. Our robust
backlog, largely in line with the same period last year and up
13.2% sequentially from the fourth quarter, as well as solid
fundamentals across many of our key markets, supports management's
confidence in our prospects as we advance further into
2023."(1)
"Our leverage ratio increased to 1.74 times as a result of
investments in working capital, most notably in inventory, to
support customer orders and demand. We continue to believe that our
strong financial results and balance sheet give us the flexibility
to further invest in our expanded Hitachi relationship, additional
organic initiatives and acquisition opportunities to help drive
future growth."(1)
(Dollars in millions, except per share
data)
|
Three Months Ended
March 31
|
|
2023
|
2022
|
% change
|
CONSOLIDATED RESULTS
|
|
|
|
Revenue
|
$516.1
|
$439.5
|
17.4 %
|
Equipment sales
|
$132.3
|
$117.2
|
12.8 %
|
Product support
|
$134.8
|
$124.5
|
8.2 %
|
Industrial parts
|
$153.3
|
$129.2
|
18.6 %
|
Engineered repair services
(ERS)
|
$85.0
|
$59.8
|
42.1 %
|
Equipment rental
|
$10.7
|
$8.7
|
22.8 %
|
|
|
|
|
Net earnings
|
$17.5
|
$16.1
|
8.8 %
|
Basic earnings per
share(2)
|
$0.81
|
$0.75
|
8.5 %
|
|
|
|
|
Adjusted net
earnings(1)(3)
|
$17.8
|
$15.7
|
13.2 %
|
Adjusted basic earnings per
share(1)(2)(3)
|
$0.83
|
$0.73
|
12.8 %
|
|
|
|
|
Adjusted EBITDA(1)
|
$43.0
|
$39.3
|
9.5 %
|
Outlook
After the first three months of 2023, the
Corporation continues to see solid fundamentals in many of the
markets it serves - particularly mining, energy and construction -
supported by relatively elevated key commodity prices and sustained
budgeting for capital projects. The Corporation's strong backlog
also continues to support management's confidence as Wajax advances
further into the year. In addition to expected growth in its heavy
equipment business, Wajax anticipates further strong demand in its
less cyclical industrial parts and engineered repair services
businesses. Wajax continues to expect the challenges of 2023 to be
similar to those of 2022 – ongoing supply chain volatility, higher
interest rates, inflation, and a tight labour
market.(1)
The Corporation's core strategic priorities remain unchanged and
Wajax is focused on continuing to invest in its people and their
overall health and well-being, delivering exceptional customer
value, organically growing its business, transacting on a robust
acquisition pipeline, leveraging its enhanced relationship with
Hitachi, prudently managing its balance sheet, deploying its ERP
system, and entrenching sustainability into the business.
Dividend
The Corporation has declared a dividend of $0.33 per share for the second quarter of 2023,
payable on July 5, 2023, to
shareholders of record on June 15,
2023.
First Quarter Highlights
- Revenue in the first quarter of 2023 increased $76.5 million, or 17.4%, to $516.1 million, from $439.5 million in the first quarter of 2022.
Regionally:
-
- Revenue in western Canada of
$238.0 million increased 15.0% from
the prior year due to strength in the engineered repair services
("ERS") and industrial parts categories, as well as higher
construction and forestry equipment sales, offset partially by
lower mining equipment sales.
- Revenue in central Canada of
$87.3 million increased 14.2% from
the prior year due primarily to strength in industrial parts sales
and higher material handling equipment sales.
- Revenue in eastern Canada of
$190.8 million increased 22.2% from
the prior year due primarily to strength in the industrial parts
and ERS categories, and higher equipment sales in the construction
and forestry, and material handling categories.
- Gross profit margin of 20.4% in the first quarter of 2023
decreased 90 basis points ("bps") compared to gross profit
margin of 21.3% in the same period of 2022. The decrease was driven
primarily by lower product support margins and a lower proportion
of product support revenue. This was offset partially by higher
equipment margins and a higher proportion of ERS
revenue.(1)
- Selling and administrative expenses as a percentage of revenue
decreased to 14.9% in the first quarter of 2023 from 15.3% in the
first quarter of 2022, driven by the 17.4% increase in revenue.
Selling and administrative expenses in the first quarter of 2023
increased $9.7 million compared to
the first quarter of 2022 due primarily to higher personnel costs
as the volume of business increased over the prior year, and a
$0.9 million unrealized loss on
interest rate swaps during the quarter as compared to a
$2.1 million unrealized gain on
interest rate swaps in the prior year.(1)
- EBIT increased $2.2 million, or
8.5%, to $28.6 million in the first
quarter of 2023 versus $26.4 million
in the same period of 2022. The year-over-year increase in EBIT
resulted primarily from higher sales volumes, offset partially by
lower product support margins and higher selling and administrative
expenses.
- The Corporation generated net earnings of $17.5 million, or $0.81 per share, in the first quarter of 2023
versus $16.1 million, or $0.75 per share, in the same period of 2022. The
Corporation generated adjusted net earnings of $17.8 million, or $0.83 per share, in the first quarter of 2023
versus $15.7 million, or $0.73 per share, in the same period of 2022.
Adjusted net earnings in the first quarter of 2023 excludes
non-cash losses on mark to market of derivative instruments of
$0.3 million after-tax, or
$0.01 per share (2022 – gains of
$0.3 million, or $0.02 per share).(1)
- Adjusted EBITDA margin decreased to 8.3% in the first quarter
of 2023 from 8.9% in the first quarter of 2022.(1)
- The Corporation's backlog at March 31,
2023 of $530.8 million
increased $62.0 million, or 13.2%,
compared to December 31, 2022 backlog
of $468.8 million due to higher
orders in all categories, but most notably in the mining, material
handling, ERS, and construction and forestry categories. The
Corporation's backlog at March 31,
2023 of $530.8 million
decreased $9.3 million, or 1.7%,
compared to March 31, 2022 due to
lower construction and forestry, mining and power systems orders,
offset partially by higher ERS, industrial parts, and material
handling orders.(1)
- Working capital of $425.2 million
at March 31, 2023 increased
$79.2 million from December 31, 2022 due primarily to higher
inventory and decreased income taxes payable, offset partially by
increased accounts payable and accrued liabilities, and higher bank
indebtedness. Working capital efficiency was 17.4%, an
increase of 70 bps from December 31,
2022, due to the higher trailing four quarter average
working capital.(1)
- Cash flows used in operating activities amounted to
$69.6 million in the first quarter of
2023, compared to cash flows generated from operating activities of
$19.4 million in the same quarter of
the previous year. The decrease in cash generated from operating
activities of $89.0 million was
mainly attributable to an increase in inventory of $122.2 million during the quarter compared to an
increase of $20.1 million in the
prior year, and income taxes paid of $27.0
million during the quarter compared to $4.2 million in the prior year. These decreases
in cash generated from operating activities were offset partially
by a decrease in trade and other receivables of $5.0 million compared to an increase of
$15.2 million in the prior year, and
an increase in accounts payable and accrued liabilities of
$46.7 million compared to an increase
of $26.4 million in the prior
year.
- The Corporation's leverage ratio increased to 1.74 times at
March 31, 2023, compared to 1.13
times at December 31, 2022. The
increase in the leverage ratio was due to the higher debt level in
the current period, driven largely by the Corporation's investment
in inventory. The Corporation's senior secured leverage ratio
was 1.33 times at March 31, 2023,
compared to 0.71 times at December 31,
2022.(1)
- Subsequent to quarter-end, Justin
Warren, Senior Vice President, Industrial Parts and ERS,
left the Corporation to pursue another opportunity. Mr. Warren's
responsibilities have been assumed on an interim basis by
Steven Deck who, as Chief Operating
Officer of Wajax, previously had executive responsibility for the
Corporation's industrial parts and ERS business from 2019 to
2021.
Conference Call Details
Wajax will webcast its First
Quarter Financial Results Conference Call. You are invited to
listen to the live webcast on Tuesday, May
2, 2023 at 2:00 p.m. EDT. To
access the webcast, please visit our website wajax.com,
under "Investor Relations", "Events and
Presentations", "Q1 2023 Financial Results" and click on
the "Webcast" link. An archive of the webcast will be available
following the live presentation.
About Wajax Corporation
Founded in 1858, Wajax (TSX:
WJX) is one of Canada's
longest-standing and most diversified industrial products and
services providers. The Corporation operates an integrated
distribution system providing sales, parts and services to a broad
range of customers in diverse sectors of the Canadian economy,
including: construction, forestry, mining, industrial and
commercial, oil sands, transportation, metal processing, government
and utilities, and oil and gas.
The Corporation's goal is to be Canada's leading industrial products and
services provider, distinguished through its three core
capabilities: sales force excellence, the breadth and efficiency of
repair and maintenance operations, and the ability to work closely
with existing and new vendor partners to constantly expand its
product offering to customers. The Corporation believes that
achieving excellence in these three areas will position it to
create value for its customers, employees, vendors and
shareholders.
Notes:
(1)
|
"Adjusted net
earnings", "Adjusted basic and diluted earnings per share",
"Adjusted EBITDA", "Adjusted EBITDA margin", "Backlog", "Leverage
ratio", "Senior secured leverage ratio", "Working capital", "Gross
profit margin", "Selling and administrative expenses as a
percentage of revenue" and "Pro-forma adjusted EBITDA" do not have
standardized meanings prescribed by generally accepted accounting
principles ("GAAP"). See the Non-GAAP and Other Financial
Measures section later in this press release.
|
(2)
|
Weighted average
shares, net of shares held in trust, outstanding for calculation of
basic and diluted earnings per share for the three months ended
March 31, 2023 was 21,489,126 (2022 – 21,415,435) and 22,154,023
(2022 – 22,126,541),
respectively.
|
(3)
|
Net earnings excluding
the following:
|
|
a.
|
after-tax non-cash
losses on mark to market of derivative instruments of $0.3 million
(2022 – gains of $0.3 million), or basic and diluted loss per share
of $0.01 (2022 – earnings per share of $0.02) for the three months
ended March 31, 2023.
|
Non-GAAP and Other Financial Measures
The press release contains certain non-GAAP and other financial
measures that do not have a standardized meaning prescribed by
GAAP. Therefore, these financial measures may not be comparable to
similar measures presented by other issuers. Investors are
cautioned that these measures should not be construed as an
alternative to net earnings or to cash flow from operating,
investing, and financing activities determined in accordance with
GAAP as indicators of the Corporation's performance. The
Corporation's management believes that:
(i)
|
these measures are
commonly reported and widely used by investors and
management;
|
(ii)
|
the non-GAAP measures
are commonly used as an indicator of a company's cash operating
performance, profitability and ability to raise and service
debt;
|
(iii)
|
"Adjusted net
earnings" and "Adjusted basic and diluted earnings per
share" provide indications of the results by the Corporation's
principal business activities prior to recognizing non-recurring
costs (recoveries) and non-cash losses (gains) on mark to market of
derivative instruments. These adjustments to net earnings and basic
and diluted earnings per share allow the Corporation's management
to consistently compare periods by removing infrequent charges
incurred outside of the Corporation's principal business activities
and the impact of unrealized losses (gains) resulting from
fluctuations in interest rates and the Corporation's share
price;
|
(iv)
|
"Adjusted
EBITDA" provides an indication of the results by the
Corporation's principal business activities prior to recognizing
non-recurring costs (recoveries) and non-cash losses (gains) on
mark to market of derivative instruments. These adjustments to net
earnings allow the Corporation's management to consistently compare
periods by removing infrequent charges incurred outside of the
Corporation's principal business activities, the impact of
unrealized losses (gains) resulting from fluctuations in interest
rates and the Corporation's share price, the impact of fluctuations
in finance costs related to the Corporation's capital structure,
the impact of tax rates, and the impact of depreciation and
amortization of long-term assets; and
|
(v)
|
"Pro-forma adjusted
EBITDA" provides the same utility as Adjusted EBITDA described
above, however pursuant to the terms of the bank credit facility,
is adjusted for the EBITDA of business acquisitions made during the
period as if they were made at the beginning of the trailing
12-month period, and for the deduction of payments of lease
liabilities. Pro-forma adjusted EBITDA is used in calculating the
Leverage ratio and Senior secured leverage ratio.
|
Non-GAAP financial measures are identified and defined below:
|
|
Funded net debt
|
Funded net debt
includes bank indebtedness, debentures and total long-term debt,
net of cash. Funded net debt is relevant in calculating the
Corporation's funded net debt to total capital, which is a non-GAAP
ratio commonly used as an indicator of a company's ability to raise
and service debt.
|
Debt
|
Debt is funded net
debt plus letters of credit. Debt is relevant in calculating the
Corporation's leverage ratio, which is a non-GAAP ratio commonly
used as an indicator of a company's ability to raise and service
debt.
|
Total capital
|
Total capital is
shareholders' equity plus funded net debt.
|
EBITDA
|
Net earnings (loss)
before finance costs, income tax expense, depreciation and
amortization.
|
Adjusted net earnings (loss)
|
Net earnings (loss)
before any gains/losses recorded on the sale of properties,
restructuring and other related costs, non-cash gains/losses on
mark to market of derivative instruments, and acquisition-related
transaction costs.
|
Adjusted basic and diluted earnings (loss)
per share
|
Basic and diluted
earnings (loss) per share before any gains/losses recorded on the
sale of properties, restructuring and other related costs, non-cash
gains/losses on mark to market of derivative instruments, and
acquisition-related transaction costs.
|
Adjusted EBIT
|
EBIT before any
gains/losses recorded on the sale of properties, restructuring and
other related costs, non-cash gains/losses on mark to market of
derivative instruments, and acquisition-related transaction
costs.
|
Adjusted EBITDA
|
EBITDA before any
gains/losses recorded on the sale of properties, restructuring and
other related costs, non-cash gains/losses on mark to market of
derivative instruments, and acquisition-related transaction
costs.
|
Pro-forma adjusted EBITDA
|
Defined as adjusted
EBITDA adjusted for the EBITDA of business acquisitions made during
the period as if they were made at the beginning of the trailing
12-month period pursuant to the terms of the bank credit facility
and the deduction of payments of lease liabilities.
|
Working capital
|
Defined as current
assets less current liabilities, as presented in the condensed
consolidated interim statements of financial position.
|
Other working capital amounts
|
Defined as working
capital less trade and other receivables and inventory plus
accounts payable and accrued liabilities, as presented in the
condensed consolidated interim statements of financial
position.
|
Non-GAAP ratios are identified and defined below:
EBITDA margin
|
Defined as EBITDA
(defined above) divided by revenue, as presented in the condensed
consolidated interim statements of earnings.
|
Adjusted EBITDA margin
|
Defined as adjusted
EBITDA (defined above) divided by revenue, as presented in the
condensed consolidated interim statements of earnings.
|
Leverage ratio
|
The leverage ratio is
defined as debt (defined above) at the end of a particular quarter
divided by trailing 12-month pro-forma adjusted EBITDA (defined
above). The Corporation's objective is to maintain this ratio
between 1.5 times and 2.0 times.
|
Senior secured leverage ratio
|
The senior secured
leverage ratio is defined as debt (defined above) excluding
debentures at the end of a particular quarter divided by trailing
12-month pro-forma adjusted EBITDA (defined above).
|
Funded net debt to total
capital
|
Defined as funded net
debt (defined above) divided by total capital (defined
above).
|
Working capital efficiency
|
Trailing four-quarter
average working capital (defined above) as a percentage of the
trailing 12-month revenue.
|
Supplementary financial measures are identified and defined
below:
EBIT margin
|
Defined as EBIT
divided by revenue, as presented in the condensed consolidated
interim statements of earnings.
|
Backlog
|
Backlog is a
management measure which includes the total sales value of customer
purchase commitments for future delivery or commissioning of
equipment, parts and related services, including ERS projects.
There is no directly comparable GAAP financial measure for
Backlog.
|
Gross profit margin
|
Defined as gross
profit divided by revenue, as presented in the condensed
consolidated interim statements of earnings.
|
Selling and administrative expenses as a percentage
of revenue
|
Defined as selling
and administrative expenses divided by revenue, as presented in the
condensed consolidated interim statements of earnings.
|
Reconciliation of the Corporation's net earnings to adjusted net
earnings and adjusted basic and diluted earnings per share is as
follows:
|
Three months ended
|
|
March 31
|
|
2023
|
2022
|
Net earnings
|
$
17.5
|
$
16.1
|
Non-cash losses (gains)
on mark to market of derivative instruments, after-tax
|
0.3
|
(0.3)
|
Adjusted net earnings
|
$
17.8
|
$
15.7
|
Adjusted basic earnings per
share(1)
|
$
0.83
|
$
0.73
|
Adjusted diluted earnings per
share(1)
|
$
0.80
|
$
0.71
|
(1) For the three
months ended March 31, 2023, the numbers of basic and diluted
shares outstanding were 21,489,126 and 22,154,023, respectively
(2022 – 21,415,435 and 22,126,541, respectively).
|
Reconciliation of the Corporation's EBIT to EBITDA, Adjusted EBIT,
Adjusted EBITDA and Pro-forma adjusted EBITDA is as follows:
|
Three months ended
|
Twelve months ended
|
|
March 31
2023
|
March
31 2022
|
March 31
2023
|
December
31 2022
|
EBIT
|
$
28.6
|
$
26.4
|
$
116.1
|
$
113.9
|
Depreciation and
amortization
|
14.0
|
13.4
|
56.1
|
55.5
|
EBITDA
|
$
42.6
|
$
39.7
|
$
172.2
|
$
169.3
|
|
|
|
|
|
EBIT
|
$
28.6
|
$
26.4
|
$
116.1
|
$
113.9
|
Non-cash losses (gains)
on mark to market of derivative
instruments(1)
|
0.4
|
(0.5)
|
(2.6)
|
(3.5)
|
Adjusted EBIT
|
$
29.0
|
25.9
|
$
113.5
|
110.4
|
Depreciation and
amortization
|
14.0
|
13.4
|
56.1
|
55.5
|
Adjusted EBITDA
|
$
43.0
|
$
39.3
|
$
169.6
|
$
165.9
|
Payment of lease
liabilities(3)
|
(8.6)
|
(7.6)
|
(33.0)
|
(32.0)
|
Pro-forma adjusted EBITDA
|
$
34.4
|
$
31.6
|
$
136.6
|
$
133.9
|
(1)
|
Non-cash losses (gains)
on mark to market of non-hedged derivative instruments.
|
(2)
|
Effective with the
reporting period beginning on January 1, 2019 and the adoption of
IFRS 16, the Corporation amended the definition of Funded net debt
to exclude lease liabilities not considered part of debt. As a
result, the corresponding lease costs must also be deducted from
EBITDA for the purpose of calculating the leverage
ratio.
|
Calculation of the Corporation's funded net debt, debt, leverage
ratio and senior secured leverage ratio is as follows:
|
March 31
2023
|
December
31 2022
|
Bank
indebtedness
|
$
19.0
|
$
5.2
|
Debentures
|
55.9
|
55.8
|
Long-term
debt
|
158.5
|
83.6
|
Funded net debt
|
$
233.4
|
$
144.6
|
Letters of
credit
|
4.0
|
6.2
|
Debt
|
$
237.5
|
$
150.8
|
Pro-forma adjusted
EBITDA(1)
|
$
136.6
|
$
133.9
|
Leverage ratio(2)
|
1.74
|
1.13
|
Senior secured leverage
ratio(3)
|
1.33
|
0.71
|
(1)
|
For the twelve months
ended March 31, 2023 and December 31, 2022.
|
(2)
|
Calculation uses debt
divided by the trailing four-quarter Pro-forma adjusted EBITDA.
This leverage ratio is calculated for purposes of monitoring the
Corporation's objective target leverage ratio of between 1.5 times
and 2.0 times, and is different from the leverage ratio calculated
under the Corporation's bank credit facility agreement.
|
(3)
|
Calculation uses debt
excluding debentures divided by the trailing four-quarter Pro-forma
adjusted EBITDA. While the calculation contains some differences
from the leverage ratio calculated under the Corporation's bank
credit facility agreement, the resulting leverage ratio under the
bank credit facility agreement is not significantly
different.
|
Calculation of total capital and funded net debt to total capital
is as follows:
|
March 31
2023
|
December
31 2022
|
Shareholders'
equity
|
$
455.0
|
$
449.8
|
Funded net
debt
|
233.4
|
144.6
|
Total capital
|
$
688.4
|
$
594.4
|
Funded net debt to total
capital
|
33.9 %
|
24.3 %
|
Calculation of the Corporation's working capital and other working
capital amounts is as follows:
|
March 31
2023
|
December
31 2022
|
Total current
assets
|
$
981.1
|
$
860.1
|
Total current
liabilities
|
555.8
|
514.1
|
Working capital
|
$
425.2
|
$
346.0
|
Trade and other
receivables
|
(301.1)
|
(307.1)
|
Inventory
|
(584.4)
|
(462.2)
|
Accounts payable and
accrued liabilities
|
470.8
|
423.8
|
Other working capital amounts
|
$
10.6
|
$
0.7
|
Cautionary Statement Regarding Forward-Looking Information
This news release contains certain forward-looking statements
and forward-looking information, as defined in applicable
securities laws (collectively, "forward-looking
statements"). These forward-looking statements relate to future
events or the Corporation's future performance. All statements
other than statements of historical fact are forward-looking
statements. Often, but not always, forward looking statements can
be identified by the use of words such as "plans", "anticipates",
"intends", "predicts", "expects", "is expected", "scheduled",
"believes", "estimates", "projects" or "forecasts", or variations
of, or the negatives of, such words and phrases or state that
certain actions, events or results "may", "could", "would",
"should", "might" or "will" be taken, occur or be achieved.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors beyond the Corporation's ability to
predict or control which may cause actual results, performance and
achievements to differ materially from those anticipated or implied
in such forward-looking statements. To the extent any
forward-looking information in this news release constitutes
future-oriented financial information or financial outlook within
the meaning of applicable securities law, such information is being
provided to demonstrate the potential of the Corporation and
readers are cautioned that this information may not be appropriate
for any other purpose. There can be no assurance that any
forward-looking statement will materialize. Accordingly, readers
should not place undue reliance on forward-looking statements. The
forward-looking statements in this news release are made as of the
date of this news release, reflect management's current beliefs and
are based on information currently available to management.
Although management believes that the expectations represented in
such forward-looking statements are reasonable, there is no
assurance that such expectations will prove to be correct.
Specifically, this news release includes forward looking statements
regarding, among other things: our belief that our robust backlog,
as well as solid fundamentals across many of our key markets,
supports management's confidence in our prospects as we advance
further into 2023; our continued belief that the Corporation's
strong financial results and balance sheet give us the flexibility
to further invest in our expanded Hitachi relationship, additional
organic initiatives and acquisition opportunities to help drive
future growth; our outlook after the first three months of 2023,
including our view that solid fundamentals persist in many of the
markets Wajax serves – particularly mining, energy and
construction, and that our strong backlog also continues to support
our confidence as Wajax advances further into the year; our
expectation that Wajax's heavy equipment business will grow in
2023, and anticipated further strong demand in Wajax's less
cyclical industrial parts and ERS businesses; our continued
expectation that the challenges of 2023 will be similar to 2022 -
ongoing supply chain volatility, higher interest rates, inflation,
and a tight labour market; our core strategic priorities, including
our continued focus on investing in Wajax's people and their
overall health and well-being, delivering exceptional customer
value, organically growing our business, transacting on a robust
acquisition pipeline, leveraging our enhanced relationship with
Hitachi, prudently managing our balance sheet, deploying our ERP
system, and entrenching sustainability into our business; our
objective of managing our leverage ratio within a range of 1.5 –
2.0 times; and our goal of being Canada's leading industrial products and
services provider, distinguished by our sales force excellence, the
breadth and efficiency of our repair and maintenance operations,
and our ability to work closely with existing and new vendor
partners to constantly expand our product offering to customers,
together with our belief that achieving excellence in these three
areas will position us to create value for our customers,
employees, vendors and shareholders. These statements are based on
a number of assumptions which may prove to be incorrect, including,
but not limited to, assumptions regarding: the absence of
significant negative changes to general business and economic
conditions; limited negative fluctuations in the supply and demand
for, and the level and volatility of prices for, oil, natural gas
and other commodities; the stability of financial market
conditions, including interest rates; the ability of Hitachi and
Wajax to develop and execute successful sales, marketing and other
plans related to the expanded direct distribution relationship
which took effect on March 1, 2022;
our continued ability to execute our One Wajax strategy, including
our ability to execute on our organic growth priorities, complete
and effectively integrate acquisitions, and successfully implement
new information technology platforms, systems and software, such as
our ERP system; the receding effects of the COVID-19 pandemic and
actions taken by governments, public authorities, suppliers and
customers in response to the COVID-19 virus and its variants; the
future financial performance of the Corporation; limited
fluctuations in our costs; the level of market competition; our
continued ability to attract and retain skilled staff; our
continued ability to procure quality products and inventory; and
our ongoing maintenance of strong relationships with suppliers,
employees and customers. The foregoing list of assumptions is not
exhaustive. Factors that may cause actual results to vary
materially include, but are not limited to: a continued or
prolonged deterioration in general business and economic
conditions, including as a result of new COVID-19 variants or armed
conflicts between nations; supply chain disruptions and shortages
related to or arising from the impacts of COVID-19 or armed
conflicts between nations; fluctuations in financial market
conditions, including interest rates; the impacts of new COVID-19
variants, including the duration and severity of travel, business
and other restrictions imposed by governments and public
authorities in response to such variants; actions taken by our
suppliers and customers in relation to new COVID-19 variants,
including slowing, reducing or halting operations; the inability of
Hitachi and Wajax to develop and execute successful sales,
marketing and other plans related to the expanded direct
distribution relationship which took effect on March 1, 2022; negative fluctuations in the
supply and demand for, and the level of prices for, oil, natural
gas and other commodities; a continued or prolonged decrease in the
price of oil or natural gas; the level of demand for, and prices
of, the products and services we offer; a decrease in levels of
customer confidence and spending; decreased market acceptance of
the products we offer; the termination of distribution or original
equipment manufacturer agreements; unanticipated operational
difficulties (including failure of plant, equipment or processes to
operate in accordance with specifications or expectations, cost
escalation, our inability to reduce costs in response to slow-downs
in market activity, unavailability of quality products or
inventory, supply disruptions (including those caused by or related
to new COVID-19 variants), job action and unanticipated events
related to health, safety and environmental matters); our inability
to attract and retain skilled staff and our inability to maintain
strong relationships with our suppliers, employees and customers.
The foregoing list of factors is not exhaustive. Further
information concerning the risks and uncertainties associated with
these forward-looking statements and the Corporation's business may
be found in our MD&A for the year-ended December 31, 2022 (the "2022 MD&A"),
which has been filed under the Corporation's profile on SEDAR at
www.sedar.com, under the heading "Risk Management and
Uncertainties". The forward-looking statements contained in this
MD&A are expressly qualified in their entirety by this
cautionary statement. The Corporation does not undertake any
obligation to publicly update such forward-looking statements to
reflect new information, subsequent events or otherwise unless so
required by applicable securities laws.
Readers are cautioned that the risks described in the 2022
MD&A are not the only risks that could impact the Corporation.
Risks and uncertainties not currently known to the Corporation, or
currently deemed to be immaterial, may have a material effect on
the Corporation's business, financial condition or results of
operations.
Additional information, including Wajax's Annual Report, is
available on SEDAR at www.sedar.com.
SOURCE Wajax Corporation