Tornado Global Hydrovacs Reports First Quarter 2024 Results
May 23 2024 - 7:30PM
Tornado Global Hydrovacs Ltd. (“Tornado” or the “Company”) (TSX-V:
TGH; OTCQX: TGHLF) today reported its unaudited condensed
consolidated financial results for the three months period ended
March 31, 2024. The unaudited condensed consolidated financial
statements and related management discussion and analysis are
available on the Company’s issuer profile in Canada on SEDAR+ at
www.sedarplus.com, the United States at www.otcmarkets.com and
on the Company’s website at www.tornadotrucks.com. All amounts
reported in this news release are in thousands ($000’s CAD) except
per share amounts.
First Quarter 2024 Overview and
Significant Developments
- The Company achieved record
quarterly sales in Q1/2024, marking the eighth consecutive quarter
of record revenue.
- In July 2022, the Company entered
into a four-year Product Supply and Development Agreement for the
co-development and supply of customized hydrovac trucks (the
“Supply Contract”) with Ditch Witch, a division of The Toro Company
(“Ditch Witch”).
- Net income per share (diluted) of
$0.018 increased by $0.012 (200.0%) compared to $0.006 in Q1/2023.
Net income of $2,427 increased by $1,642 (209.2%) in Q1/2024
compared to $785 in Q1/2023. This increase was principally due to
increased revenue and the associated increased EBITDAS.
- EBITDAS per share (diluted) of
$0.025 increased by $0.012 (92.3%) compared to $0.013 in Q1/2023.
EBITDAS of $3,434 increased by $1,711 (99.3%) compared to $1,723 in
Q1/2023. This increase was principally due to increased revenue and
the associated increased gross profit.
- Revenue of $33,904 increased by
$12,809 (60.7%) compared to $21,095 in Q1/2023 as a result of: (i)
the positive impact of the Supply Contract with Ditch Witch; (ii)
the increase in sales from the exclusive sales arrangement with
Custom Truck One Source, who is a single-source provider of
specialized truck and heavy equipment solutions with over 40
locations across North America (“Custom Truck”); (iii) the increase
in sales pricing to customers; (iv) the increase in the number of
hydrovac trucks sold; and (v) the increase in demand for hydrovac
trucks in North America.
- Gross profit of $5,742 increased by
$2,302 (66.9%) compared to $3,440 in Q1/2023 principally due to
increased revenue. Gross profit was also positively impacted by the
benefits from cost savings on parts sourced globally during
Q1/2024. However, gross profit was negatively impacted by the
increased costs associated with materials purchased in North
America during Q1/2024.
- General and
administrative expense of $2,387 increased by $598 (33.4%) compared
to $1,789 in Q1/2023. The increase was principally due to general
increased employee costs in North America to handle present and
anticipated growth.
EBITDAS is calculated by subtracting interest,
tax, depreciation and amortization, gain/loss on disposal of fixed
assets and stock-based compensation from earnings. EBITDAS per
share (diluted) is calculated by dividing EBITDAS by the total
number of diluted common shares. The terms EBITDAS and EBITDAS per
share (diluted) are non-IFRS financial measures, and readers are
cautioned that EBITDAS and EBITDAS per share (diluted) should not
be considered to be more meaningful than net income determined in
accordance with IFRS.
Brett Newton, President and CEO of Tornado,
commented on the Company's recent performance and strategic
direction, saying, "The first quarter of 2024 marked our eighth
consecutive quarter of record revenue. The hydrovac sector is
expanding rapidly within the broader North American infrastructure
market, and Tornado is ideally situated to leverage this momentum.
We will be focusing on moving from exclusively producing hydrovac
equipment to becoming a comprehensive provider of infrastructure
solutions. Our strategy includes offering turnkey solutions to our
clients, aimed at capturing a larger market share in the hydrovac
space and venturing into new product areas. We are committed to
adding new and innovative products to our product line that will
support the ongoing demand of the infrastructure,
telecommunications and oil and gas industries.”
Financial and Operating
Highlights (in CAD $000’s except outstanding
common share and per share data)
|
Three Months ended March 31 |
|
|
2024 |
|
|
2023 |
|
|
|
|
Revenue |
$ |
33,904 |
|
$ |
21,095 |
|
Cost of sales |
|
28,162 |
|
|
17,655 |
|
Gross profit |
|
5,742 |
|
|
3,440 |
|
|
|
|
Selling and general administrative expenses |
|
2,387 |
|
|
1,789 |
|
Other (gain) loss - foreign exchange |
|
(279 |
) |
|
64 |
|
Depreciation and amortization |
|
188 |
|
|
260 |
|
Finance expense |
|
78 |
|
|
161 |
|
Stock-based compensation |
|
196 |
|
|
129 |
|
|
|
|
Income before tax |
|
3,172 |
|
|
1,037 |
|
Income tax expense |
|
(745 |
) |
|
(252 |
) |
|
|
|
Net income |
$ |
2,427 |
|
$ |
785 |
|
|
|
|
EBITDAS (1) |
$ |
3,434 |
|
$ |
1,723 |
|
|
|
|
Outstanding common shares |
|
135,931,119 |
|
|
135,791,519 |
|
|
|
|
EBITDAS per share - diluted (1) |
$ |
0.025 |
|
$ |
0.013 |
|
Net income per share - diluted |
$ |
0.018 |
|
$ |
0.006 |
|
1 EBITDAS is calculated by subtracting interest, tax,
depreciation and amortization, gain/loss on disposal of fixed
assets and stock-based compensation from earnings. EBITDAS per
share (diluted) is calculated by dividing EBITDAS by the total
number of diluted common shares. The terms EBITDAS and EBITDAS per
share (diluted) are non-IFRS financial measures and readers are
cautioned that EBITDAS and EBITDAS per share (diluted) should not
be considered to be more meaningful than net income determined in
accordance with IFRS.
Outlook
Management expects the Company’s production and
sales of hydrovac trucks and profitability to continue to grow in
the remainder of 2024 for the following reasons:
- Expected continued spending on
infrastructure in North America.
- The continuing addition of new and
innovative products to its product lines that will support the
infrastructure, telecommunications and oil and gas industries.
- The anticipated increasing revenues
and benefits from the Supply Contract with Ditch Witch.
- The anticipated increasing revenues
and benefits from the exclusive sales arrangement with its US
strategic partner, Custom Truck, that the Company entered into in
2019.
- The Company’s commitment to
continuous improvement of its hydrovac truck design which in the
Company’s view will result in advantages over other hydrovac trucks
currently offered in the market.
- The Company’s ability to continue
to secure key manufacturing components, including chassis for
customers, into future years through strategic relationships.
- The Company has strengthened its
dealer relationships in both Canada and US to meet the expected
demand increase.
- Expanded North American coverage
for maintenance warranty and repair to serve customers better.
About Tornado Global Hydrovacs
Ltd.
Tornado is a pioneer and leader in the vacuum
truck industry and has been a choice of utility and oilfield
professionals with over 1,300 hydrovacs sold since 2005. The
Company designs and manufactures hydrovac trucks as well as
provides heavy duty truck maintenance operations in central
Alberta. It sells hydrovac trucks to excavation service providers
in the infrastructure and industrial construction and oil and gas
markets. Hydrovac trucks use high pressure water and vacuum to
safely penetrate and cut soil to expose critical infrastructure for
repair and installation without damage. Hydrovac excavation methods
are quickly becoming a standard in North America to safely excavate
in urban areas and around critical infrastructure greatly reducing
infrastructure damage and related fatalities.
For more information about Tornado Global
Hydrovacs Ltd., visit www.tornadotrucks.com or contact:
Brett NewtonPresident and Chief Executive OfficerPhone: (587)
802-5070Email: bnewton@tghl.ca |
Derek LiVice President, FinancePhone: (403) 204-6350Email:
dli@tghl.ca |
|
Advisory
Certain statements contained in this news
release constitute forward-looking statements and future oriented
financial information. These statements relate to future events.
All statements other than statements of historical fact are
forward-looking statements. The use of the words “anticipates”,
“should”, ‘‘may”, “expected”, “expects”, “believes” and other words
of a similar nature are intended to identify forward-looking
statements. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements or, as applicable, future oriented
financial information. Although Tornado believes these statements
to be reasonable, no assurance can be given that these expectations
will prove to be correct and such forward-looking statements and
future oriented financial information included in this news release
should not be unduly relied upon. Such statements include those
with respect to:
- the Company’s outlook for the
remainder of 2024 generally;
- the expectation that the Company’s
production, sales of hydrovac trucks and profitability in 2024 will
continue to grow;
- the anticipation of increasing
revenues and benefits from the Supply Contract with Ditch
Witch.
- the anticipated increasing revenues
and benefits from the exclusive sales arrangement with its US
strategic partner, Custom Truck;
- the expectation of continued
spending on infrastructure in North America;
- the expectation of adding new and
innovative products to its product lines that will support the
infrastructure, telecommunications and oil and gas industries;
- management’s belief that the
Company’s commitment to continuous improvement of its hydrovac
truck design which in the Company’s view will result in advantages
over other hydrovac trucks currently offered in the market;
- management’s belief in its
continuing ability of securing key manufacturing components,
including chassis, for customers into future years through
strategic relationships;
- management’s belief in the positive
impact of strengthened dealer relationships in both Canada and US
to meet the expected demand increase;
- management’s belief in the positive
impact of expanded North American coverage for maintenance warranty
and repair;
- management’s intention to focus on
moving from exclusively producing hydrovac equipment to becoming a
comprehensive provider of infrastructure solutions; and
- management’s intention to capture a
larger market share in the hydrovac space and venture into new
product areas.
These statements involve known and unknown
risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in
such forward-looking statements. Actual results could differ
materially from those anticipated in these forward-looking
statements as a result of prevailing economic conditions, and other
factors, many of which are beyond the control of Tornado. Although
Tornado believes these statements to be reasonable, no assurance
can be given that these expectations will prove to be correct and
such forward-looking statements included in this news release
should not be unduly relied upon. The forward-looking statements
contained in this news release represent Tornado’s expectations as
of the date hereof and are subject to change after such date.
Tornado disclaims any intention or obligation to update or revise
any forward-looking statements whether as a result of new
information, future events or otherwise, except as may be required
by applicable securities regulations.
Neither the Exchange nor its Regulation
Service Provider (as that term is defined in policies of the
Exchange) accepts responsibility for the adequacy or accuracy of
this news release.
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