Tornado Global Hydrovacs Reports Second Quarter 2024 Results
August 21 2024 - 7:30AM
Tornado Global Hydrovacs Ltd. (“Tornado” or the “Company”) (TSX-V:
TGH; OTCQX: TGHLF) today reported its unaudited condensed
consolidated financial results for the three and six month periods
ended June 30, 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.
Second Quarter 2024 Overview and
Significant Developments
- The Company achieved record
quarterly sales in Q2/2024, marking the ninth consecutive quarter
of record revenue.
- Net income per share (diluted) of
$0.018 increased by $0.010 (125.0%) compared to $0.008 in Q2/2023.
Net income of $2,511 increased by $1,457 (138.2%) compared to
$1,054 in Q2/2023. This increase was principally due to increased
revenue and the associated increased EBITDAS(1).
- EBITDAS per share (diluted)(1) of
$0.028 increased by $0.013 (85.8%) compared to $0.015 in Q2/2023.
EBITDAS(1) of $3,770 increased by $1,745 (86.2%) compared to $2,025
in Q2/2023. This increase was principally due to increased revenue
and the associated increased gross profit.
- Revenue of $34,423 increased by
$10,893 (46.3%) compared to $23,530 in Q2/2023 as a result of: (i)
the positive impact of the four-year Product Supply and Development
Agreement (the “Supply Contract”) with Ditch Witch, a division of
The Toro Company (“Ditch Witch”), which the Company entered into in
2022 for the co-development and supply of customized hydrovac
trucks; (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 of hydrovac trucks; (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 $6,234 increased by
$2,330 (59.7%) compared to $3,904 in Q2/2023 principally due to
increased revenue.
- Selling and general administrative
expenses of $2,550 increased by $599 (30.7%) compared to $1,951 in
Q2/2023. The increase was principally due to generally increased
employee, sales and travel costs to handle present and anticipated
growth and non-recurring professional fees.
1 EBITDAS is calculated by subtracting interest,
tax, depreciation and amortization, gain/loss on disposal of fixed
assets, gain/loss on foreign exchange 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 performance and outlook, stating,
“Building on our strong financial performance in the second
quarter, we are poised to continue this upward trajectory well into
2025, thanks to robust demand for our products in both the U.S. and
Canada. Our sales backlog, extending into next year, underscores
the growing market confidence in our offerings. As we actively
explore ways to enhance our production capacity to meet this robust
demand, our commitment to the infrastructure sector remains
stronger than ever. We are not only expanding our product line but
are also innovating within the space, ensuring that Tornado leads
the way in delivering comprehensive infrastructure solutions.”
Financial
and Operating Highlights (in CAD $000’s except outstanding
common share and per share data) |
|
Three months ended June 30 |
|
Six Months ended June 30 |
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
Revenue |
$ |
34,423 |
|
$ |
23,530 |
|
|
$ |
68,327 |
|
$ |
44,625 |
|
Cost of sales |
|
28,189 |
|
|
19,626 |
|
|
|
56,351 |
|
|
37,281 |
|
Gross
profit |
|
6,234 |
|
|
3,904 |
|
|
|
11,976 |
|
|
7,344 |
|
|
|
|
|
|
|
Selling and
general administrative expenses |
|
2,550 |
|
|
1,951 |
|
|
|
4,937 |
|
|
3,740 |
|
Other (gain)
loss - foreign exchange |
|
(61 |
) |
|
14 |
|
|
|
(340 |
) |
|
78 |
|
Depreciation
and amortization |
|
195 |
|
|
286 |
|
|
|
383 |
|
|
546 |
|
Finance
expense |
|
74 |
|
|
164 |
|
|
|
152 |
|
|
325 |
|
Stock-based
compensation |
|
197 |
|
|
98 |
|
|
|
393 |
|
|
227 |
|
Gain on disposal of fixed assets |
|
(9 |
) |
|
- |
|
|
|
(9 |
) |
|
- |
|
|
|
|
|
|
|
Income
before tax |
|
3,288 |
|
|
1,391 |
|
|
|
6,460 |
|
|
2,428 |
|
Income tax expense |
|
(777 |
) |
|
(337 |
) |
|
|
(1,522 |
) |
|
(589 |
) |
|
|
|
|
|
|
Net
income |
$ |
2,511 |
|
$ |
1,054 |
|
|
$ |
4,938 |
|
$ |
1,839 |
|
|
|
|
|
|
|
EBITDAS |
$ |
3,779 |
|
$ |
2,025 |
|
|
$ |
7,212 |
|
$ |
3,748 |
|
|
|
|
|
|
|
Outstanding
common shares |
|
137,556,119 |
|
|
137,556,119 |
|
|
|
137,556,119 |
|
|
135,871,119 |
|
|
|
|
|
|
|
EBITDAS per
share - diluted |
$ |
0.028 |
|
$ |
0.015 |
|
|
$ |
0.053 |
|
$ |
0.027 |
|
Net income per share - diluted |
$ |
0.018 |
|
$ |
0.008 |
|
|
$ |
0.036 |
|
$ |
0.013 |
|
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 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.
- 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 supplier
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 1,400 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. 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 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 supplier 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 belief that the
Company is poised to continue the upward trajectory into 2025;
- management’s intention to enhance
the Company’s production capacity to meet the demand; and
- management’s intention to expand
the Company’s product line and innovate to ensure the Company leads
the way in delivering comprehensive infrastructure solutions.
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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