VANCOUVER, March 5, 2015 /PRNewswire/ - WesternOne Inc.
("WesternOne") (Toronto Stock Exchange: WEQ, WEQ.DB, and
WEQ.DB.C) today announced the release of its financial results for
the year ended December 31, 2014.
The results, consisting of WesternOne's audited financial
statements for the year ended December 31,
2014 and Management's Discussion and Analysis
("MD&A") dated March 4,
2015, are available on SEDAR (www.sedar.com).
2014 Q4 financial highlights and recent events are as
follows:
- WesternOne recorded Q4 consolidated revenue of $88.2 million, gross profit of $18.5 million and adjusted EBITDA(1)
of $7.4 million. Annual consolidated
revenue, gross profit and adjusted EBITDA were $373.9 million, $81.6
million and $41.6 million
respectively.
- During the fourth quarter, WesternOne recorded an adjustment to
reduce project gross profit by $7.1
million in relation to the on-site construction portion of
phase one of the Manitoba Hydro Keeyask workforce accommodations
project (the "Manitoba Hydro Project"). This adjustment
related to on-site general construction and infrastructure work
undertaken by Britco specifically for phase one of the Manitoba
Hydro Project, which is substantially complete as of the date of
this news release. It is management's intention to not pursue such
on-site general construction and infrastructure work in the future.
In order to provide a more representative view of the Company's
financial performance, this adjustment (the "Adjustment")
has been excluded, where noted, in the discussion below.
- Excluding the Adjustment, WesternOne's normalized gross profit
and adjusted EBITDA for Q4 was $25.6
million and $14.5 million,
respectively; an increase of 43.2% and 38.6% from $17.9 million and $10.5
million, respectively, in Q4 of 2013.
- WIS, WesternOne's infrastructure services division, recorded Q4
revenue of $28.0 million and adjusted
EBITDA of $8.5 million, representing
year-over-year growth of 18.3% and 13.1%, respectively. The growth
was driven by: (i) contribution from the acquisition of the
flameless heater business in late September
2014; (ii) increased dollar contribution from fuel sales due
to higher margins; and (iii) deployment of a larger fleet of aerial
equipment. The increase was partially offset by lower construction
heater rentals due to an unseasonably mild weather in the fourth
quarter in Alberta and higher
operating costs for new branch startups and support functions
including safety, IT and finance.
- Britco, WesternOne's modular construction and modular space
rental division, recorded Q4 revenue of $60.2 million, a marginal increase of 0.5% from
Q4 of 2013. Revenue growth was recorded from: (i) modular
construction as a result of increased production output and
efficiency due to large runs of work camp units; and (ii) modular
space rentals as a result of a larger modular space rental fleet.
The revenue growth, however, was offset by a decline in the volume
of on-site construction work, which typically generates a lower
margin than modular construction and modular space rentals. Q4
adjusted EBITDA was $0.2 million,
compared to $3.9 million in 2013.
Excluding the Adjustment, Q4 normalized adjusted EBITDA was
$7.3 million, an 87.8% increase from
Q4 of 2013. The increase was primarily due to: (i) enhanced modular
manufacturing margins from the increased production output and
efficiency; (ii) higher contribution from the modular space rental
division; (iii) and incremental earnings from the additional 20%
equity interest of the Britco USA
operations which was acquired in late September 2014. The increase was partially offset
by the lower volume of on-site construction work compared to Q4 of
2013 and higher operating costs relating to shared services and
project management functions to support project execution.
- Corporate overhead for Q4 for adjusted EBITDA purposes was
$0.3 million higher than Q4 of 2013,
relating to office overhead, headcount, regulatory compliance
expenses and professional fees such as legal and consultants.
- Q4 net income from continuing operations attributable to
shareholders was $12.5 million
($0.33 per share), compared to net
loss of $0.4 million ($0.01 per share) in 2013. Included in the Q4 2014
amount was a non-cash income of $19.6
million, relating to the revaluation of the liability
component of the convertible debentures in accordance with
IFRS.
- Q4 cash flow from operations was $9.1
million, compared to a cash outflow of $21.3 million in 2013. Annual 2014 cash flow from
operations was $47.9 million, up from
$3.7 million in 2013. The improvement
reflected the more effective working capital management in respect
of large work camp projects.
- Q4 consolidated payout percentage(2) was 35.3%, or
61.5% for the year.
- On March 3, 2015, WesternOne
entered into an amendment deed in connection with the senior credit
facility agreement with its senior lender (the "Bank").
Pursuant to the amendment, among other things, assuming that the
contractual requirements of the capital and acquisition loans are
met and the demand feature is not exercised by the Bank, the date
on which the capital and acquisition loans shall be fully repayable
has been extended from July 31, 2016
to July 31, 2018.
"We are pleased with the solid operating performance in the
fourth quarter, contributed by the larger rental fleet, and the
newly acquired flameless heater business for WIS, and improved
operating margins for Britco. We believe these factors have led to
strong operating cash flow for 2014 and will better position us as
we move forward in 2015," said Mr. Peter
Blake, Chief Executive Officer. "For 2015, our goals are
preservation of cash from sustainable operations, cost management,
and orderly servicing and repayment of debt. We strive to achieve
these goals through executing on a prudent and conservative capital
strategy, including redeploying existing capital to opportunities
that deliver higher returns."
"We will also continue to assess WesternOne's operating
performance and its business environment, and implement appropriate
capital allocation, financial and operational strategies as we
navigate the current business environment," continued Mr.
Blake.
Summary Financial
Overview
($ millions except per share amounts)
|
Three months
ended
December 31,
|
Year ended
December 31,
|
|
2014
|
2013
|
2014
|
2013
|
Revenue
|
$ 88.2
|
$ 83.6
|
$ 373.9
|
$ 292.4
|
Gross
Profit
|
18.5
|
17.9
|
81.6
|
78.1
|
|
|
|
|
|
Adjusted
EBITDA (1) (2)
|
7.4
|
10.5
|
41.6
|
50.1
|
|
|
|
|
|
Normalized
Adjusted EBITDA (1) (2)
|
14.5
|
10.5
|
48.7
|
50.1
|
|
|
|
|
|
Net Income
(Loss) from Continuing Operations
(2)
|
12.5
|
(0.4)
|
18.2
|
9.8
|
Net Income (Loss)
from Discontinued Operations (2)
|
0.9
|
(18.2)
|
(29.1)
|
(23.8)
|
Net Income
(Loss)
|
13.4
|
(18.6)
|
(10.9)
|
(14.0)
|
|
|
|
|
|
Earnings (Loss) per
Share from Continuing Operations (2)
|
|
|
|
|
|
- Basic
|
0.33
|
(0.01)
|
0.55
|
0.41
|
|
- Fully
Diluted
|
0.33
|
(0.01)
|
0.55
|
0.40
|
|
|
|
|
|
Earnings (Loss) per
Share (2)
|
|
|
|
|
- Basic and Fully
Diluted
|
0.35
|
(0.74)
|
(0.33)
|
(0.59)
|
|
|
|
|
|
Distributable Cash
Generated (1)
|
4.9
|
7.4
|
22.6
|
32.6
|
Cash Dividends
Declared
|
1.7
|
3.9
|
13.9
|
14.6
|
Distributable Cash
per Share (3)
|
0.1284
|
0.3087
|
0.6802
|
1.3632
|
|
|
|
|
|
Payout
Percentage (4)
|
35.3%
|
52.9%
|
61.5%
|
44.7%
|
___________________
|
Notes:
|
(1)
|
"Adjusted EBITDA",
"Normalized Adjusted EBITDA", and "Distributable Cash" are not
recognized measures under IFRS and do not have a standardized
meaning prescribed by IFRS. "Adjusted EBITDA" refers to net income
(loss) before interest, income taxes, depreciation, amortization,
gain/loss on financial derivatives relating to changes in the fair
market value of the fixed interest rate swap, business acquisition
and trust conversion costs, debenture issuance costs, gain/loss on
debentures relating to changes in their fair values, share based
compensation, foreign exchange gains/losses, and write-down of
capital assets, intangible assets and goodwill. "Normalized
Adjusted EBITDA" refers to Adjusted EBITDA excluding the
Adjustment. "Distributable Cash" refers to cash available for
paying dividend to the shareholders by WesternOne. For a full
description of Adjusted EBITDA, Normalized Adjusted EBITDA and
Distributable Cash refer to "Non-IFRS Measures" in the MD&A
dated March 4, 2015.
|
(2)
|
Represents amount
attributable to shareholders.
|
(3)
|
Calculated based on
basic weighted average number of shares.
|
(4)
|
Amounts calculated
using distributable cash and dividends declared for the related
period, not on per share amounts. Calculated as cash portion of
dividends declared divided by distributable cash
generated.
|
Conference Call
Peter Blake, CEO, Carlos Yam, CFO and Geoff Shorten, President & COO of WIS, and
Mike Ridley, President of Britco
will host a conference call at 9:00am
(Eastern time) or 6:00am (Pacific
time), on Thursday March 5,
2015, to review the financial results and corporate
developments for the three months and year ended December 31, 2014.
To participate in this conference call, please dial one of the
following numbers approximately 10 minutes prior to the
commencement of the call, and ask to join the WesternOne conference
call.
Dial in numbers:
Toll
Free...........................................................
1-888-390-0546
International or Local Toronto.............................
1-416-764-8688
Conference Call Replay
If you cannot participate on March 5,
2015, a replay of the conference call will be available by
dialing one of the following replay numbers. You will be able to
dial in and listen to the conference two hours after the meeting
end time, and the replay will be available until March 12, 2015. Please enter the Replay ID number
356382 followed by the # key.
Replay
Dial-In: Toll
Free...........................................................
1-888-390-0541
International or Local Toronto.............................
1-416-764-8677
Forward-looking Information
Certain statements in this press 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:
management's intention to not pursue on-site general construction
and infrastructure work in the future; the date of repayment of the
capital and acquisition loans; management's goals of preserving
cash flow from sustainable operations, cost management, and orderly
servicing and repayment of debt through a prudent and conservative
capital strategy, including redeploying existing capital to
opportunities that deliver higher returns; and management's
intention to continue to assess WesternOne's operating performance
and its business environment, and implement appropriate capital
allocation, financial and operational strategies. Actual events or
results may differ materially.
Forward-looking information contained in this press release is
based on certain key expectations and assumptions made by
WesternOne, including, without limitation: the outlook of
WesternOne's business and the economy in Western Canada and the US, the supply and
demand for WesternOne's products and services and management's
assessment of future plans and operations. Although the
forward-looking information contained in this press 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
press 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 28, 2014 and Management's Discussion and
Analysis dated March 4, 2015, which
are 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 press
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, WEQ.DB, and WEQ.DB.C
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT
ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS
RELEASE.
SOURCE WesternOne Inc.