TORONTO, Dec. 13, 2018 /CNW/ - TerraVest Industries Inc.,
formerly TerraVest Capital Inc., (TSX: TVK) ("TerraVest" or the
"Company") announces its results for the fourth quarter and year
ended September 30, 2018. The Company's financial results for
the fourth quarter and year ended September 30, 2018 represent
an improvement over the comparable periods of fiscal 2017.
FOURTH QUARTER AND YEAR END REVIEW AND OUTLOOK
Business Performance
Management believes that there are certain nonāIFRS financial
measures that can be used to assist shareholders in determining the
performance of the Company. The table below highlights certain
financial results and reconciles net income to EBITDA, EBITDA to
Adjusted EBITDA and Adjusted EBITDA to Cash Available for
Distribution for the fourth quarter and the year ended
September 30, 2018 and the comparative periods in
fiscal 2017.
|
|
Fourth quarters
ended
|
Years
ended
|
|
Sept. 30, 2018
|
Sept. 30, 2017
|
Sept. 30, 2018
|
Sept. 30, 2017
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
Sales
|
79,297
|
52,699
|
269,927
|
192,535
|
|
|
|
|
|
Net income
|
8,266
|
3,478
|
17,152
|
9,028
|
Add
(subtract):
|
|
|
|
|
Income tax
expenses
|
1,523
|
(104)
|
5,313
|
2,677
|
Financing
costs
|
1,388
|
992
|
5,318
|
3,866
|
Depreciation and
amortization
|
3,902
|
2,120
|
11,758
|
9,728
|
EBITDA
|
15,079
|
6,486
|
39,541
|
25,299
|
Other (gains) losses
i)
|
(455)
|
(693)
|
1,365
|
(1,116)
|
Acquisition-related
costs
|
43
|
-
|
661
|
-
|
Adjusted
EBITDA
|
14,667
|
5,793
|
41,567
|
24,183
|
Maintenance Capital
Expenditures
|
(1,752)
|
(1,707)
|
(4,209)
|
(5,402)
|
Income taxes
paid
|
(816)
|
(744)
|
(6,249)
|
(3,811)
|
Interest
paid
|
(823)
|
(933)
|
(3,984)
|
(3,866)
|
Cash Available for
Distribution
|
11,276
|
2,409
|
27,125
|
11,104
|
Dividends Paid in
the Period
|
1,742
|
1,838
|
7,263
|
7,337
|
Dividend Payout
Ratio
|
15%
|
76%
|
27%
|
66%
|
|
|
i)
|
Other (gains) losses
exclude (gain) loss on foreign exchange
|
Sales for the quarter and year ended September 30, 2018 were $79,297 and $269,927 compared to $52,699 and $192,535 for the prior comparable periods,
representing increases of 50% and 40% respectively. These increases
are a result of the additions of MaXfield Group Inc. ("MaXfield")
and Fischer Tanks LLC ("Fischer Tanks"), which did not contribute
in the prior comparable periods, as well as increased levels of
business activity in the Fuel Containment and Processing Equipment
segments.
Adjusted EBITDA for the quarter and year ended September 30, 2018 was $14,667 and $41,567
compared to $5,793 and $24,183 for the prior comparable periods. This
represents increases of 153% and 72%, which are a result of the
reasons explained above. In reconciling EBITDA to Adjusted EBITDA,
non-recurring acquisition-related costs of $661 associated with the acquisition of MaXfield
have been added back.
Maintenance Capital Expenditures were $1,752 for the quarter versus $1,707 for the prior comparable period. During
the period, the Company's total purchase of property, plant and
equipment was $2,145 of which
$393 is considered growth capital.
This growth capital includes additions to the Company's rental
equipment fleet, as well as manufacturing equipment to support
capacity expansions and process improvements in several of its
businesses.
Cash Available for Distribution increased 368% quarter over
quarter and 144% year over year. These increases are largely
explained from the recent acquisitions and increased business
activity in Fuel Containment and Processing Equipment.
Outlook
TerraVest saw greatly improved results this year versus the
prior year due to contributions from recently acquired businesses
and newly added product lines, as well as a general increase in
business activity. The Fuel Containment segment continues to see
increased demand for most of its products and throughout next year
management expects to realize the full benefits of recently added
products lines and growth capital expenditures aimed at capacity
expansion and efficiency improvements. Management's expectations
for the Processing Equipment segment are positive as this segment
will benefit from a full year of contribution from the recently
acquired MaXfield. However, recent volatility in commodity pricing
could have a negative impact moving forward. The outlook for the
Service segment is not materially different than the prior year.
Pricing pressure has been a major challenge for this segment.
Management expects this to persist until commodity pricing
improves.
Global steel prices, tariffs and supply constraints continue to
be a challenge for the Company as a whole. Management is working
diligently with the government and suppliers to mitigate the
impact.
DIVIDEND
TerraVest is also pleased to announce that The Board of
Directors has declared its quarterly dividend of 10 cents per Common share payable on
January 11, 2019 to shareholders of record as at the
close of business on December 31, 2018. The dividend is
designated an "eligible dividend" for Canadian income tax
purposes.
Additional information can be found in TerraVest's annual
consolidated financial statements and MD&A which are available
on SEDAR at www.sedar.com.
Caution Regarding Forward-Looking
Statements
This news release contains forward-looking
statements. All statements other than statements of
historical fact contained in this news release are forward-looking
statements, including, without limitation, statements regarding our
strategic direction and evaluation of the business segments and
TerraVest as a whole, and other plans and objectives of or
involving TerraVest. Readers can identify many of these statements
by looking for words such as "expects" and "will" and similar words
or the negative thereof. Although management believes that the
expectations represented in such forward-looking statements are
reasonable, there can be no assurance that such expectations will
prove to be correct.
By their nature, forward-looking statements require us to
make assumptions and, accordingly, forward looking statements are
subject to inherent risks and uncertainties. There is significant
risk that the forward-looking statements will not prove to be
accurate. We caution readers of this news release not to place
undue reliance on our forward-looking statements because a number
of factors may cause actual future circumstances, results,
conditions, actions or events to differ materially from the plans,
expectations, estimates or intentions expressed in the
forward-looking statements and the assumptions underlying the
forward-looking statements.
Assumptions and analysis about the performance of TerraVest
as a whole and its business segments, the markets in which the
business segments compete and the prospects and values of the
business segments are considered in setting the business plan for
TerraVest, plans and/or ability to pay dividends, outlook for
operations, financial position, results and cash flow, other plans
and objectives and in making related forward-looking statements.
Such assumptions include, without limitation, demand for
products and services of the business segments in respect of the
Canadian and other markets in which the businesses are active will
be stable, and that input costs to business segments do not vary
significantly from levels experienced
historically. Should any of these factors or
assumptions vary, actual results may differ materially from the
forward-looking statements.
SOURCE TerraVest Industries Inc.