TORONTO, Feb. 13, 2019 /CNW/ - TerraVest Industries
Inc, (TSX: TVK) ("TerraVest" or the "Company") announces its
results for the first quarter ended December 31, 2018. The
Company's financial results for the first quarter ended
December 31, 2018 represent an improvement over the comparable
period of fiscal 2018.
FIRST QUARTER RESULTS AND OUTLOOK
Business Performance
Management believes that there are certain non‐IFRS financial
measures that can be used to assist shareholders in analyzing 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 first quarter ended
December 31, 2018 and the comparative period in
fiscal 2018.
|
|
|
First quarters
ended
|
|
Dec. 31, 2018
|
Dec. 31, 2017
|
|
$
|
$
|
|
|
|
Sales
|
79,031
|
62,603
|
|
|
|
Net income
|
6,139
|
5,147
|
Add:
|
|
|
Income tax
expenses
|
2,490
|
1,941
|
Financing
costs
|
1,514
|
1,077
|
Depreciation and
amortization
|
3,036
|
2,467
|
EBITDA
|
13,179
|
10,632
|
Change in fair value of
derivative financial instruments
|
1,747
|
177
|
(Gain) loss on disposal
of property, plant and equipment
|
(128)
|
45
|
Adjusted
EBITDA
|
14,798
|
10,854
|
Maintenance Capital
Expenditures
|
(1,551)
|
(813)
|
Income taxes
paid
|
(3,927)
|
(1,424)
|
Interest
paid
|
(1,423)
|
(1,197)
|
Cash Available for
Distribution
|
7,897
|
7,420
|
Dividends Paid in
the Period
|
1,763
|
1,842
|
Dividend Payout
Ratio
|
22%
|
25%
|
Sales for the quarter ended December 31,
2018 were $79,031 compared to
$62,603 for the prior comparable
period, representing an increase of 26%. This increase is a result
of the addition of MaXfield Group Inc. ("MaXfield"), which did not
contribute in the prior comparable period, as well as increased
levels of business activity in the Fuel Containment and Processing
Equipment segments.
Adjusted EBITDA for the quarter ended December 31, 2018 was $14,798 compared to $10,854 for the prior comparable period. This
represents an increase of 36%, which is a result of the reasons
explained above.
Maintenance Capital Expenditures were $1,551 for the quarter versus $813 for the prior comparable period. The
difference is related to timing of capital expenditures during the
year. During the period, the Company's total purchase of property,
plant and equipment was $5,114 of
which $3,563 is considered growth
capital. This growth capital includes additions to the Company's
desanding rental equipment fleet, as well as manufacturing
equipment to support capacity expansions and process improvements
in several of its businesses.
Income taxes paid increased from $1,424 to $3,927.
This is a result of increased profitability in the first quarter
ended December 31, 2018 compared to
the prior comparable period as well as timing of installment
payments.
Cash Available for Distribution increased 6% quarter over
quarter. This increase is largely explained from the recent
acquisition and increased business activity in Fuel Containment and
Processing Equipment partially offset by higher maintenance capital
expenditures and income taxes.
Outlook
TerraVest saw improved results this quarter versus the prior
comparable quarter 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 the remainder of the 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.
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
April 10, 2019 to shareholders of record as at the close of
business on March 29, 2019. The dividend is designated an
"eligible dividend" for Canadian income tax purposes.
Additional information can be found in TerraVest's interim
condensed 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.