Revenues of | ||||||||||
Three Months Ended | Six Months Ended | |||||||||
Revenues | $ | 588 | $ | 937 | $ | 815 | $ | 1,403 | $ | 1,969 |
EBITDA1 | 32 | 65 | 36 | 67 | 137 | |||||
EBIT1 | 16 | 51 | 20 | 36 | 109 | |||||
Net Income | 5 | 31 | 11 | 15 | 65 | |||||
Earnings per share | 0.07 | 0.50 | 0.17 | 0.24 | 1.05 | |||||
Free Cash Flow per share1 | 0.25 | 0.71 | 0.41 | 0.66 | 1.65 | |||||
Cash from Operations | 116 | 50 | 68 | 184 | 44 | |||||
Shareholders' Equity | 931 | 980 | 980 | 931 | 980 | |||||
Dividends Paid per common share | 0.38 | 0.38 | 0.38 | 0.76 | 0.76 |
All amounts are reported in millions of Canadian dollars except per share figures, which are in Canadian dollars. |
1EBITDA, EBIT and Free Cash Flow per share are non-GAAP measures. EBITDA represent earnings before interest, income taxes and depreciation. EBIT represents earnings before interest, and income taxes. Free cash flow per share represents cash from operating activities before change in working capital less capital expenditures divided by average shares outstanding for the period. Our Management's Discussion and Analysis includes additional information regarding these non-GAAP measures, including a reconciliation to the most directly comparable GAAP measures, under the headings "Non-GAAP Measures", "EBIT and EBITDA", and "Free Cash Flow". |
For the 2020 second quarter we generated net income of
During the 2020 second quarter, we generated
Mr.
The Board of Directors approved a quarterly dividend of
Revenues in our metals service centers decreased 30% to
Energy Products
Revenues in our energy products segment decreased 50% to
Steel Distributors
Second quarter revenues in our steel distributors segment decreased by 36% to
The Company will be holding an Investor Conference Call on
A replay of the call will be available at 416-764-8677 (
Additional supplemental financial information is available in our investor conference call package located on our website at www.russelmetals.com.
About
Cautionary Statement on Forward-Looking Information
Certain statements contained in this press release constitute forward-looking statements or information within the meaning of applicable securities laws, including statements as to our future capital expenditures, our outlook, the availability of future financing and our ability to pay dividends. Forward-looking statements relate to future events or our future performance. All statements, other than statements of historical fact, are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. Forward-looking statements are necessarily based on estimates and assumptions that, while considered reasonable by us, inherently 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, including the factors described below.
We are subject to a number of risks and uncertainties which could have a material adverse effect on our future profitability and financial position, including the risks and uncertainties listed below, which are important factors in our business and the metals distribution industry. Such risks and uncertainties include, but are not limited to: the volatility in metal prices; volatility in oil and natural gas prices; cyclicality of the metals industry; capital budgets in the energy industry; pandemics and epidemics; climate change; product claims; significant competition; sources of metals supply; manufacturers selling directly; material substitution; credit risk; currency exchange risk; restrictive debt covenants; asset impairments; the unexpected loss of key individuals; decentralized operating structure; future acquisitions; the failure of our key computer-based systems, labour interruptions; laws and governmental regulations; litigious environment; environmental liabilities; carbon emissions; health and safety laws and regulations; and common share risks.
While we believe that the expectations reflected in our forward-looking statements are reasonable, no assurance can be given that these expectations will prove to be correct, and our forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release and, except as required by law, we do not assume any obligation to update our forward-looking statements. Our actual results could differ materially from those anticipated in our forward-looking statements including as a result of the risk factors described above and under the heading "Risk" in our MD&A and under the heading "Risk Management and Risks Affecting Our Business" in our most recent Annual Information Form and as otherwise disclosed in our filings with securities regulatory authorities which are available on SEDAR at www.sedar.com.
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CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) | ||||||||
Quarters ended | Six months ended | |||||||
(in millions of Canadian dollars, except per share data) | 2020 | 2019 | 2020 | 2019 | ||||
Revenues | $ | 588.1 | $ | 936.7 | $ | 1,402.8 | $ | 1,969.3 |
Cost of materials | 478.0 | 761.0 | 1,140.3 | 1,603.1 | ||||
Employee expense | 55.7 | 76.7 | 123.6 | 156.1 | ||||
Other operating expenses | 38.3 | 48.1 | 99.2 | 101.0 | ||||
Asset impairment | - | - | 3.7 | - | ||||
Earnings before interest and | ||||||||
provision for income taxes | 16.1 | 50.9 | 36.0 | 109.1 | ||||
Interest expense | 9.2 | 9.9 | 18.6 | 21.0 | ||||
Earnings before provision for income taxes | 6.9 | 41.0 | 17.4 | 88.1 | ||||
Provision for income taxes | 2.3 | 10.2 | 2.3 | 23.0 | ||||
Net earnings for the period | $ | 4.6 | $ | 30.8 | $ | 15.1 | $ | 65.1 |
Basic earnings per common share | $ | 0.07 | $ | 0.50 | $ | 0.24 | $ | 1.05 |
Diluted earnings per common share | $ | 0.07 | $ | 0.50 | $ | 0.24 | $ | 1.05 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) | ||||||||
Quarters ended | Six months ended | |||||||
(in millions of Canadian dollars) | 2020 | 2019 | 2020 | 2019 | ||||
Net earnings for the period | $ | 4.6 | $ | 30.8 | $ | 15.1 | $ | 65.1 |
Other comprehensive (loss) income | ||||||||
Items that may be reclassified to earnings | ||||||||
Unrealized foreign exchange (losses) gains on | ||||||||
translation of foreign operations | (23.3) | (12.0) | 26.8 | (24.0) | ||||
Items that may not be reclassified to earnings | ||||||||
Actuarial losses on pension and similar | ||||||||
obligations net of taxes | (6.9) | (2.7) | (8.6) | (2.7) | ||||
Other comprehensive (loss) income | (30.2) | (14.7) | 18.2 | (26.7) | ||||
Total comprehensive (loss) income | $ | (25.6) | $ | 16.1 | $ | 33.3 | $ | 38.4 |
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) | ||||
(in millions of Canadian dollars) | 2020 | 2019 | ||
ASSETS | ||||
Current | ||||
Cash and cash equivalents | $ | 89.1 | $ | 16.0 |
Accounts receivable | 320.5 | 458.1 | ||
Inventories | 861.9 | 883.6 | ||
Prepaid and other | 14.4 | 18.1 | ||
Income taxes receivable | 23.7 | 18.9 | ||
1,309.6 | 1,394.7 | |||
Property, Plant and Equipment | 285.7 | 288.9 | ||
Right-of-Use Assets | 86.0 | 90.1 | ||
Deferred Income Tax Assets | 3.6 | 4.8 | ||
Pension and Benefits | - | 5.4 | ||
Financial and Other Assets | 4.0 | 4.0 | ||
135.6 | 137.0 | |||
$ | 1,824.5 | $ | 1,924.9 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Current | ||||
Bank indebtedness | $ | 11.3 | $ | 62.1 |
Accounts payable and accrued liabilities | 283.1 | 326.4 | ||
Short-term lease obligations | 18.2 | 17.1 | ||
Income taxes payable | 0.7 | 0.3 | ||
313.3 | 405.9 | |||
Long-Term Debt | 445.4 | 444.8 | ||
Pensions and Benefits | 16.6 | 10.4 | ||
Deferred Income Tax Liabilities | 14.5 | 13.2 | ||
Long-term Lease Obligations | 92.7 | 94.4 | ||
Provisions and Other Non-Current Liabilities | 11.0 | 11.6 | ||
893.5 | 980.3 | |||
Shareholders' Equity | ||||
Common shares | 544.0 | 543.7 | ||
Retained earnings | 243.7 | 284.5 | ||
Contributed surplus | 15.8 | 15.7 | ||
Accumulated other comprehensive income | 127.5 | 100.7 | ||
Total Shareholders' Equity | 931.0 | 944.6 | ||
Total Liabilities and Shareholders' Equity | $ | 1,824.5 | $ | 1,924.9 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED) | ||||||||
Quarters ended | Six months ended | |||||||
(in millions of Canadian dollars) | 2020 | 2019 | 2020 | 2019 | ||||
Operating activities | ||||||||
Net earnings for the period | $ | 4.6 | $ | 30.8 | $ | 15.1 | $ | 65.1 |
Depreciation and amortization | 15.4 | 13.9 | 31.0 | 27.6 | ||||
Provision for income taxes | 2.3 | 10.2 | 2.3 | 23.0 | ||||
Interest expense | 9.2 | 9.9 | 18.6 | 21.0 | ||||
Gain on sale of property, plant and equipment | (0.1) | (0.1) | (0.2) | (0.3) | ||||
Asset impairment | - | - | 3.7 | - | ||||
Share-based compensation | 0.1 | - | 0.2 | 0.1 | ||||
Difference between pension expense and | ||||||||
amount funded | - | (0.4) | - | (0.7) | ||||
Debt accretion, amortization and other | 0.3 | 0.3 | 0.6 | 0.6 | ||||
Interest paid, including interest on lease obligations | (11.3) | (11.8) | (18.1) | (20.2) | ||||
Cash from operating activities before | ||||||||
non-cash working capital | 20.5 | 52.8 | 53.2 | 116.2 | ||||
Changes in non-cash working capital items | ||||||||
Accounts receivable | 150.7 | 55.1 | 141.1 | 31.2 | ||||
Inventories | 34.3 | 17.4 | 34.0 | 32.7 | ||||
Accounts payable and accrued liabilities | (93.8) | (54.9) | (47.3) | (81.1) | ||||
Other | 4.0 | (3.4) | 3.6 | (4.6) | ||||
Change in non-cash working capital | 95.2 | 14.2 | 131.4 | (21.8) | ||||
Income tax paid, net | (0.1) | (17.2) | (0.9) | (50.7) | ||||
Cash from operating activities | 115.6 | 49.8 | 183.7 | 43.7 | ||||
Financing activities | ||||||||
(Decrease) increase in bank indebtedness | (39.4) | (18.7) | (50.8) | 7.0 | ||||
Issue of common shares | - | - | 0.2 | 0.1 | ||||
Dividends on common shares | (23.7) | (23.6) | (47.3) | (47.2) | ||||
Lease obligations | (4.9) | (4.3) | (9.4) | (8.7) | ||||
Cash used in financing activities | (68.0) | (46.6) | (107.3) | (48.8) | ||||
Investing activities | ||||||||
Purchase of property, plant and equipment | (5.3) | (8.7) | (12.4) | (13.9) | ||||
Proceeds on sale of property, plant and equipment | 0.8 | 0.3 | 3.3 | 0.7 | ||||
Cash used in investing activities | (4.5) | (8.4) | (9.1) | (13.2) | ||||
Effect of exchange rates on cash | ||||||||
and cash equivalents | (6.4) | (3.6) | 5.8 | (7.9) | ||||
Increase (decrease) in cash and cash equivalents | 36.7 | (8.8) | 73.1 | (26.2) | ||||
Cash and cash equivalents, beginning of the period | 52.4 | 106.9 | 16.0 | 124.3 | ||||
Cash and cash equivalents, end of the period | $ | 89.1 | $ | 98.1 | $ | 89.1 | $ | 98.1 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) | ||||||||||
Accumulated | ||||||||||
Other | ||||||||||
Common | Retained | Contributed | Comprehensive | |||||||
(in millions of Canadian dollars) | Shares | Earnings | Surplus | Income | Total | |||||
Balance, | $ | 543.7 | $ | 284.5 | $ | 15.7 | $ | 100.7 | $ | 944.6 |
Payment of dividends | - | (47.3) | - | - | (47.3) | |||||
Net earnings for the period | - | 15.1 | - | - | 15.1 | |||||
Other comprehensive income for the period | - | - | - | 18.2 | 18.2 | |||||
Recognition of share-based compensation | - | - | 0.2 | - | 0.2 | |||||
Share options exercised | 0.3 | - | (0.1) | - | 0.2 | |||||
Transfer of net actuarial losses on defined benefit plans | - | (8.6) | - | 8.6 | - | |||||
Balance, | $ | 544.0 | $ | 243.7 | $ | 15.8 | $ | 127.5 | $ | 931.0 |
Accumulated | ||||||||||
Other | ||||||||||
Common | Retained | Contributed | Comprehensive | |||||||
(in millions of Canadian dollars) | Shares | Earnings | Surplus | Income | Total | |||||
Balance, | $ | 542.1 | $ | 318.6 | $ | 15.7 | $ | 128.5 | $ | 1,004.9 |
Payment of dividends | - | (47.2) | - | - | (47.2) | |||||
Change in accounting policy | - | (16.1) | - | - | (16.1) | |||||
Net earnings for the period | - | 65.1 | - | - | 65.1 | |||||
Other comprehensive loss for the period | - | - | - | (26.7) | (26.7) | |||||
Recognition of share-based compensation | - | - | 0.1 | - | 0.1 | |||||
Share options exercised | 0.1 | - | - | - | 0.1 | |||||
Transfer of net actuarial losses on defined benefit plans | - | (2.7) | - | 2.7 | - | |||||
Balance, | $ | 542.2 | $ | 317.7 | $ | 15.8 | $ | 104.5 | $ | 980.2 |
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