"The quarter was dominated by two main themes. Unfortunately, COVID-19 continued to capture the headlines remaining the major impediment to a return to economic growth in
"The second, and more positive point, relates to acquisitions. Since the start of 2021 we have announced two significant transactions, one which closed in April and the other we expect to close in the second quarter. Both companies,
"I am both excited and positive about the future of our company for a couple of reasons. It is only a matter of time before a sharp recovery in the Canadian economy takes place because the necessary conditions, including significant capital resources and consumer pent up demand, are waiting for COVID-19 to be brought under control. And, of course, the opportunities the new acquisitions bring to our company. In addition, I am of the view that the logistics and freight industry are ripe for further consolidation which we will be well positioned to capture, particularly "tuck-in" purchases," commented Mr.
Key financial highlights for the first quarter of 2021 with comparison to 2020 are as follows:
HIGHLIGHTS | |||
(unaudited) ($ millions) | Three month periods ended | ||
2021 | 2020 | Change | |
$ | $ | % | |
Revenue | |||
Less-Than-Truckload | 120.7 | 112.9 | 6.9 |
Logistics & Warehousing | 91.3 | 96.2 | (5.1) |
Specialized & Industrial Services | 79.3 | 111.3 | (28.8) |
Corporate and intersegment eliminations | (0.8) | (2.2) | - |
Total Revenue | 290.5 | 318.2 | (8.7) |
Operating income before depreciation and amortization (1) | |||
Less-Than-Truckload | 19.3 | 13.3 | 45.1 |
Logistics & Warehousing | 15.9 | 16.4 | (3.0) |
Specialized & Industrial Services | 15.0 | 17.4 | (13.8) |
Corporate | (3.1) | (1.9) | - |
Total Operating income before depreciation and amortization (1) | 47.1 | 45.2 | 4.2 |
(1) Refer to notes section of Summary |
- generated consolidated revenue of
$290.5 million , a decrease of$27.7 million , or 8.7 percent, as compared to$318.2 million in 2020 due to the negative impact of the COVID-19 pandemic ("COVID-19") resulting in: - an increase of
$7.8 million to$120.7 million in the Less-Than-Truckload segment - a decrease of
$4.9 million to$91.3 million in the Logistics & Warehousing segment - a decrease of
$32.0 million to$79.3 million in the Specialized & Industrial Services segment - earned consolidated operating income before depreciation and amortization ("OIBDA") of
$47 .1 million, an increase of$1.9 million as compared to$45.2 million in 2020 due to cost control initiatives and$6.0 million received from theCanada Emergency Wage Subsidy ("CEWS") resulting in: - an increase of
$6.0 million to$19.3 million in the Less-Than-Truckload segment - a decrease of
$0.5 million to$15.9 million in the Logistics & Warehousing segment - a decrease of
$2.4 million to$15.0 million in the Specialized & Industrial Services segment
First Quarter Financial Results
Revenue decreased by $27.7 million, or 8.7 percent, to $290.5 million and is summarized as follows:
- Less-Than-Truckload segment up
$7.8 million , or 6.9 percent, to$120.7 million - revenue improved by$7.8 million due to the$5.9 million of incremental revenue generated from the acquisition ofPacific Coast Express Limited ("PCX") and the steady nature of consumer demand being partially offset by COVID-19 and$0.2 million of lower fuel surcharge revenue. - Logistics & Warehousing segment down
$4.9 million , or 5.1 percent, to$91.3 million - revenue declined by$4.9 million due to COVID-19 and government restrictions which led to plant closures and supply chain disruptions resulting in lower freight volumes and spot prices along with$1.7 million of lower fuel surcharge revenue. - Specialized & Industrial Services segment down
$32 .0 million, or 28.8 percent, to$79 .3 million - revenue declined by$32 .0 million due to lower demand for specialized services including large diameter pipeline hauling and stringing services as well as fluid hauling and drilling related services resulting from a decline in the rig count in theWestern Canadian Sedimentary Basin . Revenue also declined due to lower demand for civil construction services in northernManitoba at Smook Contractors Ltd.
OIBDA increased by $1.9 million, or 4.2 percent, to $47.1 million and is summarized as follows:
- Less-Than-Truckload segment up
$6.0 million , or 45.1 percent, to$19.3 million - OIBDA improved due to cost control initiatives,$1.1 million of incremental OIBDA generated by PCX, and CEWS. Operating margin increased to 16.0 percent (CEWS adjusted - 15.2 percent) from 11.8 percent in 2020 due to cost control initiatives. - Logistics & Warehousing segment down
$0.5 million , or 3.0 percent, to$15.9 million - OIBDA declined due to a$1.3 million negative variance in foreign exchange resulting from the strengthening of the Canadian dollar relative to theU.S. dollar and a higher cost of subcontractors in certain markets being partially offset by cost control initiatives and CEWS. Operating margin improved to 17.4 percent (CEWS and foreign exchange adjusted - 16.2 percent) from 17.0 percent (CEWS and foreign exchange adjusted - 15.8 percent) in 2020 due to the continued focus on cost controls. - Specialized & Industrial Services segment down
$2.4 million , or 13.8 percent, to$15.0 million - OIBDA declined due to lower OIBDA from those Business Units providing specialized services including pipeline stockpiling and stringing services and from those involved in the transportation of fluids and servicing of wells. Operating margin improved to 18.9 percent (CEWS adjusted - 14.1 percent) from 15.6 percent in 2020 due to CEWS. Adjusted for CEWS, operating margin decreased due to a change in revenue mix.
Net income increased by
- A
$2.9 million positive variance in net foreign exchange, a$1.9 million increase in OIBDA, a$1.9 million positive variance in the fair value of investments, a$0 .7 million decrease in depreciation of property, plant and equipment, a$0.6 million decrease in income tax expense, a$0.2 million decrease in finance costs and a$0.2 million increase in the gain on sale of property, plant and equipment. - The above was partially offset by a
$0.1 million increase in depreciation of right-of-use assets.
A summary of
SUMMARY | |||
(unaudited) ($ millions, except per share amounts) | Three month periods ended | ||
2021 | 2020 | Change | |
$ | $ | % | |
Revenue | 290.5 | 318.2 | (8.7) |
Operating income before depreciation and amortization(1) | 47.1 | 45.2 | 4.2 |
Net foreign exchange (gain) loss | (0.1) | 2.8 | (103.6) |
Decrease (increase) in fair value of investments | (0.4) | 1.5 | (126.7) |
Net income | 13.0 | 4.7 | 176.6 |
Net Income - adjusted(2) | 11.8 | 9.5 | 24.2 |
Earnings per share(3) | 0.13 | 0.04 | 225.0 |
Earnings per share - adjusted(2) | 0.12 | 0.09 | 33.3 |
Net cash from operating activities | 39.0 | 40.2 | (3.0) |
Net cash from operating activities per share(3) | 0.40 | 0.38 | 5.3 |
Cash dividends declared per Common Share | 0.12 | 0.15 | (20.0) |
Notes: | |
(1) | Operating income before depreciation and amortization ("OIBDA") is defined as net income before depreciation of right-of-use assets and of property, plant and equipment, amortization of intangible assets, finance costs, net foreign exchange gains and losses, other (income) expense and income taxes. |
(2) | Net income - adjusted and earnings per share - adjusted are calculated by adjusting net income and basic earnings per share by the amount of any net foreign exchange gains and losses, and the change in fair value of investments. |
(3) | Earnings per share and net cash from operating activities per share are calculated based on the weighted average number of Common Shares outstanding for the period. |
Non-GAAP Terms - |
Financial Position
The following summarizes our financial position as at
- Working capital of
$247.1 million including$117.7 million of cash and cash equivalents and an undrawn Bank Credit Facility of$150.0 million . - Total net debt (
$459.4 million ) to operating cash flow ($221.2 million ) of 2.08:1 as defined per our Private Placement Debt agreement. - Private Placement Debt of
$458.2 million with no scheduled maturities until 2024 (average fixed rate of 3.93 percent per annum). Private Placement Debt decreased by$3.6 million due to the foreign exchange gain on ourU.S. $229.0 million debt. - Book value of Derivative Financial Instruments down
$3.5 million to$34.4 million , which swaps our$229.0 million ofU.S. dollar debt at an average foreign exchange rate of$1.1096 . - Net book value of property, plant and equipment of
$932.7 million , which includes$592 .2 million of carrying costs of owned real property. - Repurchased 304,028 Common Shares at an average price of
$12.21 per share under our normal course issuer bid.
About
Contact Information
Mr.
Mr.
Mr.
Ms.
121A - 31 Southridge Drive
Telephone: 403-995-5200
Fax: 403-995-5296
Disclaimer
This news release may contain forward-looking statements that are subject to risk factors associated with the oil and natural gas business and the overall economy.
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