LOGISTEC Announces Its Results of the Second Quarter of 2020
LOGISTEC Announces Its Results of the Second Quarter of 2020
Canada NewsWire
MONTRÉAL, Aug. 6, 2020
MONTRÉAL, Aug. 6, 2020 /CNW Telbec/ - LOGISTEC Corporation (TSX: LGT.A) (TSX: LGT.B) (the "Company"), a marine and environmental services provider, today announced its financial results for the three months and six months periods ended June 27, 2020.
Highlights from the second quarter of 2020
- Consolidated revenue reached $123.6 million, down $32.6 million or 20.9%;
- Adjusted EBITDA (1) closed at $19.9 million, down $1.8 million;
- Total diluted earnings per share of $0.35, down $0.10;
- Acquisition of two additional terminals at the Port of Houston in Texas and the Port of Pascagoula in Mississippi for a total purchase price of $16.5 million;
- $1.7 million investment in cargo handling equipment at the Port of Corner Brook in Newfoundland and Labrador.
Highlights from the first half of 2020
- Consolidated revenue reached $233.0 million, down $37.9 million or 14.0%;
- Adjusted EBITDA (1) closed at $27.4 million, up $4.5 million;
- Total basic loss per share closed at $0.06.
Results of the period
During the second quarter of 2020, consolidated revenue totalled $123.6 million, a decrease of $32.6 million or 20.9% over the same period in 2019. Revenue from the marine services segment was lower at $81.4 million compared to $94.5 million in the corresponding period of 2019. Cargo handling activities are deemed essential services by the government authorities in Canada and the United States. As such, our terminal operations across our North American network remained functional under our business continuity plan; however, we noted a lower volume of trade activities as a result of the closure of economies around the world. Revenue from the environmental services segment amounted to $42.2 million, a decrease of $19.5 million or 31.6% over the second quarter of 2019. COVID-19 led to 10 weeks of delay in starting up our environmental projects, which proved very costly to our operations. Since the end of May 2020, we have resumed all businesses in this segment, and we are now operating under strict distancing and sanitation protocols.
The adjusted EBITDA (1) for the quarter closed at $19.9 million, a decrease of $1.8 million or 8.3% over the comparative period. The reduction is mainly attributable to lower revenue following the temporary halt measures on some of our lines of service imposed by government authorities, partly offset by a $11.0 million wage subsidy from the Canada Emergency Wage Subsidy program.
Overall, LOGISTEC Corporation reported a profit attributable to owners of the Company of $4.6 million in the second quarter of 2020, down $1.3 million from the $5.9 million recorded in the corresponding period last year. This translated into total diluted earnings per share of $0.35, of which $0.34 was attributable to Class A shares and $0.37 to Class B shares.
(1) Adjusted EBITDA is a non-IFRS measure, please refer to the non-IFRS measure section. |
Despite the challenges associated with COVID-19, we have kept our focus on growth opportunities, both organically and through acquisitions, with four additional terminals added this quarter. The acquisition of Care terminal at the Port of Houston and the Port of Pascagoula has further expanded our footprint and anchored Gulf Stream Marine, Inc. as the terminal operator in three gulf coast states. Our cargo handling team also started to operate at the port of Kitimat, British Columbia, the largest private port in Canada. Finally, the investment in the intermodal terminal in Corner Brook, Newfoundland and Labrador, is an excellent example of how we have kept our focus on our plan and we were able to see this investment, which was started before the pandemic arrived, through to its completion.
COVID-19
During March 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization. The situation is constantly evolving, and the measures put in place have numerous economic repercussions at the global and national levels. These measures, which include travel bans, solitary confinement or quarantine, whether voluntary or not, and social distancing, have caused significant disruption in the United States and Canada, where the Company operates.
LOGISTEC rolled out its business continuity plan for its operations that are deemed essential services by the government authorities in Canada and the United States. More precisely, the Company's marine operations are considered essential services and, as such, our terminal operations across our North American network remained open and functional. In addition, our manufacturing of woven hoses, which is essential in providing communities with drinking water and fighting forest fires, remained operational.
On the environmental services side, we are, as every year, affected by the seasonality of our operations and most activities cannot be performed in the winter season. This includes site remediation and rehabilitation of water mains. COVID-19 has nonetheless affected some of these activities, causing significant delays in our projects. However, since the end of May 2020, we have resumed all businesses in this segment, and we are now operating under strict distancing and sanitation protocols.
As at June 27, 2020, the Company believed that it qualified to receive the Canada Emergency Wage Subsidy and that there was a reasonable assurance that the amount would be received from the Canadian federal government in connection with the COVID-19 pandemic. The Company recognized a $11.0 million wage subsidy receivable against the salary expense qualified for that subsidy under employee benefits expense in the condensed consolidated interim statements of earnings for the three-month and six-month periods ended June 27, 2020.
Outlook
"The outlook for the remainder of the year is expected to be reasonably good, given the challenges associated with COVID-19. In our marine services segment, we anticipate volumes to remain somewhat depressed due to the economic slowdown that followed the measures put in place by governments to suppress the virus. Furthermore, our outlook for cargo handling may also be impacted by challenging labour negotiations at the Port of Montréal. We have been without an agreement since early 2019 and discussions have proven difficult in the last weeks, causing work stoppages. Should these situations stabilize, volumes are likely to gradually come back to normal levels in a foreseeable future. Our environmental services segment will also be impacted to a certain degree as some projects, particularly in the USA, are being postponed into the new year. Having said this, we still have a strong order book to complete before the end of the year, and unless the pandemic interferes with our activities, we should have a busy second half of 2020," indicated Madeleine Paquin, President and Chief Executive Officer of LOGISTEC Corporation.
Dividends
On August 6, 2020, the Board of Directors declared a dividend of $0.09350 per Class A Common Share and $0.10285 per Class B Subordinate Voting Share, for a total consideration of $1.3 million. These dividends will be paid on October 9, 2020 to shareholders of record as of September 25, 2020.
About LOGISTEC
LOGISTEC Corporation is based in Montréal (QC) and provides specialized services to the marine community and industrial companies in the areas of bulk, break-bulk and container cargo handling in 36 ports and 63 terminals located in North America. LOGISTEC also offers marine transportation services geared primarily to the Arctic coastal trade as well as marine agency services to foreign shipowners and operators serving the Canadian market. Furthermore, the Company operates in the environmental industri where it provides services to industrial, municipal and other governmental customers for the rehabilitation of underground water mains, soils and materials management, site remediation, risk assessment, and manufacturing of woven hoses.
The Company has been profitable and has paid regular dividends since becoming public and payments have grown steadily over the years. A public company since 1969, LOGISTEC's shares are listed on the Toronto Stock Exchange under the ticker symbols LGT.A and LGT.B. More information can be obtained on the Company's website at www.logistec.com.
Non-IFRS measure
In this press release, the Company uses a measure that is not in accordance with IFRS. Adjusted earnings before interest expense, income taxes, depreciation and amortization expense ("adjusted EBITDA") is not defined by IFRS and cannot be formally presented in the consolidated financial statements. The definition of adjusted EBITDA used by the Company may differ from those used by other companies. Even though adjusted EBITDA is a non-IFRS measure, it is used by managers, analysts, investors and other financial stakeholders to analyze and assess the Company's performance and management from a financial and operational standpoint. Refer to Company's management's discussion and analysis of the period for further information and its Non-IFRS Measures section for the definition of this indicator and the reconciliation to profit (loss) for the period.
Forward-looking statements
For the purpose of informing shareholders and potential investors about the Company's prospects, sections of this document may contain forward-looking statements, within the meaning of securities legislation, about the Company's activities, performance and financial position and, in particular, hopes for the success of the Company's efforts in the development and growth of its business. These forward-looking statements express, as of the date of this document, the estimates, predictions, projections, expectations or opinions of the Company about future events or results. Although the Company believes that the expectations produced by these forward-looking statements are founded on valid and reasonable bases and assumptions, these forward-looking statements are inherently subject to important uncertainties and contingencies, many of which are beyond the Company's control, such that the Company's performance may differ significantly from the predicted performance expressed or presented in such forward-looking statements. The important risks and uncertainties that may cause the actual results and future events to differ significantly from the expectations currently expressed are examined under "Business Risks" in the Company's annual report and include (but are not limited to) the performances of domestic and international economies and their effect on shipping volumes, weather conditions, labour relations, pricing and competitors' marketing activities. The reader of this document is thus cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to update or revise these forward-looking statements, except as required by law.
Additional information relating to our Company can be found on SEDAR's website at www.sedar.com and on LOGISTEC's website at www.logistec.com.
Q2 2020 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(unaudited)
Condensed Consolidated Interim Statements of Earnings
(in thousands of Canadian dollars, except for per share amounts and number of shares)
For the three months ended | For the six months ended | |||
June 27, | June 29, | June 27, | June 29, | |
$ | $ | $ | $ | |
Revenue | 123,595 | 156,175 | 233,026 | 270,923 |
Employee benefits expense | (54,839) | (78,715) | (111,716) | (137,092) |
Equipment and supplies expense | (32,099) | (39,254) | (64,138) | (73,618) |
Operating expense | (9,329) | (10,133) | (20,603) | (19,588) |
Other expenses | (6,047) | (6,001) | (12,491) | (16,677) |
Depreciation and amortization expense | (11,223) | (10,728) | (21,999) | (21,562) |
Share of profit of equity accounted investments | 695 | 930 | 544 | 1,492 |
Other (losses) gains | (2,046) | (1,258) | 2,781 | (2,528) |
Operating profit | 8,707 | 11,016 | 5,404 | 1,350 |
Finance expense | (2,835) | (2,884) | (5,971) | (5,641) |
Finance income | 159 | 80 | 289 | 285 |
Profit (loss) before income taxes | 6,031 | 8,212 | (278) | (4,006) |
Income taxes | (1,416) | (2,106) | (337) | 1,181 |
Profit (loss) for the period | 4,615 | 6,106 | (615) | (2,825) |
Profit (loss) attributable to: | ||||
Owners of the Company | 4,590 | 5,927 | (831) | (2,963) |
Non-controlling interest | 25 | 179 | 216 | 138 |
Profit (loss) for the period | 4,615 | 6,106 | (615) | (2,825) |
Basic earnings (loss) per Class A Common Share (1) | 0.35 | 0.44 | (0.06) | (0.22) |
Basic earnings (loss) per Class B Subordinate Voting Share (2) | 0.38 | 0.49 | (0.07) | (0.25) |
Diluted earnings (loss) per Class A share | 0.34 | 0.43 | (0.06) | (0.22) |
Diluted earnings (loss) per Class B share | 0.37 | 0.48 | (0.07) | (0.25) |
Weighted average number of Class A shares outstanding, basic and diluted | 7,380,389 | 7,389,155 | 7,380,389 | 7,390,939 |
Weighted average number of Class B shares outstanding, basic | 5,485,163 | 5,409,868 | 5,485,163 | 5,362,879 |
Weighted average number of Class B shares outstanding, diluted | 5,693,288 | 5,717,038 | 5,693,288 | 5,719,571 |
(1) | Class A Common Share ("Class A share") |
(2) | Class B Subordinate Voting Share ("Class B share") |
Condensed Consolidated Interim Statements of Comprehensive Income
(in thousands of Canadian dollars)
For the three months | For the six months | |||
June 27, | June 29, | June 27, | June 29, | |
Profit (loss) for the period | 4,615 | 6,106 | (615) | (2,825) |
Other comprehensive (loss) income | ||||
Items that are or may be reclassified to the consolidated statements of earnings | ||||
Currency translation differences arising on translation of foreign operations | (3,379) | (2,627) | 6,473 | (4,950) |
Unrealized gain on translating debt designated as hedging item of the net investment in foreign operations | 1,793 | 1,380 | (3,547) | 3,158 |
Loss on derivative financial instruments designated as cash flow hedges | — | (39) | — | (185) |
Income taxes relating to derivative financial instruments designated as cash flow hedges | — | 11 | — | 50 |
Total items that are or may be reclassified to the consolidated statements of | (1,586) | (1,275) | 2,926 | (1,927) |
Items that will not be reclassified to the consolidated statements of earnings | ||||
Remeasurement loss on benefit obligation | (5,005) | (1,047) | (1,288) | (1,080) |
Return on retirement plan assets | 1,235 | (1,363) | (167) | (1,715) |
Income taxes on remeasurement gain (loss) on benefit obligation and return on retirement plan assets | 998 | 649 | 385 | 752 |
Total items that will not be reclassified to the consolidated statements of earnings | (2,772) | (1,761) | (1,070) | (2,043) |
Share of other comprehensive (loss) income of equity accounted investments, net of income taxes | ||||
Items that are or may be reclassified to the consolidated statements of earnings | (19) | — | (19) | — |
Items that will not be reclassified to the consolidated statements of earnings | 5 | — | 5 | — |
Total share of other comprehensive loss of equity accounted investments, net of income taxes | (14) | — | (14) | — |
Other comprehensive (loss) income for the period, net of income taxes | (4,372) | (3,036) | 1,842 | (3,970) |
Total comprehensive income (loss) for the period | 243 | 3,070 | 1,227 | (6,795) |
Total comprehensive income (loss) attributable to: | ||||
Owners of the Company | 241 | 2,902 | 976 | (6,912) |
Non-controlling interest | 2 | 168 | 251 | 117 |
Total comprehensive income (loss) for the period | 243 | 3,070 | 1,227 | (6,795) |
Condensed Consolidated Interim Statements of Financial Position
(in thousands of Canadian dollars) | ||||||
As at | As at | |||||
$ | $ | |||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | 18,449 | 22,608 | ||||
Trade and other receivables | 120,663 | 156,228 | ||||
Contract assets | 23,887 | 10,593 | ||||
Current income tax assets | 11,475 | 6,028 | ||||
Inventories | 14,357 | 12,569 | ||||
Prepaid expenses and other | 10,863 | 5,129 | ||||
199,694 | 213,155 | |||||
Equity accounted investments | 39,244 | 42,349 | ||||
Property, plant and equipment | 193,993 | 184,304 | ||||
Right-of-use assets | 109,946 | 89,581 | ||||
Goodwill | 149,109 | 140,617 | ||||
Intangible assets | 40,940 | 40,735 | ||||
Non-current assets | 2,549 | 2,417 | ||||
Non-current financial assets | 7,373 | 8,829 | ||||
Deferred income tax assets | 14,005 | 12,751 | ||||
Total assets | 756,853 | 734,738 | ||||
Liabilities | ||||||
Current liabilities | ||||||
Trade and other payables | 73,987 | 86,217 | ||||
Contract liabilities | 14,789 | 5,356 | ||||
Current income tax liabilities | 4,811 | 3,131 | ||||
Dividends payable | 1,258 | 1,245 | ||||
Current portion of lease liabilities | 11,748 | 9,820 | ||||
Current portion of long-term debt | 9,062 | 9,390 | ||||
115,655 | 115,159 | |||||
Lease liabilities | 99,853 | 81,495 | ||||
Long-term debt | 173,013 | 168,510 | ||||
Deferred income tax liabilities | 21,952 | 21,156 | ||||
Post-employment benefit obligations | 20,306 | 18,383 | ||||
Contract liabilities | 2,733 | 2,933 | ||||
Non-current liabilities | 44,402 | 46,088 | ||||
Total liabilities | 477,914 | 453,724 | ||||
Equity | ||||||
Share capital | 45,663 | 40,222 | ||||
Share capital to be issued | 4,906 | 9,811 | ||||
Retained earnings | 214,902 | 220,641 | ||||
Accumulated other comprehensive income | 12,574 | 9,697 | ||||
Equity attributable to owners of the Company | 278,045 | 280,371 | ||||
Non-controlling interest | 894 | 643 | ||||
Total equity | 278,939 | 281,014 | ||||
Total liabilities and equity | 756,853 | 734,738 | ||||
Condensed Consolidated Interim Statements of Changes in Equity
(in thousands of Canadian dollars)
Attributable to owners of the Company | ||||||||||||||||||||
Share capital | Share | Accumulated other | Retained earnings | Total | Non- | Total equity | ||||||||||||||
$ | $ | $ | $ | $ | $ | $ | ||||||||||||||
Balance as at January 1, 2020 | 40,222 | 9,811 | 9,697 | 220,641 | 280,371 | 643 | 281,014 | |||||||||||||
(Loss) profit for the period | — | — | — | (831) | (831) | 216 | (615) | |||||||||||||
Other comprehensive income (loss) | ||||||||||||||||||||
Currency translation differences arising on translation of | — | — | 6,438 | — | 6,438 | 35 | 6,473 | |||||||||||||
Unrealized loss on translating debt designated as | — | — | (3,547) | — | (3,547) | — | (3,547) | |||||||||||||
Remeasurement loss on benefit obligation and return on | — | — | — | (1,070) | (1,070) | — | (1,070) | |||||||||||||
Share of other comprehensive (loss) of equity | — | — | (14) | — | (14) | — | (14) | |||||||||||||
Total comprehensive income (loss) for the period | — | — | 2,877 | (1,901) | 976 | 251 | 1,227 | |||||||||||||
Remeasurement of written put option liabilities | — | — | — | (543) | (543) | — | (543) | |||||||||||||
Repurchase of Class A shares | (3) | — | — | (140) | (143) | — | (143) | |||||||||||||
Issuance and repurchase of Class B shares | 539 | — | — | (563) | (24) | — | (24) | |||||||||||||
Issuance of Class B shares capital to a subsidiary shareholder | 4,905 | (4,905) | — | — | — | — | — | |||||||||||||
Class B shares to be issued under the Executive Stock Option Plan | — | — | — | 45 | 45 | — | 45 | |||||||||||||
Other dividend | — | — | — | (121) | (121) | — | (121) | |||||||||||||
Dividends on Class A shares | — | — | — | (1,380) | (1,380) | — | (1,380) | |||||||||||||
Dividends on Class B shares | — | — | — | (1,136) | (1,136) | — | (1,136) | |||||||||||||
Balance as at June 27, 2020 | 45,663 | 4,906 | 12,574 | 214,902 | 278,045 | 894 | 278,939 | |||||||||||||
Condensed Consolidated Interim Statements of Changes in Equity (Continued)
(in thousands of Canadian dollars)
Attributable to owners of the Company | ||||||||
Share capital | Share | Accumulated other | Retained earnings | Total | Non- | Total equity | ||
$ | $ | $ | $ | $ | $ | $ | ||
Balance as at January 1, 2019 | 35,016 | 14,717 | 12,061 | 200,404 | 262,198 | 2,191 | 264,389 | |
Loss (profit) for the period | — | — | — | (2,963) | (2,963) | 138 | (2,825) | |
Other comprehensive income (loss) | ||||||||
Currency translation differences arising on translation of | — | — | (4,929) | — | (4,929) | (21) | (4,950) | |
Unrealized gain on translating debt designated as hedging item of the net investment in foreign operations | — | — | 3,158 | — | 3,158 | — | 3,158 | |
Remeasurement loss on benefit obligation and return on retirement plan assets, net of income taxes | — | — | — | (2,043) | (2,043) | — | (2,043) | |
Cash flow hedges, net of income taxes | — | — | (135) | — | (135) | — | (135) | |
Total comprehensive (loss) income for the period | — | — | (1,906) | (5,006) | (6,912) | 117 | (6,795) | |
Remeasurement of written put option liabilities | — | — | — | (390) | (390) | — | (390) | |
Repurchase of Class A shares | (4) | — | — | (274) | (278) | — | (278) | |
Issuance and repurchase of Class B shares | 433 | — | — | (739) | (306) | — | (306) | |
Issuance of Class B share capital to a subsidiary shareholder | 4,906 | (4,906) | — | — | — | — | — | |
Dividends on Class A shares | — | — | — | (1,341) | (1,341) | — | (1,341) | |
Dividends on Class B shares | — | — | — | (1,080) | (1,080) | — | (1,080) | |
Balance as at June 29, 2019 | 40,351 | 9,811 | 10,155 | 191,574 | 251,891 | 2,308 | 254,199 | |
Condensed Consolidated Interim Statements of Cash Flows
(in thousands of Canadian dollars)
For the six months ended | ||
June 27, | June 29, | |
$ | $ | |
Operating activities | ||
Loss for the period | (615) | (2,825) |
Items not affecting cash and cash equivalents | 26,645 | 30,577 |
Cash generated from operations | 26,030 | 27,752 |
Dividends received from equity accounted investments | 3,600 | 1,520 |
Contributions to defined benefit retirement plans | (471) | (502) |
Settlement of provisions | (243) | (65) |
Changes in non-cash working capital items | 13,677 | (11,137) |
Income taxes paid | (4,799) | (7,868) |
37,794 | 9,700 | |
Financing activities | ||
Net change in short-term bank loans | — | (13,577) |
Issuance of long-term debt, net of transaction cost | 36,655 | 62,298 |
Repayment of long-term debt | (36,123) | (26,992) |
Repayment of lease liabilities | (6,797) | (4,830) |
Interest paid | (5,184) | (5,349) |
Issuance of Class B shares | 190 | 258 |
Repurchase of Class A shares | (143) | (278) |
Repurchase of Class B shares | (718) | (862) |
Dividends paid on Class A shares | (1,380) | (1,341) |
Dividends paid on Class B shares | (1,124) | (1,067) |
(14,624) | 8,260 | |
Investing activities | ||
Acquisition of property, plant and equipment | (9,742) | (21,886) |
Acquisition of intangible assets | (84) | (39) |
Proceeds from disposal of property, plant and equipment | 185 | 297 |
Business combinations | (16,457) | — |
Repayment of due to shareholders | (121) | (5,386) |
Interest received | 114 | 163 |
Repayment of other non-current financial assets | 110 | 104 |
Repayment of other non-current liabilities | — | (190) |
Acquisition of other non-current assets | (327) | (271) |
Proceeds from disposal of other non-current assets | 49 | 90 |
(26,273) | (27,118) | |
Net change in cash and cash equivalents | (3,103) | (9,158) |
Cash and cash equivalents, beginning of period | 22,608 | 15,393 |
Effect of exchange rate on balances held in foreign currencies of foreign operations | (1,056) | 1,181 |
Cash and cash equivalents, end of period | 18,449 | 7,416 |
Additional information | ||
Acquisition of property, plant and equipment included in trade and other payables | 835 | 2,627 |
Issuance of Class B shares under the Employee Stock Purchase Plan for non-interest-bearing loans | 504 | 298 |
SOURCE Logistec Corporation
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