Canada NewsWire
CALGARY, March 1, 2016
Higher Contract Income, EBITDA and Net Earnings; Stable $2.0B Backlog
CALGARY, March 1, 2016 /CNW/ - Stuart Olson Inc. (TSX: SOX, SOX.DB.A) ("Stuart Olson" or the "Company") today announced financial results for the fourth quarter and full year 2015, and declared a quarterly dividend of $0.12 per common share.
"2015 was a year of achievement for Stuart Olson as we focused on core areas of strength in the Buildings Group, expanded the Industrial Group's base of "MRO" or maintenance, repair and operations work, and maintained our robust $2.0 billion backlog with key contract wins across the country," said David LeMay, President and CEO of Stuart Olson.
"Our strategies contributed to stronger 2015 financial performance, including significantly higher EBITDA and net earnings results. Against a backdrop of low oil prices and weaker economic conditions in Alberta, these results underscore the benefits of our balanced mix of public, private and industrial projects, our diligent cost containment strategies and our access to multiple geographic markets in Canada."
"I am also pleased to report that subsequent to the year-end, on February 24, 2016, one of our longstanding oil sands customers awarded us one of the largest long-term industrial contracts in Stuart Olson's history. This five-year contract is valued at approximately $500.0 million and involves the provision of a diverse range of Industrial Group services. In the context of a 'lower for longer' oil price environment, this award affirms our strategy of expanding and vertically integrating our Industrial Group and sets the stage for new opportunities in 2016 and beyond."
FINANCIAL HIGHLIGHTS
Three months ended |
Year ended | ||||
December 31 |
December 31 | ||||
$millions, except percentages and per share amounts |
2015 |
2014(2) |
2015 |
2014(2) | |
Contract revenue |
283.1 |
364.5 |
1,151.4 |
1,306.3 | |
Contract income |
30.7 |
32.3 |
121.7 |
115.7 | |
Contract income margin |
10.8% |
8.9% |
10.6% |
8.9% | |
EBITDA |
11.5 |
13.7 |
51.1 |
43.4 | |
EBITDA margin |
4.1% |
3.8% |
4.4% |
3.3% | |
Net earnings from continuing operations |
2.1 |
1.2 |
11.2 |
7.1 | |
Net earnings (loss) from discontinued operations |
nil |
(0.7) |
nil |
(20.2) | |
Net earnings (loss) |
2.1 |
0.5 |
11.2 |
(13.1) | |
Earnings (loss) per share |
|||||
Basic from continuing operations |
0.08 |
0.05 |
0.42 |
0.29 | |
Basic earnings (loss) per share |
0.08 |
0.02 |
0.42 |
(0.52) | |
Diluted from continuing operations |
0.08 |
0.05 |
0.39 |
0.28 | |
Diluted earnings (loss) per share |
0.08 |
0.02 |
0.39 |
(0.53) | |
Dividends declared per share |
0.12 |
0.12 |
0.48 |
0.48 | |
Adjusted free cash flow |
11.2 |
7.0 |
33.7 |
18.2 | |
Adjusted free cash flow per share |
0.42 |
0.28 |
1.28 |
0.73 | |
$millions |
Dec. 31, |
Dec. 31, | |||
Backlog |
1,960.9 |
1,986.8 | |||
Working capital(1) |
64.4 |
54.4 | |||
Long-term debt (excluding current portion) |
46.6 |
0.8 | |||
Convertible debentures (excluding equity portion)(1) |
72.5 |
155.8 | |||
Total assets |
646.8 |
783.6 | |||
Notes: |
(1) The convertible debentures issued in 2010, and repaid June 30, 2015, were presented as a current liability of $84.8 million as at | ||||
(2) "EBITDA" for the year ended December 31, 2014 has been recalculated as a result of a change in definition in the year to exclude |
These financial results are presented in conformance with International Financial Reporting Standards ("IFRS"). All figures are in Canadian dollars unless otherwise noted. Certain financial and operational measures referred to in this press release, including "contract income margin", "EBITDA", "EBITDA margin", "backlog", "working capital", "adjusted free cash flow" and "adjusted free cash flow per share", are not prescribed measures under IFRS. For a description of these measures, see the "Non-IFRS Measures" section in Stuart Olson's 2015 Management's Discussion & Analysis.
Full Year 2015 Overview
Fourth Quarter (Q4) 2015 Overview
OUTLOOK
Stuart Olson expects consolidated revenue for 2016 to be similar to the level achieved in 2015. The revenue outlook is supported by a stable $2.0 billion backlog, which provides line of sight to activity levels for 2016 and into 2017, and reflects the Company's access to many different segments and geographic markets within the Canadian construction market. Both the Buildings Group and the Commercial Systems Group are executing backlogs dominated by public projects across multiple provinces. The Industrial Group has been successful in winning significant new business both within Alberta and beyond. This outlook is balanced with the potential for unknown impacts from the current "lower for longer" commodity pricing environment.
EBITDA and EBITDA margin are expected to modestly decline in 2016 reflecting the continuation of challenging economic conditions in the Alberta market and an increased proportion of lower-risk MRO projects for our Industrial Group. The EBITDA outlook also reflects the partial reversal of intercompany eliminations that favourably impacted 2015 results.
Stuart Olson's outlook for its three business groups is as follows:
Stuart Olson will hold a conference call and webcast to discuss its fourth quarter and full year 2015 results on March 2, 2016 at 7:30 a.m. Mountain Time (9:30 a.m. Eastern). The webcast will be broadcast live and will also be available for replay in the Presentations & Events subsection under Investor Relations on our website at www.stuartolson.com. For those unable to listen during the live webcast, a replay will be available on Stuart Olson's website shortly after the conclusion of the conference call for a period of 90 days. Financial analysts and institutional investors who wish to ask questions during the conference call are invited to call 1-888-390-0546 (Canada and USA) or 1-587-880-2171 (outside Canada and USA). For those unable to participate on the live call, a replay will be made available until Thursday, March 17, 2016, by dialing 1-888-390-0541 (Canada and USA) or 1-416-764-8677 (outside Canada and USA), pin 060168. The public is invited to listen to the live conference call, webcast or the replay.
About Stuart Olson Inc.
Stuart Olson Inc. provides building construction, commercial and industrial electrical contracting, and industrial insulation services to an array of public and private sector clients. The Company operates office locations throughout British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. Stuart Olson's common shares and convertible debentures are listed on the Toronto Stock Exchange under the symbols "SOX" and "SOX.DB.A", respectively. www.stuartolson.com
Forward Looking Information
This press release contains certain statements that may constitute forward-looking information within the meaning of applicable securities laws. This forward-looking information includes, without limitation, the statements relating to:
(a) |
the recently awarded $500.0 million Industrial Group contract, including the estimated value, timing and scope of the award; and | |
(b) |
made under the section entitled "Outlook" including, without limitation, those relating to: | |
(i) |
2016 revenue visibility; | |
(ii) |
Stuart Olson's backlog and the implication that such backlog provides line of sight to activity levels in 2016 and 2017; | |
(iii) |
2016 EBITDA and EBITDA margin projections; | |
(iv) |
economic conditions; and | |
(v) |
the outlook for each of Stuart Olson's business groups. |
Often, but not always, forward-looking information can be identified by the use of such words as "may", "will", "expect", "believe", "plan", "intend", "estimate", "outlook", "forecast", "should", "anticipate" and other similar terminology, including statements concerning possible or assumed future results. Forward-looking information is based on management's reasonable assumptions, analysis and estimates in respect of its experience and perception of trends, current economic conditions, government policies and expected developments, as well as other material factors that it considers to be relevant at the time of making such statements.
The forward-looking information in this press release is included solely for the purpose of assisting investors in understanding the Company's financial position and the results of its operations as at the date hereof. By its nature, forward-looking information involves known and unknown risks and uncertainties, which give rise to the possibility that management's assumptions, analysis and estimates will be incorrect and that the Company's anticipated results will not be achieved. Although the Company believes that the statements with respect to forward-looking information are reasonable and current, such statements should not be interpreted as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. Forward-looking information is necessarily subject to a number of factors that may cause actual results to differ materially from those results implied by the expectations suggested by such information. Those factors include, without limitation, the risks and uncertainties described in the Company's Annual Information Form filed with the securities regulatory authorities in Canada under the Company's profile at www.sedar.com. Readers are encouraged to consider the foregoing risks and other factors carefully when evaluating the forward-looking information and are cautioned not to place undue reliance upon such information when making investment decisions.
The forward-looking information in this press release is current to the date hereof, and is subject to change following such date. While the Company may elect to do so, unless required by applicable law, it undertakes no obligation to update this information to reflect new information or circumstances at any particular time.
SOURCE Stuart Olson Inc.