PR Newswire
CALGARY, Aug. 9, 2018
Revenue Growth, Continued Cost Savings and Increased Growth Capital Highlight the Quarter
CALGARY, Aug. 9, 2018 /PRNewswire/ - Tervita Corporation ("Tervita", the "Company") (TSX: TEV) announced today the results for Tervita and Newalta Corporation ("Newalta") on a standalone basis, for the three and six months ended June 30, 2018. As the closing of the amalgamation of Tervita and Newalta occurred following the end of Q2 2018, the entities have reported standalone financial results. Tervita's first consolidated financial results will be for Q3 2018 which will be released in November following Q3 2018.
Tervita has provided high-level pro forma results to assist shareholders. All financial figures are in millions of Canadian dollars unless otherwise noted.
Message from the President & CEO
"We are extremely excited about the recently completed merger with Newalta and the opportunities it will provide for investors, customers and employees," said John Cooper, President and CEO. "Our combined second quarter pro forma financial results show significant strength in some business segments and stability in others. This demonstrates that the size and scope of the new company will lead to lower volatility and risk for investors while still providing the potential for double-digit growth backed by a strong, self-funded balance sheet. Moreover, we are now able to provide even more solutions for our customers, helping them to lower their costs through safe, efficient and environmentally responsible solutions."
Highlights for Tervita (Pro Forma)
Pro Forma Statement of Profit (Loss)(1)
Six Months Ended June 30, 2018 | ||||||
Tervita |
Newalta |
Pro Forma |
Pro Forma | |||
Revenue (excluding energy marketing) |
240 |
120 |
- |
360 | ||
Energy marketing revenue |
690 |
- |
- |
690 | ||
Revenue |
930 |
120 |
- |
1,050 | ||
Operating expenses |
||||||
Direct operating expenses (excluding energy marketing) |
(150) |
(84) |
- |
(234) | ||
Energy marketing direct operating expenses |
(690) |
- |
- |
(690) | ||
General and administrative |
(21) |
(13) |
- |
(34) | ||
Depreciation and amortization |
(32) |
(30) |
- |
(62) | ||
Operating profit (loss) |
37 |
(7) |
- |
30 | ||
Finance costs(2) |
(27) |
(15) |
1 |
(41) | ||
Other income (expense)(3) |
(6) |
(5) |
9 |
(2) | ||
Profit (loss) before tax |
4 |
(27) |
10 |
(13) | ||
(1) |
Presents an unaudited pro forma statement of comprehensive profit or loss for the six months ended June 30, 2018 as if the Arrangement had been completed at January 1, 2018. Refer to Tervita's and Newalta's Q2 2018 unaudited Financial Statements for further information. |
(2) |
The adjustment to finance costs represents the difference between the finance costs related to the Escrow Notes and the finance costs related to the Newalta secured and unsecured debt settled through the Arrangement. |
(3) |
Other income (expense) is adjusted for the elimination of expenses related to the Arrangement incurred by Tervita and Newalta. |
Pro Forma Statement Adjusted EBITDA(1)
Six Months 2018 Net profit (loss) (14) Add back: Severance costs 1 Depreciation and amortization 62 Finance costs 41 Other expense (income) 2 Income taxes expense (recovery) 1 Adjusted EBITDA 93 Adjusted EBITDA margin 26%
Ended June
30
(1) |
Adjusted EBITDA and Adjusted EBITDA margin are Non-GAAP measures. Please refer to Tervita's unaudited Q2 2018 Financial Statements and the section "Non-GAAP Measures of the Management's Discussion and Analysis" and Newalta's unaudited Q2 2018 Financial Statements and the section "Reconciliation of Non-GAAP Measures" of the Management's Discussion and Analysis for the definition and reconciliation of such Non-GAAP measures. |
Synergy Updates
Outlook
Key Q2 2018 Highlights – Tervita (Standalone)
Tervita (Standalone) Financial Results (1)
Three Months Ended June 30 |
Six Months Ended June 30 | ||||||||
2018 |
2017 |
% Change |
2018 |
2017 |
% Change | ||||
Revenue (net of energy marketing revenue and direct costs) |
540 |
373 |
45% |
930 |
822 |
13% | |||
General and administrative expenses |
(11) |
(12) |
-8% |
(21) |
(31) |
-32% | |||
Net profit (loss) |
- |
(12) |
-100% |
3 |
(14) |
-121% | |||
- per share ($), basic and diluted |
- |
(0.11) |
-100% |
0.03 |
(0.13) |
-123% | |||
Adjusted EBITDA (2) |
33 |
33 |
0% |
70 |
74 |
-5% | |||
Energy Services Divisional EBITDA (2) |
35 |
35 |
0% |
79 |
82 |
-4% | |||
Industrial Services Divisional EBITDA (2) |
9 |
8 |
13% |
11 |
15 |
-27% | |||
Maintenance capital expenditures |
5 |
5 |
n/m |
9 |
7 |
n/m | |||
Growth and expansion capital expenditures |
10 |
5 |
n/m |
21 |
12 |
n/m | |||
Shares outstanding, June 30, 2018 (3) |
104,626 |
104,626 |
0% |
104,626 |
104,626 |
0% | |||
Weighted average shares outstanding, June 30, 2018(3) |
104,626 |
104,626 |
0% |
104,626 |
104,626 |
0% | |||
(1) |
Refer to Tervita's Q2 2018 Management's Discussion and Analysis and unaudited Condensed Consolidated Financial Statements for further information. |
(2) |
These financial measures are Non-GAAP measures and are, therefore, unlikely to be comparable to similar measures presented by other issuers. These Non-GAAP financial measures are defined and reconciled in Tervita's Q2 2018 MD&A. |
(3) |
As at August 9, 2018 Tervita had 117,557,112 common shares outstanding and 2,702,649 million Warrants. |
Key Q2 2018 Highlights – Newalta (Standalone)
Newalta (Standalone) Financial Results(1)
Three Months Ended June 30 |
Six Months Ended June 30 | ||||||||
2018 |
2017 |
% Change |
2018 |
2017 |
% Change | ||||
Revenue |
58 |
58 |
0% |
120 |
119 |
1% | |||
General and administrative expenses |
(6) |
(7) |
-17% |
(13) |
(14) |
-13% | |||
Net profit (loss) |
(16) |
(16) |
0% |
(27) |
(31) |
-13% | |||
- per share ($), basic and diluted |
(0.18) |
(0.18) |
0% |
(0.30) |
(0.35) |
-14% | |||
Adjusted EBITDA (2) |
11 |
10 |
15% |
24 |
20 |
18% | |||
Maintenance capital expenditures |
2 |
2 |
n/m |
4 |
3 |
n/m | |||
Growth and expansion capital expenditures |
4 |
1 |
n/m |
11 |
2 |
n/m | |||
Shares outstanding - June 30, 2018 (3) |
88,148 |
88,148 |
0% |
88,148 |
88,148 |
0% | |||
Weighted average shares outstanding, June 30, 2018 |
88,148 |
88,148 |
0% |
88,148 |
88,148 |
0% | |||
(1) |
Refer to Newalta's Q2 2018 Management's Discussion and Analysis and unaudited Condensed Consolidated Financial Statements for further information. |
(2) |
These financial measures are Non-GAAP measures and are, therefore, unlikely to be comparable to similar measures presented by other issuers. These Non-GAAP financial measures are defined and reconciled in Newalta's Q2 2018 MD&A. |
(3) |
After giving effect to the Arrangement, pursuant to which each former shareholder of Newalta received 0.1467 of one common share of Tervita Corporation for each Newalta common share held and 0.03066 of on Warrant, Tervita Corporation has 117,557,112 common shares outstanding and 2,702,649 million Warrants. |
Management's Discussion and Analysis and Financial Statements
The Q2 2018 MD&A and Interim Financial Statements, which contain additional notes and disclosures, for each standalone entity are available on SEDAR under Tervita Corporation at www.SEDAR.com or on our website at www.tervita.com on the Investor Relations page.
Second Quarter 2018 Conference Call
Tervita will host a conference call on Friday August 10, 2018 at 11:00 a.m. MT to discuss details related to the second quarter. To participate in the conference call, dial 647-427-7450 or toll free 1-888-231-8191. To access the simultaneous webcast, please visit www.tervita.com. For those unable to listen to the live call, a taped broadcast will be available at www.tervita.com and, until midnight on Friday, August 17, 2018 by dialing 855-859-2056 and using the pass code 2745799.
About Tervita
Tervita has close to 40 years of operational experience in Canada as a leading environmental solutions provider. Our integrated earth, water, waste and resource solutions deliver safe and efficient results through all phases of a project by minimizing impact, maximizing returns.™ Our dedicated employees are trusted sustainability partners to oil and gas, construction, mining, government and communities. Safety is our highest priority: it influences our actions and shapes our culture. For more information visit Tervita.com.
Advisories
Forward-Looking Information
This news release contains certain statements that may be "forward-looking statements" or "forward-looking information" within the meaning of applicable securities laws. Forward looking statements are statements that are not historical facts and are often, but not always, identified using words or phrases such as "expects", "plans", "anticipates", "intends", "estimates", "estimated", "projects", "potential" and similar expressions, or stating that certain actions, events or conditions "will", "would", "may", "might", "could" or "should" occur or be achieved or other similar terminology. In particular, but without limiting the foregoing, this news release contains forward-looking statements or information pertaining to, the anticipated benefits of the Arrangement involving Tervita and Newalta, certain combined and pro forma financial information relating to Tervita and Newalta, our plans and objectives for future operations, anticipated operational and financial performance (including anticipated benefits from synergies and cost reductions), the nature of our operations since completion of the Arrangement, our growth strategy and our ability to take advantage of future growth opportunities, our cash flow, liquidity and financial position, our expectations regarding our maintenance capital spending, growth and expansion capital projects and sources of funding for our capital program, our expectations regarding higher oil and gas industry activity, our expectations regarding favourable seasonal conditions in respect of our Industrial Services segment, our expectations that oil and gas producers will continue to outsource waste by-product treatment and disposal and that it is difficult for third parties to replicate the expensive footprint of our facilities. By their nature, forward-looking statements and information involve known and unknown opportunities, costs, risks and uncertainties that may cause actual results; to differ materially from those anticipated. Risks and uncertainties that may affect actual results include, without limitation, our ability to realize the expected benefits of the Arrangement, decreases in exploration, drilling and production activity levels in the markets where we offer our services, customers may decide to no longer outsource their waste management and other environmental service activities, risks related to non-compliance with environmental laws or delays resulting from such non-compliance, legislative and regulatory initiatives that impact our business, competition, fluctuations in commodity prices and exchange rates and volatility in global financial conditions. With respect to the forward-looking statements and information contained in this news release, Tervita has made assumptions regarding, among other things: our ability to integrate our business with that of Newalta, the realization of the anticipated benefits and other synergies and cost savings of the Arrangement, the stability of the industries in which we operate, the creditworthiness of our customers, commodity prices, no material changes in the legislative and operating framework our business, our ability to access capital, our ability to successfully market our business in the areas in which we operate, conditions of the oil and gas industry in our current and proposed market, general economic, business and market conditions, our future debt levels and the impact of increasing competition. Although Tervita believes the expectations expressed in such forward-looking statements and information are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward-looking statements and information are based on the beliefs, estimates and opinions of Tervita's management on the date the statements are made. Except as required by law, Tervita undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.
The forward-looking statements and information included in this news release are expressly qualified in their entirety by this cautionary statement. Tervita cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking statements and information contained in this news release are made as of the date hereof, and Tervita does not undertake any obligation to update publicly or to revise any of the included forward-looking statements or information, whether as a result of new information, change in management's estimates or opinions, future circumstances or events or otherwise, except as expressly required by applicable securities law.
Any financial outlook in this document, as defined by applicable securities legislation has been approved by management of Tervita. Such financial outlook is provided with the purpose of providing information about management's current expectation and management's plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.
Non-GAAP Financial Measures
Certain financial measures in this news release are not prescribed by Internal Financial Reporting Standards ("IFRS") and therefore are considered non-GAAP measures. All non-GAAP measures presented herein do not have any standardized meaning and therefore are unlikely to be comparable to similar measures presented by other companies. Therefore, these non-GAAP measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. All non-GAAP measures are included because management uses the information to analyze operating performance and results, and therefore may be considered useful information by investors. Any non-GAAP measure presented herein has been identified and the applicable definition and reconciliation of such non-GAAP measure can be found in each of Tervita and Newalta's Q2 2018 MD&A.
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SOURCE Tervita Corporation