TORONTO, ONTARIO -- (Marketwired) -- 07/29/13 -- Toromont Industries Ltd. (TSX: TIH) today reported financial results for the second quarter ended June 30, 2013. Net earnings increased 7% in the quarter compared to the same period last year while revenues were 1% lower.
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Three months ended June 30 Six months ended June 30
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millions, except per % %
share amounts 2013 2012 change 2013 2012 change
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$ $ $ $
Revenues 374.7 379.6 (1%) 687.9 661.1 4%
$ $ $ $
Operating income 38.7 36.7 6% 64.1 60.8 5%
$ $ $ $
Net earnings 27.3 25.4 7% 45.1 42.4 7%
$ $ $ $
Earnings per share -
basic 0.36 0.33 9% 0.59 0.55 7%
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"We are pleased with results for the quarter and first half of the year. Although our Equipment Group faced tough year-over-year comparators in mining, we delivered increased profitability reflecting our strong market position, diversity of industries served and growing contribution from product support. CIMCO achieved record revenues for a second quarter and first six months. Across all of our operations, execution remains strong and we are focused on cost control initiatives," said Scott J. Medhurst, President and Chief Executive Officer of Toromont Industries Ltd. "We continued to see stronger competitive conditions in equipment markets due to global excess inventories together with softness in certain market segments."
Highlights:
-- Equipment Group revenues for the second quarter of 2013 were $317
million, down 5% from 2012. Equipment revenues were 14% lower than 2012
which included significant deliveries to mining customers not repeated
in 2013. Excluding mining, sales to other market segments increased 14%,
principally on strength with road building and infrastructure customers.
Product support and rentals grew 5% and 15% respectively, both setting
new records for a second quarter. Operating income increased 2% compared
to last year on higher gross profit margins, partially offset by lower
revenues.
-- Equipment Group revenues for the first six months of 2013 were $584
million, up 1% from 2012. Equipment sales were 6% lower than 2012 due to
lower relative mining revenues. Excluding mining, equipment sales were
up 16%, significantly due to road building, infrastructure and power
systems. Product support and rentals grew 6% and 17% respectively.
Operating income increased 4% compared to last year on lower expense
levels. Operating income as a percentage of revenues for the six months
ended June 30, 2013 was 9.9% compared with 9.7% for the similar period
last year.
-- Equipment Group backlogs were $173 million at June 30, 2013 compared to
$128 million at December 31, 2012 and $260 million at this time last
year. Backlogs have declined from this time last year due to significant
mining deliveries during 2012 and improved equipment availability.
Bookings were $193 million in the second quarter of 2013 compared to
$195 million for the same period last year.
-- CIMCO revenues set a new record for this time of year, at $58 million
for the quarter and $104 million for the first six months of 2013.
Revenues increased 27% in the quarter and 28% year-to-date compared to
last year on revenues related to a significant industrial project. CIMCO
realized a $1 million gain due to insurance proceeds. Excluding this,
operating income increased 16% in the quarter and 5% through June 30,
2013 compared to last year on higher revenues. Operating income
excluding the gain as a percentage of revenues for the six months ended
June 30, 2013 was 4.8% compared with 5.9% for the similar period last
year on lower gross margins.
-- CIMCO bookings in the second quarter of 2013 were $34 million, down 19%
versus the second quarter of 2012. Canadian bookings were lower while US
bookings were strong. Through the first half of 2013, bookings were 1%
higher than last year excluding a $50 million order in the prior year.
Backlogs were $104 million at June 30, 2013.
-- Net earnings were $27.3 million in the quarter ($0.36 per share basic),
up 7% from $25.4 million ($0.33 per share basic) reported last year,
reflecting higher gross profit margins and lower net interest expense.
For the first six months of 2013, net earnings were $45.1 million ($0.59
per share basic), up 7% from $42.4 million ($0.55 per share basic)
reported last year, reflecting higher revenues and lower expense levels
partially offset by lower gross profit margins.
-- Equipment Group inventory levels have been a focus area. These
inventories were reduced $8 million from a year ago but were $42 million
higher than December 31, 2012. The normal seasonal trend would have
levels increasing during the first half of the year, however incremental
ordering (tier III) and lower sales volumes also contributed this year.
-- Total debt net of cash to total capitalization was 25%, well within
stated capital targets.
-- The Board of Directors approved the regular quarterly dividend of 13
cents per share on outstanding common shares, payable October 1, 2013 to
shareholders of record on September 12, 2013. The regular quarterly
dividend was previously increased 8% to 13 cents per share effective
with the dividend paid April 1, 2013.
"The strength of product support and diversity of end-markets are encouraging for our performance; however, we are seeing continuing softness in certain market segments," continued Mr. Medhurst. "At CIMCO, recreational bookings recovered to more normal levels and the order backlog position bodes well for performance this year."
Quarterly Results Materials
The complete second quarter report for 2013, including MD&A and unaudited interim condensed financial statements, is available on our website at www.toromont.com.
Quarterly Conference Call and Webcast
Interested parties are invited to join the quarterly conference call with investment analysts, in listen-only mode, on Monday, July 29, 2013 at 5:00 p.m. (ET). The call may be accessed by telephone at 1-866-226-1792 (toll free) or 416-340-2216 (Toronto area). A replay of the conference call will be available until Monday, August 12, 2013 by calling 1-800-408-3053 or 905-694-9451 and quoting passcode 7809226.
Both the live webcast and the replay of the quarterly conference call can be accessed at www.toromont.com.
Advisory
Information in this press release that is not a historical fact is "forward-looking information". Words such as "plans", "intends", "outlook", "expects", "anticipates", "estimates", "believes", "likely", "should", "could", "will", "may" and similar expressions are intended to identify statements containing forward-looking information. Forward-looking information in this press release is based on current objectives, strategies, expectations and assumptions which management considers appropriate and reasonable at the time including, but not limited to, general economic and industry growth rates, commodity prices, currency exchange and interest rates, competitive intensity and shareholder and regulatory approvals.
By its nature, forward-looking information is subject to risks and uncertainties which may be beyond the ability of Toromont to control or predict. The actual results, performance or achievements of Toromont could differ materially from those expressed or implied by forward-looking information. Factors that could cause actual results, performance, achievements or events to differ from current expectations include, among others, risks and uncertainties related to: business cycles, including general economic conditions in the countries in which Toromont operates; commodity price changes, including changes in the price of precious and base metals; changes in foreign exchange rates, including the Cdn$/US$ exchange rate; the termination of distribution or original equipment manufacturer agreements; equipment product acceptance and availability of supply; increased competition; credit of third parties; additional costs associated with warranties and maintenance contracts; changes in interest rates; the availability of financing; and, environmental regulation.
Any of the above mentioned risks and uncertainties could cause or contribute to actual results that are materially different from those expressed or implied in the forward-looking information and statements included in this press release. For a further description of certain risks and uncertainties and other factors that could cause or contribute to actual results that are materially different, see the risks and uncertainties set out in the "Risks and Risk Management" and "Outlook" sections of Toromont's most recent annual or interim Management Discussion and Analysis, as filed with Canadian securities regulators at www.sedar.com and may also be found at www.toromont.com. Other factors, risks and uncertainties not presently known to Toromont or that Toromont currently believes are not material could also cause actual results or events to differ materially from those expressed or implied by statements containing forward-looking information.
Readers are cautioned not to place undue reliance on statements containing forward-looking information that are included in this press release, which are made as of the date of this press release, and not to use such information for anything other than their intended purpose. Toromont disclaims any obligation or intention to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities legislation.
About Toromont
Toromont Industries Ltd. operates through two business segments: The Equipment Group and CIMCO. The Equipment Group includes one of the larger Caterpillar dealerships by revenue and geographic territory in addition to industry leading rental operations. CIMCO is a market leader in the design, engineering, fabrication and installation of industrial and recreational refrigeration systems. Both segments offer comprehensive product support capabilities. This press release and more information about Toromont Industries can be found at www.toromont.com.
TOROMONT INDUSTRIES LTD.
INTERIM CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
Three months ended Six months ended
June 30 June 30
($ thousands, except
share amounts) 2013 2012 2013 2012
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Restated Restated
Revenues $ 374,738 $ 379,607 $ 687,870 $ 661,066
Cost of goods sold 283,321 289,938 520,534 496,152
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Gross profit 91,417 89,669 167,336 164,914
Selling and
administrative
expenses 52,710 52,987 103,278 104,164
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Operating income 38,707 36,682 64,058 60,750
Interest expense 2,175 2,249 4,277 4,370
Interest and
investment income (1,068) (442) (2,260) (1,637)
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Income before income
taxes 37,600 34,875 62,041 58,017
Income taxes 10,316 9,492 16,909 15,664
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Net Earnings $ 27,284 $ 25,383 $ 45,132 $ 42,353
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Earnings per share
Basic $ 0.36 $ 0.33 $ 0.59 $ 0.55
Diluted $ 0.35 $ 0.33 $ 0.59 $ 0.55
Weighted average
number of shares
outstanding
Basic 76,588,810 76,760,731 76,542,490 76,773,193
Diluted 77,159,097 77,336,473 77,117,747 77,399,535
Contacts:
Toromont Industries Ltd.
Paul R. Jewer
Executive Vice President and Chief Financial Officer
(416) 667-5638
www.toromont.com
