Mr. Andre Laramee reports
CVTECH GROUP INC. REPORTS SHARPLY IMPROVED OPERATING PROFITABILITY IN 2012; RECORD RESULTS IN TERMS OF REVENUES, EBITDA AND NET EARNINGS; REVENUES FROM CONTINUING OPERATIONS OF $249.2 MILLION, UP 6.8% FROM 2011; EBITDA FROM CONTINUING OPERATIONS UP 38.0% TO $25.2 MILLION, OR 10.1% OF
REVENUES; NET EARNINGS FROM CONTINUING OPERATIONS OF $12.1 MILLION OR $0.17 PER
SHARE, ALMOST DOUBLE NET EARNINGS OF 2011
CVTech Group Inc.
has released results for
its fourth quarter and fiscal year ended Dec. 31, 2012. On Oct. 16, 2012, the corporation announced the sale of its operations in the
CVT systems and related products segment. Consequently the results of
this segment are presented as discontinued operations and the results
of the previous year have been restated accordingly.
"Two thousand twelve was a highly rewarding year for CVTech. First, our continuing
operations set new records in revenues, earnings before interest,
taxes, depreciation and amortization, and net earnings, and
we ended the year with an excellent financial situation. We also
achieved important strategic breakthroughs by pursuing our geographic
expansion in Ontario and the leadership of our subsidiaries in their
respective markets won them numerous contracts. Moreover, the fourth
quarter was vigorous, as our teams were called upon in response to
natural disasters in the northeastern U.S.," said Andre Laramee,
president and chief executive officer of CVTech.
(in thousands of dollars, except per share data)
Three months ended Dec. 31, Years ended Dec. 31,
2012 2011 2012 2011
Revenues $82,572 $66,685 $249,201 $233,237
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EBITDA from continuing operations 8,108 5,205 25,236 18,293
Net earnings from continuing operations 3,885 1,909 12,117 6,188
Per share -- basic and diluted $ 0.05 $ 0.03 $ 0.17 $ 0.09
Net earnings from discontinued operations $ 68 $ 3,350 $ 1,939 $ 3,097
-------- -------- --------- ---------
Net earnings (loss) $ 3,817 $(1,441) $ 10,178 $ 3,091
======== ======== ========= =========
Per share -- basic and diluted $ 0.05 $ (0.02) $ 0.14 $ 0.04
Revenues from continuing operations were up 23.8 per cent to $82.6-million from
$66.7-million in the fourth quarter of the previous year. The increase
reflects revenues of $34.7-million related to natural disasters in the
fourth quarter of 2012, compared with revenues of $11.4-million in the
corresponding quarter of 2011. The execution of this emergency work
required temporary reassignment of some workers and postponement of
work on regular contracts. The corporation estimates that recognition
of approximately $8.0-million in revenues was accordingly deferred from
the fourth quarter of 2012 to subsequent periods. Excluding these
items, revenues were relatively stable.
EBITDA from continuing operations was $8.1-million, or 9.8 per cent of revenues,
in the fourth quarter of 2012, compared with $5.2-million or 7.8 per cent of
revenues in the fourth quarter of 2011. The increase in EBITDA, in both
dollars and percentage of revenues, was due to the increase in sales
volume and to a more favourable revenue mix between the two periods
Net earnings from continuing operations were $3.9-million, or five cents per
diluted share, in the fourth quarter of 2012, compared with $1.9-million,
or three cents per diluted share, in the fourth quarter of 2011. For
discontinued operations, a net loss of $68,000 was recorded, compared with a net loss of $3.4-million a year earlier, when a goodwill
impairment charge of $2.9-million was recorded. As a result, net
earnings in the fourth quarter of 2012 were $3.8-million, or five cents per
diluted share, compared with a net loss of $1.4-million, or two cents per
diluted share, a year earlier.
At Dec. 31, 2012, the corporation had an order backlog of
Fiscal 2012 results
For the year ended Dec. 31, 2012, revenues from continuing
operations were $249.2-million, up 6.8 per cent from $233.2-million in 2011.
The increase of $16.0-million is attributable essentially to higher
revenues related to natural disasters in the fourth quarter of 2012
relative to the corresponding period of 2011, offset by the
postponement of revenue recognition to subsequent periods. Excluding
these items, revenues were relatively stable.
EBITDA from continuing operations was $25.2-million, or 10.1 per cent of
revenues, compared with $18.3-million or 7.8 per cent of revenues in 2011. EBITDA
for 2012 includes a $2.2-million life insurance settlement, offset by
non-recurring charges totalling $2.0-million related to a proxy fight
with regard to the acceptance of a circular from a dissenting
shareholder, the strategic alternatives review process, a provision for
bad debts and the reimbursement of legal fees related to a judgment.
Net earnings from continuing operations in 2012 were $12.1-million, or
17 cents per diluted share, almost double the net earnings of $6.2-million, or nine cents per diluted share, recorded in 2011. With
discontinued operations taken into account, net earnings in 2012 were
$10.2-million, or 14 cents per diluted share, compared with $3.1-million, or
four cents per diluted share, in 2011.
Solid cash flow and debt reduction
Reflecting the rise in net earnings, cash flow from operations before
changes in working capital items was $24.3-million in 2012, compared with
$18.9-million in 2011.
This strong cash flow, combined with the disposal of the CVT systems and
related products segment, enabled the corporation to improve its
financial position considerably in 2012. At Dec. 31, 2012, CVTech
had $14.3-million in cash and long-term debt, including the current
portion, was $25.2-million. The ratio of long-term debt to equity was
0.31 at Dec. 31, 2012, compared with 0.48 a year earlier.
"The year's accomplishments, both in the improvement of our operating
profitability and in the broadening of our service offering, signal the
beginning of a new era for the corporation. With massive investment in
the construction and maintenance of transmission and distribution
networks projected for the coming years, our ever-increasing presence
in eastern North America positions us favourably to profit from the
resulting business opportunities. Beyond the projected acquisition of
B.G. High Voltage Systems Ltd., which we expect to complete shortly,
we remain on the lookout for potential strategic acquisitions that will
enhance our service offering, our expertise and our geographic reach,"
concluded Mr. Laramee.
We seek Safe Harbor.
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