VANCOUVER, BC --(Marketwired - May 11, 2017) - WesternOne Inc.
("WesternOne") (TSX: WEQ) (TSX: WEQ.DB) today
announced the release of its financial results for the three months ended March 31, 2017.
The results, consisting of WesternOne's unaudited interim financial statements for the three months ended March 31, 2017 and
Management's Discussion and Analysis ("MD&A") dated May 11, 2017, are available on SEDAR (www.sedar.com).
2017 Q1 financial summary:
- WesternOne recorded Q1 consolidated revenue from continuing operations of $26.0 million, an increase of 16.5% from $22.3
million in the prior year period. The increase was due primarily to a comparatively colder winter season in Alberta, leading to
a general rise in heat-related rental volume and fuel sales. Heat-related services to major project customers also contributed
to the revenue growth, resulting in an increase of 66.1% in service revenues compared to the prior year period.
- Q1 gross profit and adjusted EBITDA (as defined below) were $10.7 million and $6.1 million respectively, compared to the
respective amounts of $10.3 million and $6.2 million in the prior year period. Despite the revenue growth, changes in gross
profit and adjusted EBITDA were minimal, reflecting challenges with rate-driven competition and supply-related factors that
continued to weigh on operating margins.
- Q1 net cash from operating activities of continuing operations was $5.4 million, compared to $6.3 million in the prior year
period. The decline was mainly due to increased accounts receivable relating to the higher business activities. Net change in
cash position from continuing operations was $14.9 million, compared to negative $5.4 million in the prior year period. The
increase was mainly due to the sale of WesternOne's modular space rental business and modular manufacturing operations in the
United States announced on March 6, 2017. WesternOne received estimated gross sale proceeds of $45.1 million from these
transactions and made a lump-sum principal repayment of $25.7 million under its senior credit facility. Other changes in the Q1
cash position included items relating to cash flow from operating activities, net capital expenditures, interest costs and
scheduled payments towards indebtedness.
- Net loss from continuing operations attributable to shareholders was $4.8 million ($0.28 per share), compared to net income
of $0.8 million ($0.71 per share) in prior year period. Included in the net loss or income were non-cash finance expense
relating to changes in the fair value of convertible debentures at quarter-end. Excluding the related non-cash effects on an
after-tax basis, net income for Q1 would have been $0.2 million ($0.01 per share), compared to net loss of $0.9 million ($0.76
per share) in the prior year period.
- On May 2, 2017, WesternOne completed the exit from the modular manufacturing and rental businesses with the announcement of
the closing of the sale of its Canadian modular manufacturing assets and liabilities for $2.5 million. The proceeds of this
transaction are subject to post-closing working capital adjustments and WesternOne may receive up to an additional $2.5 million
contingent on earnings from the business sold for the 12-month period following the close of the transaction.
Summary Financial Overview
($ millions except per share amounts) |
|
Three months ended March 31, |
| |
|
|
2017 |
|
|
|
2016 |
| Revenue from Continuing Operations |
|
$ |
26.0 |
|
|
$ |
22.3 |
| Gross Profit from Continuing Operations |
|
|
10.7 |
|
|
|
10.3 |
| |
|
|
|
|
|
|
|
| Adjusted EBITDA (1) (2) |
|
|
6.1 |
|
|
|
6.2 |
| |
|
|
|
|
|
|
|
| Net Income/(Loss) from Continuing Operations (2) |
|
|
(4.8) |
|
|
|
0.8 |
| Net Income (Loss) from Discontinued Operations (2) |
|
|
(0.2) |
|
|
|
(1.1) |
| Net Loss (2) |
|
|
(5.0) |
|
|
|
(0.3) |
| |
|
|
|
|
|
|
|
| Income/(Loss) per share from Continuing Operations (2) (3) |
|
|
(0.28) |
|
|
|
0.71 |
| Loss per share (2) (3) |
|
|
(0.29) |
|
|
|
(0.26) |
__________________
| (1) |
|
"Adjusted EBITDA" is not a recognized measure under IFRS and does not have a standardized meaning
prescribed by IFRS. "Adjusted EBITDA" refers to net income or loss from continuing operations before interest, taxes,
depreciation and amortization, and other specified items that would impact comparability including, where applicable,
non-operational income and expenses, securities-based compensation and other gains or losses. The use of the term
"non-operational income and expenses" is defined by WesternOne as those that do not impact operating decisions taken by
WesternOne's management as well as items of an unusual nature that do not reflect WesternOne's ongoing operations. For a
full description of adjusted EBITDA, refer to "Non-IFRS Measures" in the MD&A dated May 11, 2017. |
| (2) |
|
Represents amount attributable to shareholders. |
| (3) |
|
Income/(Loss) per share for prior periods have been adjusted on a retroactive basis to reflect the
consolidation of WesternOne's issued and outstanding common shares on the basis of one post-consolidation common share for
every 35 pre-consolidation common shares (the "Consolidation"). The Consolidation was completed on October
31, 2016. |
"We are pleased with the year-over-year growth in Q1 revenues as a result of our strategic focus on growing and servicing
major project customers within the construction heat markets, along with favorable impact from cold temperatures which bolstered
rental and related service activity levels. The market remains challenging, however, with rate compression brought on by
competition and an oversupply of fleet equipment," said Mr. Peter Blake, CEO of WesternOne. "To maintain market share and
competitiveness we will continue to focus on effectively redeploying rental fleet to targeted markets and managing capital
returns and liquidity."
Conference Call
Peter Blake, CEO, and the management team will host a conference call at 11:00am (Eastern time) or 8:00am (Pacific time), on
Friday, May 12, 2017 to review the financial results and corporate developments for the three months ended March 31, 2017.
To participate in this conference call, please dial one of the following numbers approximately 10 minutes prior to the
commencement of the call, and ask to join the WesternOne conference call.
Dial in numbers: Toll Free.......................................................... 1-888-390-0546
International or Local Toronto........................ 1-416-764-8688
Conference Call Replay
If you cannot participate on May 12, 2017, a replay of the conference call will be available by dialing one of the following
replay numbers. You will be able to dial in and listen to the conference two hours after the meeting end time, and the replay
will be available until May 19, 2017. Please enter the Replay ID number 319116 followed by the # key.
Replay Dial-In: Toll Free.......................................................... 1-888-390-0541
International or Local Toronto........................ 1-416-764-8677
Forward-looking Information
Certain statements in this news release may constitute "forward-looking" information that involves known and unknown risks,
uncertainties and other factors, and it may cause actual results, performance or achievements or industry results, to be
materially different from any future results, performance or achievements or industry results expressed or implied by such
forward-looking information. Forward-looking information is identified by the use of terms and phrases such as "anticipate",
"believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and
phrases, including references to assumptions. Such information includes, without limitation, statements with respect to: the
determination of post-closing working capital adjustments and future amounts payable to WesternOne pursuant to the earn-out
provision in relation to the sale of WesternOne's Canadian modular manufacturing assets and liabilities; and WesternOne's
intention to continue to focus on effectively redeploying rental fleet to targeted markets and managing capital returns and
liquidity. Actual events or results may differ materially.
Forward-looking information contained in this news release is based on certain key expectations and assumptions made by
WesternOne, including, without limitation: the stability of the economy in Western Canada; the impact of the current economic
climate in Western Canada on WesternOne's operations will remain consistent with WesternOne's current expectations; the increased
competitive environment in which WesternOne and its business units operate; rental fleet utilizations will remain challenging as
excess supply of rental equipment in the market place is expected to continue and adversely affect rental volumes and rates; a
protracted period of lower crude oil prices; the supply and demand for WesternOne's products and services and the related impact
on the pricing on such products and services will remain consistent with WesternOne's current expectations; and management's
assessment of future plans and operations. Although the forward-looking information contained in this news release is based upon
what WesternOne's management believes to be reasonable assumptions, WesternOne cannot assure investors that actual results will
be consistent with such information. Forward-looking information reflects current expectations of management regarding future
events and operating performance as of the date of this news release. Such information involves significant risks and
uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate
indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially
from the results discussed in the forward-looking information, and a description of these factors can be found under "Risk
Factors" in WesternOne's Annual Information Form dated March 30, 2017 and MD&A dated May 11, 2017, which are both available
on SEDAR (www.sedar.com).
The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement.
Forward-looking information reflects management's current beliefs and is based on information currently available to WesternOne.
The forward-looking information is made as of the date of this news release and WesternOne assumes no obligation to update or
revise such information to reflect new events or circumstances, except as may be required by applicable law.
About WesternOne
WesternOne Inc. seeks to acquire and grow businesses in the construction and infrastructure services sectors in Western
Canada. Its primary business platform, WesternOne Infrastructure Services, is a leading provider of construction heat services
and aerial equipment rentals to businesses in the construction, infrastructure, film and television industries in Western
Canada.
Additional Information
Additional information relating to WesternOne and other public filings, is available on SEDAR at www.sedar.com or on WesternOne's website at www.weq.ca.
Trading Symbols
Toronto Stock Exchange: WEQ and WEQ.DB
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF
THIS RELEASE.