TSX Symbol: WJX
TORONTO, Nov. 7, 2022 /CNW/ - Wajax Corporation ("Wajax" or the "Corporation") today announced its 2022 third quarter results.
In commenting on the Corporation's performance, Iggy Domagalski, President and Chief Executive Officer, stated "Wajax delivered excellent operational results in the third quarter, with revenues of $470.8 million and adjusted EBITDA of $39.1 million. The business continues to perform strongly, with robust heavy equipment sales, particularly in the construction and forestry category. This is due in part to our expanded direct distribution relationship with Hitachi, which took effect on March 1, 2022. To date, we have been exceptionally pleased with the growth enabled by this enhanced relationship with Hitachi, and continue to see even further potential, expecting that the relationship will continue to expand and drive greater equipment sales and product support revenue."(1)
Mr. Domagalski continued, "Industrial parts and ERS sales have also shown robust year-over-year growth, due in part to elevated commodity prices and capital spending by customers across all regions. During the first half of 2022, improved cash flow from operations allowed us to make early repayment of our acquisition credit facility and fund two tuck-in acquisitions, further expanding our ERS footprint and service offerings."
Mr. Domagalski added, "During the quarter, we continued to see overall strength in our backlog, which increased to a record $558.8 million. This momentum is being driven by sound fundamentals in many of our key markets, supported by higher commodity prices and capital spending as customers work to source equipment and services that were constrained during the COVID-19 pandemic."(1)
|
(Dollars in millions, except per share data)
|
Three Months Ended
September 30
|
Nine Months Ended
September 30
|
|
2022
|
2021
|
% change
|
2022
|
2021
|
% change
|
|
CONSOLIDATED RESULTS
|
|
|
|
|
|
|
|
Revenue
|
$470.8
|
$401.3
|
17.3 %
|
$1,421.5
|
$1,234.5
|
15.1 %
|
|
Equipment sales
|
$136.9
|
$104.7
|
30.8 %
|
$426.3
|
$364.5
|
17.0 %
|
|
Product support
|
$118.8
|
$114.3
|
3.9 %
|
$365.6
|
$334.8
|
9.2 %
|
|
Industrial parts
|
$134.7
|
$111.1
|
21.2 %
|
$397.9
|
$329.4
|
20.8 %
|
|
Engineered repair services
|
$70.1
|
$62.1
|
12.9 %
|
$202.9
|
$179.8
|
12.8 %
|
|
Equipment rental
|
$10.3
|
$9.2
|
12.0 %
|
$28.9
|
$26.0
|
11.2 %
|
|
|
|
|
|
|
|
|
Net earnings
|
$18.0
|
$14.7
|
22.4 %
|
$55.8
|
$45.3
|
23.2 %
|
|
Basic earnings per share(2)
|
$0.84
|
$0.68
|
23.5 %
|
$2.60
|
$2.13
|
22.1 %
|
|
|
|
|
|
|
|
|
Adjusted net earnings(1)(3)
|
$16.7
|
$15.5
|
7.7 %
|
$52.0
|
$44.5
|
16.9 %
|
|
Adjusted basic earnings per share(1)(2)(3)
|
$0.78
|
$0.72
|
8.3 %
|
$2.43
|
$2.09
|
16.3 %
|
|
|
|
|
|
|
|
|
Adjusted EBITDA(1)
|
$39.1
|
$40.7
|
(3.9 %)
|
$123.6
|
$117.2
|
5.5 %
|
As Wajax moves into the last quarter of 2022, it continues to see sound fundamentals in many of its key markets, bolstered by elevated commodity prices and capital spending. This positive view of the market remains counterbalanced primarily by rising interest rates, inflation, labour availability and ongoing supply chain issues. Wajax continues to manage these challenges through frequent dialogue with key suppliers and customers.
The Corporation's robust balance sheet and record quarter end backlog of $558.8 million, approximately two-thirds of which is expected to be converted in 2022, continue to show momentum in the business.(1) To maintain this momentum and increase shareholder value, Wajax plans to maintain focus on the following priorities:
- Developing its "people first" culture; by investing in its team and their safety and delivering exceptional customer experiences.
- Setting the stage for growth - organically through strategic investments, continuing to build its acquisition pipeline with a focus on ERS and industrial parts businesses, continuing to support its enhanced relationship with Hitachi, and prudently managing its balance sheet.
- Deploying its ERP and remote diagnostic systems and continuing to build sustainability into its business.
Looking ahead, Wajax believes its strong balance sheet, ability to generate cash flow, abundant organic growth opportunities and acquisition program will allow its business to grow meaningfully over the long term.
The Corporation also announced the declaration of a dividend of $0.25 per share for the fourth quarter of 2022 payable on January 4, 2023 to shareholders of record on December 15, 2022.
Third Quarter Highlights
- Revenue in the third quarter of 2022 increased $69.5 million, or 17.3%, to $470.8 million, from $401.3 million in the third quarter of 2021. Regionally:
- Revenue in western Canada of $224.3 million increased 26.4% from the prior year due to robust construction and forestry and mining equipment sales, and strength in the engineering repair services ("ERS") and industrial parts categories.
- Revenue in central Canada of $71.0 million decreased 4.3% from the prior year due primarily to lower material handling and power systems equipment sales, and lower mining and power systems product support revenue, offset partially by strength in industrial parts sales.
- Revenue in eastern Canada of $175.5 million increased 17.3% from the prior year due primarily to higher bearings sales driving higher industrial parts revenue, higher construction and forestry equipment revenue, and higher product support revenue in the mining category.
- Gross profit margin of 20.3% in the third quarter of 2022 decreased 90 basis points ("bps") compared to gross profit margin of 21.2% in the same period of 2021. The decrease was driven by a less favourable sales mix and lower product support and ERS margins, partially offset by higher industrial parts, equipment and equipment rental margins.
- Selling and administrative expenses as a percentage of revenue decreased to 14.7% in the third quarter of 2022 from 15.1% in the third quarter of 2021. Selling and administrative expenses in the third quarter of 2022 increased $8.7 million compared to the third quarter of 2021 due mainly to higher personnel costs as the volume of business increased over the prior year.
- EBIT increased $2.0 million, or 8.0%, to $26.7 million in the third quarter of 2022 versus $24.7 million in the same period of 2021. The year-over-year increase in EBIT was due primarily to higher sales volumes, offset partially by increased selling and administrative expenses.
- The Corporation generated net earnings of $18.0 million, or $0.84 per share, in the third quarter of 2022 versus $14.7 million, or $0.68 per share, in the same period of 2021. The Corporation generated adjusted net earnings of $16.7 million, or $0.78 per share, in the third quarter of 2022 versus $15.5 million, or $0.72 per share, in the same period of 2021. Adjusted net earnings in the third quarter of 2022 excludes non-cash gains on mark to market of derivative instruments of $1.3 million after-tax, or $0.06 per share (2021 – losses of $0.9 million after-tax, or $0.04 per share). Adjusted net earnings in the same period of 2021 also excludes a gain recorded on the sale of properties of $0.1 million after-tax, or less than $0.01 per share.(1)
- Adjusted EBITDA margin decreased to 8.3% in the third quarter of 2022 from 10.1% in the third quarter of 2021.(1)
- The Corporation's record backlog at September 30, 2022 of $558.8 million increased $23.9 million, or 4.5%, compared to June 30, 2022 backlog of $534.8 million due to more mining, material handling and ERS orders. Compared to September 30, 2021, backlog increased $187.2 million, or 50.4%, due to increased volume of orders in most categories, most notably construction and forestry, industrial parts and ERS.(1)
- Working capital of $342.7 million at September 30, 2022 increased $34.8 million from June 30, 2022 due to higher trade and other receivables and higher inventory, offset partially by increased accounts payable and accrued liabilities. Trailing four-quarter average working capital as a percentage of the trailing 12-month sales was 17.6%, a decrease of 50 bps from June 30, 2022, due to the higher trailing 12-month sales.(1)
- Cash flows used in operating activities amounted to $3.4 million in the third quarter of 2022, compared to cash flows generated from operating activities of $40.2 million in the same quarter of the previous year. The decrease in cash generated from operating activities of $43.6 million was mainly attributable to a decrease in cash generated from changes in non-cash operating working capital of $44.0 million, which was driven largely by an increase in inventory of $32.7 million in the third quarter of 2022 as compared to a decrease in inventory of $5.6 million in the same quarter of the previous year.
- The Corporation's leverage ratio increased to 1.28 times at September 30, 2022, compared to 1.10 times at June 30, 2022. The increase in the leverage ratio was due primarily to the higher debt level in the current period. The Corporation's senior secured leverage ratio was 0.81 times at September 30, 2022, compared to 0.65 times at June 30, 2022.(1)
- Effective October 6, 2022, the Corporation amended its bank credit facility to extend the maturity date from October 1, 2026 to October 1, 2027. The bank credit facility has a $400.0 million credit limit as at September 30, 2022, composed of a $50.0 million non-revolving term facility and a $350.0 million revolving term facility.
Wajax Corporation
Founded in 1858, Wajax (TSX: WJX) is one of Canada's longest-standing and most diversified industrial products and services providers. The Corporation operates an integrated distribution system providing sales, parts and services to a broad range of customers in diverse sectors of the Canadian economy, including: construction, forestry, mining, industrial and commercial, oil sands, transportation, metal processing, government and utilities, and oil and gas.
The Corporation's goal is to be Canada's leading industrial products and services provider, distinguished through its three core capabilities: sales force excellence, the breadth and efficiency of repair and maintenance operations, and the ability to work closely with existing and new vendor partners to constantly expand its product offering to customers. The Corporation believes that achieving excellence in these three areas will position it to create value for its customers, employees, vendors and shareholders.
Wajax will webcast its Third Quarter Financial Results Conference Call. You are invited to listen to the live webcast on Tuesday, November 8, 2022 at 2:00 p.m. ET. To access the webcast, please visit our website wajax.com, under "Investor Relations", "Events and Presentations", "Q3 2022 Financial Results" and click on the "Webcast" link.
|
Notes:
|
|
(1)
|
"Adjusted net earnings", "Adjusted basic earnings per share", "Adjusted EBITDA", "Adjusted EBITDA margin", "backlog", "leverage ratio", "senior secured leverage ratio" and "working capital" do not have standardized meanings prescribed by generally accepted accounting principles ("GAAP"). See the Non-GAAP and Other Financial Measures section later in this press release.
|
|
|
(2)
|
Weighted average shares, net of shares held in trust, outstanding for calculation of basic and diluted earnings per share for the three months ended September 30, 2022 was 21,399,694 (2021 – 21,409,323) and 22,217,478 (2021 – 22,075,170), respectively.
|
|
|
Weighted average shares, net of shares held in trust, outstanding for calculation of basic and diluted earnings per share for the nine months ended September 30, 2022 was 21,412,993 (2021 – 21,300,718) and 22,186,152 (2021 – 21,937,073), respectively.
|
|
|
(3)
|
Net earnings excluding the following:
|
|
|
a.
|
after-tax gain recorded on the sale of properties of nil (2021 – $0.1 million), or basic and diluted earnings per share of nil (2021 – less than $0.01) for the three months ended September 30, 2022.
|
|
b.
|
after-tax gain recorded on the sale of properties of nil (2021 – $0.8 million), or basic and diluted earnings per share of nil (2021 – $0.04) for the nine months ended September 30, 2022.
|
|
c.
|
after-tax non-cash gains on mark to market of derivative instruments of $1.3 million (2021 – losses of $0.9 million), or basic and diluted earnings per share of $0.06 (2021 – loss of $0.04) for the three months ended September 30, 2022.
|
|
d.
|
after-tax non-cash gains on mark to market of derivative instruments of $3.7 million (2021 – gains of $0.2 million), or basic and diluted earnings per share of $0.17 (2021 – $0.01) for the nine months ended September 30, 2022.
|
|
e.
|
after-tax Tundra transaction costs of nil (2021 – $0.3 million), or basic and diluted earnings per share of nil (2021 – $0.01) for the nine months ended September 30, 2022.
|
Non-GAAP and Other Financial Measures
The press release contains certain non-GAAP and other financial measures that do not have a standardized meaning prescribed by GAAP. Therefore, these financial measures may not be comparable to similar measures presented by other issuers. Investors are cautioned that these measures should not be construed as an alternative to net earnings or to cash flow from operating, investing, and financing activities determined in accordance with GAAP as indicators of the Corporation's performance. The Corporation's management believes that:
|
(i)
|
these measures are commonly reported and widely used by investors and management;
|
|
(ii)
|
the non-GAAP measures are commonly used as an indicator of a company's cash operating performance, profitability and ability to raise and service debt;
|
|
(iii)
|
"Adjusted net earnings" and "Adjusted basic and diluted earnings per share" provide indications of the results by the Corporation's principal business activities prior to recognizing non-recurring costs (recoveries) and non-cash losses (gains) on mark to market of derivative instruments. These adjustments to net earnings and basic and diluted earnings per share allow the Corporation's management to consistently compare periods by removing infrequent charges incurred outside of the Corporation's principal business activities and the impact of unrealized losses (gains) resulting from fluctuations in interest rates and the Corporation's share price;
|
|
(iv)
|
"Adjusted EBITDA" provides an indication of the results by the Corporation's principal business activities prior to recognizing non-recurring costs (recoveries) and non-cash losses (gains) on mark to market of derivative instruments. These adjustments to net earnings allow the Corporation's management to consistently compare periods by removing infrequent charges incurred outside of the Corporation's principal business activities, the impact of unrealized losses (gains) resulting from fluctuations in interest rates and the Corporation's share price, the impact of fluctuations in finance costs related to the Corporation's capital structure, the impact of tax rates, and the impact of depreciation and amortization of long-term assets; and
|
|
(v)
|
"Pro-forma adjusted EBITDA" provides the same utility as Adjusted EBITDA described above, however pursuant to the terms of the bank credit facility, is adjusted for the EBITDA of business acquisitions made during the period as if they were made at the beginning of the trailing 12-month period, and for the deduction of payments of lease liabilities. Pro-forma adjusted EBITDA is used in calculating the Leverage ratio and Senior secured leverage ratio.
|
Non-GAAP financial measures are identified and defined below:
|
|
|
Funded net debt
|
Funded net debt includes bank indebtedness, debentures and total long-term debt, net of cash. Funded net debt is relevant in calculating the Corporation's funded net debt to total capital, which is a non-GAAP ratio commonly used as an indicator of a company's ability to raise and service debt.
|
|
Debt
|
Debt is funded net debt plus letters of credit. Debt is relevant in calculating the Corporation's leverage ratio, which is a non-GAAP ratio commonly used as an indicator of a company's ability to raise and service debt.
|
|
Total capital
|
Total capital is shareholders' equity plus funded net debt.
|
|
EBITDA
|
Net earnings (loss) before finance costs, income tax expense, depreciation and amortization.
|
|
Adjusted net earnings (loss)
|
Net earnings (loss) before (gain) loss recorded on the sale of properties, non-cash losses (gains) on mark to market of derivative instruments and Tundra transaction costs.
|
|
Adjusted basic and diluted earnings (loss)per share
|
Basic and diluted earnings (loss) per share before (gain) loss recorded on the sale of properties, non-cash losses (gains) on mark to market of derivative instruments and Tundra transaction costs.
|
|
Adjusted EBITDA
|
EBITDA before (gain) loss recorded on the sale of properties, non-cash losses (gains) on mark to market of derivative instruments and Tundra transaction costs.
|
|
Pro-forma adjusted EBITDA
|
Defined as adjusted EBITDA adjusted for the EBITDA of business acquisitions made during the period as if they were made at the beginning of the trailing 12-month period pursuant to the terms of the bank credit facility and the deduction of payments of lease liabilities.
|
|
|
|
Working capital
|
Defined as current assets less current liabilities, as presented in the condensed consolidated interim statements of financial position.
|
|
Other working capital amounts
|
Defined as working capital less trade and other receivables and inventory plus accounts payable and accrued liabilities, as presented in the condensed consolidated interim statements of financial position.
|
|
|
|
Backlog
|
Backlog is a management measure which includes the total sales value of customer purchase commitments for future delivery or commissioning of equipment, parts and related services, including ERS projects. This differs from the remaining performance obligations as defined by IFRS 15 Revenue from Contracts with Customers. There is no directly comparable GAAP financial measure for Backlog.
|
Non-GAAP ratios are identified and defined below:
|
EBITDA margin
|
Defined as EBITDA divided by revenue, as presented in the condensed consolidated interim statements of earnings.
|
|
Adjusted EBITDA margin
|
Defined as adjusted EBITDA divided by revenue, as presented in the condensed consolidated interim statements of earnings.
|
|
Leverage ratio
|
The leverage ratio is defined as debt at the end of a particular quarter divided by trailing 12-month pro-forma adjusted EBITDA. The Corporation's objective is to maintain this ratio between 1.5 times and 2.0 times.
|
|
|
|
Senior secured leverage ratio
|
The senior secured leverage ratio is defined as debt excluding debentures at the end of a particular quarter divided by trailing 12-month pro-forma adjusted EBITDA.
|
|
|
|
Funded net debt to total capital
|
Defined as funded net debt divided by total capital. Total capital is the funded net debt plus shareholder's equity.
|
Supplementary financial measures are identified and defined below:
|
EBIT margin
|
Defined as EBIT divided by revenue, as presented in the condensed consolidated interim statements of earnings.
|
Reconciliation of the Corporation's net earnings to adjusted net earnings and adjusted basic and diluted earnings per share is as follows:
|
Three months ended
|
Nine months ended
|
|
September 30
|
September 30
|
|
2022
|
2021
|
2022
|
2021
|
|
Net earnings
|
$ 18.0
|
$ 14.7
|
$ 55.8
|
$ 45.3
|
|
Gain recorded on the sale of properties, after-tax
|
—
|
(0.1)
|
—
|
(0.8)
|
|
Non-cash (gains) losses on mark to market of derivative instruments, after-tax
|
(1.3)
|
0.9
|
(3.7)
|
(0.2)
|
|
Tundra transaction costs, after-tax
|
—
|
—
|
—
|
0.3
|
|
Adjusted net earnings
|
$ 16.7
|
$ 15.5
|
$ 52.0
|
$ 44.5
|
|
Adjusted basic earnings per share(1)
|
$ 0.78
|
$ 0.72
|
$ 2.43
|
$ 2.09
|
|
Adjusted diluted earnings per share(1)
|
$ 0.75
|
$ 0.70
|
$ 2.34
|
$ 2.03
|
|
(1)
|
For the three months ended September 30, 2022, the numbers of basic and diluted shares outstanding were 21,399,694 and 22,217,478, respectively (2021 – 21,409,323 and 22,075,170, respectively).
|
|
For the nine months ended September 30, 2022, the numbers of basic and diluted shares outstanding were 21,412,993 and 22,186,152, respectively (2021 – 21,300,718 and 21,937,073, respectively).
|
Reconciliation of the Corporation's EBIT to EBITDA, Adjusted EBITDA and Pro-forma adjusted EBITDA is as follows:
|
Three months ended
|
Nine months ended
|
Twelve months ended
|
|
September 30
2022
|
September 30
2021
|
September 30
2022
|
September 30
2021
|
September 30
2022
|
June 30
2022
|
December 31
2021
|
|
EBIT
|
$ 26.7
|
$ 24.7
|
$ 87.1
|
$ 77.0
|
$ 102.5
|
$ 100.5
|
$ 92.3
|
|
Depreciation and amortization
|
14.2
|
14.8
|
41.4
|
41.1
|
55.7
|
56.4
|
55.4
|
|
EBITDA
|
$ 40.8
|
$ 39.5
|
$ 128.5
|
$ 118.0
|
$ 158.2
|
$ 156.8
|
$ 147.7
|
|
Gain recorded on the sale of properties
|
—
|
(0.1)
|
—
|
(1.0)
|
(1.5)
|
(1.5)
|
(2.5)
|
|
Non-cash (gains) losses on mark to market of derivative instruments(1)
|
(1.7)
|
1.3
|
(5.0)
|
(0.3)
|
(4.7)
|
(1.7)
|
—
|
|
Tundra transaction costs(2)
|
—
|
—
|
—
|
0.4
|
—
|
—
|
0.4
|
|
Adjusted EBITDA
|
$ 39.1
|
$ 40.7
|
$ 123.6
|
$ 117.2
|
$ 152.1
|
$ 153.6
|
$ 145.6
|
|
Payment of lease liabilities(3)
|
(8.1)
|
(7.0)
|
(23.6)
|
(21.1)
|
(31.4)
|
(30.3)
|
(28.9)
|
|
Pro-forma adjusted EBITDA
|
$ 31.0
|
$ 33.7
|
$ 100.0
|
$ 96.1
|
$ 120.6
|
$ 123.3
|
$ 116.7
|
|
(1)
|
Non-cash (gains) losses on mark to market of non-hedged derivative instruments.
|
|
(2)
|
In 2021, the Corporation incurred transaction costs relating to the Tundra acquisition. These costs were primarily for advisory services.
|
|
(3)
|
Effective with the reporting period beginning on January 1, 2019 and the adoption of IFRS 16, the Corporation amended the definition of Funded net debt to exclude lease liabilities not considered part of debt. As a result, the corresponding lease costs must also be deducted from EBITDA for the purpose of calculating the leverage ratio.
|
Calculation of the Corporation's funded net debt, debt, leverage ratio and senior secured leverage ratio is as follows:
|
September 30
2022
|
June 30
2022
|
December 31
2021
|
|
Cash
|
$ (1.7)
|
$ (3.5)
|
$ (10.0)
|
|
Debentures
|
55.6
|
55.5
|
55.2
|
|
Long-term debt
|
93.8
|
77.7
|
98.2
|
|
Funded net debt
|
$ 147.7
|
$ 129.7
|
$ 143.5
|
|
Letters of credit
|
6.2
|
6.3
|
7.3
|
|
Debt
|
$ 153.9
|
$ 135.9
|
$ 150.7
|
|
Pro-forma adjusted EBITDA(1)
|
$ 120.6
|
$ 123.3
|
$ 116.7
|
|
Leverage ratio(2)
|
1.28
|
1.10
|
1.29
|
|
Senior secured leverage ratio(3)
|
0.81
|
0.65
|
0.82
|
|
(1)
|
For the twelve months ended September 30, 2022, June 30, 2022, and December 31, 2021.
|
|
(2)
|
Calculation uses debt divided by the trailing four-quarter Pro-forma adjusted EBITDA. This leverage ratio is calculated for purposes of monitoring the Corporation's objective target leverage ratio of between 1.5 times and 2.0 times, and is different from the leverage ratio calculated under the Corporation's bank credit facility agreement.
|
|
(3)
|
Calculation uses debt excluding debentures divided by the trailing four-quarter Pro-forma adjusted EBITDA. While the calculation contains some differences from the leverage ratio calculated under the Corporation's bank credit facility agreement, the resulting leverage ratio under the bank credit facility agreement is not significantly different.
|
Calculation of total capital and funded net debt to total capital is as follows:
|
September 30
2022
|
June 30
2022
|
December 31
2021
|
|
Shareholders' equity
|
$ 438.3
|
$ 421.4
|
$ 389.9
|
|
Funded net debt
|
147.7
|
129.7
|
143.5
|
|
Total capital
|
$ 586.0
|
$ 551.0
|
$ 533.4
|
|
Funded net debt to total capital
|
25.2 %
|
23.5 %
|
26.9 %
|
Calculation of the Corporation's working capital and other working capital amounts is as follows:
|
September 30
2022
|
June 30
2022
|
December 31
2021
|
|
Total current assets
|
$ 814.0
|
$ 728.5
|
$ 681.4
|
|
Total current liabilities
|
471.3
|
420.6
|
367.9
|
|
Working capital
|
$ 342.7
|
$ 307.9
|
$ 313.5
|
|
Trade and other receivables
|
(274.2)
|
(236.8)
|
(223.5)
|
|
Inventory
|
(446.7)
|
(414.0)
|
(388.7)
|
|
Accounts payable and accrued liabilities
|
384.7
|
343.9
|
305.8
|
|
Other working capital amounts
|
$ 6.5
|
$ 1.0
|
$ 7.1
|
Cautionary Statement Regarding Forward-Looking Information
This news release contains certain forward-looking statements and forward-looking information, as defined in applicable securities laws (collectively, "forward-looking statements"). These forward-looking statements relate to future events or the Corporation's future performance. All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward looking statements can be identified by the use of words such as "plans", "anticipates", "intends", "predicts", "expects", "is expected", "scheduled", "believes", "estimates", "projects" or "forecasts", or variations of, or the negatives of, such words and phrases or state that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors beyond the Corporation's ability to predict or control which may cause actual results, performance and achievements to differ materially from those anticipated or implied in such forward-looking statements. To the extent any forward-looking information in this news release constitutes future-oriented financial information or financial outlook within the meaning of applicable securities law, such information is being provided to demonstrate the potential of the Corporation and readers are cautioned that this information may not be appropriate for any other purpose. There can be no assurance that any forward-looking statement will materialize. Accordingly, readers should not place undue reliance on forward looking statements. The forward-looking statements in this news release are made as of the date of this news release, reflect management's current beliefs and are based on information currently available to management. Although management believes that the expectations represented in such forward-looking statements are reasonable, there is no assurance that such expectations will prove to be correct. Specifically, this news release includes forward looking statements regarding, among other things: our view that our enhanced relationship with Hitachi has even further growth potential, and our expectation that the relationship will continue to expand and drive greater equipment sales and product support revenues; our view that, as we move into the last quarter of 2022, we are continuing to see sound fundamentals in many of our key markets, bolstered by elevated commodity prices and capital spending, and that this positive view of the market is counterbalanced primarily by rising interest rates, inflation, labour availability and ongoing supply chain issues; our plans to continue to manage these challenges through frequent dialogue with key suppliers and customers; our belief that our robust balance sheet and record quarter-end backlog continue to show momentum in our business, together with our expectation that approximately two-thirds of such quarter-end backlog will be converted in 2022; our plans to maintain such momentum and increase shareholder value by maintaining our focus on the following priorities: (1) developing our "people first" culture by investing in our team and their safety, and delivering exceptional customer experiences, (2) setting the stage for growth – organically through strategic investments, continuing to build our acquisition pipeline with a focus on ERS and industrial parts businesses, continuing to support our enhanced relationship with Hitachi, and prudently managing our balance sheet, and (3) deploying our ERP and remote diagnostic systems, and continuing to build sustainability into our business; our belief that our strong balance sheet, ability to generate cash flow, abundant growth opportunities and acquisition program will allow our business to grow meaningfully over the long-term; our objective of managing our working capital and normal course capital investment programs within a leverage range of 1.5 – 2.0 times; and our goal of being Canada's leading industrial products and services provider, distinguished by our sales force excellence, the breadth and efficiency of our repair and maintenance operations, and our ability to work closely with existing and new vendor partners to constantly expand our product offering to customers, together with our belief that achieving excellence in these three areas will position us to create value for our customers, employees, vendors and shareholders. These statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions regarding: general business and economic conditions; the supply and demand for, and the level and volatility of prices for, oil, natural gas and other commodities; financial market conditions, including interest rates; our ability to successfully manage our business through the COVID-19 pandemic and actions taken by governments, public authorities, suppliers and customers in response to the novel coronavirus and its variants; the ability of Hitachi and Wajax to develop and execute successful sales, marketing and other plans related to the expanded direct distribution relationship which took effect on March 1, 2022; our ability to execute our One Wajax strategy, including our ability to execute on our organic growth priorities, complete and effectively integrate acquisitions, and successfully implement new information technology platforms, systems and software, such as our ERP system; the future financial performance of the Corporation; our costs; market competition; our ability to attract and retain skilled staff; our ability to procure quality products and inventory; and our ongoing relations with suppliers, employees and customers. The foregoing list of assumptions is not exhaustive. Factors that may cause actual results to vary materially include, but are not limited to: a continued or prolonged deterioration in general business and economic conditions, including as a result of the COVID-19 pandemic or armed conflicts between nations; supply chain disruptions and shortages related to or arising from the impacts of COVID-19 or armed conflicts between nations; fluctuations in financial market conditions, including interest rates; the continuing impact of the COVID-19 virus and its variants, including the duration and severity of travel, business and other restrictions imposed by governments and public authorities in response to COVID-19 and its variants; actions taken by our suppliers and customers in relation to the COVID-19 pandemic, including slowing, reducing or halting operations; the inability of Hitachi and Wajax to develop and execute successful sales, marketing and other plans related to their expanded direct distribution relationship; volatility in the supply and demand for, and the level of prices for, oil, natural gas and other commodities; a continued or prolonged decrease in the price of oil or natural gas; the level of demand for, and prices of, the products and services we offer; levels of customer confidence and spending; market acceptance of the products we offer; termination of distribution or original equipment manufacturer agreements; unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications or expectations, cost escalation, our inability to reduce costs in response to slow-downs in market activity, unavailability of quality products or inventory, supply disruptions (including those caused by or related to the COVID-19 pandemic), job action and unanticipated events related to health, safety and environmental matters); our ability to attract and retain skilled staff and our ability to maintain our relationships with suppliers, employees and customers. The foregoing list of factors is not exhaustive. Further information concerning the risks and uncertainties associated with these forward-looking statements and the Corporation's business may be found in our Annual Information Form for the year ended December 31, 2021 (the "AIF"), in our annual MD&A for financial risks, and in our most recent quarterly MD&A, all of which have been filed on SEDAR. The forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement. The Corporation does not undertake any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.
Readers are cautioned that the risks described in the AIF, and in our annual and quarterly MD&A, are not the only risks that could impact the Corporation. Risks and uncertainties not currently known to the Corporation, or currently deemed to be immaterial, may have a material effect on the Corporation's business, financial condition or results of operations.
Additional information, including Wajax's Annual Report, is available on SEDAR at www.sedar.com.
SOURCE Wajax Corporation
View original content: http://www.newswire.ca/en/releases/archive/November2022/07/c0377.html