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Press release from Marketwire

Toromont Announces Results for the Third Quarter of 2013 and Regular Quarterly Dividend

Monday, November 04, 2013

Toromont Announces Results for the Third Quarter of 2013 and Regular Quarterly Dividend

16:35 EST Monday, November 04, 2013

TORONTO, ONTARIO--(Marketwired - Nov. 4, 2013) - Toromont Industries Ltd. (TSX:TIH) today reported financial results for the third quarter ended September 30, 2013. For the quarter, revenues increased 20% and net earnings were 34% higher compared to the same period last year.

Three months ended
September 30
Nine months ended
September 30
millions, except per share amounts 2013 2012 % change 2013 2012 % change
Revenues $ 498.3 $ 415.0 20% $ 1,186.2 $ 1,076.1 10%
Operating income $ 62.1 $ 46.6 33% $ 126.2 $ 107.4 17%
Net earnings $ 43.5 $ 32.5 34% $ 88.6 $ 74.8 18%
Earnings per share - basic $ 0.57 $ 0.43 33% $ 1.16 $ 0.98 19%

"We are very pleased with results through September 2013. We booked and delivered a significant package of equipment to support the Baffinland Iron Ore mining project in Nunavut, a testament to our strong product offering, service capability and diversity. While the equipment and power industries are down in our territory, we have improved our market share. Our continued strength in product support and rentals supports our market position and profitability," said Scott J. Medhurst, President and Chief Executive Officer of Toromont Industries Ltd. "CIMCO also achieved record revenues for this time of year. Continued attention to project execution and expanding product support are key focus areas for growth and profitability."

Highlights:

  • Equipment Group revenues for the third quarter of 2013 were $427 million, up 18% from 2012 setting third quarter records for new, used rentals and product support. Equipment revenues increased 29% compared to last year with mining, construction and agriculture markets reporting solid year-over-year increases. Product support and rentals grew 6% and 2% respectively. Operating income increased 33% compared to last year on higher revenues, improved gross profit margins and lower relative expense growth.
  • On a year-to-date basis, Equipment Group revenues were $1 billion, up 7% from 2012. New and used equipment revenues were 7% higher than 2012. While mining revenues were 18% lower, construction related markets including road building and infrastructure reported increases. Product support and rentals grew 6% and 10% respectively. Operating income increased 16% compared to last year on higher revenues and lower relative expense levels. Operating income as a percentage of revenues for the nine months ended September 30, 2013 was 11.2% compared with 10.3% for the similar period last year.
  • Equipment Group backlogs were $116 million at September 30, 2013, down from $128 million at December 31, 2012 and $166 million at this time last year. Backlogs have declined from this time last year due to significant mining deliveries and improved equipment availability. Bookings were $203 million in the third quarter of 2013 compared to $108 million for the same period last year.
  • CIMCO set a new record for revenue for this time of year, at $71 million for the quarter and $175 million for the nine-month period ending September 30, 2013. Revenues increased 35% in the quarter and 31% year-to-date compared to last year on revenues related to a significant industrial project. Compared to last year, operating income increased 30% in the first nine months on higher revenues. On a year-to-date basis, operating income as a percentage of revenues was 7.3%, unchanged from last year.
  • CIMCO bookings in the third quarter of 2013 were $19 million compared to $22 million in the same period last year. Canadian recreational bookings were up slightly from last year while industrial and US bookings were lower. On a year-to-date basis, bookings were 2% lower than last year excluding a record $50 million order in the prior year. Backlogs were $76 million at September 30, 2013, a good level for this time of year.
  • Net earnings were $43.5 million in the quarter ($0.57 per share basic), up 34% from $32.5 million ($0.43 per share basic) reported last year, reflecting higher revenues and lower relative selling and administrative expenses. Through September 2013, net earnings were $88.6 million ($1.16 per share basic), up 18% from $74.8 million ($0.98 per share basic) reported last year, reflecting higher revenues, improved selling and administrative and expense levels and lower net interest expense, partially offset by lower gross margins.
  • Total debt net of cash to total capitalization was 21%, well within stated capital targets, strengthening from 33% at this time last year on improved cash flows.
  • Toromont announced the appointment of two new independent directors, Ms. Cathryn E. Cranston and Ms. Katherine A. Rethy, effective July 29, 2013. With these appointments, the Company's Board now consists of nine directors of whom seven are independent.
  • The Board of Directors approved the regular quarterly dividend of 13 cents per share on outstanding common shares, payable January 2, 2014 to shareholders of record on December 11, 2013. The regular quarterly dividend was previously increased 8% to 13 cents per share effective with the dividend paid April 1, 2013.

"We continue to see stronger competitive conditions in equipment markets due to ongoing global excess inventories and decreased industry opportunities, evidenced by gross margin pressures in the traditional construction markets. Bookings excluding the Baffinland package are up 1% year-to-date, with good activity in construction markets largely offset by declines in power systems. Total backlogs are 30% lower than this time last year. At CIMCO, Canadian recreational bookings recovered to more normal levels although industrial bookings were lower year-over-year. Order backlog position at CIMCO bodes well for its performance this year," continued Mr. Medhurst. "Across all of our operations, execution remains strong and we are focused on cost control initiatives."

Quarterly Results Materials

The complete third 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 Tuesday, November 5, 2013 at 8:00 a.m. (ET). The call may be accessed by telephone at 1-866-223-7781 (toll free) or 416-340-2216 (Toronto area). A replay of the conference call will be available until Tuesday, November 19, 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
September 30
Nine months ended
September 30
($ thousands, except share amounts) 2013 2012 2013 2012
Restated Restated
Revenues $ 498,297 $ 415,039 $ 1,186,167 $ 1,076,105
Cost of goods sold 377,969 314,504 898,503 810,656
Gross profit 120,328 100,535 287,664 265,449
Selling and administrative expenses 58,235 53,919 161,513 158,083
Operating income 62,093 46,616 126,151 107,366
Interest expense 2,242 2,597 6,519 6,967
Interest and investment income (599) (450) (2,859) (2,087)
Income before income taxes 60,450 44,469 122,491 102,486
Income taxes 16,965 12,006 33,874 27,670
Net Earnings $ 43,485 $ 32,463 $ 88,617 $ 74,816
Earnings per share
Basic $ 0.57 $ 0.43 $ 1.16 $ 0.98
Diluted $ 0.56 $ 0.42 $ 1.15 $ 0.97
Weighted average number of shares outstanding
Basic 76,625,374 76,289,126 76,570,320 76,616,258
Diluted 77,227,797 76,803,571 77,143,911 77,225,086

FOR FURTHER INFORMATION PLEASE CONTACT:

Contact Information:
Toromont Industries Ltd.
Paul R. Jewer
Executive Vice President and Chief Financial Officer
(416) 667-5638
www.toromont.com

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