Logistec Corporation
TSX : LGT.A
TSX : LGT.B

Logistec Corporation

November 03, 2011 12:33 ET

Logistec Achieves a Record Profit in the Third Quarter of 2011

MONTRÉAL, QUÉBEC--(Marketwire - Nov. 3, 2011) - Logistec Corporation (TSX:LGT.A)(TSX:LGT.B), a marine and environmental services provider, today announced its financial results for the third quarter and first nine months ended September 24, 2011.

During the third quarter of 2011, Logistec achieved a solid 21.3% growth in its consolidated revenue which totalled $67.2 million, compared to $55.4 million for the equivalent period of 2010. The marine services segment's revenue grew by 5.7% to $33.0 million for the third quarter of 2011, compared to $31.2 million for the third quarter of 2010. This growth is due to intensified revenue in the United States as well as higher volumes of bulk cargo. The environmental services segment's revenue rose 41.4% to $34.2 million, up from $24.2 million for the third quarter of 2010. Sanexen's excellent results were driven by the increase in site remediation activities.

Logistec achieved a record profit for the period in the third quarter of 2011. The consolidated profit attributable to owners of the Company totalled $13.2 million, which works out to basic and diluted earnings per share of $1.94 attributable to Class A common shares ("Class A shares") and of $2.13 attributable to Class B subordinate voting shares ("Class B shares"). In comparison with the equivalent period of 2010, this represents a $7.9 million increase in the consolidated profit attributable to owners of the Company which amounted to $5.3 million in 2010, for basic and diluted earnings per share of $0.78 attributable to Class A shares and of $0.84 attributable to Class B shares. The consolidated profit attributable to owners of the Company for the third quarter of 2011 includes a $6.2 million share of gain on the sale of part of our shares in a subsidiary of an equity accounted investment. Without this transaction, the consolidated profit attributable to owners of the Company would nevertheless have reached a record high of $7.0 million. Including this gain, the marine services segment posted a pre-tax profit of $11.1 million for the third quarter of 2011, up by $6.9 million over $4.2 million for the third quarter of 2010. The environmental services segment recorded a pre-tax profit of $5.3 million for the third quarter of 2011, up by $2.3 million over $3.0 million for the same period in 2010.

For the first nine months of 2011, consolidated revenue grew by 9.3% to $158.4 million, up from $144.9 million in 2010. The 2011 year-to-date consolidated profit attributable to owners of the Company increased by $5.8 million to $14.6 million, which works out to basic and diluted earnings per share of $2.15 attributable to Class A shares and of $2.35 attributable to Class B shares, compared to $8.8 million for the same period in 2010, for basic and diluted earnings per share of $1.28 attributable to Class A shares and of $1.40 attributable to Class B shares.

This is the first year in which the Company is presenting its financial statements under IFRS. The change in standard that had the most significant impact on the financial statements relates to its joint ventures. The Company has elected to use the equity method to account for its interests in joint ventures whereas previously, under Canadian GAAP, the Company was using the proportionate consolidation method. For example, the exclusion of its proportionate share of revenue from joint ventures reduced its previously reported consolidated revenue for the third quarter of 2010 by $20.9 million. The effects of the transition to IFRS on the condensed statement of earnings, statement of comprehensive income, statement of financial position, statement of changes in equity, and statement of cash flows are presented in detail in Note 12 of the notes to Q3 2011 condensed consolidated interim financial statements.

Outlook

"The business environment remains uncertain, considering the stagnant U.S. economy, rising protectionism in parts of the world, the slowing growth of the Chinese economy and the sovereign debt crisis in Europe. Despite these unfavourable factors, we nevertheless achieved a satisfactory improvement in our third quarter results. Regarding the fourth quarter of 2011, we believe Sanexen's site remediation activities will continue to drive our environmental services segment, whereas our marine services segment should maintain a level of activity similar to the third quarter," indicated Madeleine Paquin, President and Chief Executive Officer of Logistec Corporation.

"From a broader perspective, we remain focused on our development plan over the medium and long term and we are confident that we have the human and financial resources to implement it and thereby continue to create value for our shareholders," concluded Ms. Paquin.

About Logistec

Logistec Corporation is based in Montréal (QC) and provides specialized services to the marine community and industrial companies in the areas of bulk, break-bulk and container cargo handling in 23 ports in Eastern Canada, the Great Lakes and the U.S. East Coast. Logistec also offers marine transportation services geared primarily to the Arctic coastal trade, short-line rail transportation services, as well as agency services to foreign shipowners and operators serving the Canadian market. Furthermore, the Company operates in the environmental sector where it provides services to industrial companies and municipalities for the trenchless structural rehabilitation of underground water mains, PCB management, site remediation, risk assessment, and woven-hose manufacturing.

The Company has been profitable and has paid regular dividends since becoming public and payments have grown steadily over the years. A public company since 1969, Logistec's shares are listed on the Toronto Stock Exchange under the ticker symbols LGT.A and LGT.B. More information can be obtained at the Company's website at www.logistec.com.

Forward-Looking Statements

For the purpose of informing shareholders and potential investors about the Company's prospects, sections of this document may contain forward-looking statements, within the meaning of securities legislation, about the Company's activities, performance and financial situation and, in particular, hopes for the success of the Company's efforts in the development and growth of its business. These forward-looking statements express, as of the date of this document, the estimates, predictions, projections, expectations or opinions of the Company about future events or results. Although the Company believes that the expectations produced by these forward-looking statements are founded on valid and reasonable bases and assumptions, these forward-looking statements are inherently subject to important uncertainties and contingencies, many of which are beyond the Company's control, such that the Company's performance may differ significantly from the predicted performance expressed or presented in such forward-looking statements. The important risks and uncertainties that may cause the actual results and future events to differ significantly from the expectations currently expressed are examined under "Business Risks" in the Company's annual report and include (but are not limited to) the performances of domestic and international economies and their effect on shipping volumes, weather conditions, labour relations, pricing and competitors' marketing activities. The reader of this document is thus cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to update or revise these forward-looking statements, except as required by law.

Additional information relating to our Company can be found on SEDAR's website at www.sedar.com and on Logistec's website at www.logistec.com.

Q3 2011 Condensed Consolidated Interim Financial Statements

Condensed Consolidated Interim Statements of Earnings

(in thousands of Canadian dollars, except for number of shares and per share amounts)
For the three months ended For the nine months ended
September 24,
2011
(Unaudited)
September 25,
2010
(Unaudited)
September 24,
2011
(Unaudited)
September 25,
2010
(Unaudited)
$ $ $ $
Revenue 66,888 54,989 157,399 143,601
Interest revenue from investments in service contracts 314 411 1,016 1,304
Total revenue 67,202 55,400 158,415 144,905
Employee benefits expense (31,451 ) (28,364 ) (78,438 ) (72,751 )
Equipment and supplies expense (19,106 ) (12,869 ) (42,150 ) (34,407 )
Rental expense (5,075 ) (5,313 ) (14,854 ) (15,461 )
Other expenses (2,483 ) (2,391 ) (8,411 ) (7,266 )
Depreciation and amortization expense (2,141 ) (2,099 ) (6,260 ) (6,238 )
Share of profit of equity accounted investments 3,049 3,013 4,045 4,361
Share of gain 6,171 6,171
Other gains and losses 399 (33 ) (129 ) (178 )
Operating profit 16,565 7,344 18,389 12,965
Finance expense (289 ) (321 ) (716 ) (907 )
Finance income 103 115 441 260
Profit before income taxes 16,379 7,138 18,114 12,318
Income taxes (2,027 ) (1,210 ) (2,243 ) (2,679 )
Profit for the period 14,352 5,928 15,871 9,639
Profit attributable to:
Owners of the Company 13,202 5,322 14,608 8,810
Non-controlling interests 1,150 606 1,263 829
Profit for the period 14,352 5,928 15,871 9,639
Basic and diluted earnings per Class A Common Share (1) 1.94 0.78 2.15 1.28
Basic and diluted earnings per Class B Subordinate Voting Share (2) 2.13 0.84 2.35 1.40
Weighted average number of Class A shares outstanding, basic and diluted 3,759,011 3,773,911 3,763,189 3,780,978
Weighted average number of Class B shares outstanding, basic and diluted 2,767,250 2,784,950 2,769,817 2,820,028
(1) Class A Common Share ("Class A share")
(2) Class B Subordinate Voting Share ("Class B share")

Condensed Consolidated Interim Statements of Comprehensive Income

(in thousands of Canadian dollars)
For the three months ended For the nine months ended
September 24,
2011
(Unaudited)
September 25,
2010
(Unaudited)
September 24,
2011
(Unaudited)
September 25,
2010
(Unaudited)
$ $ $ $
Profit for the period 14,352 5,928 15,871 9,639
Other comprehensive income
Currency translation differences arising on translation of foreign operations 247 (65 ) 203 (163 )
Share of other comprehensive income of equity accounted investments
Gains (losses) on derivatives designated as cash flow hedges (39 ) 100
Transfer of gains on derivatives designated as cash flow hedges to non-financial assets (19 )
Income taxes relating to derivatives designated as cash flow hedges 5 (12 )
Other comprehensive income (loss) for the period, net of income taxes 213 (65 ) 272 (163 )
Total comprehensive income for the period 14,565 5,863 16,143 9,476
Total comprehensive income attributable to:
Owners of the Company 13,415 5,257 14,880 8,647
Non-controlling interests 1,150 606 1,263 829
Total comprehensive income for the period 14,565 5,863 16,143 9,476

Condensed Consolidated Interim Statements of Financial Position

(in thousands of Canadian dollars)
As at
September 24,
2011
As at
December 31,
2010
As at
January 1,
2010
(Unaudited) (Unaudited) (Unaudited)
$ $ $
Assets
Current assets
Cash and cash equivalents 7,068 8,382 9,649
Short-term investments 1,573
Short-term portion of investments in service contracts 186 173 2,289
Trade and other receivables 62,937 45,137 39,843
Current income tax assets 4,038 1,734 3,279
Prepaid expenses 2,663 2,037 2,062
Inventories 3,962 3,264 3,819
80,854 60,727 62,514
Equity accounted investments 31,456 25,050 20,987
Investments in service contracts 14,052 17,432 19,435
Property, plant and equipment 45,824 46,365 49,159
Goodwill 11,986 11,986 10,349
Other intangible assets 2,226 3,085 4,207
Other non-current assets 4,161 4,125 4,697
Post-employment benefit assets 1,353 1,419
Long-term financial assets 3,494 3,505 1,835
Deferred income tax assets 5,691 5,677 3,667
Total assets 201,097 179,371 176,850
Liabilities
Current liabilities
Short-term bank loans 13,002 2,278 3,048
Trade and other payables 32,187 31,118 22,147
Deferred revenue 882 980 1,412
Current income tax liabilities 1,279 2,901 616
Dividends payable 595 582 538
Current portion of long-term debt 2,550 2,570 2,785
Provisions 407 742 714
50,902 41,171 31,260
Long-term debt 13,898 15,625 30,359
Provisions 172 154 146
Deferred income tax liabilities 4,613 4,914 4,997
Post-employment benefit obligations 5,991 6,466 5,669
Other non-current liabilities 1,743 1,184 3,845
Total liabilities 77,319 69,514 76,276
Equity
Share capital 15,172 15,130 15,395
Retained earnings 103,046 90,702 81,991
Accumulated other comprehensive loss (95 ) (367 )
Equity attributable to owners of the Company 118,123 105,465 97,386
Non-controlling interests 5,655 4,392 3,188
Total equity 123,778 109,857 100,574
Total liabilities and equity 201,097 179,371 176,850

Condensed Consolidated Interim Statements of Changes in Equity

(in thousands of Canadian dollars)
Attributable to owners of the Company
Accumulated other comprehensive income (loss)
Share capital Hedging Foreign currency trans-
lation
Retained earnings Total Non-
control-
ling
inte-
rests
Total equity
$ $ $ $ $ $ $
Balance as at January 1, 2011 15,130 (367 ) 90,702 105,465 4,392 109,857
Profit for the period 14,608 14,608 1,263 15,871
Other comprehensive income
Currency translation differences arising on translation of foreign operations 203 203 203
Share of cash flow hedges of equity accounted investments, net of income taxes 69 69 69
Total comprehensive income for the period 69 203 14,608 14,880 1,263 16,143
Repurchase and conversion of Class A shares (14 ) (82 ) (96 ) (96 )
Issuance, repurchase and conversion of Class B shares 56 (426 ) (370 ) (370 )
Dividends on Class A shares (970 ) (970 ) (970 )
Dividends on Class B shares (786 ) (786 ) (786 )
Balance as at September 24, 2011 15,172 69 (164 ) 103,046 118,123 5,655 123,778
(in thousands of Canadian dollars)
Attributable to owners of the Company
Accumulated other comprehensive income (loss)
Share capital Hedging Foreign currency trans-
lation
Retained earnings Total Non-
control-
ling
inte-
rests
Total equity
$ $ $ $ $ $ $
Balance as at January 1, 2010 15,395 81,991 97,386 3,188 100,574
Profit for the period 8,810 8,810 829 9,639
Other comprehensive loss
Currency translation differences arising on translation of foreign operations (163 ) (163 ) (163 )
Total comprehensive income for the period (163 ) 8,810 8,647 829 9,476
Repurchase and conversion of Class A shares (20 ) (217 ) (237 ) (237 )
Issuance, repurchase and conversion of Class B shares (205 ) (1,178 ) (1,383 ) (1,383 )
Dividends on Class A shares (908 ) (908 ) (908 )
Dividends on Class B shares (745 ) (745 ) (745 )
Balance as at September 25, 2010 15,170 (163 ) 87,753 102,760 4,017 106,777

Condensed Consolidated Interim Statements of Cash Flows

(in thousands of Canadian dollars)
For the nine months ended
September 24,
2011
(Unaudited)
September 25,
2010
(Unaudited)
$ $
Operating activities 15,871 9,639
Profit for the period
Items not affecting cash (2,183 ) 2,995
Cash generated from operations 13,688 12,634
Dividends received from equity accounted investments 3,878 1,826
Contributions to defined benefit retirement plans (928 ) (930 )
Settlement of provisions (324 ) (254 )
Changes in non-cash working capital items (17,674 ) (2,083 )
Income taxes paid (5,966 ) (1,355 )
(7,326 ) 9,838
Financing activities
Net change in short-term bank loans 10,724 3,732
Repayment of long-term debt (1,810 ) (12,060 )
Issuance of Class B shares 4 4
Interest paid (722 ) (807 )
Repurchase of Class B shares (505 ) (1,530 )
Repurchase of Class A shares (96 ) (237 )
Dividends paid (1,743 ) (1,606 )
5,852 (12,504 )
Investing activities
Customer repayment of investments in service contracts 3,367 3,083
Interest received 1,428 1,570
Investments in service contracts (38 )
Disposal of short-term investments 1,492
Business acquisition (1,320 )
Acquisition of property, plant and equipment (4,650 ) (3,364 )
Proceeds from disposal of property, plant and equipment 90 76
Acquisition of intangible assets (70 ) (53 )
Acquisition of other assets (1,952 )
165 (506 )
Net change in cash and cash equivalents (1,309 ) (3,127 )
Cash and cash equivalents (1), beginning of period 8,382 9,649
Effect of exchange rate on balances held in foreign currencies of foreign operations (5 ) 200
Cash and cash equivalents (2), end of period 7,068 6,722
Additional information
Acquisition of property, plant and equipment included in trade and other payables 820 259
(1) Comprised of cash on hand and short-term investments with maturity date less than three months from the acquisition date
(2) Comprised of cash on hand

Contact Information

  • Jean-Claude Dugas CA
    Vice-President, Finance
    Logistec Corporation
    jdugas@logistec.com
    (514) 985-2345