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

Logistec Corporation

August 03, 2011 14:52 ET

Logistec Announces Financial Results for the Second Quarter of 2011

MONTRÉAL, QUÉBEC--(Marketwire - Aug. 3, 2011) - Logistec Corporation (TSX:LGT.A)(TSX:LGT.B), a marine and environmental services provider, today announced its financial results for the second quarter and the first six months ended June 25, 2011.

Consolidated revenue totalled $50.2 million in the second quarter of 2011, down by $0.8 million or 1.5% from $51.0 million for the equivalent period in 2010. The marine services segment's revenue was fairly stable at $32.4 million in the second quarter of 2011, compared with $32.5 million in the second quarter of 2010, a slight decrease of $0.1 million. The decline in activity came primarily from U.S. terminals, where fruit and steel volumes were lower than last year. This was offset by higher revenue in Canada. The environmental services segment's revenue declined to $17.8 million in the second quarter of 2011, down by $0.7 million from revenue of $18.5 million for the second quarter of 2010. During the second quarter of 2011, Sanexen's results were negatively affected by very low revenue from its woven-hose products, where sales of fire hoses were at an all-time low. The Aqua-Pipe® business was also below last year as there are no more subsidies assisting municipalities to undertake this work, resulting in fewer and smaller contracts available. However, the solid performance of site remediation activities compensated to a large extent these negative factors.

During the second quarter of 2011, Logistec recorded consolidated profit attributable to owners of the Company of $1.3 million, which works out to basic and diluted earnings per share of $0.20 attributable to Class A Common Shares ("Class A shares") and of $0.21 attributable to Class B Subordinate Voting Shares) ("Class B shares"). For the equivalent period in 2010, Logistec registered consolidated profit attributable to owners of the Company of $2.7 million, which corresponds to basic and diluted earnings per share of $0.39 attributable to Class A shares and of $0.44 attributable to Class B shares. The marine services segment recorded profit before income taxes of $0.7 million for the second quarter of 2011, compared with $2.7 million in the second quarter of 2010, whereas the environmental services segment posted profit before income taxes of $1.2 million for the second quarter of 2011, compared with $1.7 million for the same period in 2010. The lower profitability can be attributed to the above factors as well as a substantial one-time cost associated with terminating a lease in New Haven (CT). This terminal had specialized in handling import steel but the volumes have gone down substantially in the last years and we do not expect that they will come back to the extent needed to render this facility profitable.

During the first half of fiscal 2011, consolidated revenue remained almost stable, increasing from $89.5 million in 2010 to $91.2 million in 2011, whereas the consolidated profit attributable to owners of the Company totalled $1.4 million, which works out to basic and diluted earnings per share of $0.21 attributable to Class A shares and $0.22 attributable to Class B shares, compared with $3.5 million for the first six months of 2010, which corresponds to basic and diluted earnings per share of $0.50 attributable to Class A shares and $0.56 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 second quarter of 2010 by $11.2 million. The effects of the transition to IFRS on the condensed statement of financial position, statement of earnings, statement of comprehensive income and statement of cash flows are presented in detail on Note 12 of the notes to Q2 2011 condensed consolidated interim financial statements.

Outlook

"Within the near term, the global economic outlook continues to be highly uncertain due to the sluggish U.S. economy and the sovereign debt crisis in Europe. In such a context and considering that the second half is generally the busiest period for our marine services segment, we are maintaining our conservative attitude by forecasting that our bulk cargo and break-bulk cargo related activities will remain stable, whereas container handling could post a slight improvement. Sanexen still has a well-filled order backlog, but its growth is without a doubt being hindered by the U.S. economy," indicated Madeleine Paquin, President and Chief Executive Officer of Logistec Corporation.

"We remain focused on our development plan over the medium and long term and are pleased to have been awarded a new multi-year contract during the quarter, covering cargo-handling services for an aluminum smelter in Northern Québec," 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.

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 six months
ended
June 25,
2011
(Unaudited)
June 26,
2010
(Unaudited)
June 25,
2011
(Unaudited)
June 26,
2010
(Unaudited)
$ $ $ $
Revenue 49,832 50,522 90,511 88,612
Interest revenue from investments in service contracts 339 438 702 893
Total revenue 50,171 50,960 91,213 89,505
Employee benefits expense (25,726 ) (25,009 ) (46,987 ) (44,387 )
Equipment and supplies expense (12,490 ) (12,583 ) (23,044 ) (21,538 )
Rental expense (4,645 ) (5,171 ) (9,779 ) (10,148 )
Other expenses (3,683 ) (2,427 ) (5,928 ) (4,875 )
Depreciation and amortization expense (2,243 ) (2,044 ) (4,119 ) (4,139 )
Share of profit of equity accounted investments 864 872 996 1,348
Other gains and losses (424 ) 87 (528 ) (145 )
Operating profit 1,824 4,685 1,824 5,621
Finance expense (192 ) (312 ) (427 ) (586 )
Finance income 230 72 338 145
Profit before income taxes 1,862 4,445 1,735 5,180
Income taxes (278 ) (1,365 ) (216 ) (1,469 )
Profit for the period 1,584 3,080 1,519 3,711
Profit attributable to:
Owners of the Company 1,329 2,717 1,406 3,488
Non-controlling interests 255 363 113 223
Profit for the period 1,584 3,080 1,519 3,711
Basic and diluted earnings per Class A Common Share (1) 0.20 0.39 0.21 0.50
Basic and diluted earnings per Class B Subordinate Voting Share (2) 0.21 0.44 0.22 0.56
Weighted average number of Class A shares outstanding, basic and diluted 3,762,211 3,781,344 3,765,278 3,783,711
Weighted average number of Class B shares outstanding, basic and diluted 2,770,050 2,818,483 2,771,100 2,833,100
(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 six months
ended
June 25,
2011
(Unaudited)
June 26,
2010
(Unaudited)
June 25,
2011
(Unaudited)
June 26,
2010
(Unaudited)
$ $ $ $
Profit for the period 1,584 3,080 1,519 3,711
Other comprehensive income
Currency translation differences arising on translation of foreign operations 35 59 (44 ) (98 )
Share of other comprehensive income of equity accounted investments
Gains on derivatives designated as cash flow hedges 21 139
Transfer of gains on derivatives designated as cash flow hedges to non-financial assets (19 ) (19 )
Income taxes relating to derivatives designated as cash flow hedges (17 )
Other comprehensive income for the period, net of income taxes 37 59 59 (98 )
Total comprehensive income for the period 1,621 3,139 1,578 3,613
Total comprehensive income attributable to:
Owners of the Company 1,366 2,776 1,465 3,390
Non-controlling interests 255 363 113 223
Total comprehensive income for the period 1,621 3,139 1,578 3,613

Condensed Consolidated Interim Statements of Financial Position

(in thousands of Canadian dollars)
As at
June 25,
2011
As at
December 31,
2010
As at
January 1,
2010
(Unaudited) (Unaudited) (Unaudited)
$ $ $
Assets
Current assets
Cash and cash equivalents 6,248 8,382 9,649
Short-term investments 1,573
Short-term portion of investments in service contracts 181 173 2,289
Trade and other receivables 44,390 45,137 39,843
Current income tax assets 3,411 1,734 3,279
Prepaid expenses 2,003 2,037 2,062
Inventories 3,840 3,264 3,819
60,073 60,727 62,514
Equity accounted investments 25,761 25,050 20,987
Investments in service contracts 15,204 17,432 19,435
Property, plant and equipment 44,954 46,365 49,159
Goodwill 11,986 11,986 10,349
Other intangible assets 2,509 3,085 4,207
Other non-current assets 4,293 4,125 4,697
Post-employment benefit assets 1,376 1,419
Long-term financial assets 3,393 3,505 1,835
Deferred income tax assets 5,643 5,677 3,667
Total assets 175,192 179,371 176,850
Liabilities
Current liabilities
Short-term bank loans 8,109 2,278 3,048
Trade and other payables 25,579 31,118 22,147
Deferred revenue 749 980 1,412
Current income tax liabilities 589 2,901 616
Dividends payable 581 582 538
Current portion of long-term debt 2,568 2,570 2,785
Provisions 524 742 714
38,699 41,171 31,260
Long-term debt 14,432 15,625 30,359
Provisions 166 154 146
Deferred income tax liabilities 4,653 4,914 4,997
Post-employment benefit obligations 6,099 6,466 5,669
Other non-current liabilities 1,181 1,184 3,845
Total liabilities 65,230 69,514 76,276
Equity
Share capital 15,196 15,130 15,395
Retained earnings 90,569 90,702 81,991
Accumulated other comprehensive loss (308 ) (367 )
Equity attributable to owners of the Company 105,457 105,465 97,386
Non-controlling interests 4,505 4,392 3,188
Total equity 109,962 109,857 100,574
Total liabilities and equity 175,192 179,371 176,850

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
interests
Total
equity
$ $ $ $ $ $ $
Balance as at January 1, 2011 15,130 (367 ) 90,702 105,465 4,392 109,857
Profit for the period 1,406 1,406 113 1,519
Other comprehensive income (loss)
Currency translation differences arising on translation of foreign operations (44 ) (44 ) (44 )
Share of cash flow hedges of equity accounted investments, net of income taxes 103 103 103
Total comprehensive income for the period 103 (44 ) 1,406 1,465 113 1,578
Repurchase and conversion of Class A shares (11 ) (39 ) (50 ) (50 )
Issuance, repurchase and conversion of Class B shares 77 (338 ) (261 ) (261 )
Dividends on Class A shares (642 ) (642 ) (642 )
Dividends on Class B shares (520 ) (520 ) (520 )
Balance as at June 25, 2011 15,196 103 (411 ) 90,569 105,457 4,505 109,962
(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
interests
Total
equity
$ $ $ $ $ $ $
Balance as at January 1, 2010 15,395 81,991 97,386 3,188 100,574
Profit for the period 3,488 3,488 223 3,711
Other comprehensive income (loss)
Currency translation differences arising on translation of foreign operations (98 ) (98 ) (98 )
Total comprehensive income for the period (98 ) 3,488 3,390 223 3,613
Repurchase and conversion of Class A shares (12 ) (134 ) (146 ) (146 )
Issuance, repurchase and conversion of Class B shares (109 ) (829 ) (938 ) (938 )
Dividends on Class A shares (588 ) (588 ) (588 )
Dividends on Class B shares (484 ) (484 ) (484 )
Balance as at June 26, 2010 15,274 (98 ) 83,444 98,620 3,411 102,031

Condensed Consolidated Interim Statements of Cash Flows

(in thousands of Canadian dollars)
For the six months ended
June 25,
2011
(Unaudited)
June 26,
2010
(Unaudited)
$ $
Operating activities
Profit for the period 1,519 3,711
Items not affecting cash and cash equivalents 4,067 3,556
Cash generated from operations 5,586 7,267
Dividends received from equity accounted investments 388 1,674
Contributions to defined benefit retirement plans (654 ) (658 )
Settlement of provisions (206 ) (101 )
Changes in non-cash working capital items (6,418 ) 611
Income taxes paid (4,202 ) (2,423 )
(5,506 ) 6,370
Financing activities
Net change in short-term bank loans 5,831 1,732
Repayment of long-term debt (1,206 ) (11,357 )
Issuance of Class B shares 4 4
Interest paid (475 ) (517 )
Repurchase of Class B shares (396 ) (1,085 )
Repurchase of Class A shares (50 ) (146 )
Dividends paid (1,162 ) (1,074 )
2,546 (12,443 )
Investing activities
Customer repayment of investments in service contracts 2,220 2,032
Interest received 1,019 1,044
Investments in service contracts (38 )
Business acquisitions (570 )
Disposal of short-term investments 1,442
Acquisition of property, plant and equipment (2,435 ) (2,137 )
Proceeds from disposal of property, plant and equipment 69 44
Acquisition of intangible assets (45 ) (12 )
Acquisition of other assets (4 ) (2 )
824 1,803
Net change in cash and cash equivalents (2,136 ) (4,270 )
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 2 (14 )
Cash and cash equivalents (1), end of period 6,248 5,365
Cash and cash equivalents comprised of:
Cash on hand 6,248 4,119
Short-term investments 1,246
Cash and cash equivalents, end of period 6,248 5,365
Additional information
Acquisition of property, plant and equipment included in trade and other payables 467 291
(1)Comprised of cash on hand and short-term investments with maturity date less than three months from the acquisition date

Contact Information

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