NAPEC Inc.
TSX : NPC

NAPEC Inc.

August 13, 2015 07:00 ET

NAPEC Inc. Reports Results for the Second Quarter of 2015

DRUMMONDVILLE, QUEBEC--(Marketwired - Aug. 13, 2015) - NAPEC Inc. ("NAPEC" or "the Corporation") (TSX:NPC) today reported results for its second quarter ended June 30, 2015. All amounts are in Canadian dollars unless otherwise indicated.

Financial highlights Three months ended June 30, Six months ended June 30,
(in thousands of dollars, except per-share data) 2015 2014 2015 2014
Revenues 82,077 77,925 140,900 149,108
EBITDA 5,111 1,824 6,820 6,374
Net earnings 829 (691 ) (302 ) 726
Per share - basic and diluted ($) 0.01 (0.01 ) 0.00 0,01
Weighted average number of outstanding shares (basic, in thousands) 74,311 71,533 72,922 71,533

"NAPEC's solid results in the second quarter were stimulated by growth of more than 20% in revenues from U.S. operations. During the second quarter, we were able to catch up to a large portion of the work delay seen in the first quarter due to severe winter conditions. The improvement in profitability reflects the implementation of our new business model as well as the effect of higher sales. We have also launched the implementation of this model in Canada with the change of name of our Ontario subsidiary to Thirau Inc. The unification of our Canadian business under a single brand will favour pooling of our talents and will improve our operating productivity," said Pierre L. Gauthier, President and Chief Executive Officer of NAPEC.

At June 30, 2015, the value of the Corporation's order backlog was $338.0 million, compared to $176.0 million at June 30, 2014, an increase of 92.0% over the last 12 months.

SECOND-QUARTER RESULTS

Revenues for the quarter were $82.1 million, up 5.3% from $77.9 million in the second quarter of 2014. The increase was due mainly to higher revenues from contracts for the construction, maintenance and repair of transmission and distribution lines. In addition, fluctuations in the exchange value of the Canadian dollar increased the value of U.S.-dollar-denominated revenues during the second quarter of 2015 by approximately $7.0 million compared to the second quarter of 2014. On the other hand, revenues from contracts for the construction, maintenance and repair of underground lines and for mechanical projects showed a decline.

The increase in revenues and a more favourable revenue mix lifted earnings before interest, taxes, depreciation and amortization ("EBITDA") to $5.1 million, or 6.2% of revenues, from $1.8 million, or 2.3% of revenues, in the second quarter of 2014. Net earnings for the quarter were $829,000, or $0.01 per basic and diluted share, compared to a net loss of $691,000, or $0.01 per basic and diluted share, in the second quarter of 2014.

SIX-MONTH RESULTS

Revenues for the six months ended June 30, 2015 were $140.9 million, compared to $149.1 million for the six months ended June 30, 2014. EDITDA was $6.8 million, or 4.8% of revenues, up from $6.4 million, or 4.3% of revenues, a year earlier. For the first six months of 2015, the Corporation recorded a net loss of $302,000, or $0.00 per basic and diluted share, compared to net earnings of $726,000, or $0.01 per basic and diluted share, in the first six months of 2014.

FINANCIAL POSITION

As at June 30, 2015, the long-term debt, including the current portion, was $34.3 million, versus $34.0 million three months earlier, and the ratio of long-term debt to equity was 0.36, versus 0.38 three months earlier. At the same date, the cash balance was $3.0 million and a total of $9.0 million had been drawn on the authorized renewable credit facility of $40.0 million.

OUTLOOK

"Given the strong fundamentals and favourable trends prevailing in the industry, we anticipate that demand for NAPEC's services will remain strong. We continue to expect that implementation of our strategic plan will allow us to seize business opportunities providing greater added value and to realize synergies from our organizational transformation, while remaining on the lookout for acquisitions that would enhance our service offering," concluded Mr. Gauthier.

NON-IFRS MEASURE

EBITDA is a measure that has no standardized meaning prescribed by IFRS and is thus considered to be a non-IFRS measure. Therefore, this measure may not be comparable to similar measures presented by other issuers. This measure is presented and described in this release in order to provide additional information regarding the Corporation's liquidity and its ability to generate funds to finance its operations.

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements that reflect management's current expectations regarding future events. Forward-looking statements are based on a number of factors and include risks and uncertainties. Actual results may differ from forecast results. Management assumes no obligation beyond what is required under the law to update or revise forward-looking statements pursuant to new information or future events.

OVERVIEW OF THE CORPORATION

NAPEC is a corporation operating in the energy sector. The Corporation is a leading service provider to the public utility and heavy industrial markets mainly in Quebec, Ontario and the eastern United States. NAPEC and its subsidiaries build and maintain electrical transmission and distribution grids, as well as networks for gas utilities. In addition, the Corporation installs gas-powered and electric-powered heavy equipment for utilities, gas-fired industrial power plants, and petrochemical facilities in North America.

Further information regarding NAPEC is available in the SEDAR database (www.sedar.com) and on the Corporation's website at www.napec.ca.

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