Newalta Corporation

TSX : NAL


Newalta Corporation

May 05, 2014 19:07 ET

Newalta Reports First Quarter 2014 Results, Increases Dividend

CALGARY, ALBERTA--(Marketwired - May 5, 2014) - Newalta Corporation ("Newalta") (TSX:NAL) today reported results for the three months ended March 31, 2014. Reflecting its continued positive long-term outlook and the momentum associated with growth initiatives, Newalta announced a 14% percent increase in its quarterly dividend to $0.125 per share.

FINANCIAL HIGHLIGHTS1

Three months ended
March 31,
($000s except per share data) (unaudited) 2014 2013 % Increase (Decrease )
Revenue 187,780 171,348 10
Gross profit 41,652 37,836 10
- % of revenue 22 % 22 % -
Net earnings(2) 6,503 14,160 (54 )
- per share ($) - basic 0.12 0.26 (54 )
- per share ($) - diluted 0.12 0.26 (54 )
Adjusted net earnings(2) 10,368 5,753 80
- per share ($) - basic(2) 0.19 0.11 73
Adjusted EBITDA(2) 32,051 27,721 16
- per share ($)(2) 0.58 0.51 14
Cash from (used in) operating activities 11,637 (19,002 ) 161
- per share ($) 0.21 (0.35 ) 160
Funds from operations(2) 24,103 23,699 2
- per share ($)(2) 0.43 0.43 -
Maintenance capital expenditures(2) 3,811 3,670 4
Growth capital expenditures(2) 23,284 16,871 38
Dividends declared 6,128 5,473 12
- per share ($)(2) 0.11 0.10 10
Dividends paid 4,459 4,311 3
Book value per share, March 31, 12.24 12.05 2
Weighted average shares outstanding 55,518 54,512 2
Shares outstanding, March 31,(3) 55,710 54,735 2
(1) Newalta's unaudited Condensed Consolidated Financial Statements are attached. References to Generally Accepted Accounting Principles ("GAAP") are synonymous with IFRS and references to unaudited Condensed Consolidated Financial Statements are synonymous with Financial Statements.
(2) These financial measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. Non-GAAP financial measures are identified and defined later in this document.
(3) Newalta has 55,768,237 shares outstanding as at May 5, 2014.

Management Commentary

"In the first quarter, performance in New Markets and Oilfield was strong," said Al Cadotte, President and CEO of Newalta. "Revenue was up 10 percent and Adjusted EBITDA increased 16 percent, compared to last year.

"We continue to expect 20 percent growth in Adjusted EBITDA for the year, driven by strong contributions from our growth capital investments and improved market activity. We will continue to grow our New Markets and Oilfield divisions as we review strategic alternatives for our Industrial Division."

Dividend Increase

In determining the dividend, the Board of Directors considers a number of factors including forecasts for operating and financial results, maintenance and growth capital requirements, market activity and economic conditions. After a review of all factors, the Board approved a 14 percent increase in the quarterly cash dividend to $0.125 per share ($0.50 per share annualized) from $0.11 per share ($0.44 per share annualized), starting with the dividend payable to shareholders of record as of June 30, 2014.

Consolidated Overview

Results in the first quarter were driven by contributions from our growth capital investments and improved commodity prices, offset by the impact of the unusually cold winter on our operations. First quarter revenue was up 10% year-over-year to $187.8 million, while Adjusted EBITDA grew by 16% to $32.1 million. Solid contributions from New Markets and Oilfield were partially offset by Industrial. Net earnings were $6.5 million, down 54% over Q1 2013 due to stock-based compensation expense and restructuring related costs.

Q1 2014 Adjusted SG&A declined from 12.3% of revenue in 2013 to 11.1% of revenue this year, primarily due to overhead reductions in the quarter as part of the Rationalization Plan.

Capital expenditures for the three months ended March 31, 2014 were $27.1 million, focused primarily on growth capital projects in New Markets and Oilfield.

Operational Overview

New Markets revenue and gross profit in the quarter increased 37% and 17%, respectively, to $56.1 million and $14.6 million compared to prior year. Improved performance was driven by strong growth in Heavy Oil supported by our growth capital investments in onsite contracts and contributions from our Heavy Oil facilities.

Oilfield revenue and gross profit in the quarter increased 12% and 5%, respectively, to $54.3 million and $20.6 million compared to prior year. Results were positively impacted by contributions from growth capital investments, higher waste processing volumes and improved commodity prices. These gains were offset by the impact of extreme weather on operating costs.

Industrial revenue decreased by 6% to $77.3 million while gross profit increased by 14% to $6.4 million. Strong contributions from our onsite services and from the Rationalization Plan were offset by lower contributions from our oil recycling services (ORS), and the timing of waste receipts at our Stoney Creek Landfill (SCL).

Recent Developments

During the quarter, we initiated the rationalization plan associated with the comprehensive review announced in December 2013 focused primarily on our Industrial Division (the Rationalization Plan). We closed four facilities, reduced overhead in associated support functions and began redirecting lines of business. In April, we also engaged RBC Capital Markets to conduct a review of a full range of strategic alternatives for our Industrial Division, including a potential sale, IPO or spin-off of the division, in whole or in parts.

In Q1 2014, we realized approximately $1.5 million in savings and remain on track to realize approximately $10 million in annualized ongoing cash savings associated with the Rationalization Plan. We incurred approximately $4.5 million in one-time restructuring costs and anticipate incurring an additional $1.0 million before year end. Management will assess and update savings and cost estimates throughout the year.

In addition to the Rationalization Plan discussed above, we are assessing our cost structure across all divisions, including SG&A. We have identified areas where improvements can be made to better align resources with our business needs and actions will be taken throughout 2014. Once implemented, additional cost savings above those identified under the Rationalization Plan will be realized.

Outlook

We expect to deliver Adjusted EBITDA growth of 20% over 2013. Growth capital investments combined with improved commodity prices, the rationalization initiatives focused primarily on the Industrial Division and reductions in SG&A, will drive strong returns and improved results over prior year.

  • Growth in New Markets will be driven by our onsite contracts and the progression of the U.S. satellite program. We continue to work on securing new contracts, including MFT processing in the oil sands, and on the development of our multiphase Fort McMurray facility. In Q2, we will benefit from contributions from three satellites in the U.S. and are on track to exit 2014 with six satellites established in oil rich plays either operating or in some phase of construction or commissioning.
  • In Oilfield, growth will be driven by our satellite program, improved commodity prices and steady drilling activity. Our satellite program continues to progress with two satellites, established in late 2013, expected to be contributing following spring break up. In addition, we plan to construct two additional satellites in 2014.
  • In Industrial, we expect improved returns from steady activity levels and initiatives implemented under the Rationalization Plan. Activity levels at Ville Ste-Catherine (VSC) and SCL are expected to be in line with 2013.

We continue to focus on growing our portfolio of longer term contracts, strengthening our foundation of stable cash flow, and maximizing returns from our existing assets.

Other Highlights

Newalta's Board of Directors declared a first quarter dividend of $0.11 per share ($0.44 per share annualized) paid April 15, 2014 to shareholders of record on March 31, 2014.

On April 1, 2014, we issued $150 million Series 3 Senior Unsecured Debentures with a seven-year term, bearing interest at the rate of 5.875% per annum. Proceeds from the offering were used to redeem our $125 million 7.675% Series 1 Senior Unsecured Debentures and to repay a portion of outstanding debt on our credit facility. These initiatives further enhance our financial flexibility and strengthen our balance sheet by increasing the proportion of long term debt, extending the average term of our debt outstanding, and lowering our cost of debt.

Quarterly Conference Call

Management will hold a conference call on Tuesday, May 6, 2014 at 11:30 a.m. (ET) to discuss Newalta's performance for the quarter ended March 31, 2014. To participate in the teleconference, please call 416-340-2216, or 866-223-7781. To access the simultaneous webcast, please visit www.newalta.com. For those unable to listen to the live call, a taped broadcast will be available at www.newalta.com and, until midnight on Tuesday, May 13, 2014 by dialing 800-408-3053 and entering passcode 7153555 followed by the pound sign.

Newalta will hold its annual and special meeting of shareholders on Wednesday, May 7, 2013 at 11:00 a.m. Mountain Time.

Location: Newalta's corporate office, Building 'C'
220 - 12th Avenue, S.W.
Calgary, Alberta

For those unable to attend the annual and special meeting, the presentation will be webcast live at www.newalta.com and subsequently archived on Newalta's website.

About Newalta

Newalta is North America's leading provider of innovative, engineered environmental solutions that enable customers to reduce disposal, enhance recycling and recover valuable resources from industrial residues. We serve customers onsite directly at their operations and through a network of 85 locations in Canada and the U.S. Our proven processes, portfolio of more than 250 operating permits and excellent record of safety make us the first choice provider of sustainability enhancing services to oil, natural gas, petrochemical, refining, lead, manufacturing and mining markets. With a skilled team of more than 2,100 people, two decade track record of profitable expansion and commitment to commercializing new solutions, Newalta is positioned for sustained future growth and improvement. Newalta trades on the TSX as NAL. For more information, visit www.newalta.com.

The press release contains certain statements that constitute forward-looking information. Please refer to the section below "Forward-Looking Information", for further discussion of assumptions and risks relating to this forward looking information.

The unaudited interim Condensed Consolidated Financial Statements and MD&A, which contain additional notes and disclosures, are available on our website at www.newalta.com under Investor Relations/Financial Reports.

SELECTED FINANCIAL INFORMATION
Three months ended
March 31,
($000s, except where otherwise noted) (unaudited) 2014 2013 % Increase
(Decrease
)
New Markets(1)
Revenue 56,109 40,858 37
Gross Profit 14,627 12,491 17
- % of revenue 26 % 31 % (16 )
Revenue by Business Unit
Heavy Oil 71 % 60 % 18
U.S. 29 % 40 % (28 )
Divisional EBITDA(2) 18,347 14,958 23
Assets Employed(3) 301,766 225,659 34
Oilfield(1)
Revenue 54,328 48,632 12
Gross Profit 20,612 19,704 5
- % of revenue 38 % 41 % (7 )
Divisional EBITDA(2) 24,059 22,681 6
Assets Employed(3) 386,947 354,753 9
Industrial
Revenue 77,343 81,858 (6 )
Gross Profit 6,413 5,641 14
- % of revenue 8 % 7 % 14
Revenue by Business Unit
Western Industrial 25 % 24 % 6
Eastern Industrial 75 % 76 % (1 )
VSC as a percent of Industrial Division 35 % 40 % (13 )
Divisional EBITDA(2) 10,451 11,192 (7 )
Assets Employed(3) 398,085 428,805 (7 )
Capital Expenditures
Maintenance capital expenditures 3,811 3,670 4
New Markets 1,054 252 318
Oilfield 1,242 1,852 (33 )
Industrial 849 838 1
Growth capital expenditures 23,284 16,871 38
New Markets 11,990 5,323 125
Oilfield 6,522 5,242 24
Industrial 1,879 2,838 (34 )
(1) New Markets and Oilfield Divisional EBITDA and Gross Profit for the three months ended March 31, 2013 have been restated to reflect a change in reporting structure. New Markets was reduced and Oilfield was increased by $527.
(2) Divisional EBITDA does not have any standardized meaning prescribed by GAAP.
(3) Assets employed is provided to assist management and investors in determining the effectiveness of the use of the assets at a divisional level. Assets employed is the sum of capital assets, intangible assets and goodwill allocated to each division. Assets employed as defined does not include capital assets held by corporate. Corporate assets include information technology, leasehold improvements, and technical development.
Condensed Consolidated Balance Sheets
(Unaudited - Expressed in thousands of Canadian Dollars)
March 31, 2014 December 31, 2013
Assets
Current assets
Accounts and other receivables 146,360 148,998
Inventories 60,465 57,037
Prepaid expenses and other assets 11,625 14,441
Assets held for sale 11,089 2,450
229,539 222,926
Non-current assets
Property, plant and equipment 1,026,863 1,011,921
Permits and other intangible assets 49,802 52,595
Other long-term assets 31,823 24,632
Goodwill 96,167 96,167
TOTAL ASSETS 1,434,194 1,408,241
Liabilities
Current liabilities
Bank indebtedness 739 1,321
Accounts payable and accrued liabilities 179,274 217,283
Dividends payable 6,128 6,087
186,141 224,691
Non-current liabilities
Senior secured debt 171,895 117,136
Senior unsecured debentures 247,129 246,970
Other liabilities 1,403 2,537
Deferred tax liability 80,867 80,646
Decommissioning liability 64,767 61,099
TOTAL LIABILITIES 752,202 733,079
Shareholders' Equity
Shareholders' capital 416,744 409,894
Contributed surplus 10,669 15,251
Retained earnings 246,209 245,834
Accumulated other comprehensive income 8,370 4,183
TOTAL SHAREHOLDERS' EQUITY 681,992 675,162
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1,434,194 1,408,241
Condensed Consolidated Statements of Operations
(Unaudited - Expressed in thousands of Canadian Dollars)
(Except per share data)
For the three months ended March 31,
2014 2013
Revenue 187,780 171,348
Cost of sales 146,128 133,512
Gross profit 41,652 37,836
Selling, general and administrative 30,218 23,166
Restructuring related costs 4,382 -
Earnings before finance charges and income taxes 7,052 14,670
Finance charges 6,649 6,593
Embedded derivative gain (6,556 ) (7,068 )
Net financing charges expense (recovery) 93 (475 )
Earnings before income taxes 6,959 15,145
Income tax expense 456 985
Net earnings 6,503 14,160
Net earnings per share 0.12 0.26
Diluted earnings per share 0.12 0.26
Supplementary information:
Amortization included within cost of sales 11,205 10,995
Amortization included in selling, general and administrative 3,373 3,395
Total amortization 14,578 14,390
Condensed Consolidated Statements of Comprehensive Income
(Unaudited - Expressed in thousands of Canadian Dollars)
For the three months ended March 31,
2014 2013
Net earnings 6,503 14,160
Other comprehensive income:
Exchange difference on translating foreign operations 4,160 2,361
Unrealized gain (loss) on available for sale investment 27 (32 )
Other comprehensive income 4,187 2,329
Total comprehensive income 10,690 16,489
Condensed Consolidated Statement of Changes in Equity
(Unaudited - Expressed in thousands of Canadian Dollars)
Shareholders'
capital
Contributed surplus Retained earnings Accumulated other comprehensive income (loss ) Total
Balance, December 31, 2012 394,048 2,881 247,565 (3,054 ) 641,440
Changes in equity for the three months ended March 31, 2013
Exercise of options 5,912 - - - 5,912
Reduction of 2012 share issuance costs 124 - - - 124
Issuance of shares 1,116 - - - 1,116
Dividends declared - - (5,473 ) - (5,473 )
Other comprehensive income - - - 2,329 2,329
Net earnings for the period - - 14,160 - 14,160
Balance, March 31, 2013 401,200 2,881 256,252 (725 ) 659,608
Changes in equity for the nine months ended December 31, 2013
Expense related to vesting of options - 235 - - 235
Reclassification of equity settled options - 12,598 - - 12,598
Exercise of options 4,722 (463 ) - - 4,259
Issuance of shares 3,972 - - - 3,972
Dividends declared - - (18,198 ) - (18,198 )
Other comprehensive income - - - 4,908 4,908
Net earnings for the period - - 7,780 - 7,780
Balance, December 31, 2013 409,894 15,251 245,834 4,183 675,162
Changes in equity for the three months ended March 31, 2014
Expense related to vesting of options - 640 - - 640
Exercise of options 5,222 (5,222 ) - - -
Issuance of shares 1,628 - - - 1,628
Dividends declared - - (6,128 ) - (6,128 )
Other comprehensive income - - - 4,187 4,187
Net earnings for the period - - 6,503 - 6,503
Balance, March 31, 2014 416,744 10,669 246,209 8,370 681,992
Condensed Consolidated Statements of Cash Flows
(Unaudited - Expressed in thousands of Canadian Dollars)
For the three months ended March 31,
2014 2013
Cash provided by (used for):
Operating Activities
Net earnings 6,503 14,160
Adjustments for:
Amortization 14,578 14,390
Income tax expense 456 985
Income tax paid (32 ) (207 )
Non-cash stock-based compensation expense (recovery) 3,215 (4,313 )
Net financing charges 93 (475 )
Finance charges paid (858 ) (1,006 )
Other 148 165
Funds from Operations 24,103 23,699
Increase in non-cash working capital (10,753 ) (41,673 )
Decommissioning costs incurred (1,713 ) (1,028 )
Cash from (used in) Operating Activities 11,637 (19,002 )
Investing Activities
Additions to property, plant and equipment (60,787 ) (39,782 )
Other (397 ) (3,645 )
Cash used in Investing Activities (61,184 ) (43,427 )
Financing Activities
Issuance of shares - 1,647
Increase in senior secured debt 54,759 49,501
(Decrease) increase in bank indebtedness (582 ) 14,767
Dividends paid (4,459 ) (4,311 )
Cash from Financing Activities 49,718 61,604
Effect of foreign exchange on cash (171 ) 416
Change in cash - (409 )
Cash, beginning of period - 409
Cash, end of period - -

FORWARD-LOOKING INFORMATION

Certain statements contained in this document constitute "forward-looking information" as defined under applicable securities laws. When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", "potential", "strategy", "target", and similar expressions, as they relate to Newalta Corporation and the subsidiaries of Newalta Corporation, or their management, are intended to identify forward-looking information. In particular, forward-looking information included or incorporated by reference in this document include statements with respect to:

  • future operating and financial results;
  • business prospects and strategy including related timelines;
  • capital expenditure programs and other expenditures;
  • realization of anticipated benefits of growth capital investments, acquisitions and our technical development initiatives;
  • realization of anticipated benefits from our Rationalization Plan and in particular the anticipated value and sustainability of the cash savings from such initiatives;
  • anticipated industry activity levels;
  • expected demand for our services;
  • the amount of dividends declared or payable in the future;
  • our projected cost structure; and
  • expectations and implications of changes in legislation.

Such information reflects our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, including, without limitation:

  • general market conditions of the industries we service;
  • strength of the oil and gas industry, including drilling activity;
  • fluctuations in commodity prices for oil and the price we received for our recovered oil;
  • fluctuations in commodity prices for lead including the price differential we pay for lead feedstock and the price we receive for our lead products;
  • fluctuations in base oil prices including the price differential we pay for used oil and the price we receive for our finished lube oil products;
  • fluctuations in interest rates and exchange rates;
  • supply of waste lead acid batteries as feedstock to support direct lead sales;
  • demand for our finished lead products by the battery manufacturing industry;
  • our ability to secure future capital to support and develop our business, including the issuance of additional common shares;
  • the highly regulated nature of the environmental services and waste management business in which we operate;
  • dependence on our senior management team and other operations management personnel with waste industry experience;
  • the competitive environment of our industry in Canada and the U.S.;
  • success of our growth, acquisition and technical development strategies including integration of businesses and processes into our operations and potential liabilities from acquisitions;
  • potential operational and safety risks and hazards, obtaining insurance for such risks and hazards on reasonable financial terms, and potential failure of meeting customer safety standards;
  • the seasonal nature of our operations;
  • costs associated with operating our landfills and reliance on third party waste volumes;
  • risk of pending and future legal proceedings;
  • risk to our reputation;
  • our ability to attract, retain, and integrate skilled employees and maintain positive labour union relationships;
  • open access for new industry entrants and the general unprotected nature of technology used in the waste industry;
  • possible volatility of the price of, and the market for, our common shares, and potential dilution for shareholders in the event of a sale of additional shares;
  • financial covenants in our debt agreements that may restrict our ability to engage in transactions or to obtain additional financing; and
  • such other risks or factors described from time to time in reports we file with securities regulatory authorities.

On April 7, 2014, we engaged a financial advisor to conduct a review of a full range of potential strategic alternatives for our Industrial Division which review is ongoing. As such, forward-looking information in this document is made subject to any changes that may be implemented as a result of this strategic review.

By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking information will not occur. Many other factors could also cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking information and readers are cautioned that the foregoing list of factors is not exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Furthermore, the forward-looking information contained in this document is made as of the date of this document and, in each case, is expressly qualified by this cautionary statement. Unless otherwise required by law, we do not intend, or assume any obligation, to update any such forward-looking information.

The information contained on our website does not form part of this press release.

RECONCILIATION OF NON-GAAP MEASURES

This Press Release contains references to certain financial measures, including some that do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS" or "GAAP") and may not be comparable to similar measures presented by other corporations or entities. These financial measures are identified and defined below:

"EBITDA", "EBITDA per share", "Adjusted EBITDA", and "Adjusted EBITDA per share" are measures of our operating profitability. EBITDA provides an indication of the results generated by our principal business activities prior to how these activities are financed, assets are amortized or impaired, or how the results are taxed in various jurisdictions. In addition, Adjusted EBITDA provides an indication of the results generated by our principal business activities prior to recognizing stock-based compensation and restructuring related costs. Adjusted EBITDA provides improved continuity with respect to the comparison of our operating results over a period of time. Stock-based compensation, a component of employee remuneration, can vary significantly with changes in the price of our common shares while restructuring costs are outside of our normal course of business. Restructuring related costs are charges directly attributable to the Rationalization Plan associated with the comprehensive review announced in December 2013. EBITDA and Adjusted EBITDA are derived from the consolidated statements of operations and comprehensive income. EBITDA per share and Adjusted EBITDA per share are derived by dividing EBITDA and Adjusted EBITDA by the basic weighted average number of shares.

They are calculated as follows:

Three months ended
March 31,
($000s) 2014 2013
Net earnings 6,503 14,160
Add back (deduct):
Income taxes 456 985
Net finance expense (recovery) 93 (475 )
Amortization(1) 14,578 14,390
EBITDA 21,630 29,060
Add back (deduct):
Stock-based compensation expense (recovery) 6,039 (1,339 )
Restructuring related costs 4,382 -
Adjusted EBITDA 32,051 27,721
Weighted average number of shares 55,518 54,512
EBITDA per share 0.39 0.53
Adjusted EBITDA per share 0.58 0.51
(1) Includes impairment charges, non-cash gains or losses on asset disposal and other non-cash charges.

"Divisional EBITDA" provides an indication of the results generated by the division's principal business activities prior to how the assets are amortized, and before allocation of Selling, general and administrative costs ("SG&A"). Divisional EBITDA is the sum of gross profit and amortization for the respective division. Divisional EBITDA is derived from Gross Profit as follows:

Three months ended
March 31,
($000s) 2014 2013
Gross Profit 41,652 37,836
Add back:
Amortization included in cost of sales 11,205 10,995
Divisional EBITDA 52,857 48,831
New Markets(1) 18,347 14,958
Oilfield(1) 24,059 22,681
Industrial 10,451 11,192
Deduct:
SG&A(2) 26,845 19,771
Restructuring related costs 4,382 -
EBITDA 21,630 29,060
(1) New Markets and Oilfield Divisional EBITDA for the three months ended March 31, 2013 has been restated to reflect a change in reporting structure. New Markets was reduced and Oilfield was increased by $527.
(2) SG&A excludes amortization of $3,373 and $3,395 for Q1 2014 and 2013, respectively.

"Adjusted net earnings" and "Adjusted net earnings per share" are measures of our profitability. Adjusted net earnings provides an indication of the results generated by our principal business activities prior to recognizing stock-based compensation recovery or expense, the gain or loss on embedded derivatives and restructuring related charges. Stock-based compensation expense, a component of employee remuneration, can vary significantly with changes in the price of our common shares. The gain on the embedded derivative is a result of the change in the trading price of the debentures and the volatility of the applicable bond market. Restructuring related costs are related to initiatives outside of our normal course of business. As such, Adjusted net earnings provides improved continuity with respect to the comparison of our results over a period of time. Adjusted net earnings per share is derived by dividing Adjusted net earnings by the basic weighted average number of shares.

Three months ended
March 31,
($000s) 2014 2013
Net earnings 6,503 14,160
Add back (deduct):
Stock-based compensation expense (recovery) 6,039 (1,339 )
Embedded derivative (gain) (6,556 ) (7,068 )
Restructuring related costs 4,382 -
Adjusted net earnings 10,368 5,753
Weighted average number of shares 55,518 54,512
Adjusted net earnings per share 0.19 0.11

"Book value per share" is used to assist management and investors in evaluating the book value compared to the market value.

Three months ended
March 31,
($000s) 2014 2013
Total Equity 681,992 659,608
Shares outstanding, March 31, 55,710 54,735
Book value per share 12.24 12.05

"Cash Basis Return on Capital" ("ROC - Cash") is used to assist management and investors in measuring the returns realized at the consolidated level from capital employed. ROC - Cash is derived from Adjusted EBITDA less cash stock-based compensation, cash taxes and maintenance capital divided by Net Assets. Net Assets is an average of the beginning and ending balances of our total assets less current liabilities for the period.

"Divisional Return on Capital" is used to assist management and investors in measuring the returns realized at the Divisional level from capital employed. It is derived from Divisional EBITDA divided by the average of the beginning and ending balances of assets employed for the period.

"Funds from operations" is used to assist management and investors in analyzing cash flow and leverage. Funds from operations as presented is not intended to represent operating funds from operations or operating profits for the period, nor should it be viewed as an alternative to cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. Funds from operations is derived from the consolidated statements of cash flows and is calculated as follows:

Three months ended
March 31,
($000s) 2014 2013
Cash from (used in) Operating Activities 11,637 (19,002 )
Add back:
Increase in non-cash working capital 10,753 41,673
Decommissioning obligations incurred 1,713 1,028
Funds from operations 24,103 23,699
Weighted average number of shares 55,518 54,512
Funds from operations per share 0.43 0.43

References to EBITDA, EBITDA per share, Adjusted EBITDA, Adjusted EBITDA per share, Divisional EBITDA, Adjusted net earnings, Adjusted net earnings per share, ROC - Cash, Divisional Return on Capital, Funds from operations, and Funds from operations per share throughout this document have the meanings set out above. Adjusted SG&A is defined as SG&A adjusted for stock-based compensation and amortization.

Contact Information

  • Newalta Corporation
    Anne M. Plasterer
    Executive Director, Investor Relations
    (403) 806-7019

    Newalta Corporation
    Stephanie MacVicar
    Director, Investor Relations
    (403) 806-7391
    www.newalta.com