VANCOUVER, BC--(Marketwired - November 11, 2016) - WesternOne Inc. ("WesternOne") (
The results, consisting of WesternOne's unaudited interim financial statements for the three and nine months ended September 30, 2016 and Management's Discussion and Analysis ("MD&A") dated November 11, 2016, are available on SEDAR (www.sedar.com).
2016 Q3 financial summary:
- Consolidated revenue of $25.7 million, gross profit of $3.4 million and adjusted EBITDA (as defined below) of negative $1.9 million, compared to the respective amounts of $46.8 million, $6.7 million and positive $1.0 million in Q3 of 2015.
- The decline was mainly due to reduced volume of on-site modular installation work at Britco and lower rental fleet utilization from WesternOne Infrastructure Services. The decline was partially offset by organic growth from Britco's modular space rental division, which saw an 8.4% or $0.2 million increase in rental revenue compared to Q3 of 2015, and improved product sales due to a diversified mix of permanent modular and relocatable buildings at Britco Canada which generated $2.7 million of revenue, compared with $1.7 million in the prior year period.
- Net change in cash position from continuing operations was positive $1.8 million, compared to negative $0.5 million in Q3 of 2015. As at September 30, 2016, WesternOne had total liquidity of $24.1 million, comprising net cash on hand and available capacity under the credit facility.
- WesternOne continued to execute debt reduction strategy through the full redemption of the series 2 extendible convertible unsecured subordinated debentures on August 5, 2016. Debt-to-equity ratio was 1.23 at September 30, 2016, significantly improved from 2.38 at June 30, 2016.
- Net loss from continuing operations attributable to shareholders was $14.0 million ($1.27 per share), compared to $7.1 million ($6.27 per share) in Q3 of 2015. Excluding non-cash effects relating to quarter-end revaluation of debentures as required under IFRS, adjusted net loss was $7.1 million ($0.65 per share) in Q3 of 2016, compared to $6.2 million ($5.48 per share) in Q3 of 2015.
WIS, WesternOne's infrastructure services division, recorded Q3 revenue of $13.2 million and adjusted EBITDA of negative $0.2 million, compared to the respective amounts of $15.2 million and positive $2.3 million in the prior year. Excess supply of fleet from competitors and lower rental demand, primarily in the Alberta markets, continued to weigh on fleet utilizations and was the main factor impacting WIS revenue and earnings. The decline was partially offset by higher fuel sales volume which resulted in a 3.4% increase in gross profit contribution.
Britco, WesternOne's modular construction and modular space rental division, recorded Q3 revenue of $12.5 million and adjusted EBITDA of negative $0.7 million, compared to the respective amounts of $31.6 million and positive $0.1 million in the prior year. The decline was mainly due to reduced on-site work at Britco Canada as the final installation of two major work camp projects was substantially completed in 2015, and reduced output at the Britco USA facility as low demand from the industrial sectors persisted. The decline was partially offset by a growth in Britco's modular space rental revenue, which increased 8.4% from $2.0 million in the prior year period to $2.2 million as demand from the construction segment in BC remained firm. In Q3 Britco Canada also recorded $2.7 million of revenues relating to permanent modular and relocatable buildings for education, industrial and indigenous customers, a 59% increase from the $1.7 million in the prior year period.
Corporate overhead before amortization and share-based compensation for Q3 was $1.0 million, a 28% reduction from $1.4 million in the prior year primarily due to reduced payroll-related expenses and professional fees.
| Summary Financial Overview | Three months ended September 30, |
Nine months ended September 30, |
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| ($ millions except per share amounts) | ||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenue | $ | 25.7 | $ | 46.8 | $ | 82.9 | $ | 197.0 | ||||||||
| Gross Profit | 3.4 | 6.7 | 21.3 | 43.2 | ||||||||||||
| Adjusted EBITDA(1) (2) | (1.9 | ) | 1.0 | 3.1 | 20.3 | |||||||||||
| Net Loss from Continuing Operations(2) | (14.0 | ) | (7.1 | ) | (40.9 | ) | (9.3 | ) | ||||||||
| Net Income (Loss) from Discontinued Operations (2) | 0.2 | - | 0.6 | (0.1 | ) | |||||||||||
| Net Loss (2) | (13.8 | ) | (7.1 | ) | (40.3 | ) | (9.4 | ) | ||||||||
| Loss per Share from Continuing Operations (2) | (1.27 | ) | (6.27 | ) | (9.23 | ) | (8.23 | ) | ||||||||
| Loss per Share (2) (3) | (1.26 | ) | (6.27 | ) | (9.09 | ) | (8.29 | ) | ||||||||
| (1) | "Adjusted EBITDA" is not a recognized measure under IFRS and does not have a standardized meaning prescribed by IFRS. "Adjusted EBITDA" refers to net income (loss) from continuing operations before interest, income and commodity taxes, depreciation, amortization, non-controlling interest, gain/loss on financial derivatives relating to changes in the fair market value of the fixed interest rate swap, business acquisition costs, debenture issuance costs, gain/loss on debentures relating to changes in their fair market values, share based compensation, severance costs, foreign exchange gains/losses, and write-down of fleet assets, intangible assets and goodwill. For a full description of adjusted EBITDA, refer to "Non-IFRS Measures" in the MD&A dated November 11, 2016. | |
| (2) | Represents amount attributable to shareholders. | |
| (3) | Loss per Share for prior periods have been adjusted on a retroactive basis to reflect the consolidation of WesternOne's issued and outstanding common shares on the basis of one post-consolidation common share for every 35 pre-consolidation common shares (the "Consolidation"). The Consolidation was approved by WesternOne's shareholders at the special shareholders meeting on October 28, 2016. | |
"Our Q3 results were negatively impacted by persistent economic headwinds and continuing challenging market conditions. However, going forward we are encouraged to see some signs of positive sales momentum from Britco's modular construction division in Canada. We also are experiencing early signs of success in WIS from our strategic focus on major projects within the heat business," said Peter Blake, CEO of WesternOne. "We will continue to focus on disciplined execution of our strategies to grow revenues, contain costs and manage liquidity as we continue to navigate through the current economic environment."
Conference Call
Peter Blake, CEO, and the management team will host a conference call at 9:00am (Eastern time) or 6:00am (Pacific time), on Monday, November 14, 2016 to review the financial results and corporate developments for the three and nine months ended September 30, 2016.
To participate in this conference call, please dial one of the following numbers approximately 10 minutes prior to the commencement of the call, and ask to join the WesternOne conference call.
Dial in numbers:
Toll Free.......................................................... 1-888-390-0546
International or Local Toronto........................ 1-416-764-8688
Conference Call Replay
If you cannot participate on November 14, 2016, a replay of the conference call will be available by dialing one of the following replay numbers. You will be able to dial in and listen to the conference two hours after the meeting end time, and the replay will be available until November 21, 2016. Please enter the Replay ID number 832853 followed by the # key.
Replay Dial-In:
Toll Free.......................................................... 1-888-390-0541
International or Local Toronto........................ 1-416-764-8677
Forward-looking Information
Certain statements in this news release may constitute "forward-looking" information that involves known and unknown risks, uncertainties and other factors, and it may cause actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information. Forward-looking information is identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. Such information includes, without limitation, statements with respect to: signs of positive sales momentum from Britco's modular construction division in Canada; signs of success in WIS from its strategic focus on major projects within the heat business; and WesternOne's intention to continue to focus on disciplined execution of strategies to grow revenues, contain costs and manage liquidity in the current economic environment. Actual events or results may differ materially.
Forward-looking information contained in this news release is based on certain key expectations and assumptions made by WesternOne, including, without limitation: the stability of the economy in Western Canada and the United States, the impact of the current economic climate in Western Canada and the United States on WesternOne's operations will remain consistent with WesternOne's current expectations, the supply and demand for WesternOne's products and services and the related impact on the pricing on such products and services will remain consistent with WesternOne's current expectations and management's assessment of future plans and operations. Although the forward-looking information contained in this news release is based upon what WesternOne's management believes to be reasonable assumptions, WesternOne cannot assure investors that actual results will be consistent with such information. Forward-looking information reflects current expectations of management regarding future events and operating performance as of the date of this news release. Such information involves significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information, and a description of these factors can be found under "Risk Factors" in WesternOne's Annual Information Form dated March 30, 2016 and MD&A dated November 11, 2016, which are both available on SEDAR (www.sedar.com).
The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information reflects management's current beliefs and is based on information currently available to WesternOne. The forward-looking information is made as of the date of this news release and WesternOne assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.
About WesternOne
WesternOne seeks to acquire and grow businesses in the construction and infrastructure services sectors in order to generate value for its shareholders.
Additional Information
Additional information relating to WesternOne and other public filings, is available on SEDAR at www.sedar.com or on WesternOne's website at www.weq.ca.
Trading Symbols
Toronto Stock Exchange: WEQ and WEQ.DB
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE.
Contact Information:
For investor relations information, please contact:
Andrew Greig
Manager of Investor Relations
WesternOne Inc.
Suite 910, 925 West Georgia Street
Vancouver, BC V6C 3L2
Phone: (604) 678-4042
E-mail: agreig@weq.ca