TerraVest Announces First Quarter Results for Fiscal 2016

VEGREVILLE, AB, Feb. 10, 2016

The first quarter is generally one of TerraVest's strongest quarters, on a seasonal basis, however reduced activity levels in the oil and gas sector have impacted certain segments. Despite these challenges, Management is pleased with the overall performance in the quarter and remains optimistic of the long-term outlook for TerraVest. Furthermore, the Company is conservatively levered, maintains a good cash balance and has in excess of 50% of its EBITDA generated from businesses insulated from the oil & gas sector.

The Dividend Payout ratio of the Company was 37% for the quarter.

• Highlights in the quarter include:
• Revenues of $55,762 for the quarter up 5% from the comparable period in fiscal 2015;
• Completed the acquisition of a manufacture of highly specialized tanks and related equipment for the North American oil and gas industry;
• Repurchased $695 face value of convertible debentures at a discount to face value.  

"Although our oil & gas segments are facing the challenges of today's macroeconomic trends, the Company has performed well and we feel our diversification positions us to take advantage of any opportunities that may arise during this downturn. At the same time, we continue to benefit from our U.S. geographic exposure and the Fuel Containment segment's diversification away from declining world oil prices." said Charles Pellerin, Executive Chairman of TerraVest.

	2015	2014
	$ ARIVA.DE Börsen-Geflüster Kurse TERRAVEST CORP. -   0,00%	$
Sales	55,762	53,004
Cost of sales	42,226	38,827
Gross profit	13,536	14,177
General and administration expenses	4,704	4,533
Selling expenses	1,140	1,182
Financing costs	897	658
Net income before tax	6,795	7,804
Income taxes	1,861	2,470
Net Income	4,934	5,334
Allocated to non-controlling interest	96	274
Net income available to common shareholders	4,838	5,060
Weighted average shares outstanding - Basic	18,279	18.108
Weighted average shares outstanding – Diluted	21,154	18.108
Earnings per share – Basic	$0.26	$0.28
Earnings per share – Diluted	$0.24	$0.28

TerraVest's first quarter ended December 31^st, 2015 saw an increase in revenue of approximately 5% versus the comparable period ended December 31^st, 2014. Adjusted EBITDA decreased by approximately 6% in the same periods. While revenue increased primarily due to the addition of Signature Truck Systems, driven by strong demand for certain Fuel Containment segment products and the weaker Canadian dollar relative to the US dollar, EBITDA declines were primarily the result of declines in the level of business in the Fabrication and Service Segments.

Outlook

TerraVest continues to focus on pursuing opportunities to expand the Company's existing portfolio of businesses and add new businesses where current operational and management expertise can be leveraged. 

The Fuel Containment segment has experienced healthy demand for its entire suite of propane products both in the U.S. and Canada. However, recent warmer weather conditions in parts of the Northeast are likely to impact demand for propane related products in the short-term. In spite of these changes, management remains optimistic in the long-term growth prospects for the segment. Most recently, the Fuel Containment segment developed the capability to assemble larger propane trailers out of its U.S. facilities (in addition to assembly of Bobtail propane trucks). Management expects that these additional capabilities will only enhance the segment's long-term growth prospects for propane related products in the U.S. The current backlog in the Fuel Containment segment's propane tank business is approximately $18,916 and stretches into 2016. Separate from propane, with the strong US dollar and low oil price environment, management expects strong performance from the residential oil tank business which is expected to generate higher EBITDA relative to the prior year.

The Fabrication segment continues to experience pricing pressures and more recently, project cancellations or deferrals, from certain of its customers paralleling the state of the oil & gas market. In an effort to mitigate the impacts of a negative outlook for the western Canadian economy, management took steps in 2015 to reduce staffing levels in the Fabrication segment and continues to evaluate all cost saving opportunities. Additionally, the Fabrication segment continues to take advantage of this economic slowdown to improve manufacturing processes through investment in equipment and changes to our plant work flow. These changes should result in cost rationalization, shorter lead times and increased capacity that will persist beyond an eventual recovery in oil prices. The Fabrication segment's backlog is approximately $19,394 which is not as strong last year and has been impacted by the continuation of the low oil prices affecting the oil and gas industry in its entirety. Management expects the continued low oil price environment will be challenging for this segment. Management expects pricing pressures as well as order deferrals will continue in the short to medium term.

The Service segment's results in the first quarter of fiscal 2016 were weaker than the prior year's quarter as a result pricing pressures and reduced activity due to the continued depressed oil and gas prices. Although this segment has faced pricing pressure from its major customers, management is working diligently to maintain rig utilization levels and reduce operating costs. The Service segment is a resilient business and as oil companies cut their capital budgets an emphasis is placed on well optimization which helps mitigate the cyclicality for this segment. We expect the low oil price environment will continue to put pressure on field rates and utilization levels for the foreseeable future. We remain confident in the long-term outlook for this business and its ability to withstand the current downturn.   

Conference Call

TerraVest will hold a conference call on Friday, February 12^th at 10:00 am Eastern Standard Time to discuss its financial results for the quarter ended December 31^st, 2015.

To participate in the call, please dial: 416.695.7806 or 888.789.9572 using Participant code: 8551455

For those unable to attend the call, an instant replay of the call will be available until the 26^th of February, 2016 at 905.694.9451 using Participant code: 5837153.

Dividend

TerraVest is also pleased to announce that The Board of Directors has declared its quarterly dividend of 10 cents per share upon the outstanding Common Shares in the capital stock of the Company being payable on April 8th, 2016 to shareholders of record as at the close of business on March 31, 2016. The ex-dividend date is March 29^th 2016. The dividend is designated an "eligible dividend" for Canadian income tax purposes.

Additional information can be found in TerraVest's unaudited interim condensed consolidated financial statements and MD&A which are available on SEDAR at www.sedar.com.

Caution Regarding Forward-Looking Statements

This news release contains forward-looking statements.  All statements other than statements of historical fact contained in this news release are forward-looking statements, including, without limitation, statements regarding our strategic direction and evaluation of the business segments and TerraVest as a whole, and other plans and objectives of or involving TerraVest. Readers can identify many of these statements by looking for words such as "expects" and "will" and similar words or the negative thereof. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

By their nature, forward-looking statements require us to make assumptions and, accordingly, forward looking statements are subject to inherent risks and uncertainties. There is significant risk that the forward-looking statements will not prove to be accurate. We caution readers of this news release not to place undue reliance on our forward-looking statements because a number of factors may cause actual future circumstances, results, conditions, actions or events to differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements and the assumptions underlying the forward-looking statements. 

Assumptions and analysis about the performance of TerraVest as a whole and its business segments, the markets in which the business segments compete and the prospects and values of the business segments are considered in setting the business plan for TerraVest, plans and/or ability to pay dividends, outlook for operations, financial position, results and cash flow, other plans and objectives and in making related forward-looking statements. Such assumptions include, without limitation, demand for products and services of the business segments in respect of the Canadian and other markets in which the businesses are active will be stable, and that input costs to business segments do not vary significantly from levels experienced historically. Should any of these factors or assumptions vary, actual results may differ materially from the forward-looking statements.

The information set forth under "Risk Factors" in the annual information form of TerraVest dated December 10, 2015 and under "Risk Factors" in the MD&A of TerraVest for the year ended September 30, 2015, identifies risk factors that could affect the operating results and performance of TerraVest and its business segments and the values of the business segments and TerraVest as a whole. We caution that the lists of factors discussed in such information is not exhaustive and that, when relying on forward-looking statements to make decisions with respect to TerraVest, investors and others should carefully consider the factors discussed, as well as other uncertainties and potential events, and the inherent risks and uncertainties of forward-looking statements.  The forward-looking statements herein are made based on the assumption that TerraVest will not be affected by such risks, but that, if TerraVest is affected by such risks, the forward-looking statements may become inaccurate.

The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.  The forward-looking statements included in this news release are made as of the date of this news release.  Except as required by applicable securities laws, TerraVest does not undertake to update such forward-looking statements.

Non-GAAP Financial Measures

For Non-GAAP financial measures please refer to the definitions outlined the TerraVest Management's Discussion and Analysis dated December 10, 2015.

SOURCE TerraVest Capital Inc.