TerraVest Announces First Quarter Results for Fiscal 2017

VEGREVILLE, AB, Feb. 8, 2017

The first quarter is generally one of TerraVest's strongest quarters, on a seasonal basis, however the business environment in Western Canada continues to impact the business segments. TerraVest's non‐oil and gas exposed business segment, the Fuel Containment division, also experienced a decline over the comparable period in fiscal 2016 as a result of softer demand for propane related products. Management is hopeful that the Company will experience a reversal in these trends as the year progresses. From an operational perspective, TerraVest continues to reinvest in the business in order to garner additional operating efficiencies that will benefit shareholders over the long term. Management is pleased with the overall performance and remains positive of the long-term outlook for the Company. The Dividend Payout ratio of the Company for the quarter was 47%.

Highlights for the quarter include:

• Revenues of $48,278 for the quarter, down 13% from the comparable period in fiscal 2016;
• First quarter Adjusted EBITDA of $8,448, which is a decrease of 18% over the comparable period in fiscal 2016;
• Free cash flow for the quarter of $(3,856), which is a decrease of $10,330 over the comparable period in fiscal 2016;
• Repurchased $441 face value of convertible debentures; and
• Earnings per share and diluted earnings per share of $0.21 and $0.19, respectively for the three months ended December 31, 2016 compared to earnings per share and diluted earnings per share of $0.26 and $0.24, respectively in the comparable period in fiscal 2016.

"TerraVest continues to demonstrate that it has strong and diversified cash flows.  With the capital reinvestment we are making in our businesses, the continued integration of our acquisitions and the potential for a reversal in Oil & Gas drilling activity, I remain confident that we can continue to increase shareholder value over the long term." said Charles Pellerin, Executive Chairman of TerraVest.

			Three months ended December 31
			2016	2015 ARIVA.DE Börsen-Geflüster Kurse TERRAVEST CORP. -   0,00%
			$	$
Revenue			48,278	55,762
Net income			3,741	4,934
Add (subtract):
Income taxes			1,377	1,861
Financing costs			887	897
Amortization and depreciation			2,519	2,584
EBITDA			8,524	10,276
Gain on disposal of property, plant and equipment			(76)	(25)
Adjusted EBITDA			8,448	10,251
Maintenance Capital Expenditures			(2,355)	(802)
Cash income taxes paid			(1,484)	(2,647)
Financing costs paid			(710)	(1,522)
Distribution to non-controlling interest			-	(266)
Cash Available for Distribution			3,899	5,014
Dividends Paid in the Period			1,832	1,831
Dividend Payout Ratio			47%	37%
Free Cash Flow
Cash flow from operations before changes in non-cash Working Capital			6,361	6,116
Changes in non-cash Working Capital			(7,998)	1,101
Cash flow from operations			(1,637)	7,217
Add (subtract):
	Purchase of property, plant and equipment		(2,355)	(802)
	Proceeds on disposal of property, plant and equipment		136	59
Free Cash Flow			(3,856)	6,474

TerraVest's first quarter ended December 31, 2016 saw decreases in revenue and Adjusted EBITDA of approximately 13% and 18%, respectively, versus the comparable period ended December 31, 2015. These decreases were primarily the result of declines in the Fuel Containment and Service segments.

Outlook

TerraVest's Fuel Containment segment continues to see strong demand for this segment's residential steel and fiberglass tank products. Demand for this segment's propane product line has been mixed over the previous year with demand for bulk storage tanks being relatively strong and demand for trailers and bobtails being soft as a result of the previous unseasonably warm winter. Management is starting to see this trend reverse as we experience normal seasonal temperatures.

TerraVest's Fabrication segment is seeing an increase in plant utilization in conjunction with the increase in drilling activity in recent months.  Despite this increase in plant utilization, margins remain depressed as there is considerable pricing pressure. Overall, Management remains optimistic that performance will improve relative to the previous fiscal year. Management also continues to streamline operations and develop new revenue opportunities for the segment, the benefits of which are expected to materialize over the medium term.

Similar to the Fabrication segment, the Service segment is seeing an increase in utilization of its service rigs.  While hourly rates have yet to follow suit, management is optimistic that financial performance for the segment will improve if existing oil prices stabilize.

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 12, 2017 to shareholders of record as at the close of business on March 31, 2017. The ex-dividend date is March 29, 2017. 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 7, 2016 and under "Financial instruments" in the MD&A of TerraVest for the three months ended December 31, 2016, 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 February 8, 2017.

SOURCE TerraVest Capital Inc.