ZCL Composites Reports Q1 2017 Financial Results

EDMONTON, May 3, 2017

Q1 2017 compared with Q1 2016 (Continuing Operations)

• Revenue of $31.7 million, down $3.2 million or 9% from $34.9 million;
• Gross profit of $6.1 million (19% of revenue), down $1.6 million or 20% from $7.7 million (22% of revenue);
• Net income of $0.9 million or $0.03 per share (fully diluted), down $1.2 million or $0.04 per share from $2.1 million or $0.07 per share (fully diluted);
• Excluding the impact of the withholding taxes on the repatriation of earnings in the US required to fund the Q1 2017 special dividend of $20.0 million, earnings per share from continuing operations would have been $0.05; and
• Adjusted EBITDA of $3.2 million (10% of revenue), down $0.9 million from $4.0 million (12% of revenue).

"As we enter our 30^th Anniversary year, we remain optimistic about ZCL's future.  Although revenue of $31.7 million was down 9% compared to the first quarter of 2016, due primarily to poor weather conditions in large parts of North America, our strong backlog of $50.8 million as at March 31, 2017 gives us reasonable confidence that the slow start is a seasonal issue that is not indicative of our more positive outlook for the rest of 2017," said Ron Bachmeier, President and Chief Executive Officer. 

"Looking ahead, our market intelligence and customer feedback give us confidence that for the full year we will achieve our 2017 objectives.  As we have shared in the past, our 10/10/10 objective for achieving minimum 10% Compound Annual Growth Rates (CAGR) in revenues, earnings, and our dividend, all while being responsible stewards and prudent allocators of capital, forms the foundation for our long term strategy," continued Mr. Bachmeier.

"ZCL is preparing the company for the next phase of growth by investing in our business in areas such as sales and marketing, human capital management, information technology, employee safety and hygiene and operational improvements.  Although not reflected in current gross margin results, we believe the investments we are making now will result in increasing levels of profitability as we grow our business in the future," said Mr. Bachmeier.

Dividends

The Board has declared a quarterly dividend of $0.12 per share, the same rate as the prior quarter and a 50% increase over the $0.08 declared at the same time last year.  The dividend will be paid on July 17, 2017, to the shareholders of record as of June 30, 2017.