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02.11.2016 23:15
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ZCL Composites Reports Third Quarter 2016 Financial Results
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EDMONTON, Nov. 2, 2016
EDMONTON, Nov. 2, 2016 /CNW/ - ZCL Composites Inc. (TSX: ZCL) today announced financial results for the third quarter ended September 30, 2016.
Q3 2016 compared with Q3 2015 (continuing operations)
- Record revenue of $57.9 million, up $2.3 million or 4% from $55.6 million;
- Record gross profit of $14.5 million (25% of revenue), up $0.8 million or 6% from $13.7 million (25% of revenue);
- Net income of $7.7 million or $0.25 per fully diluted share, down $0.2 million or 2% from $7.9 million or $0.26 per fully diluted share;
- Adjusted EBITDA of $12.1 million (21% of revenue), compared to $12.2 million (22% of revenue);
- Backlog of $46.5 million, down $1.3 million or 3% from $47.8 million; and
- Declared quarterly dividend of $0.08 per share, up 60% from $0.05 per share.
First nine months 2016 compared with first nine months 2015 (continuing operations)
- Revenue of $137.5 million, up $17.0 million or 14% from $120.5 million;
- Gross profit of $31.7 million (23% of revenue), up $5.5 million or 21% from $26.2 million (22% of revenue);
- Net income of $14.3 million or $0.46 per fully diluted share, up $1.5 million or 12% from $12.7 million or $0.42 per fully diluted share; and
- Adjusted EBITDA of $23.6 million (17% of revenue), up $2.5 million or 12% from $21.1 million (17% of revenue).
"During the third quarter of 2016, ZCL achieved record revenue and record gross profit from continuing operations," said Ron Bachmeier, President and Chief Executive Officer. "We paid off our term debt and our balance sheet remains very strong with working capital of $68.3 million, including a cash balance of $38.1 million."
Primarily because of foreign exchange fluctuations, net income from continuing operations was slightly lower than a year earlier. Excluding foreign exchange gains, net income would have been $0.3 million higher than the third quarter of 2015.
ZCL completed three separate asset sale transactions associated with the previously disclosed exit from the ZCL Dualam operations. Although the proceeds on these transactions were not material, ZCL was able to avoid significant closures costs by selling the assets of these business units to third parties. ZCL is now acutely focused on further expansion of our core and emerging markets served by our Petroleum, Water and Industrial Products groups.
Backlog
Backlog was $46.5 million, down $1.3 million or 3% from $47.8 million a year earlier. The decrease from a year earlier resulted from a reduction in Water Products and Industrial Products (formerly Corrosion Products) backlog partially offset by a $3.3 million increase in the Petroleum Products backlog.
Petroleum Products backlog of $41.5 million was up $3.3 million or 9% compared to a year earlier. The increase in Petroleum Products backlog was driven by both Canadian and US customers. On a source currency basis, Petroleum Products backlog was up 12% compared to a year earlier.
Water Products backlog of $4.4 million was down $1.6 million or 26% compared with a year earlier. The reduction in backlog was primarily driven by a reduction in US Water Products backlog where customer orders have been slower to come to fruition. On a source currency basis, Water Products backlog was down $1.1 million or 25% compared with September 30, 2015.
The total backlog decreased by $8.5 million or 16% from $55.0 million at June 30, 2016 due to the normal seasonal nature of the business.
Financial Position
At September 30, 2016, ZCL's balance sheet had working capital (current assets less current liabilities) of $68.2 million compared to $76.8 million at December 31, 2015, including a net cash balance of $38.1 million compared to $39.1 million at December 31, 2015.
Dividends
The Board has maintained the dividend level, declaring a quarterly dividend of $0.08 per share, up 60% from $0.05 paid a year earlier. The dividend will be paid on January 16, 2017, to the shareholders of record as of December 30, 2016.
Outlook
We expect Petroleum Products growth will continue to be led by higher volume from larger fuel retailers, particularly in the US. These retailers are building an increasing number of "new to industry" downstream retail fueling sites as they compete for market share. Accelerating tank replacement programs due to the aging of the installed tank base also continue to support growth in this market. Some studies1 estimate that 15-20% of the retail fuel tanks in service today are older than 30 years, and that 50-60% are older than 20 years. Increasing pressure from bankers, insurers and regulators, who are motivated to mitigate financial and environmental risk factors by removing older tanks from service, is supporting this replacement activity.
Although not reflected in our 2016 revenues and current backlog due to a deferral in construction spending this year, we continue to believe that our Water Products group is also poised for growth. Increasing general construction activity across a broad cross section of markets, and growing awareness of water as the next scarce commodity, are driving demand for water storage solutions. We are in the process of completing an in-depth review of our Water Products sales and marketing strategies and anticipate making changes over the coming weeks and months to increase our revenue and market share.
We expect Industrial Products, the remaining portion of our former Corrosion Products business, will be less than 5% of our total revenues going forward.
ZCL's portfolio of Petroleum Products, Water Products and Industrial Products possess significant competitive advantages and present a strong value proposition to our customers. We remain confident that we will be able to sustain organic compound annual growth rates in both revenues and earnings of 10% over the longer term, however achievement of this growth rate in any individual year cannot be assured.
| _____________________________________ |
Summary Financial Results
| For the three months ended | 2016 | 2015 | 2014 | ||||||
| (in thousands of dollars, | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | |
| except per share amounts) | $ | $ | $ | $ | $ | $ | $ | $ | |
| Revenue | 57,885 | 44,719 | 34,917 | 44,398 | 55,636 | 41,469 | 23,439 | 41,601 | |
| Net income | | | | | | | | | |
| | Continuing operations | 7,741 | 4,396 | 2,132 | 4,774 | 7,896 | 3,883 | 960 | 4,573 |
| | Discontinued operations (note 1) | (1,249) | (2,842) | (1,093) | (889) | (2,691) | (483) | (451) | 322 |
| | Total | 6,492 | 1,554 | 1,039 | 3,885 | 5,205 | 3,400 | 509 | 4,895 |
| Adjusted EBITDA (note 2) | 12,125 | 7,387 | 4,048 | 7,062 | 12,172 | 6,619 | 2,293 | 7,084 | |
| Basic and diluted earnings per share | | | | | | | | | |
| | Continuing operations | 0.25 | 0.14 | 0.07 | 0.16 | 0.26 Werbung Mehr Nachrichten zur ZCL COMPOSITES INC. Aktie kostenlos abonnieren
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