|Three months ended
|millions, except per share amounts||2019||2018||% change|
|Basic earnings per share ("EPS")||$||0.48||$||0.38||27%|
“The Company delivered good results in the first quarter through operational improvements in the
- Net earnings increased
$8.5 millionor 28% in the quarter versus a year ago to $39.3 millionor $0.48EPS.
- Net earnings and EPS, excluding a non-recurring curtailment gain of
$3.7 million( $0.04per share) as described in note 9 of the notes to the unaudited interim condensed consolidated financial statements, increased 16%.
- Revenues were up
$20.9 millionor 3% to $633.9 millionfor the quarter on strong product support and rental growth. Total new and used equipment sales into mining markets were lower against a tough prior year comparator which included large deliveries to support expansion plans at certain mine sites, while sales into construction markets were down slightly. Total industry activity softened versus last year’s strong start.
- Operating income(1) was up
$6.9 millionor 15%, excluding the non-recurring item, largely reflecting higher revenues and margins and lower expenses.
- Bookings(1) in the first quarter of
$293.1 millionwere 21% lower. Mining and power systems orders were lower while construction orders increased compared to the comparable period last year. Backlogs(1) of $395.1 millionat the end of March 2019were down $41.4 millionor 9% from the end of March 2018. Substantially all of the backlog is expected to be delivered this year.
- Revenues of
$66.1 millionincreased $2.2 millionor 4% compared to the first quarter last year. Record product support revenue growth for a first quarter served to offset the impact of lower package sales into both recreational and industrial markets in Canadaand the US.
- Operating income was down
$2.3 millionor 68%, due to lower package and product support margins, partially offset by reduced expenses.
- Bookings were up
$9.3 millionor 15% to $69.7 million. In Canada, recreational orders were higher while industrial orders were lower. In the US, industrial orders were higher while recreational orders were lower. Backlogs of $149.8 millionwere down $6.9 millionfrom the record level at the end of March last year. Substantially all of the backlog is expected to be realized as revenue this year.
- Toromont’s share price of
$68.25at the end of March 2019, translated to a market capitalization(1) of $5.6 billionand a total enterprise value(1) of $6.0 billion.
- The Company maintained a very strong financial position. Leverage as represented by the net debt to total capitalization(1) ratio was 26% at the end
March 2019, compared to 18% at the end of December 2018and 33% at the end of March 2018.
- The Board of Directors announced a quarterly dividend of
27 centsper common share, payable on July 3, 2019to shareholders on record on June 7, 2019. The quarterly dividend was previously increased 17% to 27 centsper share effective with the dividend paid April 3, 2019.
“Despite a relatively slower start to the year in certain segments, infrastructure projects and broader construction activity in the territory continue to present opportunities for the
Annual Meeting of Shareholders
The Company will hold its Annual Meeting of Shareholders on
Financial and Operating Results
All comparative figures in this press release are for the first quarter ended
Quarterly Conference Call and Webcast
Interested parties are invited to join the quarterly conference call with investment analysts, in listen-only mode, on
Both the live webcast and the replay of the quarterly conference call can be accessed at www.toromont.com.
Information in this press release that is not a historical fact is "forward-looking information". Words such as "plans", "intends", "outlook", "expects", "anticipates", "estimates", "believes", "likely", "should", "could", "will", "may" and similar expressions are intended to identify statements containing forward-looking information. Forward-looking information in this press release reflects current estimates, beliefs, and assumptions, which are based on Toromont’s perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. Toromont’s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, are subject to change. Toromont can give no assurance that such estimates, beliefs and assumptions will prove to be correct. This press release also contains forward-looking statements about the recently acquired businesses.
Numerous risks and uncertainties could cause the actual results to differ materially from the estimates, beliefs and assumptions expressed or implied in the forward-looking statements, including, but not limited to: business cycles, including general economic conditions in the countries in which Toromont operates; commodity price changes, including changes in the price of precious and base metals; changes in foreign exchange rates, including the Cdn$/US$ exchange rate; the termination of distribution or original equipment manufacturer agreements; equipment product acceptance and availability of supply; increased competition; credit of third parties; additional costs associated with warranties and maintenance contracts; changes in interest rates; the availability of financing; potential environmental liabilities of the acquired businesses and changes to environmental regulation; failure to attract and retain key employees; damage to the reputation of Caterpillar, product quality and product safety risks which could expose Toromont to product liability claims and negative publicity; new, or changes to current, federal and provincial laws, rules and regulations including changes in infrastructure spending; and any requirement of Toromont to make contributions to the registered funded defined benefit pension plans, postemployment benefits plan or the multi-employer pension plan obligations in which it participates and acquired in excess of those currently contemplated. Risks and uncertainties related to the 2017 significant acquisition could also cause the actual results to differ materially from the estimates beliefs and assumptions expressed or implied in the forward-looking statements, including but not limited to: changes in consumer and business confidence as a result of the change in ownership; the potential for liabilities assumed in the acquisition to exceed our estimates or for material undiscovered liabilities in the 2017 acquisition; the potential for third parties to terminate or alter their agreements or relationships with Toromont as a result of the acquisition; and risks related to integration of the acquired operations with those of Toromont including cost of integration and ability to achieve the expected benefits. Readers are cautioned that the foregoing list of factors is not exhaustive.
Any of the above mentioned risks and uncertainties could cause or contribute to actual results that are materially different from those expressed or implied in the forward-looking information and statements included in this press release. For a further description of certain risks and uncertainties and other factors that could cause or contribute to actual results that are materially different, see the risks and uncertainties set out in the "Risks and Risk Management" and "Outlook" sections of Toromont’s most recent annual Management Discussion and Analysis, as filed with Canadian securities regulators at www.sedar.com or at our website www.toromont.com. Other factors, risks and uncertainties not presently known to Toromont or that Toromont currently believes are not material could also cause actual results or events to differ materially from those expressed or implied by statements containing forward-looking information.
Readers are cautioned not to place undue reliance on statements containing forward-looking information, which reflect Toromont’s expectations only as of the date of this press release, and not to use such information for anything other than their intended purpose. Toromont disclaims any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
For more information contact:
Executive Vice President and
Chief Financial Officer
Tel: (416) 514-4790
- These financial metrics do not have a standardized meaning under International Financial Reporting Standards (IFRS), which are also referred to herein as Generally Accepted Accounting Principles (GAAP), and may not be comparable to similar measures used by other issuers. These measurements are presented for information purposes only. The Company’s Management’s Discussion and Analysis (MD&A) includes additional information regarding these financial metrics, including definitions and a reconciliation to the most directly comparable GAAP measures, under the headings “Additional GAAP Measures”, “Non-GAAP Measures” and “Key Performance Indicators.”
|INTERIM CONDENSED CONSOLIDATED INCOME STATEMENTS|
|Three months ended
|($ thousands, except share amounts)||2019||2018|
|Cost of goods sold||529,313||510,054|
|Selling and administrative expenses||111,878||117,559|
|Interest and investment income||(2,572||)||(2,179||)|
|Income before income taxes||54,436||42,499|
|Earnings per share|
|Weighted average number of shares outstanding|
Source: Toromont Industries Ltd.