|Three months ended
||Six months ended
|millions, except per share amounts||2019||2018||% change||2019||2018||% change|
|Basic earnings per share ("EPS")||$||0.95||$||0.83||14%||$||1.43||$||1.21||18%|
“The Company delivered solid results in the second quarter, as we continued to leverage the strength of our larger organization in this second year of integration across our
- Net earnings increased
$9.8 millionor 14% in the quarter versus a year ago to $77.4 millionor $0.95EPS.
- For the first half of the year, net earnings increased 19% and EPS up 18%. Adjusted to exclude the non-recurring gain recorded in the first quarter described in note 9 to the financial statements, net earnings and EPS both increased 15%.
- Revenues were up
$21.3 millionor 2% to $895.5 millionfor the quarter on robust growth in product support, rentals and used equipment sales. New equipment sales were lower.
- Revenues were up
$42.2 millionor 3% to $1.5 billionyear-to-date with similar trends as the quarter.
- Operating income(1) was up
$10.5 millionor 11% to $104.5 millionin the quarter on higher revenues and gross profit margins. Operating income margin(1) increased 100 basis points (“bps”) to 11.7%.
- Operating income was up
$22.4 millionor 16% to $162.1 millionyear-to-date, also on higher revenues and gross profit margins. Excluding the non-recurring item, operating income was up 12% and operating income margin increased 90 bps to 10.3%.
- Bookings(1) increased
$4.4 millionor 1% in the quarter but were down $72.2 millionor 9% year-to-date. Construction orders were strong in the quarter and year-to-date while decreases were reported in other market sectors. Backlogs(1) of $403.4 millionat the end of June 2019were down $3.6 millionor 1% from the end of June 2018. Substantially all of the backlog is expected to be delivered this year.
- Revenues decreased
$4.3 millionor 5% to $82.9 millionfor the quarter. Record product support revenues for a second quarter served to partially offset lower package sales in Canadaand the US.
- Revenues decreased
$2.0 millionor 1% to $149.0 millionyear-to-date with similar trends as the quarter.
- Operating income was up
$1.5 millionor 30% to $6.6 millionlargely reflecting higher gross profit margins and was up 210 bps to 7.9% as a percentage of revenues.
- Operating income was down
$0.8 millionor 9% to $7.7 millionyear-to-date, largely on the lower revenues and gross profit margins. Operating income margin decreased 40 bps to 5.2%.
- Bookings were down
$16.5 millionor 27% in the quarter and $7.3 millionor 6% year-to-date on lower Canadian orders, partially offset by higher US activity. Backlogs of $148.1 millionwere down $15.2 millionor 9%, approximately two-thirds of which is expected to be realized as revenue this year.
- The Company maintained its very strong financial position. Leverage as represented by the net debt to total capitalization(1) ratio was 26% at the end
June 2019, compared to 18% at the end of December 2018and 28% at the end of June 2018.
- The Board of Directors announced a quarterly dividend of
27 centsper common share, payable on October 2, 2019to shareholders on record on September 6, 2019. The quarterly dividend was previously increased 17% to 27 centsper share effective with the dividend paid April 3, 2019.
- The Company continued its long track record of superior shareholder returns, delivering increased dividends, a 22.3% trailing twelve months return on opening shareholder’ equity(1) and a 22.5% trailing twelve months pre-tax return on capital employed(1).
- Toromont’s share price of
$62.07at the end of June 2019, translated to a market capitalization(1) of $5.1 billionand a total enterprise value(1) of $5.6 billion.
“Infrastructure investment and broader construction activity continue to present opportunities for the
Financial and Operating Results
All comparative figures in this press release are for the three and six months 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
||Six months ended
|($ thousands, except share amounts)||2019||2018||2019||2018|
|Cost of goods sold||741,412||736,401||1,270,725||1,246,455|
|Selling and administrative expenses||125,880||125,886||237,758||243,445|
|Interest and investment income||(2,208||)||(2,051||)||(4,780||)||(4,230||)|
|Income before income taxes||106,248||93,312||160,684||135,811|
|Earnings per share|
|Weighted average number of shares outstanding|
Source: Toromont Industries Ltd.