|Three months ended
||Six months ended
|millions, except per share amounts||2021||2020||% change||2021||2020||% change|
|Basic earnings per share ("EPS")||$||1.03||$||0.62||66||%||$||1.62||$||1.08||50||%|
“We are pleased with the overall activity levels in our end markets and are proud of our team’s dedication and ability to adjust to ongoing changes in the environment and customer requirements”, stated
- Revenues increased 33% in the quarter versus the same period last year on higher sales in both the
Equipment Groupand CIMCO. This reflected improved activity levels in most markets and across all regions, as well as good execution from our teams. Product support revenues were 14% higher and rental revenues were up 27% compared to the similar quarter last year reflecting the initial impact of COVID-19 in the second quarter of 2020.
- Revenues increased 24% to
$1.9 billionyear-to-date, as the improved activity in end markets continued. Strong deliveries from order backlogs and on improving demand drove equipment and packages revenues f 44% higher, while product support and rental revenues increased 7%.
- Operating income(1) increased 59% in the quarter and 46% year-to-date on the higher revenues. Operating income was 10.0% of revenues for the first half of 2021 compared to 8.5% in the similar period last year, improving on the higher activity levels.
- Backlogs(1) were
$957.8 millionat June 30, 2021, compared to $496.5 millionat June 30, 2020, reflecting strong bookings(1) in the Equipment Groupover the last three quarters and timing of order delivery.
- Net earnings increased
$34.2 millionor 67% in the quarter versus a year ago to $85.4 million and EPS (basic) was up 66% to $1.03per share.
- For the first half of the year, net earnings increased
$44.8 millionor 51% and EPS (basic) was up 50% to $1.62per share.
- Revenues increased
$239.8 millionor 31% to $1.0 billionfor the quarter on strong equipment sales combined with higher product support and rental activity in most markets and across all regions.
- Revenues were up
$309.4 millionor 22% to $1.7 billionyear-to-date with similar trends as the quarter.
- Operating income was up
$44.0 millionor 61% to $116.4 millionreflecting higher revenues coupled with a lower expense ratio to revenues.
- Operating income was up
$58.7 millionor 46% to $186.3 millionyear-to-date, on the same reasons as noted for the quarter. Operating income margin increased 180 bps to 10.7%.
- Bookings increased
$335.9 millionor 113% to $633.9 millionin the quarter and $684.4 million or 108% to $1.3 billionyear-to-date. Most of the sectors reported higher orders, particularly in the mining and construction sectors.
- Backlogs of
$810.3 millionat the end of June 2021were up $541.5 millionor 201% from the end of June 2020across all sectors. Approximately 65% of the backlog is expected to be delivered this year; certain mining orders are scheduled for delivery next year based on customer requirements.
- Revenues of
$110.5 millionincreased $37.6 millionor 52% compared to the second quarter last year, with strong package revenues, up $37.6 millionor 104%, reflecting build out of industrial orders booked in 2020. Product support sales remained flat, largely on lower activity in the recreational segment stemming from site restrictions.
- Revenues increased
$58.8 millionor 45% to $189.4 millionyear-to-date on increased package revenues. Product support sales decreased $2.6 millionor 4% versus 2020, as activity was impacted by site restrictions, particularly in the recreational segment.
- Operating income increased 31% to
$6.1 millionin the quarter on the higher revenues. Operating income was 5.5% as a percentage of revenues (Q2 2020 – 6.4%), reflecting lower gross margins on larger industrial projects and on product mix (lower proportion of product support to total).
- Operating income was up
$1.7 millionor 35% to $6.5 millionyear-to-date on similar reasons as noted for the quarter above. Operating income margin decreased to 3.4% (2020 – 3.7%) reflecting the unfavourable sales mix.
- Bookings were down
$5.9 millionor 11% in the quarter and $80.2 millionor 49% year-to-date, mainly on lower industrial orders in Canadawith several large industrial orders received in the first quarter of 2020.
- Backlogs of
$147.5 millionwere lower by $80.2 millionor 35%, against a very strong level last year, reflecting project build out and lower bookings to date. Subject to construction site access and schedules, approximately 90% of the backlog is estimated to be realized as revenue this year.
- Toromont’s share price of
$108.00at the end of June 2021, translated to a market capitalization(1) and a total enterprise value(1) of $8.9 billion.
- The Company maintained a very strong financial position. Leverage as represented by the net debt to total capitalization(1) ratio was -1% at the end of
June 2021(net cash position), compared to 3% at December 2020and 12% at June 2020.
- The Board of Directors announced a quarterly dividend of
35 centsper common share, payable on October 4, 2021to shareholders on record on September 8, 2021. The quarterly dividend was previously increased 12.9% to 35 centsper share effective with the dividend paid July 5, 2021.
- Return on opening shareholders’ equity(1) was 19.0% at
June 30, 2021, on a trailing twelve-month basis, compared to 16.6% at December 2020, and 18.7% at June 2020. Trailing twelve month pre-tax return on capital employed(1) was 24.2% at the end of June 2021, compared to 20.4% at December 2020, and 20.2% at June 2020.
Robert was a leader and mentor to many of today’s Toromont leadership team and Board of Directors. The entire organization wishes Robert well in his retirement and thanks him for his significant contributions to Toromont’s success and his steadfast commitment to our employees, customers and shareholders.
“We continue to provide essential services and solutions to our clients, while remaining diligently focused on safeguarding our employees, and protecting our business for the future,” noted
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
Presentation materials to accompany the call will be available on our investor page on our website.
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 and regions in which Toromont operates; commodity price changes, including changes in the price of precious and base metals; potential risks and uncertainties relating to the novel COVID-19 global pandemic, including an economic downturn, reduction or disruption in supply or demand for our products and services, or adverse impacts on our workforce, capital resources, or share trading price or liquidity, and increased regulation of or restrictions placed on our businesses; 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; information technology failures, including data or cyber security breaches; 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; 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; and ability to secure insurance coverage and cost of premiums. 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
1 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)||2021||2020||2021||2020|
|Cost of goods sold||872,360||655,810||1,491,220||1,200,411|
|Selling and administrative expenses||132,198||116,653||249,360||232,270|
|Interest and investment income||(2,260||)||(1,564||)||(4,264||)||(4,289||)|
|Income before income taxes||117,766||70,808||182,809||121,843|
|Earnings per share|
|Weighted average number of shares outstanding|
Source: Toromont Industries Ltd.