|Three months ended
||Nine months ended
|millions, except per share amounts||2021||2020||% change||2021||2020||% change|
|Basic earnings per share ("EPS")||$||1.13||$||0.94||20||%||$||2.75||$||2.02||36||%|
“We are pleased with our operating performance, financial results, cash generation and financial position through a challenging business environment. Overall end market activity levels remained solid with the easing of pandemic restrictions and shutdowns. Nonetheless, we continue to operate in a very fluid, complex and uncertain operating environment,” stated
- Revenues increased 8% in the quarter reflecting solid activity levels in most markets, as well as good execution from our teams. Product support revenues were 4% higher and rental revenues were up 6% compared to the third quarter last year.
- Revenues increased 18% to
$2.9 billionyear-to-date on improved activity in end markets compared to 2020 hit by pandemic restrictions and shutdowns. Deliveries from healthy order backlogs and on strong demand generally, drove equipment and packages revenues 32% higher, while product support and rental revenues increased 6% and 7% respectively.
- Operating income(1) increased 19% in the quarter and 33% year-to-date on the higher revenues. Operating income was 11.2% of revenues for the nine months ended
September 30, 2021compared to 9.9% in the similar period last year, improving on the higher activity levels, coupled with better margins and expense control.
- Backlogs(1) were
$1.1 billionat September 30, 2021, compared to $472.1 millionat September 30, 2020, reflecting strong bookings(1) in the Equipment Groupover the last four quarters. Production timing and tight supply of equipment from manufacturers is beginning to lengthen some delivery schedules to end customers.
- Net earnings increased
$16.4 millionor 21% in the quarter versus a year ago to $93.8 million and EPS (basic) was up 20% to $1.13per share.
- Year-to-date, net earnings increased
$61.2 millionor 37% and EPS (basic) was up 36% to $2.75per share.
- Revenues increased
$79.7 millionor 10% to $914.4 millionfor the quarter on strong equipment sales (up $62.9 million). Product support and rental activity continues to increase.
- Revenues were up
$389.1 millionor 17% to $2.7 billionyear-to-date with similar trends as the quarter.
- Operating income was up
$26.0 millionor 25% to $129.4 millionreflecting higher revenues coupled with a lower expense ratio.
- Operating income was up
$84.7 millionor 37% to $315.6 millionyear-to-date, on the same reasons as noted for the quarter. Operating income margin increased 170 bps to 11.9%.
- Bookings increased
$168.8 millionor 45% to $539.9 millionin the quarter and $853.1 million or 85% to $1.9 billionyear-to-date. Most sectors reported higher orders, particularly mining and construction.
- Backlogs of
$903.5 millionat the end of September 2021were up $647.4 millionor 253% from the end of September 2020across all sectors. Approximately 40% of the backlog is expected to be delivered this year; certain mining orders are scheduled for delivery in 2023 based on customer requirements.
- Revenues of
$82.8 milliondecreased $4.1 millionor 5% compared to the third quarter last year. Package revenues were down $7.8 millionor 16%, in part due to delays in project schedules. Product support sales increased $3.7 millionor 10%, on higher activity in the recreational segment with the easing of site restrictions and re-opening of recreational rinks for the upcoming winter season.
- Revenues increased
$54.7 millionor 25% to $272.2 millionyear-to-date. Package revenues increased $53.5 millionor 50% on build of industrial projects in process. Product support sales increased $1.1 millionor 1% versus 2020, with the aforementioned recovery in the third quarter.
- Operating income decreased 47% to
$5.1 millionin the quarter on the lower package revenues. Operating income was 6.1% as a percentage of revenues (Q3 2020 – 10.9%), reflecting lower gross margins on larger industrial projects, increased expenditure in support of higher expected activity levels and a cost of $0.9 millionrelated to a forthcoming move of the head office facility.
- Operating income was down
$2.8 millionor 19% to $11.5 millionyear-to-date on higher package revenues, partially offset by lower package gross margins and increased expenses. Operating income margin decreased to 4.2% (2020 – 6.6%).
- Bookings were up
$8.9 millionor 22% in the quarter and down $71.2 millionor 35% year-to-date, on lower industrial orders in Canadawhere the comparable 2020 period included large orders received in the first quarter.
- Backlogs of
$153.8 millionwere lower by $62.2 millionor 29%, against a very strong level last year, reflecting project build out of prior year bookings and lower bookings through September 2021. Subject to construction site access and schedules, approximately 52% of the backlog is estimated to be realized as revenue this year.
- Toromont’s share price of
$105.73at the end of September 2021, translated to a market capitalization(1) of $8.7 billionand a total enterprise value(1) of $8.6 billion.
- The Company maintained a very strong financial position. Leverage as represented by the net debt to total capitalization(1) ratio was -5% at the end of
September 2021(net cash position), compared to 3% at December 2020and 10% at September 2020.
- The Company commenced a Normal Course Issuer Bid in
September 2021, and has repurchased and cancelled 230,000 common shares for $24.2 million(average cost of $105.31per share, including transaction costs) through to September 30, 2021.
- The Board of Directors announced a quarterly dividend of
35 centsper common share, payable on January 5, 2022to shareholders on record on December 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 19.3% at
September 30, 2021, on a trailing twelve-month basis, compared to 16.6% at December 2020, and 17.6% at September 2020. Trailing twelve month pre-tax return on capital employed(1) was 25.3% at the end of September 2021, compared to 20.4% at December 2020, and 20.3% at September 2020.
“We value our entire team’s incredible effort and on-going commitment to adapt to changes in the business environment and focus on executing customer deliverables,” noted
Financial and Operating Results
All comparative figures in this press release are for the three and nine 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
||Nine months ended
|($ thousands, except share amounts)||2021||2020||2021||2020|
|Cost of goods sold||738,764||695,043||2,229,984||1,895,454|
|Selling and administrative expenses||123,991||113,736||373,351||346,006|
|Interest and investment income||(1,936||)||(1,719||)||(6,200||)||(6,008||)|
|Income before income taxes||129,286||106,722||312,095||228,565|
|Earnings per share|
|Weighted average number of shares outstanding|
Source: Toromont Industries Ltd.