Toromont Announces Results for the Third Quarter of 2015 and Regular Quarterly Dividend

TORONTO, ONTARIO--(Marketwired - Nov. 2, 2015) - Toromont Industries Ltd. (TSX:TIH) reported its financial results for the third quarter ended September 30, 2015.

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                          Three months ended          Nine months ended

                             September 30               September 30

                       ------------------------- ---------------------------

millions, except per                          %                           %

 share amounts             2015     2014 change       2015      2014 change

------------------------------------------------ ---------------------------

Revenues                $ 505.6  $ 467.4      8%  $1,330.3  $1,194.7     11%

Operating income        $  62.3  $  56.2     11%  $  142.8  $  122.7     16%

Net earnings            $  44.7  $  40.0     12%  $  101.3  $   87.5     16%

Earnings per share -

 basic                  $  0.58  $  0.52     12%  $   1.30  $   1.14     14%

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"We are pleased with the steady performance of Toromont through these times of challenging and highly competitive market conditions," said Scott J. Medhurst, President and Chief Executive Officer of Toromont Industries Ltd. "In the Equipment Group, product support, heavy rents and power rentals continued to fuel growth, benefitting from focus and the increased installed base of equipment. At CIMCO, the growth in both equipment and product support revenues have also led to improved profitability."


--  Equipment Group revenues increased 7% to $439.3 million in the third

    quarter driven by increased product support and, to a lesser extent,

    increased heavy equipment and power rental revenues. Equipment sales

    were flat against a year ago as sales of construction equipment declined

    against a difficult comparator in 2014, which included $43.0 million of

    sales into a single project. This was offset by increased sales into

    mining and agriculture (benefitting from recent acquisitions), even

    though both markets continue to experience very tight conditions. The

    weaker Canadian dollar provides a positive impact on revenue as pricing

    is adjusted to reflect the higher cost of US sourced equipment and

    parts. Operating income(1) increased 9% compared to last year,

    reflecting the higher revenues and good expense management. Lower

    utilization levels in the expanded light equipment rental fleet together

    with extremely challenging conditions in the agricultural equipment

    market, were offsets to the improved profitability.

--  Equipment Group revenues were up 11% to $1.2 billion year-to-date.

    Equipment sales were up $44.6 million or 8% on increased sales into

    construction, agricultural and mining markets and the weaker Canadian

    dollar. Product support revenues increased to a new high for the first

    nine months of the year on strong parts and services growth, reflecting

    higher activity levels and the weaker Canadian dollar. Operating income

    increased 16% compared to last year on the higher revenues, slightly

    improved gross profit margins and good expense management.

--  Equipment Group backlogs(1) were $131.0 million at September 30, 2015

    compared to $102.0 million at December 31, 2014 and $111.0 million at

    this time last year. Substantially all of the backlog is expected to be

    delivered this year. Bookings(1) increased 17% in the quarter to $176.0

    million and 11% year-to-date to $614.0 million.

--  CIMCO revenues were up 18% to $66.2 million in the quarter on increased

    package sales and continued product support growth. Operating income

    increased 38% reflecting the higher revenues and improved project

    execution and was 9.4% as a percentage of revenues.

--  CIMCO revenues were up 10% to $166.7 million year-to-date. Product

    support revenues increased 11% to $80.3 million and surpassed the

    previous record set last year. Operating income margin(1) of 5.7% was 80

    basis points higher than last year.

--  CIMCO bookings were up 50% in the quarter and 24% year-to-date. Backlogs

    of $86.0 million at September 30, 2015 were up from $67.0 million at

    December 31, 2014 and $70.0 million at September 30, 2014. All market

    segments were up in both Canada and the US with approximately half of

    the backlog expected to translate to revenue over the remainder of the


--  Net earnings increased 12% in the quarter to $44.7 million and 16% to

    $101.3 million year-to-date largely due to the higher revenues, improved

    gross profit margins(1) and a relatively lower expense ratio.

--  Earnings per share (basic) increased 12% or $0.06 in the quarter to

    $0.58 and 14% or $0.16 to $1.30 year-to-date, both records for the

    respective periods.

--  Toromont's financial position remains strong. Net debt to total

    capitalization(1) was 22%, well within stated capital targets.

--  During the quarter, the Company amended and increased its existing

    $200.0 million committed credit facility to $250.0 million and extended

    the term of the agreement to September 2020.

--  On September 30, 2015, the Company issued $150.0 million in senior

    debentures due in 2025 and bearing interest at 3.71% per annum. Proceeds

    were used to fund the maturity of $125.0 million in 4.92% senior

    debentures, which came due subsequent to quarter end, together with

    general corporate purposes.

--  The Board of Directors announced the regular quarterly dividend of 17

    cents per common share, payable January 4, 2016 to shareholders of

    record on December 10, 2015. The regular quarterly dividend was

    previously increased 13% to 17 cents per share effective with the

    dividend paid April 1, 2015.

"Toromont's Equipment Group continued to perform well in the quarter, however we have seen some softening in construction markets in recent months as evidenced by lower total industry unit sales. Infrastructure investment continues and there is potential for further long-term growth if the new Federal government follows through on its commitment to increase spending. The tight conditions experienced in mining markets are expected to continue. In the near-term, the weakened Canadian dollar exacerbating heightened competitive market conditions, together with lower utilization levels in the expanded light equipment rental fleet, are expected to exert downward pressure on earnings," continued Mr. Medhurst. "We were encouraged by CIMCO's results with the strides made in both Canadian and US market segments. Product support growth continued in both the US and Canada and remains a strategic focus. Across all of our businesses, diversity of opportunity continues to be a strength."

Quarterly Results Materials

The complete third quarter report for 2015, including MD&A and unaudited interim condensed consolidated financial statements, is available on our website at

Quarterly Conference Call and Webcast

Interested parties are invited to join the quarterly conference call with investment analysts, in listen-only mode, on Tuesday, November 3, 2015 at 8:00 a.m. (ET). The call may be accessed by telephone at 1-800-355-4959 (toll free) or 416-340-8527 (Toronto area). A replay of the conference call will be available until Tuesday, November 17, 2015 by calling 1-800-408-3053 or 905-694-9451 and quoting passcode 6968837.

Both the live webcast and the replay of the quarterly conference call can be accessed at


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 is based on current objectives, strategies, expectations and assumptions which management considers appropriate and reasonable at the time including, but not limited to, general economic and industry growth rates, commodity prices, currency exchange and interest rates, competitive intensity and shareholder and regulatory approvals.

By its nature, forward-looking information is subject to risks and uncertainties which may be beyond the ability of Toromont to control or predict. The actual results, performance or achievements of Toromont could differ materially from those expressed or implied by forward-looking information. Factors that could cause actual results, performance, achievements or events to differ from current expectations include, among others, risks and uncertainties related 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; and, environmental regulation.

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 or interim Management Discussion and Analysis, as filed with Canadian securities regulators at and may also be found at 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 that are included in this press release, which are made 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 or intention to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities legislation.

About Toromont

Toromont Industries Ltd. operates through two business segments: The Equipment Group and CIMCO. The Equipment Group includes one of the larger Caterpillar dealerships by revenue and geographic territory in addition to industry leading rental operations and a growing agricultural equipment business. CIMCO is a market leader in the design, engineering, fabrication and installation of industrial and recreational refrigeration systems. Both segments offer comprehensive product support capabilities. This press release and more information about Toromont Industries Ltd. can be found at


(1)These financial metrics do not have a standardized meaning under International Financial Reporting Standards, which are also referred to herein as Generally Accepted Accounting Principles (GAAP), and may not be comparable to similar measures used by other issuers. The Company's Management's Discussion and Analysis (MD&A) includes additional information regarding these financial metrics, including definitions, under the heading "Description of Non-GAAP and Additional GAAP Measures."




                            Three months ended         Nine months ended

                               September 30              September 30

                        -------------             -------------

($ thousands, except

 share amounts)                 2015         2014         2015         2014


Revenues                 $   505,553  $   467,432  $ 1,330,282  $ 1,194,739

Cost of goods sold           381,604      353,622    1,006,214      907,886


Gross profit                 123,949      113,810      324,068      286,853

Selling and

 administrative expenses      61,605       57,621      181,231      164,185


Operating income              62,344       56,189      142,837      122,668

Interest expense               2,347        2,060        6,432        6,217

Interest and investment

 income                         (653)        (444)      (2,278)      (2,406)


Income before income

 taxes                        60,650       54,573      138,683      118,857

Income taxes                  15,920       14,535       37,421       31,331


Net earnings             $    44,730  $    40,038  $   101,262  $    87,526



Earnings per share

 Basic                   $      0.58  $      0.52  $      1.30  $      1.14

 Diluted                 $      0.57  $      0.51  $      1.29  $      1.13


Weighted average number

 of shares outstanding

 Basic                    77,773,042   77,116,885   77,606,112   77,015,442

 Diluted                  78,534,161   77,775,872   78,280,421   77,647,692



Toromont Industries Ltd.

Paul R. Jewer

Executive Vice President and Chief Financial Officer

(416) 667-5638

Source: Toromont Industries Ltd.

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