Montréal, Québec – LOGISTEC Corporation [TSX: LGT.A and LGT.B] (the “Company”), a marine and environmental services provider, today announced its financial results for the nine months period ended September 26, 2020.
Highlights from the third quarter of 2020
- Consolidated revenue reached $191.9 million, down $3.4 million or 1.8%;
- Adjusted EBITDA (1) closed at $41.7 million, up $5.7 million;
- Total diluted earnings per share of $1.56, up 17.3%;
- Launch of ALTRA, LOGISTEC’s field-proven innovation in water technology solutions.
Highlights from the first nine-month period of 2020
- Consolidated revenue reached $424.9 million, down $41.3 million or 8.9%;
- Adjusted EBITDA (1) closed at $69.1 million, up $10.2 million;
- Total diluted earnings per share closed at $1.50, up 36.4%.
Results of the period
During the third quarter of 2020, consolidated revenue totalled $191.9 million, a decrease of $3.4 million or 1.8% over the same period in 2019. Revenue from the marine services segment was lower at $79.3 million compared to $100.9 million in the corresponding period of 2019. As we anticipated, volumes were depressed, as global trade has slowed down following the measures put in place by governments to suppress the COVID-19 virus. In addition, volumes in the United States further suffered from an extremely active hurricane season that disrupted some of our terminals’ operations. Revenue from the environmental services segment amounted to $112.6 million, an increase of $18.2 million or 19.3% over the third quarter of 2019. Since the end of May 2020, we have resumed all businesses in this segment, and we are now operating at full capacity to execute the strong order book we have.
The adjusted EBITDA (1) for the quarter closed at $41.7 million, an increase of $5.7 million or 15.8% over the comparative period. The increase stems mainly from the strong performance of our environmental services segment and from a $1.7 million wage subsidy from the Canada Emergency Wage Subsidy program.
Overall, LOGISTEC Corporation reported a profit attributable to owners of the Company of $20.4 million in the third quarter of 2020, up $3.0 million from the $17.4 million recorded in the corresponding period last year. This translated into total diluted earnings per share of $1.56, of which $1.50 was attributable to Class A shares and $1.65 to Class B shares
During March 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization. The situation is constantly evolving, and the measures put in place have numerous economic repercussions at the global and national levels. These measures, which include travel bans, solitary confinement or quarantine, whether voluntary or not, and social distancing, have caused significant disruption in the United States and Canada, where the Company operates.
LOGISTEC rolled out its business continuity plan for its operations that are deemed essential services by the government authorities in Canada and the United States. More precisely, the Company’s marine operations are considered essential services and, as such, our terminal operations across our North American network remained open and functional. In addition, our manufacturing of woven hoses, which is essential in providing communities with drinking water and fighting forest fires, remained operational.
On the environmental services side, we are, as every year, affected by the seasonality of our operations and most activities cannot be performed in the winter season. This includes site remediation and renewal of water mains. COVID-19 has nonetheless affected some of these activities, causing significant delays in our projects. However, since the end of May 2020, we have resumed all businesses in this segment, and we are now operating under strict distancing and sanitation protocols.
As at September 26, 2020, the Company believed that it qualified to receive the Canada Emergency Wage Subsidy and that there was a reasonable assurance that the amount would be received from the Canadian federal government in connection with the COVID-19 pandemic. For the three-month and the nine-month periods ended September 26, 2020, the Company recognized a wage subsidy of $1.7 million and $12.7 million, respectively, against the salary expense qualifying for that subsidy under employee benefits expense in the condensed consolidated interim statements of earnings.
“We view the outlook for the remainder of the year with cautious optimism considering the unprecedented impact of this pandemic. In our marine services segment, we anticipate volumes to remain somewhat depressed due to the impact of the second wave of the COVID-19 virus on the economy around the world. In our environmental services segment, we foresee a reasonable quarter as we ramp down our activities before the end of the year. In the long run, with the launch of ALTRA, our field-proven innovation in water technology solutions, we believe that it will consolidate our unique water solutions under one brand and strengthen our product offering to allow us to gain market share in key markets,” indicated Madeleine Paquin, President and Chief Executive Officer of LOGISTEC Corporation.
LOGISTEC Corporation is based in Montréal (QC) and provides specialized services to the marine community and industrial companies in the areas of bulk, break-bulk and container cargo handling in 38 ports and 65 terminals located in North America. LOGISTEC also offers marine transportation services geared primarily to the Arctic coastal trade as well as marine agency services to foreign shipowners and operators serving the Canadian market. Furthermore, the Company operates in the environmental industry where it provides services to industrial, municipal and other governmental customers for the renewal of underground water mains, soils and materials management, site remediation, risk assessment, and manufacturing of woven hoses.
The Company has been profitable and has paid regular dividends since becoming public and payments have grown steadily over the years. A public company since 1969, LOGISTEC’s shares are listed on the Toronto Stock Exchange under the ticker symbols LGT.A and LGT.B. More information can be obtained on the Company’s website at www.logistec.com.
In this press release, the Company uses a measure that is not in accordance with IFRS. Adjusted earnings before interest expense, income taxes, depreciation and amortization expense (“adjusted EBITDA”) is not defined by IFRS and cannot be formally presented in the consolidated financial statements. The definition of adjusted EBITDA used by the Company may differ from those used by other companies. Even though adjusted EBITDA is a non-IFRS measure, it is used by managers, analysts, investors and other financial stakeholders to analyze and assess the Company’s performance and management from a financial and operational standpoint. Refer to Company’s management’s discussion and analysis of the period for further information and its Non-IFRS Measures section for the definition of this indicator and the reconciliation to profit (loss) for the period.
For the purpose of informing shareholders and potential investors about the Company’s prospects, sections of this document may contain forward-looking statements, within the meaning of securities legislation, about the Company’s activities, performance and financial position and, in particular, hopes for the success of the Company’s efforts in the development and growth of its business. These forward-looking statements express, as of the date of this document, the estimates, predictions, projections, expectations or opinions of the Company about future events or results. Although the Company believes that the expectations produced by these forward-looking statements are founded on valid and reasonable bases and assumptions, these forward-looking statements are inherently subject to important uncertainties and contingencies, many of which are beyond the Company’s control, such that the Company’s performance may differ significantly from the predicted performance expressed or presented in such forward-looking statements. The important risks and uncertainties that may cause the actual results and future events to differ significantly from the expectations currently expressed are examined under “Business Risks” in the Company’s annual report and include (but are not limited to) the performances of domestic and international economies and their effect on shipping volumes, weather conditions, labour relations, pricing and competitors’ marketing activities. The reader of this document is thus cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to update or revise these forward-looking statements, except as required by law.