|Delayed - 09/25 03:56:52 pm|
Horizon North Logistics Inc :. Announces Results for the Second Quarter ended June 30, 2020
|08/11/2020 | 07:15pm|
Second Quarter Highlights
- Merger with Dexterra (the "Acquisition") closed
May 29, 2020and treated as a Reverse Take Over;
- Revenue of
$76.1 millionand EBITDA of $22.9 million, including transaction costs of $0.4 million;
- Net earnings of
$47.4 millionincluding a Bargain purchase gain of $34.1 millionand Adjusted EPS of $0.06;
- EBITDA was positively impacted by
$18.4 millionof CanadaEmergency Wage Subsidies;
- Achieved cost synergies that will save
$18.0 millionannualized and $14.0 millionin 2020;
- New committed credit facility of
$175 millionclosed June 30, 2020;
- Net debt reduced from
$138 millionto $124 millionsince the merger, targeting under $100 millionat year end;
- Reinstatement of the quarterly Dividend at
- Share consolidation occurred on a 5 for 1 basis to start trading on
July 16, 2020;
Second Quarter Financial Summary
Three months ended
Six months ended
(000's except per share amounts)
Earnings per share
Basic and diluted
Please refer to "Non-GAAP measures" for the definition of EBITDA and Adjusted Earnings per share.
Net earnings for the three and six months ended
The merger of Dexterra and Horizon North, which was completed on
Horizon North had Q2 2020 revenue of
The Corporation significantly improved its leverage and liquidity position through the Acquisition as well as the amended and extended credit facility with increased limit to
Revenue for Q2 2020 was
Facilities Management revenues in Q2 2020 were
EBITDA as a percentage of revenue increased to 35% in Q2 2020 from 5% in Q2 2019 due to the inclusion of
As businesses are expected to reopen in the third quarter of the year, the Corporation expects that its clients will have heightened requirements for cleaning, disinfecting and building maintenance services and Horizon North should be well positioned to support these expanded requirements. While the Corporation reduced its variable cost structure to align with the expected lower revenue, the Corporation cannot accurately predict the extent to which COVID-19 will impact its operations.
The Modular Solutions business was part of the Acquisition of Horizon North which closed on
EBITDA for Q2 2020 and the first six months of 2020 was
The Modular Solutions division is well positioned to benefit from the increased Federal and Provincial support for affordable and social housing through the demonstrated success of the affordable and social housing strategy and execution in
The Modular Solutions division will focus on affordable and social housing projects and does not expect to build hotels in the foreseeable future. A number of corrective actions including closure of the
WAFES has been deemed an essential service and its revenue performance has been strong in a COVID-19 environment. Revenues from the WAFES segment for Q2 2020 were
EBITDA as a percentage of revenue increased to 34% in Q2 2020 from 21% in Q2 2019 mainly due to the inclusion of
Horizon North has a long history and expertise in providing workforce accommodations, hospitality and other services across
WAFES revenue decline is nominal and is an exceptional performance with the pandemic impact on industrial customers and the complete elimination of wildfire revenues which may be pandemic related. Workforce accommodations new sales have been behind plan primarily due to COVID-19 and market conditions but are expected to pick up Q3 and Q4 of 2020 especially around the mining industry and powerline projects in
Liquidity and Capital Resources
Operating cash flow before net change in non-cash working capital was
The Corporation's financial position and liquidity remain strong. The Corporation has generated Free Cash Flow of
A copy of the Corporation's condensed consolidated interim financial statements for the three and six months ended
In this press release Horizon North uses non-GAAP measures including "EBITDA", calculated as earnings before interest, taxes, depreciation, amortization, share based compensation, bargain purchase gain and gain/loss on disposal of property, plant and equipment, "Adjusted EBITDA", calculated as EBITDA before transaction costs, "EBITDA as a % of revenue", calculated as EBITDA divided by revenue, "Adjusted Earnings Per Share", calculated as net earnings less the bargain purchase gain divided by the weighted average number of shares outstanding, and "Free Cash Flow", calculated as net cash flows from (used in) operating activities, less changes in non-cash working capital for investing activities, capital expenditures, payments for lease liabilities and finance costs, to provide investors with supplemental measures of Horizon North's operating performance and thus highlight trends in its core businesses that may not otherwise be apparent when relying solely on GAAP financial measures. Horizon North also believes that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation of issuers. Horizon North's management also uses non-GAAP measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets, and to determine components of management compensation.
Certain measures in this press release do not have any standardized meaning as prescribed by generally accepted accounting principles ("GAAP") and, therefore, are considered non-GAAP measures. These measures are regularly reviewed by the Chief Operating Decision Maker and provide investors with an alternative method for assessing the Corporation's operating results in a manner that is focused on the performance of the Corporation's ongoing operations and to provide a more consistent basis for comparison between periods. These measures should not be construed as alternatives to net earnings and total comprehensive income determined in accordance with GAAP as an indicator of the Corporation's performance. The method of calculating these measures may differ from other entities and accordingly, may not be comparable to measures used by other entities. For a reconciliation of these non-GAAP measures to their nearest measure under GAAP please refer to "Reconciliation of non-GAAP measures" in the MD&A.
Certain statements contained in this press release may constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to Horizon North's future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as "continue"; "forecast"; "may"; "will"; "project"; "could"; "should"; "expect"; "plan"; "anticipate"; "believe"; "outlook"; "target"; "intend"; "estimate"; "predict"; "might"; "potential"; "continue"; "foresee"; "ensure" or other similar expressions concerning matters that are not historical facts. In particular, statements regarding Horizon North's future operating results and economic performance and its objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions, including expected growth, results of operations, performance and business prospects and opportunities regarding Horizon North, which Horizon North believes are reasonable as of the current date. While management considers these assumptions to be reasonable based on information currently available to Horizon North, they may prove to be incorrect. Forward-looking information is also subject to certain factors that could cause actual results to differ materially from what Horizon North currently expects.
The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While management may elect to, Horizon North is under no obligation and does not undertake to update or alter this information at any time, except as may be required by law.
Horizon North will host a conference call and webcast to begin promptly at
To access the conference call by telephone the conference call dial in number is 1-888-231-8191
A live webcast of the conference call will be accessible on Horizon's website at www.horizonnorth.ca by selecting the webcast link on the home page. A PowerPoint presentation will be posted on Horizon's website at www.horizonnorth.ca on
An archived recording of the conference call will be available approximately one hour after the completion of the call until
About Horizon North
Our Modular Solutions business integrates modern design concepts with off-site manufacturing processes to produce high-quality building solutions for commercial, residential and industrial clients. Our Facilities Management business delivers operation and maintenance solutions for built assets and infrastructure in the public and private sectors, including aviation, defence and security, retail, healthcare, education and government. Our Workforce Accommodations, Forestry and Energy Services business provides a full range of workforce accommodations solutions, forestry services and access solutions to clients in the energy, mining, forestry and construction sectors among others.
Horizon North has an outstanding record of creating and managing places that play a vital role in the national economy and our local communities. What sets us apart is our expertise in bringing together the right people with the right skills to transform service delivery and improve customers' experiences.
Additional information related to Horizon North, including the Corporation's annual information form, press releases, financial statements and management's discussion and analysis are available on SEDAR at www.sedar.com.
You can also visit our website at www.horizonnorth.ca.
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