TORONTO, ONTARIO (December 13th, 2018) – TerraVest Industries Inc., formerly TerraVest Capital Inc., (TSX: TVK) (“TerraVest” or the “Company”) announces its results for the fourth quarter and year ended September 30, 2018. The Company’s financial results for the fourth quarter and year ended September 30, 2018 represent an improvement over the comparable periods of fiscal 2017.
FOURTH QUARTER AND YEAR END REVIEW AND OUTLOOK
Management believes that there are certain non‐IFRS financial measures that can be used to assist shareholders in determining the performance of the Company. The table below highlights certain financial results and reconciles net income to EBITDA, EBITDA to Adjusted EBITDA and Adjusted EBITDA to Cash Available for Distribution for the fourth quarter and the year ended September 30, 2018 and the comparative periods in fiscal 2017.
Sales for the quarter and year ended September 30, 2018 were $79,297 and $269,927 compared to $52,699 and $192,535 for the prior comparable periods, representing increases of 50% and 40% respectively. These increases are a result of the additions of MaXfield Group Inc. (“MaXfield”) and Fischer Tanks LLC (“Fischer Tanks”), which did not contribute in the prior comparable periods, as well as increased levels of business activity in the Fuel Containment and Processing Equipment segments.
Adjusted EBITDA for the quarter and year ended September 30, 2018 was $14,667 and $41,567 compared to $5,793 and $24,183 for the prior comparable periods. This represents increases of 153% and 72%, which are a result of the reasons explained above. In reconciling EBITDA to Adjusted EBITDA, non-recurring acquisition-related costs of $661 associated with the acquisition of MaXfield have been added back.
Maintenance Capital Expenditures were $1,752 for the quarter versus $1,707 for the prior comparable period. During the period, the Company’s total purchase of property, plant and equipment was $2,145 of which $393 is considered growth capital. This growth capital includes additions to the Company’s rental equipment fleet, as well as manufacturing equipment to support capacity expansions and process improvements in several of its businesses.
Cash Available for Distribution increased 368% quarter over quarter and 144% year over year. These increases are largely explained from the recent acquisitions and increased business activity in Fuel Containment and Processing Equipment.
TerraVest saw greatly improved results this year versus the prior year due to contributions from recently acquired businesses and newly added product lines, as well as a general increase in business activity. The Fuel Containment segment continues to see increased demand for most of its products and throughout next year management expects to realize the full benefits of recently added products lines and growth capital expenditures aimed at capacity expansion and efficiency improvements. Management’s expectations for the Processing Equipment segment are positive as this segment will benefit from a full year of contribution from the recently acquired MaXfield. However, recent volatility in commodity pricing could have a negative impact moving forward. The outlook for the Service segment is not materially different than the prior year. Pricing pressure has been a major challenge for this segment. Management expects this to persist until commodity pricing improves.
Global steel prices, tariffs and supply constraints continue to be a challenge for the Company as a whole. Management is working diligently with the government and suppliers to mitigate the impact.
TerraVest is also pleased to announce that The Board of Directors has declared its quarterly dividend of 10 cents per Common share payable on January 11, 2019 to shareholders of record as at the close of business on December 31, 2018. The dividend is designated an “eligible dividend” for Canadian income tax purposes.
Additional information can be found in TerraVest’s annual consolidated financial statements and MD&A which are available on SEDAR at www.sedar.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
TerraVest Industries Inc.
Chief Executive Officer
Caution Regarding Forward-Looking Statements
This news release contains forward-looking statements. All statements other than statements of historical fact contained in this news release are forward-looking statements, including, without limitation, statements regarding our strategic direction and evaluation of the business segments and TerraVest as a whole, and other plans and objectives of or involving TerraVest. Readers can identify many of these statements by looking for words such as “expects” and “will” and similar words or the negative thereof. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.
By their nature, forward-looking statements require us to make assumptions and, accordingly, forward looking statements are subject to inherent risks and uncertainties. There is significant risk that the forward-looking statements will not prove to be accurate. We caution readers of this news release not to place undue reliance on our forward-looking statements because a number of factors may cause actual future circumstances, results, conditions, actions or events to differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements and the assumptions underlying the forward-looking statements.
Assumptions and analysis about the performance of TerraVest as a whole and its business segments, the markets in which the business segments compete and the prospects and values of the business segments are considered in setting the business plan for TerraVest, plans and/or ability to pay dividends, outlook for operations, financial position, results and cash flow, other plans and objectives and in making related forward-looking statements. Such assumptions include, without limitation, demand for products and services of the business segments in respect of the Canadian and other markets in which the businesses are active will be stable, and that input costs to business segments do not vary significantly from levels experienced historically. Should any of these factors or assumptions vary, actual results may differ materially from the forward-looking statements.