Third Quarter Highlights
- Revenue of
$176.9 million and EBITDA of$33.4 million , including legal settlements of$6.6 million ; - Net earnings of
$16.1 million and basic EPS of$0.25 ; - EBITDA was positively impacted by
$9.5 million ofCanada Emergency Wage Subsidies; - Net debt reduced from
$138 million to$109 million since the merger, targeting under$100 million at year end; - Horizon North has achieved cost synergies that will save the Corporation
$22 million annually for 2021 and onward. Further cost synergies may be realized as future integration and cross-line-of-business sales opportunities are realized; - Horizon North declared a dividend of
$0.075 per share for shareholders on recordDecember 31, 2020 , to be paidJanuary 15, 2021 ; - Share consolidation occurred on a 5 for 1 basis in
July 2020 ; - Proposed name change to "
Dexterra Group Inc. ", to be approved by Shareholders at Special Meeting onNovember 13 ; and - The Board has approved locating and building a Modular Solutions plant in
Ontario to increase capacity and address the surging demand for rapid housing; the Corporation expects to announce a new President of Modular Solutions in the very near future;
Third Quarter Financial Summary
Three months ended | Nine months ended | ||||||||
(000's except per share amounts) | 2020 | 2019 | 2020 | 2019 | |||||
Revenue(1) | $ | 176,918 | $ | 76,151 | $ | 313,397 | $ | 196,925 | |
EBITDA(2)(4) | 33,444 | 5,185 | 58,477 | 13,225 | |||||
Adjusted EBITDA(2)(4) | 27,085 | 5,185 | 53,609 | 13,225 | |||||
Net earnings(3)(4) | 16,061 | 3,425 | 64,452 | 7,849 | |||||
Earnings per share | |||||||||
Basic(5) | $ | 0.25 | $ | 0.10 | $ | 1.37 | $ | 0.24 | |
Diluted(5) | $ | 0.24 | $ | 0.10 | $ | 1.37 | $ | 0.24 |
Revenue includes | |
(1) | Please refer to "Non-GAAP measures" for the definition of EBITDA and Adjusted EBITDA. |
(2) | Net earnings for the nine months ended |
(3) | Includes |
(4) | All share and per share data presented has been retroactively adjusted to reflect the Consolidation discussed in the "Outstanding Shares" section of the MD&A. |
Operations Analysis
Facilities Management
Facilities Management revenues in Q3 2020 were
EBITDA as a percentage of revenue increased to 16% in Q3 2020 from 7% in Q3 2019 mainly due to the inclusion of
Year to date, Facilities Management revenues were
EBITDA as a percentage of revenue increased to 17% in the first nine months of 2020 from 5% in 2019 due to the inclusion of
Modular Solutions
The Modular Solutions business was part of the Acquisition of Horizon North which closed on
EBITDA for Q3 2020 and for the year to date post-Acquisition, was
With the recent announcement by
Workforce Accommodations, Forestry and Energy Services ("WAFES")
WAFES has been deemed an essential service and its revenue performance has been strong in a COVID-19 environment. Revenues from the WAFES segment Q3 2020 were
EBITDA as a percentage of revenue increased to 28% in Q3 2020 from 9% in Q3 2019 mainly due to the inclusion of
Revenues from the WAFES segment for the nine months ended
Year to date, EBITDA as a percentage of revenue increased to 27% from 13% in the same period in 2019 mainly due to the inclusion of
Camp occupancy for Q4 2020 is expected to be lower than Q3 2020 given the continuing overhang and uncertainty surrounding COVID-19, which has resulted in the slower start-up of the LNG Canada facility build in
Liquidity and Capital Resources
Operating cash flow before net change in non-cash working capital was
The Corporation's financial position and liquidity are strong. The Corporation has generated Free Cash Flow of
A copy of the Corporation's condensed consolidated interim financial statements for the three and nine months ended
Non-GAAP measures
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 and other revenue, "EBITDA as a % of revenue", calculated as EBITDA divided by revenue, 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".
Forward-Looking Information
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.
Conference Call
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.
Corporate Information
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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