Shawcor Ltd., dba Mattr Infratech (“Mattr” or the “Company”) (TSX:
MATR) reported today its operational and financial results for the
three and nine months ended September 30, 2023. This press release
should be read in conjunction with the Company’s Management
Discussion and Analysis (“MD&A”) and interim consolidated
financial statements for the three and nine months ended September
30, 2023, which are available on the Company’s website and at
www.sedarplus.com.
Highlights from the third quarter include1:
- The Company entered into a
definitive agreement to sell a substantial part of its Pipeline
Performance Group (“PPG”) business which was previously reported
under the Pipeline and Pipe Services (“PPS”) segment for $166
million USD, or approximately $230 million CAD at October 31, 2023
exchange rates, to Tenaris S.A. (“Tenaris”). This transaction is
subject to normal working capital adjustments, is currently
expected to close by the middle of the first quarter of 2024 and
largely completes the Company’s portfolio transformation and
strategic review process. Consequently, the Company is now
reporting those elements of the PPG business covered by this
agreement as held for sale and their results as discontinued
operations, while the remaining active businesses are reported as
continuing operations. Accordingly, prior period information has
been retrospectively revised to reflect Continuing Operations and
Discontinued Operations;
- Continuing Operations revenue was
$225 million, operating income from continuing operations was $26
million and Adjusted EBITDA from continuing operations was $41
million;
- Composite Technologies (formerly
known as Composite Systems) segment revenue decreased by 5% to $140
million compared to $148 million in the prior year’s quarter.
Excluding $14 million of revenue in the third quarter of 2022 from
the Oilfield Asset Management (“OAM”) business unit (sold in the
fourth quarter of 2022), the segment’s revenue increased by $6
million or 5%;
- Connection Technologies (formerly
known as Automotive & Industrial) segment revenue was $82
million, unchanged compared to the prior year’s quarter;
- Discontinued Operations revenue was
$289 million, operating income from discontinued operations was $80
million and Adjusted EBITDA from discontinued operations was $87
million, including the results from the Southeast Gateway Pipeline
(“SGP”) project in Altamira, Mexico, for which coating operations
were approximately 40% complete as of quarter end;
- On a consolidated basis, (including
Continuing Operations and Discontinued Operations) Mattr reported
Net Income of $72 million, Adjusted EBITDA of $128 million, fully
diluted Earnings Per Share (“EPS”) of $1.03 and fully diluted
Adjusted EPS of $1.13;
- A net repayment of $9 million was
made on the Credit Facility (as defined herein). As at September
30, 2023, the Company had total net debt of $152 million and a Net
Debt-to-EBITDA1 ratio (using a trailing twelve-month consolidated
Adjusted EBITDA1) of approximately 0.50 times;
- Subsequent to the quarter, the
Company repaid an additional $30 million on the Credit Facility,
bringing the outstanding balance to zero. Including this subsequent
repayment, since the beginning of 2021 the Company has reduced its
Credit Facility balance by $291 million, reducing annual cash
interest payments by approximately $20 million at current
rates;
- Subsequent to the quarter, the
Company completed the sale of its facility in Pozzallo, Italy
yielding gross proceeds of approximately $6 million.
1 EBITDA, Adjusted EBITDA, Net- Debt to EBITDA and Adjusted EPS
are non-GAAP measures. Order backlog is a supplementary financial
measure. Non-GAAP measures do not have standardized meanings under
GAAP and are not necessarily comparable to similar measures
provided by other companies. See “Section 5.0 – Reconciliation of
Non-GAAP Measure and Other Financial Measures” for further details
and a reconciliation of these non-GAAP measures. Adjusted EBITDA is
adjusted for all periods presented as the Company updated this
non-GAAP measure to include adjustments for share-based incentive
compensation cost and foreign exchange (gain) loss. See Section 5.0
– Reconciliation of Non-GAAP Measures for further details on this
modification. The amounts presented above reflect restated figures
for all prior periods to align with the current presentation. The
Company expects the current calculation methodology of Adjusted
EBITDA to be consistently applied in future periods.
“During the quarter Mattr continued to execute
on its strategy to deliver long-term growth, margin expansion and
volatility reduction, announcing a definitive agreement to divest
nearly all of our pipe coating business, which is now reported as
Discontinued Operations. This transaction is expected to close by
the middle of the first quarter of 2024 and represents the final
step in our transformation into an infrastructure products
provider, delivering high-value solutions used in harsh
environments by customers as they expand and renew critical
infrastructure around the world,” said Mike Reeves, President &
CEO of Mattr.
“Our consolidated Adjusted EBITDA margins
reached 25% during Q3, with Continuing Operations delivering
Adjusted EBITDA margins1 in excess of 18%, despite some
unfavourable near-term market conditions which weighed on our
Composite Technologies segment in the quarter. In the face of these
short-term headwinds, Mattr continues to lower its cost base and
enhance production efficiency throughout the organization. The
Company’s positive longer-term outlook across our remaining
portfolio is unchanged.”
“Our Discontinued Operations delivered
substantial revenue growth on a sequential basis, driven primarily
by a full quarter of coating activity on the SGP project. The
efficiency of execution on this project, and several others, drove
Adjusted EBITDA margin1 in Discontinued Operations to exceed 30%
during Q3.”
“The Company maintains its disciplined,
returns-focused capital allocation strategy, progressing the
establishment of four new North American production sites which are
expected, over time, to further accelerate revenue growth and
expand Adjusted EBITDA margins1 in our Composite Technologies and
Connection Technologies segments. In parallel, the Company has
accelerated share repurchases under its recently renewed and
increased NCIB.”
“We believe Mattr is very well positioned to
deliver substantial value creation for shareholders over the coming
years given its strong balance sheet, clear opportunities for high
return organic and inorganic growth, and pending completion of its
portfolio optimization process. While we expect Continuing
Operations Adjusted EBITDA1 will move down in the fourth quarter as
normal seasonal impacts combine with ongoing lower activity levels
in North American oilfield activity and delayed fuel project
execution, we anticipate our total consolidated Adjusted EBITDA1
(Continuing Operations and Discontinued Operations) will rise,
driven primarily by the impact of sequentially stronger pipe
coating activity.”
1 EBITDA, Adjusted EBITDA, Adjusted EPS,
Adjusted EBITDA margin and Net debt-to-EBITDA are non-GAAP
measures. Non-GAAP measures do not have standardized meanings under
GAAP and are not necessarily comparable to similar measures
provided by other companies. See “Section 5.0 – Reconciliation of
Non-GAAP Measure and Other Financial Measures” for further details
and a reconciliation of these non-GAAP measures. Adjusted EBITDA is
adjusted for all periods presented as the Company updated this
non-GAAP measure in the first quarter of 2023 to include
adjustments for share-based incentive compensation cost and foreign
exchange (gain) loss. See Section 5.0 – Reconciliation of Non-GAAP
Measures for further details on this modification. The amounts
presented above reflect restated figures for all prior periods to
align with the current presentation. The Company expects the
current calculation methodology of Adjusted EBITDA to be
consistently applied in future periods.
Selected Financial
Highlights
|
(in thousands of Canadian dollars, except per share amounts and
percentages) |
Three Months Ended September
30 |
Nine Months Ended September
30 |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
$ |
% |
$ |
% |
$ |
% |
$ |
% |
|
Revenue |
225,407 |
|
234,227 |
|
714,504 |
|
636,035 |
|
|
Gross profit |
73,397 |
33% |
72,868 |
31% |
230,566 |
32% |
188,679 |
30% |
|
Income from Continuing
Operations(a) |
25,975 |
11% |
30,805 |
13% |
79,223 |
11% |
98,588 |
16% |
|
Net Income (Loss) from Continuing
Operations(b) |
18,145 |
|
29,211 |
|
53,523 |
|
79,858 |
|
|
Net Income (Loss) from Discontinued
Operations |
53,829 |
|
(6,208) |
|
56,702 |
|
(44,024) |
|
|
Net Income (loss) for the period |
71,974 |
|
23,003 |
|
110,225 |
|
35,834 |
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
Basic |
1.04 |
|
0.33 |
|
1.59 |
|
0.52 |
|
|
Diluted |
1.03 |
|
0.33 |
|
1.57 |
|
0.52 |
|
|
Adjusted EBITDA from Continuing
Operations(c)(d) |
41,061 |
18% |
43,442 |
19% |
132,290 |
18% |
100,412 |
16% |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA from Discontinued
Operations(c)(d) |
87,379 |
30% |
(535) |
(1%) |
117,953 |
21% |
(5,132) |
(2%) |
|
Total Adjusted EBITDA from Operations(c)(d) |
128,440 |
25% |
42,909 |
13% |
250,243 |
20% |
95,280 |
11% |
|
Total Adjusted EPS from Operations:(c) |
|
|
|
|
|
|
|
|
|
Basic |
1.14 |
|
0.46 |
|
1.96 |
|
0.39 |
|
|
Diluted |
1.13 |
|
0.46 |
|
1.95 |
|
0.39 |
|
|
|
(a) |
Operating income in the three months ended September 30, 2023,
includes impairment charges of $8.7 million and no restructuring
costs and other, net; while operating income in the three months
ended September 30, 2022, includes no impairment charges and $2.1
million in restructuring costs and other, net. Operating income in
nine months ended September 30, 2023, includes impairment charges
of $8.7 million and no gain on sale of land and other or
restructuring costs and other, net; while operating income in the
nine months ended September 30, 2022, includes $43.0 million in
gain on sale of land and other, $7.3 million in impairment charges
and $5.6 million in restructuring costs and other, net. |
(b) |
Attributable to shareholders of the Company. |
(c) |
Adjusted EBITDA and Adjusted EPS are non-GAAP measures. Non-GAAP
measures do not have standardized meanings prescribed by GAAP and
are not necessarily comparable to similar measures provided by
other companies. See Section 5.0 – Reconciliation of Non-GAAP
Measures for further details and a reconciliation of these
non-GAAP measures. |
(d) |
Adjusted EBITDA is adjusted for all periods presented as the
Company updated this non-GAAP measure in the first quarter of 2023
to include adjustments for share-based incentive compensation cost
and foreign exchange (gain) loss. See Section 5.0 –
Reconciliation of Non-GAAP Measures for further details on the
changes in the composition in Adjusted EBITDA. The amounts
presented above reflect restated figures for all prior periods to
align with the current presentation. |
1.0 THIRD QUARTER
HIGHLIGHTS
The Company delivered operating income from
Continuing Operations of $26.0 million and Adjusted EBITDA1 from
Continuing Operations of $41.1 million in the third quarter of
2023, a reduction of $4.8 million and $2.4 million, respectively,
compared to the third quarter of 2022. Income from Continuing
Operations results included a foreign exchange loss of $1.0 million
which compares to a $5.7 million gain in the comparative period.
Additionally, an impairment charge of $8.7 million related to
certain real estate assets in Western Canada was recorded against
operating income from Continuing Operations during the third
quarter of 2023, while operating income from Continuing Operations
in the prior year’s third quarter included a $2.1 million
restructuring charge. Continuing Operations Adjusted EBITDA in the
third quarter of 2022 included $1.9 million attributable to the OAM
business unit, which was sold during the fourth quarter of 2022.
The vast majority of the Company's continuing revenue during the
third quarter of 2023 was derived from sales into infrastructure
and industrial end markets.
The Company continues to execute on its strategy
to optimize its portfolio, while exploring organic and inorganic
investment opportunities. During the quarter, the Company entered
into a definitive agreement to sell the majority of its PPG
business to Tenaris for a purchase price of US $166 million,
approximately $230 million at October 31, 2023 exchange rates on
cash-free, debt-free basis, subject to normal working capital
adjustments and customary closing conditions. As of the date
hereof, the transaction has received regulatory approval in one of
the two required jurisdictions and is expected to secure the
remaining approval and subsequently close by the middle of the
first quarter of 2024. The completion of this transaction will
conclude the Company’s previously communicated strategic review and
portfolio transformation process.
As at September 30, 2023, the Company had cash
and cash equivalents totaling $98 million (December 31, 2022 –
$264.0 million). The decrease in cash from year-end 2022 was driven
by (i) an investment of $29.9 million in working capital mostly in
support of continued activity in the Composite Technologies and
Connection Technologies segments, (ii) a repayment of $39.0 million
of the Company’s syndicated credit facility (the “Credit
Facility”), (iii) $22.6 million of share acquisitions under the
NCIB, (iv) $57.5 million of growth and maintenance capital
expenditures for continuing operations, (v) $8.1 million spent on
the acquisition of Triton Stormwater Solutions and (vi) $113.6
million in items related to discontinued operations including
capital in support of the SGP project. This was offset by $6.5
million received from the divesture of the Shaw Pipeline Services
(“SPS”) and UK Coating businesses net of transaction expenses.
Since the beginning of 2021 and up to September 30, 2023, the
Company has repaid $261.5 million against the Credit Facility.
Subsequent to the quarter, the Company repaid the outstanding
Credit Facility balance of $30.0 million. The Company will continue
to focus on maximizing the conversion of operating income into
cash, optimizing its capital structure, investing in organic and
inorganic growth opportunities, and maximizing returns to
shareholders.
1 EBITDA, Adjusted EBITDA, Adjusted EPS, and net
debt-to-Adjusted EBITDA are non-GAAP measures. Order backlog is a
supplementary financial measure. Non-GAAP measures do not have
standardized meanings under GAAP and are not necessarily comparable
to similar measures provided by other companies. See “Section 5.0 –
Reconciliation of Non-GAAP Measures” for further details and a
reconciliation of these non-GAAP measures. Adjusted EBITDA is
adjusted for all periods presented as the Company updated this
non-GAAP measure to include adjustments for share-based incentive
compensation cost and foreign exchange (gain) loss. See “Section
5.0 – Reconciliation of Non-GAAP Measures” for further details on
the changes in composition of Adjusted EBITDA. The amounts
presented above reflect restated figures for all prior periods to
align with the current presentation. The Company expects the
current calculation methodology of Adjusted EBITDA to be
consistently applied in future periods.
Selected Segment Financial
Highlights
|
(in thousands of Canadian dollars, except percentages) |
Three Months Ended September
30 |
Nine Months Ended September
30 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
$ |
% |
$ |
% |
$ |
% |
$ |
% |
|
Revenue |
|
|
|
|
|
|
|
|
|
Composite Technologies |
140,130 |
|
147,696 |
|
423,060 |
|
389,552 |
|
|
Connection Technologies |
81,762 |
|
81,623 |
|
265,998 |
|
239,191 |
|
|
Financial, Corporate, and Others |
3,515 |
|
4,908 |
|
25,446 |
|
7,292 |
|
|
Revenue from Continuing Operations |
225,407 |
|
234,227 |
|
714,504 |
|
636,035 |
|
|
Revenue from Discontinued Operations |
288,576 |
|
100,792 |
|
564,516 |
|
273,796 |
|
|
Operating income |
|
|
|
|
|
|
|
|
|
Composite Technologies |
25,483 |
18.2% |
21,747 |
14.7% |
71,785 |
17.0% |
38,142 |
9.8% |
|
Connection Technologies |
13,910 |
17.0% |
13,915 |
17.0% |
48,565 |
18.3% |
43,634 |
18.2% |
|
Financial and Corporate |
(13,418) |
|
(4,857) |
|
(41,127) |
|
16,812 |
|
|
Operating income from Continuing Operations |
25,975 |
|
30,805 |
|
79,223 |
|
98,588 |
|
|
Operating Income from Discontinued Operations |
80,087 |
27.8% |
(7,935) |
(8.0%) |
90,915 |
16.1% |
(40,667) |
(15.2%) |
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
Composite Technologies |
32,446 |
23.2% |
32,197 |
21.8% |
93,985 |
22.2% |
70,345 |
18.1% |
|
Connection Technologies |
15,218 |
18.6% |
15,811 |
19.4% |
54,805 |
20.6% |
48,233 |
20.2% |
|
Financial and Corporate |
(6,603) |
|
(4,566) |
|
(16,500) |
|
(18,166) |
|
|
Adjusted EBITDA from Continuing Operations(a) |
41,061 |
18.2% |
43,442 |
18.5% |
132,290 |
18.5% |
100,412 |
15.8% |
|
Adjusted EBITDA from Discontinued
Operations(a) |
87,379 |
30.3% |
(532) |
(0.6%) |
117,953 |
20.9% |
(5,132) |
(1.9%) |
|
|
|
|
|
|
|
|
|
|
(a) |
Adjusted EBITDA is
a non-GAAP measure. Non-GAAP measures do not have a standardized
meaning prescribed by GAAP and are not necessarily comparable to
similar measures provided by other companies. See Section 5.0
– Reconciliation of Non-GAAP Measures for further details and
a reconciliation of these non-GAAP measures. Adjusted EBITDA is
adjusted for all periods presented as the Company updated this
non-GAAP measure in the first quarter of 2023 to include
adjustments for share-based incentive compensation cost and foreign
exchange (gain) loss. See Section 5.0 – Reconciliation of
Non-GAAP Measures for further details on the changes in
composition for Adjusted EBITDA. The amounts presented above
reflect restated figures for all prior periods to align with the
current presentation. |
Composite Technologies segment revenue in the third quarter of
2023 was $140.1 million, a decrease of $7.6 million, or 5%,
compared to the third quarter of 2022, with an operating income of
$25.5 million. The decrease in revenue was largely attributed to
the absence of the OAM business unit which was sold during the
fourth quarter of 2022. Demand for composite pipe products lowered
slightly, as North American onshore rig counts declined by over 10%
during the quarter. The Company also observed a modest decline in
underground fiberglass reinforced plastic (“FRP”) tank shipments
driven primarily by permitting delays for customer installations.
The segment also incurred idle costs of approximately $0.5 million
associated with the establishment of its new North American
production sites during the quarter. Adjusted EBITDA1 in the third
quarter of 2023 was $32.4 million, relatively unchanged compared to
$32.2 million in the third quarter of 2022 despite the absence of
the previously sold OAM business unit.
The Connection Technologies segment delivered
revenue of $81.8 million in the third quarter of 2023 which was
approximately the same as the third quarter of 2022. Its operating
income in the third quarter of 2023 was $13.9 million. In the wire
and cable business, the segment was impacted by earlier than usual
destocking activity from its Canadian distributors as they
carefully managed inventories in the face of elevated interest
rates. Offsetting this decrease, the segment was able to leverage
shorter lead times to capture increased sales into Canadian and US
utility markets. Deliveries to the segment’s automotive customers
were only marginally impacted by the United Auto Workers (“UAW”)
strike in North America. The segment also incurred idle costs of
less than half a million dollars associated with the relocation of
its North American footprint during the quarter. The segment
delivered Adjusted EBITDA1 of $15.2 million during the third
quarter of 2023, a 4% decrease versus the prior year quarter.
Discontinued Operations, which consists of the
businesses formerly reported under the PPS segment excluding the
entities not within the perimeter of the pending transaction with
Tenaris, generated revenue of $288.6 million in the third quarter
of 2023, representing an increase of 186% versus the same quarter
of 2022. Operating income in the third quarter of 2023 was $80.1
million. This significant increase was a result of strong
performance in pipe coating facilities across all regions bolstered
by a full quarter of coating activity at the SGP project. As at the
end of the third quarter of 2023, approximately 40% of the total
anticipated SGP project revenue had been recognized. Discontinued
Operations generated $87.4 million of Adjusted EBITDA1 in the third
quarter of 2023, a substantial increase from the negative $0.5
million reported in the prior year’s third quarter. Execution
efficiency and favourable revenue mix resulted in Adjusted EBITDA
margins1 of 30.3% during the quarter, compared to a modestly
negative Adjusted EBITDA margin1 in the prior year’s third
quarter.
The assets and liabilities of the PPG business
which is now reported as Discontinued Operations are measured at
the lower of their carrying amount and fair value less cost of
disposal (“FVLCD”). The Company determined FVLCD based on
management's best estimate of future proceeds of purchase price and
remaining future cash flows from certain existing contracts, net of
estimated selling costs. The Company determined that the carrying
amount of the net assets of PPS segment to be recoverable as at
September 30, 2023. Upon closing, the Company will reassess the
determination of FVLCD and any gain or loss on the sale will be
recognized in discontinued operations in the consolidated
statements of income (loss).
The Company’s total backlog for Continuing
Operations as at September 30, 2023 was $392.5 million, a decrease
of $40.5 million from $433.0 million as of June 30, 2023 primarily
driven by lower North American onshore drilling and completion
activity levels, the execution of projects in the backlog for the
pipe coating business components reported under Continuing
Operations, and the lower level of orders from Canadian wire and
cable distributors as they carefully mange inventory.
The PPG business which has historically
comprised the vast majority of the Company’s bid and budgetary
estimates is now reported as Discontinued Operations and thus the
Company no longer reports these metrics.
2.0 OUTLOOK
The Company expects to experience modest slowing
of activity in its Continuing Operations during the final quarter
of 2023, as normal seasonal effects in both the Composite
Technologies and Connection Technologies segments are combined with
anticipated sequentially lower demand for products in the Composite
Technologies segment. The Composite Technologies segment’s outlook
is driven by expectations for North American onshore drilling and
completion activity to remain approximately in-line with the Q3
exit run-rate and continued permitting delay impacts on fuel
storage tank shipments throughout the quarter. The Connection
Technologies segment is expected to see a slight decline in
profitability compared to the third quarter, predominantly related
to product mix, modest impacts to its automotive sales from UAW
strike action and slight increases in one-time costs associated
with its North American production facility relocation project.
In management’s view, the underlying mid and
long-term market trends for all of Mattr’s primary businesses
remain favourable. Despite elevated interest rates, demand for
products in support of critical infrastructure renewal and
expansion is expected to remain robust; its fuel tank customers
have made adjustments to accommodate elongated permitting timelines
which are expected to result in a return to more normal FRP tank
shipment patterns during the first half of 2024; the tentative
resolution of labour disputes in the North American automotive
sector should result in normalized sales activity resumption during
the first quarter of 2024; and anticipated continuing healthy oil
and gas commodity prices combined with a new annual capital
spending cycle for North American oil and gas producers is expected
to drive a gradual increase in demand for oilfield products moving
through the first half of next year. More broadly, management
expects that demand for its differentiated, harsh environment,
products will continue to rise in the coming years, as a result of
the global need to renew and expand critical infrastructure,
including energy generation and distribution, electrification,
transportation network enhancement and storm water management. The
Company continues to closely monitor raw material and labour costs
and, accordingly, will continue to ensure its pricing appropriately
reflects the value of its products and its cost inputs.
During the second quarter of 2023, the Company
detailed several planned 2023 and 2024 capital investments into
high-return growth and efficiency improvement opportunities in both
segments. These investments include the construction of new
composite pipe, FRP tanks, and heat shrink tubing production
facilities in the US, as well as a new wire and cable facility in
Canada, the latter two facilities replacing and expanding the
Company’s existing North American footprint for the Connection
Technologies segment. The Company expects to continue to make
sizeable organic investments during the remainder of 2023 and into
2024 to expand capacity in targeted geographies and improve
efficiency within its Composite Technologies and Connection
Technologies segments. In aggregate, once completed, these planned
growth capital investments are expected to result in the Company
creating at least $150 million per year of incremental revenue
generating capacity with comparable margins to those realized in
its Composite Technologies and Connection Technologies segments.
These levels of outputs are expected to be realized over the
3–5-year period following completion, as the facilities reach
efficient utilization levels in accordance with their currently
expected timelines.
The Company continues to take an “all of the
above” approach to capital allocation, skewed towards investment in
organic opportunities viewed as having the highest risk-adjusted
return on investment potential. While disciplined capital
investment in all areas continues, high-return potential growth
capital investments, recurring lease liabilities and share
repurchases under the Company’s recently renewed NCIB are expected
to consume a majority of the cash generated from Continuing
Operations during the final quarter of 2023, with cash generated
from Discontinued Operations expected to enhance the Company's
balance sheet.
Continuing Operations total order backlog1 is
expected to modestly decline through the fourth quarter of the year
as customers maintain tight controls around inventory levels,
followed by a gradual rebuild in early 2024 as new budgeting cycles
begin.
1 Order backlog is a supplementary financial
measure. See “Section 5.0 – Reconciliation of Non-GAAP Measures”
for additional information.
1 EBITDA, Adjusted EBITDA, adjusted EBITDA
margins and net debt-to-Adjusted EBITDA are non-GAAP measures.
Order backlog is a supplementary financial measure. Non-GAAP
measures do not have standardized meanings under GAAP and are not
necessarily comparable to similar measures provided by other
companies. See “Section 5.0 – Reconciliation of Non-GAAP Measures”
for further details and a reconciliation of these non-GAAP
measures. Adjusted EBITDA is adjusted for all periods presented as
the Company updated this non-GAAP measure in the first quarter of
2023 to include adjustments for share-based incentive compensation
cost and foreign exchange (gain) loss. See “Section 5.0 –
Reconciliation of Non-GAAP Measures” for further details on the
changes in composition of Adjusted EBITDA. The amounts presented
above reflect restated figures for all prior periods to align with
the current presentation. The Company expects the current
calculation methodology of Adjusted EBITDA to be consistently
applied in future periods.
Composite Technologies
Segment
The Company is expecting a decline in demand for
underground FRP tanks in the fourth quarter of 2023 driven by
normal seasonal cycles in customer installation activity, modestly
intensified by the continued impact of permitting delays. This is
anticipated to continue into the first quarter of 2024 as ground
conditions remain unfavorable to installation activity, with a
rebound in demand expected in the second quarter as ground
conditions improve and normal customer purchasing patterns are
combined with the impacts of changes in permitting approaches to
overcome recently observed permit issuance timeline extension. The
Company expects demand for its water and storm-water storage and
treatment systems to follow a similar trajectory. With many North
American oil and gas operators facing 2023 calendar year budget
exhaustion, the Company anticipates North American drilling and
completion activity levels in the majority of the fourth quarter
will be similar to the third quarter exit rate, before lowering
further over the year-end period as normally observed, causing a
sequentially lower demand for the Company’s Flexpipe product line.
With new calendar year capital budgets taking effect early in 2024,
the Company expects a gradual rise in North American onshore
drilling and completion activity to drive increasing demand for its
Flexpipe product line moving through the first half of 2024, with
overall market activity enhanced by continued adoption of the
Company’s recently introduced larger diameter product portfolio.
International sales of composite pipe products are expected to
generally trend upwards, although the tender-based nature of many
international orders means timing of order delivery and related
revenue recognition is likely to remain irregular. The segment
continues to execute the establishment of two new US production
sites, with its Texas Flexpipe and South Carolina FRP tank
facilities progressing on-time and on-budget. First production from
both sites is still expected during the second half of 2024. The
segment continues to closely monitor raw material and labour costs
and, as a result, will continue to ensure its pricing appropriately
reflects the value of its products and its cost inputs.
Additionally, the segment remains intensely focused on cost
controls and ensuring its fixed cost base is appropriate.
Connection Technologies
Segment
The Company is expecting generally stable levels
of demand for its Connection Technologies segment products through
the fourth quarter of 2023, although profitability is expected to
be slightly lower as a result of less favourable product mix,
modest ongoing impacts to its automotive sales from UAW strike
action and a slight increase in idle costs associated with facility
relocations. The Company continues to monitor recessionary concerns
and broad supply chain impacts. Its outlook does not incorporate
any expectation of meaningful growth in total global vehicle output
within the automotive end markets, which represented approximately
28% of the segment’s revenue in the third quarter of 2023. Despite
the macroeconomic backdrop, demand for the Company’s automotive
products is expected to continue to outpace overall automotive
production as a result of electronic content growth in premium,
hybrid and full electric vehicle markets, particularly in the Asia
Pacific and Europe, Middle East and Africa regions. The Company is
expecting to benefit from continued infrastructure spending in 2024
and beyond as new and upgraded utility and communication networks
are constructed, nuclear refurbishments continue in Canada, and
federal stimulus packages are rolled out. The segment continues to
execute the establishment of two new production sites, with its
Toronto area and Ohio facilities progressing on-time and on-budget.
First production from both sites is still expected during the first
half of 2025. The segment continues to closely monitor raw material
and labour costs, particularly copper, and, as a result, will
continue to ensure its pricing appropriately reflects the value of
its products and its cost inputs.
Strategic Review Update
On September 12, 2022, the Company announced
that it had commenced a review of strategic alternatives (the
“Strategic Review”) for its PPG, SPS, and OAM operating units. In
connection with the Strategic Review, the Company also announced
its intent to re-brand and rename the Company from “Shawcor Ltd” to
“Mattr Corp”, subject to necessary regulatory and shareholder
approvals.
Since the commencement of the Strategic Review
the Company has considered and explored a range of options for each
of the operating units, including the sale of such units. To date,
the Strategic Review process (including the sale of a non-material
business unit preceding the formal launch of the Strategic Review)
has resulted in the successful completion of the following:
- the sale of its Lake Superior
Consulting business (which formed part of what was previously the
PPS segment) in September 2022;
- the sale of its OAM business (which
formed part of the Composite Technologies segment) in November
2022;
- the sale of its Socotherm
subsidiary (which formed part of what was previously the PPS
segment) in December 2022;
- the sale of its specialty pipe
coating facility in Ellon, Scotland in the second quarter of
2023;
- the sale of its SPS business (which
formed part of what was previously the PPS segment) at the end of
May 2023;
- the sale of its facility in
Pozzallo, Italy subsequent to the third quarter of 2023;
- the entry into a definitive
agreement with Tenaris for the sale of the substantial majority of
its PPG operating unit (which currently forms the entirety of what
was previously the PPS segment) in September of 2023, which is
expected to close by the middle of the first quarter of 2024.
The Company will provide further details on the
sale of the majority of its PPG operating unit when the transaction
closes. With respect to the entities within the PPG operating unit
that are outside the perimeter of the transaction with Tenaris, the
Company remains committed to divest of these entities, though
proceeds are not expected to be material to the Company or its
financial results.
Additionally, at the beginning of June 2023, the
Company announced its official rebrand to “Mattr”,
reflecting its transformation from an energy services organization,
into a materials technology company, providing differentiated,
high-performance products to critical infrastructure
markets around the world.
Discontinued Operations (Pipeline and
Pipe Services Segment)
The Company expects that its Discontinued
Operations will see further elevation of activity levels during the
fourth quarter of 2023, primarily driven by the sequencing of
coating operations within the SGP project and high levels of
activity across virtually all geographies. The Company anticipates
that SGP project coating activity will be completed during the
first quarter of 2024.
The Company anticipates the sale of the majority
of its PPG business, which represents substantially all of its
Discontinued Operations, to Tenaris to conclude by the middle of
the first quarter of 2024.
3.0 CONFERENCE CALL AND
ADDITIONAL INFORMATION
Mattr will be hosting a Shareholder and Analyst
Conference Call and Webcast on Tuesday, November 14th, 2023 at 9:00
AM ET, which will discuss the Company’s Third Quarter 2023
Financial Results. To participate via telephone, please register at
https://register.vevent.com/register/BIa67b64ace22546ff812334947749c7c7and
a telephone number and pin will be provided.
Alternatively, please go to the following
website address to participate via webcast:
https://edge.media-server.com/mmc/p/z3w9gu27. The webcast recording
will be available within 24 hours of the live presentation and will
be accessible for 90 days.
About Mattr
Mattr is a growth-oriented, global materials
technology company broadly serving critical infrastructure markets,
including transportation, communication, water management, energy
and electrification. The Company operates through a network of
fixed manufacturing facilities. Its two business segments,
Composite Technologies and Connection Technologies, enable
responsible renewal and enhancement of critical infrastructure
while lowering risk and environmental impact.
For further information, please contact:
Meghan
MacEachernDirector, External Communications & ESGTel:
437-341-1848Email: meghan.maceachern@mattr.comWebsite:
www.mattr.com
Source: Shawcor Ltd,. dba Mattr
InfratechMattr.ER4.0 FORWARD-LOOKING
INFORMATION
This news release includes certain statements
that reflect management’s expectations and objectives for the
Company’s future performance, opportunities and growth, which
statements constitute “forward-looking information” and
“forward-looking statements” (collectively “forward-looking
information”) under applicable securities laws. Such statements,
other than statements of historical fact, are predictive in nature
or depend on future events or conditions. Forward-looking
information involves estimates, assumptions, judgements and
uncertainties. These statements may be identified by the use of
forward-looking terminology such as “may”, “will”, “should”,
“anticipate”, “expect”, “believe”, “predict”, “estimate”,
“continue”, “intend”, “plan” and variations of these words or other
similar expressions. Specifically, this news release includes
forward-looking information in the Outlook Section and elsewhere in
respect of, among other things, the ability of the Company to
deliver higher returns to all shareholders; the evolution of the
Company’s portfolio of products and services beyond the energy
sector; the completion of the remaining portion of the Strategic
Review process, as well as the timing of the closing of the Tenaris
transaction in connection therewith; the expected market dynamics
during the first quarter of 2024; the Company’s intention to change
its legal name from “Shawcor Ltd.” to “Mattr Corp.”; the
favourability of underlying business trends of the Company; the
Company’s ability to execute on its portfolio optimization
strategy; the Company’s ability to execute projects under contract;
the Company’s ability to execute on its business plan and
strategies, including the pursuit, execution and integration of
potential organic and inorganic growth opportunities, as
applicable; the expected order backlog decline through the fourth
quarter of 2023 and the expected gradual increase in early 2024;
the level of financial performance through the remainder of 2023
and throughout 2024; the expected gradual increase in demand for
oilfield products in the first half of 2024; the demand for, and
activity in, the Company’s products in the Composite Technologies
and the Connection Technologies segments of the Company’s business;
Company’s expected investments during the remainder of 2023 and
2024 to expand capacity within the Composite Technologies and
Connection Technologies segments; continued share repurchases under
the NCIB; the anticipated timeline of the SGP project coating and
the level of coating activity through the remainder of 2023 and its
anticipated completion in the first quarter of 2024; the
anticipated results and timing of the Company's capital
expenditures investments and the expected impact on the Company's
revenue generating capacity, operational efficiencies, margin
profile enhancement, and financial results; the expected activity
levels of the Company’s Discontinued Operations during the fourth
quarter of 2023; expected production levels following the 2024 and
2025 facility relocation and capacity expansion programs;
statements regarding timing for completion of the new facilities,
and timing of achievement of anticipated production levels; the
seasonal impacts to, and increased demand in, the Company’s
Composite Technologies and Connection Technologies segments; the
anticipated lower activity levels in North American oilfield
activity and fuel project execution during the fourth quarter of
2023; the anticipated normalized product shipment patterns during
the first half of 2024; the anticipated demand for the Company’s
Flexpipe product line; the growth in premium, hybrid and full
electric vehicle markets and the impact thereof on the Company’s
financial performance; the impact of continued infrastructure
spending, including in the areas of water management, communication
networks and nuclear refurbishment on the Company’s financial
performance; the Company’s management of raw material and labour
costs; the impact of labour disputes in the North American
automotive sector; the impact of global economic activity on the
demand for the Company's products; the impact of continuing demand
for oil and gas; the impact of global oil and gas commodity prices
and the annual capital spending cycle for North American oil and
gas producers; the global need to renew and expand critical
infrastructure; the execution of definitive contracts on
outstanding bids for and the timing to complete certain pipe
coating projects;; the ability of the Company to fund its operating
and capital requirements; the ability of the Company to comply with
its debt covenants; and the ability to finance increases in working
capital.
Forward-looking information involves known and
unknown risks and uncertainties that could cause actual results to
differ materially from those predicted by the forward-looking
information. Readers are cautioned not to place undue reliance on
forward-looking information as a number of factors could cause
actual events, results and prospects to differ materially from
those expressed in or implied by the forward-looking information.
Significant risks facing the Company include but are not limited
to: the risks and uncertainties described in the Company’s
Management Discussion and Analysis under “Risks and Uncertainties”
and in the Company’s Annual Information Form under “Risk
Factors”.
These statements of forward-looking information
are based on assumptions, estimates and analysis made by management
in light of its experience and perception of trends, current
conditions and expected developments as well as other factors
believed to be reasonable and relevant in the circumstances.
These assumptions include those in respect of
the Company’s ability to manage supply chain disruptions caused by
pandemics, other health crises or by natural disasters; the
Company’s ability to manage supply chain disruptions and other
business impacts caused by, among other things, geopolitical events
or conflicts, such as the conflict in Ukraine and related sanctions
on Russia; global oil and gas prices stabilizing at current levels;
improved pipe-coating activity throughout the remainder of 2023;
the impact of the war in Ukraine and related sanctions on Russia;
the current escalating Israel-Palestine conflict; the impact of the
UAW strike; the Company’s demand for products and the strength of
its and its customers supply chains; the impact of raw material
shortages on the Company; the costs of raw materials and labour,
including as a result of labour shortages and capacity constraints;
seasonal impacts on the Company’s FRP tanks business due to North
American ground conditions; sustained strong demand for the
Company’s FRP tanks, including for retail fuel storage and water
treatment and storage; seasonal impacts to the Company’s composite
pipe business due to spring break-up conditions; the increased
demand for composite pipe products and the Company’s products
within the Connection Technologies markets; heightened demand for
electric and hybrid vehicles and for electronic content within
those vehicles; the growth in demand for water and storm-water
storage and treatment systems; heightened infrastructure spending
in Canada, including in respect of commercial and municipal water
projects, transportation networks, communication networks and
nuclear refurbishments; the recommencement of increased capital
expenditures in the global offshore oil and gas pipeline segment to
replace, maintain and rehabilitate existing infrastructure, replace
production due to reservoir depletion and to address geopolitical
challenges impacting several producing regions; the continued
recovery of the global economy; a gradual recovery of oil and gas
markets in North America; the Company’s ability to execute projects
under contract; the Company’s continuing ability to provide new and
enhanced product offerings to its customers; that the Company will
continue to be able to optimize its portfolio and identify and
successfully execute on opportunities for acquisitions and
dispositions in alignment with its strategic plan; the effect of
the Strategic Review process on the Company; the higher level of
investment in working capital by the Company; the easing of supply
chain shortages and the continued supply of and stable pricing or
the ability to pass on higher prices to its customers for
commodities used by the Company; the availability of personnel
resources sufficient for the Company to operate its businesses; the
maintenance of operations by the Company in major oil and gas
producing regions; the adequacy of the Company’s existing accruals
in respect of environmental compliance and in respect of litigation
and tax matters and other claims generally; the increase in order
backlog and contracts; the adequacy of the impairment charges
taken; and the ability of the Company to satisfy all covenants
under its Credit Facility (as defined herein) and other debt
obligations and having sufficient liquidity to fund its obligations
and planned initiatives. The Company believes that the expectations
reflected in the forward-looking information are based on
reasonable assumptions in light of currently available information.
However, should one or more risks materialize, or should any
assumptions prove incorrect, then actual results could vary
materially from those expressed or implied in the forward-looking
information included in this document and the Company can give no
assurance that such expectations will be achieved.
When considering the forward-looking information
in making decisions with respect to the Company, readers should
carefully consider the foregoing factors and other uncertainties
and potential events. The Company does not assume the obligation to
revise or update forward-looking information after the date of this
document or to revise it to reflect the occurrence of future
unanticipated events, except as may be required under applicable
securities laws.
To the extent any forward-looking information in
this document constitutes future oriented financial information or
financial outlooks, within the meaning of securities laws, such
information is being provided to demonstrate the potential of the
Company and readers are cautioned that this information may not be
appropriate for any other purpose. Future oriented financial
information and financial outlooks, as with forward-looking
information generally, are based on the assumptions and subject to
the risks noted above.
5.0 RECONCILIATION OF
NON-GAAP MEASURES
The Company reports on certain non-GAAP measures
that are used to evaluate its performance and segments, as well as
to determine compliance with debt covenants and to manage its
capital structure. These non-GAAP measures do not have standardized
meanings under IFRS and are not necessarily comparable to similar
measures provided by other companies. The Company discloses these
measures because it believes that they provide further information
and assist readers in understanding the results of the Company’s
operations and financial position. These measures should not be
considered in isolation or used in substitution for other measures
of performance prepared in accordance with GAAP. The following is a
reconciliation of the non-GAAP measures reported by the
Company.
EBITDA and Adjusted EBITDA
In an effort to reduce the volatility of the
Adjusted EBITDA metric imposed by factors outside of the Company’s
control and to provide enhanced comparability of the Company’s
results from its principal business activities with those of the
Company’s peer group, the Company has modified the composition of
Adjusted EBITDA. Beginning in the first quarter of 2023, Adjusted
EBITDA includes adjustments for share-based incentive compensation
costs and foreign exchange (gains) losses. Share-based incentive
compensation costs have recently experienced a high degree of
volatility derived from movements in the market value of the
Company’s shares and the related impact on such plans. Given the
Company’s global presence and its exposure to several foreign
currency rates, the Company experiences fluctuation from foreign
exchange gains or losses outside of its control. The Company
believes this modified composition will present a more accurate
representation of the Company’s results from principal business
activities. The amounts presented below reflect restated figures
for prior periods as needed to align with the updated
definition.
EBITDA is a non-GAAP measure defined as earnings
before interest, income taxes, depreciation and amortization.
Adjusted EBITDA is also a non-GAAP measure defined as EBITDA
adjusted for items which do not impact day to day operations.
Adjusted EBITDA is calculated by adding back to EBITDA the sum of
impairments, costs associated with refinancing of long-term debt
and credit facilities, gain on sale of land and other, gain on sale
of investment in associates, gain on sale of operating unit,
acquisition costs, restructuring costs, share-based incentive
compensation cost, foreign exchange (gain) loss and other, net and
hyperinflationary adjustments. The Company believes that EBITDA and
Adjusted EBITDA are useful supplemental measures that provide a
meaningful indication of the Company’s results from principal
business activities prior to the consideration of how these
activities are financed or the tax impacts in various jurisdictions
and for comparing its operating performance with the performance of
other companies that have different financing, capital or tax
structures. The Company presents Adjusted EBITDA as a measure of
EBITDA that excludes the impact of transactions that are outside
the Company’s normal course of business or day to day operations.
Adjusted EBITDA is used by many analysts as one of several
important analytical tools to evaluate financial performance and is
a key metric in business valuations. It is also considered
important by lenders to the Company and is included in the
financial covenants of the Credit Facility.
Continuing Operations
(in thousands of Canadian dollars) |
Three Months Ended |
Nine Months Ended |
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income from Continuing Operations |
$ |
18,145 |
|
$ |
29,211 |
|
$ |
53,523 |
|
$ |
79,858 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (recovery) |
|
2,486 |
|
|
(4,446) |
|
|
10,398 |
|
|
2,808 |
|
Finance costs, net |
|
5,344 |
|
|
6,040 |
|
|
15,302 |
|
|
15,922 |
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
9,785 |
|
|
9,102 |
|
|
27,976 |
|
|
28,564 |
|
EBITDA from Continuing Operations |
$ |
35,760 |
|
$ |
39,907 |
|
$ |
107,199 |
|
$ |
127,152 |
|
Share-based incentive compensation (recovery) cost |
|
(2,414) |
|
|
8,182 |
|
|
16,211 |
|
|
13,112 |
|
Foreign exchange loss (gain) |
|
952 |
|
|
(5,664) |
|
|
2,117 |
|
|
(8,640) |
|
Gain on sale of land and other |
|
– |
|
|
– |
|
|
– |
|
|
(43,017) |
|
Curtailment of defined benefit plan |
|
(1,889) |
|
|
– |
|
|
(1,889) |
|
|
– |
|
2019 ZCL Composites Inc. purchase trust |
|
– |
|
|
(1,059) |
|
|
– |
|
|
(1,059) |
|
Impairment |
|
8,652 |
|
|
– |
|
|
8,652 |
|
|
7,293 |
|
Restructuring costs and other, net |
|
– |
|
|
2,076 |
|
|
– |
|
|
5,571 |
|
Adjusted EBITDA from Continuing Operations |
$ |
41,061 |
|
$ |
43,442 |
|
$ |
132,290 |
|
$ |
100,412 |
|
(in thousands of Canadian dollars) |
Three Months Ended |
|
March 31, |
|
|
June 30, |
|
|
2023 |
|
|
2023 |
|
|
|
|
|
|
Net Income from Continuing Operations |
$ |
20,708 |
|
$ |
14,670 |
|
|
|
|
|
|
Add: |
|
|
|
|
Income tax expense |
|
4,585 |
|
|
3,327 |
|
Finance costs, net |
|
4,984 |
|
|
4,974 |
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
9,021 |
|
|
9,170 |
|
EBITDA from Continuing Operations |
$ |
39,298 |
|
$ |
32,141 |
|
Share-based incentive compensation (recovery) cost |
|
(42) |
|
|
18,668 |
|
Foreign exchange loss (gain) |
|
1,210 |
|
|
(45) |
|
Gain on sale of land and other |
|
– |
|
|
– |
|
Acquisition cost |
|
– |
|
|
– |
|
Impairment |
|
– |
|
|
– |
|
Restructuring costs and other, net |
|
– |
|
|
– |
|
Adjusted EBITDA from Continuing Operations |
$ |
40,466 |
|
$ |
50,764 |
|
(in thousands of Canadian dollars) |
Three Months Ended |
|
March 31, |
|
|
June 30, |
|
|
September 30, |
|
|
December 31, |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
Net Income from Continuing Operations |
$ |
10,017 |
|
$ |
40,629 |
|
$ |
29,211 |
|
$ |
13,485 |
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
Income tax expense (recovery) |
|
249 |
|
|
7,006 |
|
|
(4,446) |
|
|
(6,963) |
|
Finance costs, net |
|
3,948 |
|
|
5,934 |
|
|
6,040 |
|
|
4,530 |
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
9,464 |
|
|
9,998 |
|
|
9,102 |
|
|
9,064 |
|
EBITDA from Continuing Operations |
$ |
23,678 |
|
$ |
63,567 |
|
$ |
39,907 |
|
$ |
20,116 |
|
Share-based incentive compensation cost |
|
2,346 |
|
|
2,584 |
|
|
8,182 |
|
|
12,899 |
|
Foreign exchange (gain) loss |
|
(2,625) |
|
|
(351) |
|
|
(5,664) |
|
|
769 |
|
Gain on sale of land and other |
|
– |
|
|
(43,017) |
|
|
– |
|
|
– |
|
Loss on sale of operating unit |
|
– |
|
|
– |
|
|
– |
|
|
1,327 |
|
Impairment |
|
– |
|
|
7,293 |
|
|
– |
|
|
2,165 |
|
2019 ZCL
Composites Inc. purchase trust release |
|
– |
|
|
– |
|
|
(1,059) |
|
|
– |
|
Restructuring costs and other, net |
|
1,075 |
|
|
2,420 |
|
|
2,076 |
|
|
4,133 |
|
Adjusted EBITDA from Continuing Operations |
$ |
24,474 |
|
$ |
32,496 |
|
$ |
43,442 |
|
$ |
41,409 |
|
Composite Technologies Segment
(in thousands of Canadian dollars) |
Three Months Ended |
Nine Months Ended |
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
$ |
25,483 |
|
$ |
21,747 |
|
$ |
71,785 |
|
$ |
38,142 |
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
7,398 |
|
|
7,189 |
|
|
20,787 |
|
|
22,508 |
|
EBITDA |
$ |
32,881 |
|
$ |
28,936 |
|
$ |
92,572 |
|
$ |
60,650 |
|
Share-based incentive compensation (recovery) cost |
|
(435) |
|
|
1,173 |
|
|
1,413 |
|
|
1,744 |
|
Gain on sale of property plant & equipment |
|
– |
|
|
– |
|
|
– |
|
|
(3,820) |
|
Impairment |
|
– |
|
|
– |
|
|
– |
|
|
7,293 |
|
Restructuring costs and other |
|
– |
|
|
2,088 |
|
|
– |
|
|
4,478 |
|
Adjusted EBITDA |
$ |
32,448 |
|
$ |
32,197 |
|
$ |
93,985 |
|
$ |
70,345 |
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of Canadian dollars) |
Three Months Ended |
|
March 31, |
|
|
June 30, |
|
|
2023 |
|
|
2023 |
|
|
|
|
|
|
|
Operating Income |
$ |
20,722 |
|
$ |
25,580 |
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
6,627 |
|
|
6,762 |
|
EBITDA |
$ |
27,349 |
|
$ |
32,342 |
|
Share-based incentive compensation (recovery) cost |
|
(601) |
|
|
2,449 |
|
Gain on sale of property plant & equipment |
|
– |
|
|
– |
|
Impairment |
|
– |
|
|
– |
|
Restructuring costs and other |
|
– |
|
|
– |
|
Adjusted EBITDA |
$ |
26,748 |
|
$ |
34,791 |
|
(in thousands of Canadian dollars) |
Three Months Ended |
|
March 31, |
|
|
June 30, |
|
September 30, |
|
|
December 31, |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
$ |
6,874 |
|
$ |
9,521 |
|
$ |
21,747 |
|
$ |
15,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
7,409 |
|
|
7,910 |
|
|
7,189 |
|
|
7,250 |
|
EBITDA |
$ |
14,283 |
|
$ |
17,431 |
|
$ |
28,936 |
|
$ |
22,455 |
|
Share-based incentive compensation cost |
|
278 |
|
|
293 |
|
|
1,173 |
|
|
2,724 |
|
Gain on
sale of property plant & equipment |
|
– |
|
|
(3,820) |
|
|
– |
|
|
– |
|
Impairment |
|
– |
|
|
7,293 |
|
|
– |
|
|
2,164 |
|
Restructuring costs and other, net |
|
423 |
|
|
1,967 |
|
|
2,088 |
|
|
– |
|
Adjusted EBITDA |
$ |
14,984 |
|
$ |
23,164 |
|
$ |
32,197 |
|
$ |
27,343 |
|
Connection Technologies Segment
(in thousands of Canadian dollars) |
Three Months Ended |
Nine Months Ended |
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
$ |
13,910 |
|
$ |
13,915 |
|
$ |
48,565 |
|
$ |
43,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
1,356 |
|
|
1,076 |
|
|
4,038 |
|
|
3,220 |
|
EBITDA |
$ |
15,266 |
|
$ |
14,991 |
|
$ |
52,603 |
|
$ |
46,854 |
|
Share-based incentive compensation (recovery) cost |
|
(48) |
|
|
820 |
|
|
2,202 |
|
|
1,298 |
|
Restructuring costs and other |
|
– |
|
|
– |
|
|
– |
|
|
81 |
|
Adjusted EBITDA |
$ |
15,218 |
|
$ |
15,811 |
|
$ |
54,805 |
|
$ |
48,223 |
|
(in thousands of Canadian dollars) |
Three Months Ended |
|
March 31, |
|
|
June 30, |
|
|
2023 |
|
|
2023 |
|
|
|
|
|
|
|
|
Operating Income |
$ |
17,650 |
|
$ |
17,005 |
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
1,333 |
|
|
1,349 |
|
EBITDA |
$ |
18,983 |
|
$ |
18,354 |
|
Share-based incentive compensation cost |
|
26 |
|
|
2,224 |
|
Adjusted EBITDA |
$ |
19,009 |
|
$ |
20,578 |
|
(in thousands of Canadian dollars) |
Three Months Ended |
|
March 31, |
|
|
June 30, |
|
|
September 30, |
|
|
December 31, |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
$ |
14,887 |
|
$ |
14,832 |
|
$ |
13,915 |
|
$ |
11,594 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
1,085 |
|
|
1,059 |
|
|
1,076 |
|
|
1,143 |
|
EBITDA |
$ |
15,972 |
|
$ |
15,891 |
|
$ |
14,991 |
|
$ |
12,757 |
|
Share-based incentive compensation cost |
|
209 |
|
|
269 |
|
|
820 |
|
|
1,766 |
|
Restructuring costs and other, net |
|
27 |
|
|
54 |
|
|
– |
|
|
– |
|
Adjusted EBITDA |
$ |
16,208 |
|
$ |
16,214 |
|
$ |
15,811 |
|
$ |
14,503 |
|
Discontinued Operations
(in thousands of Canadian dollars) |
Three Months Ended |
Nine Months Ended |
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
Net Income from Discontinued Operations |
$ |
53,829 |
|
$ |
(6,208) |
|
$ |
56,702 |
|
$ |
(44,024) |
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
Income tax expense (recovery) |
|
23,769 |
|
|
(13,919) |
|
|
27,272 |
|
|
(12,737) |
|
Finance costs, net |
|
400 |
|
|
455 |
|
|
1,114 |
|
|
980 |
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
6,480 |
|
|
7,340 |
|
|
27,549 |
|
|
22,833 |
|
EBITDA from Discontinued Operations |
$ |
84,478 |
|
$ |
(12,332) |
|
$ |
112,637 |
|
$ |
(32,948) |
|
Share-based incentive compensation cost (recovery) cost |
|
(498) |
|
|
1,284 |
|
|
2,238 |
|
|
1,761 |
|
Foreign exchange loss (gain) |
|
1,310 |
|
|
(920) |
|
|
(2,749) |
|
|
(2,487) |
|
Loss on sale of operating unit and subsidiary |
|
2,089 |
|
|
5,932 |
|
|
5,827 |
|
|
5,932 |
|
Hyperinflation adjustment for Argentina |
|
– |
|
|
5,510 |
|
|
– |
|
|
8,933 |
|
Impairment |
|
– |
|
|
– |
|
|
– |
|
|
12,976 |
|
Restructuring costs and other, net |
|
– |
|
|
(6) |
|
|
– |
|
|
701 |
|
Adjusted EBITDA from Discontinued Operations |
$ |
87,379 |
|
$ |
(532) |
|
$ |
117,953 |
|
$ |
(5,132) |
|
(in thousands of Canadian dollars) |
Three Months Ended |
|
March 31, |
|
|
June 30, |
|
|
2023 |
|
|
2023 |
|
|
|
|
|
|
Net Income (loss) from Discontinued
Operations |
$ |
4,521 |
|
$ |
(1,648 |
) |
|
|
|
|
|
Add: |
|
|
|
|
Income tax expense |
|
672 |
|
|
2,831 |
|
Finance costs, net |
|
160 |
|
|
554 |
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
10,209 |
|
|
10,860 |
|
EBITDA from Discontinued Operations |
$ |
15,562 |
|
$ |
12,597 |
|
Share-based incentive compensation (recovery) cost |
|
(561 |
) |
|
3,296 |
|
Foreign exchange gain |
|
(939 |
) |
|
(3,120 |
) |
Loss on sale of operating unit and subsidiary |
|
– |
|
|
3,738 |
|
Adjusted EBITDA from Discontinued Operations |
$ |
14,062 |
|
$ |
16,511 |
|
(in thousands of Canadian dollars) |
Three Months Ended |
|
March 31, |
|
|
June 30, |
|
|
September 30, |
|
|
December 31, |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
Net Loss from Discontinued Operations |
$ |
(17,133) |
|
$ |
(20,682) |
|
$ |
(6,208) |
|
$ |
(80,299) |
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
Income tax expense (recovery) |
|
1,988 |
|
|
(807) |
|
|
(13,919) |
|
|
(2,386) |
|
Finance costs, net |
|
397 |
|
|
128 |
|
|
455 |
|
|
284 |
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
8,008 |
|
|
7,485 |
|
|
7,340 |
|
|
10,955 |
|
EBITDA from Discontinued Operations |
$ |
(6,740) |
|
$ |
(13,876) |
|
$ |
(12,332) |
|
$ |
(71,447) |
|
Share-based incentive compensation |
|
339 |
|
|
138 |
|
|
1,284 |
|
|
3,719 |
|
Foreign exchange (gain) loss |
|
(411) |
|
|
(1,155) |
|
|
(920) |
|
|
645 |
|
Loss on sale of operating unit and subsidiary |
|
- |
|
|
- |
|
|
5,932 |
|
|
- |
|
Hyperinflation adjustment for Argentina |
|
1,890 |
|
|
1,533 |
|
|
5,510 |
|
|
3,843 |
|
Loss from sale of Subsidiaries |
|
- |
|
|
- |
|
|
- |
|
|
77,492 |
|
Impairment |
|
- |
|
|
12,976 |
|
|
- |
|
|
- |
|
Restructuring costs and other, net |
|
131 |
|
|
576 |
|
|
(6) |
|
|
793 |
|
Adjusted EBITDA from Discontinued Operations |
$ |
(4,791) |
|
$ |
192 |
|
$ |
(532) |
|
$ |
15,046 |
|
Total Consolidated Mattr (Continuing and Discontinued
Operations)
(in thousands of Canadian dollars) |
Three Months Ended |
Nine Months Ended |
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
Net Income |
$ |
71,974 |
|
$ |
23,003 |
|
$ |
110,225 |
|
$ |
35,834 |
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
Income tax expense (recovery) |
|
26,255 |
|
|
(18,365) |
|
|
37,670 |
|
|
(9,929) |
|
Finance costs, net |
|
5,744 |
|
|
6,495 |
|
|
16,416 |
|
|
16,902 |
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
16,265 |
|
|
16,442 |
|
|
55,525 |
|
|
51,397 |
|
EBITDA |
$ |
120,238 |
|
$ |
27,575 |
|
$ |
219,836 |
|
$ |
94,204 |
|
Share-based incentive compensation recovery) cost |
|
(2,912) |
|
|
9,466 |
|
|
18,449 |
|
|
14,873 |
|
Foreign exchange loss (gain) |
|
2,262 |
|
|
(6,585) |
|
|
(632) |
|
|
(11,127) |
|
Gain on sale of land and other |
|
– |
|
|
– |
|
|
– |
|
|
(43,017) |
|
Acquisition Costs |
|
– |
|
|
(1,059) |
|
|
– |
|
|
(1,059) |
|
Loss on sale of operating unit and subsidiary |
|
2,089 |
|
|
5,932 |
|
|
5,827 |
|
|
5,932 |
|
Adjustment on Defined Benefit plan |
|
(1,889) |
|
|
– |
|
|
(1,889) |
|
|
- |
|
Hyperinflation adjustment for Argentina |
|
– |
|
|
5,510 |
|
|
– |
|
|
8,933 |
|
Impairment |
|
8,652 |
|
|
– |
|
|
8,652 |
|
|
20,269 |
|
Restructuring costs and other, net |
|
– |
|
|
2,070 |
|
|
– |
|
|
6,272 |
|
Adjusted EBITDA |
$ |
128,440 |
|
$ |
42,909 |
|
$ |
250,243 |
|
$ |
95,280 |
|
(in thousands of Canadian dollars) |
Three Months Ended |
|
March 31, |
|
|
June 30, |
|
|
2023 |
|
|
2023 |
|
|
|
|
|
|
Net Income |
$ |
25,229 |
|
$ |
13,022 |
|
|
|
|
|
|
Add: |
|
|
|
|
Income tax expense |
|
5,257 |
|
|
6,158 |
|
Finance costs, net |
|
5,144 |
|
|
5,528 |
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
19,230 |
|
|
20,030 |
|
EBITDA |
$ |
54,860 |
|
$ |
44,738 |
|
Share-based incentive compensation (recovery) cost |
|
(603) |
|
|
21,964 |
|
Foreign exchange loss (gain) |
|
271 |
|
|
(3,165) |
|
Loss on sale of operating unit and subsidiary |
|
– |
|
|
3,738 |
|
Adjusted EBITDA |
$ |
54,528 |
|
$ |
67,275 |
|
(in thousands of Canadian dollars) |
Three Months Ended |
|
March 31, |
|
|
June 30, |
|
|
September 30, |
|
|
December 31, |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
Net (Loss) Income |
$ |
(7,116) |
|
$ |
19,947 |
|
$ |
23,003 |
|
$ |
(66,814) |
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
Income tax expense (recovery) |
|
2,237 |
|
|
6,199 |
|
|
(18,365) |
|
|
(9,349) |
|
Finance costs, net |
|
4,345 |
|
|
6,062 |
|
|
6,495 |
|
|
4,813 |
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
17,472 |
|
|
17,483 |
|
|
16,442 |
|
|
20,019 |
|
EBITDA |
$ |
16,938 |
|
$ |
49,691 |
|
$ |
27,575 |
|
$ |
(51,331) |
|
Share-based incentive compensation cost (recovery) |
|
2,685 |
|
|
2,722 |
|
|
9,466 |
|
|
16,618 |
|
Foreign exchange (gain) loss |
|
(3,036) |
|
|
(1,506) |
|
|
(6,585) |
|
|
1,414 |
|
Gain on sale of land and other |
|
- |
|
|
(43,017) |
|
|
- |
|
|
- |
|
Acquisition Costs |
|
- |
|
|
- |
|
|
5,932 |
|
|
78,819 |
|
Loss on sale of operating unit and subsidiary |
|
1,890 |
|
|
1,533 |
|
|
5,510 |
|
|
3,843 |
|
Hyperinflation adjustment for Argentina |
|
- |
|
|
20,269 |
|
|
- |
|
|
2,164 |
|
Impairment |
|
- |
|
|
- |
|
|
(1,059) |
|
|
- |
|
Restructuring costs and other, net |
|
1,206 |
|
|
2,996 |
|
|
2,070 |
|
|
4,927 |
|
Adjusted EBITDA |
$ |
19,683 |
|
$ |
32,688 |
|
$ |
42,909 |
|
$ |
56,454 |
|
Adjusted EBITDA Margin
Adjusted EBITDA margin is defined as Adjusted
EBITDA divided by revenue and is a non-GAAP measure. The Company
believes that Adjusted EBITDA margin is a useful supplemental
measure that provides meaningful assessment of the business results
of the Company and its Operating Segments from principal business
activities excluding the impact of transactions that are outside of
the Company’s normal course of business.
See reconciliation above for the changes in
composition of Adjusted EBITDA, as a result of which the table
below reflects restated figures for the prior year quarter to align
with the updated composition.
Operating Margin
Operating margin is defined as operating (loss)
income divided by revenue and is a non-GAAP measure. The Company
believes that operating margin is a useful supplemental measure
that provides meaningful assessment of the business performance of
the Company and its Operating Segments. The Company uses this
measure as a key indicator of financial performance, operating
efficiency and cost control based on volume of business
generated.
Adjusted Net Income (attributable to
shareholders)
Adjusted Net Income (attributable to
shareholders) is a non-GAAP measure defined as Net Income
(attributable to shareholders) adjusted for items which do not
impact day to day operations. Adjusted Net Income (attributable to
shareholders) is calculated by adding back to Net Income
(attributable to shareholders) the after tax impact of the sum of
impairments, costs associated with refinancing of long-term debt
and credit facilities, gain on sale of land and other, gain on sale
of investment in associates, gain on sale of operating unit,
acquisition costs, restructuring costs, share-based incentive
compensation cost, foreign exchange (gain) loss and other, net and
hyperinflationary adjustments. The Company believes that Adjusted
Net Income (attributable to shareholders) is a useful supplemental
measure that provides a meaningful indication of the Company’s
results from principal business activities for comparing its
operating performance with the performance of other companies that
have different financing, capital or tax structures.
Adjusted Earnings Per Share (“Adjusted
EPS”)
Adjusted EPS (basic) is a non-GAAP measure
defined as Adjusted Net Income (attributable to shareholders)
divided by the number of common shares outstanding. Adjusted EPS
(diluted) is a non-GAAP measure defined as Adjusted Net Income
(attributable to shareholders) divided by the number of common
shares outstanding, further adjusted for potential dilutive impacts
of outstanding securities which are convertible to common shares.
The Company presents Adjusted EPS as a measure of Earning Per Share
that excludes the impact of transactions that are outside the
Company’s normal course of business or day to day operations.
Adjusted EPS indicates the amount of Adjusted Net Income the
Company makes for each share of its stock and is used by many
analysts as one of several important analytical tools to evaluate
financial performance and is a key metric in business
valuations.
Total Consolidated Mattr Adjusted EPS (Continuing and
Discontinued Operations)
|
Three Months Ended |
|
September 30, |
000s except for per share amounts |
2023 |
|
$ CAD |
Earnings Per Share – Basic |
Earnings Per Share – Diluted |
Net Income(a) |
71,917 |
1.04 |
1.03 |
Adjustments (before tax): |
|
|
|
Share-based incentive compensation cost |
(2,912) |
|
|
Foreign exchange loss |
2,262 |
|
|
Gain on sale of land and other |
- |
|
|
Loss on sale of operating unit and subsidiary |
2,089 |
|
|
Adjustment on Defined Benefit plan |
(1,889) |
|
|
Hyperinflation adjustment for Argentina |
- |
|
|
Impairment |
8,652 |
|
|
Restructuring costs and other, net |
- |
|
|
Tax effect of above adjustments |
(1,204) |
|
|
Adjusted Net Income
(non-GAAP)(a) |
78,915 |
1.14 |
1.13 |
(a) attributable to Shareholders of the Company |
|
|
|
|
Three Months Ended |
|
September 30, |
000s except for per share amounts |
2022 |
|
$ CAD |
Earnings Per Share - Basic |
Earnings Per Share - Diluted |
Net Income(a) |
23,014 |
0.33 |
0.33 |
Adjustments (before tax): |
|
|
|
Share-based incentive compensation cost |
9,466 |
|
|
Foreign exchange gain |
(6,585) |
|
|
Gain on sale of land and other |
- |
|
|
Loss on sale of operating unit and subsidiary |
5,932 |
|
|
Adjustment on Defined Benefit plan |
- |
|
|
Hyperinflation adjustment for Argentina |
- |
|
|
Impairment |
- |
|
|
Restructuring costs and other, net |
2,070 |
|
|
Tax effect of above adjustments |
(1,226) |
|
|
Adjusted Net Income (non-GAAP)(a) |
32,671 |
0.46 |
0.46 |
(a) attributable to Shareholders of the Company |
|
|
|
|
Nine Months Ended |
|
September 30, |
000s except for per share amounts |
2023 |
|
$ CAD |
Earnings Per Share - Basic |
Earnings Per Share - Diluted |
Net Income(a) |
110,209 |
1.58 |
1.57 |
Adjustments (before tax): |
|
|
|
Share-based incentive compensation cost |
18,449 |
|
|
Foreign exchange gain |
(632) |
|
|
Gain on sale of land and other |
- |
|
|
Loss on sale of operating unit and subsidiary |
5,827 |
|
|
Adjustment on Defined Benefit plan |
(1,889) |
|
|
Hyperinflation adjustment for Argentina |
- |
|
|
Impairment |
8,652 |
|
|
Restructuring costs and other, net |
- |
|
|
Tax effect of above adjustments |
(3,837) |
|
|
Adjusted Net Income
(non-GAAP)(a) |
136,779 |
1.96 |
1.95 |
(a) attributable to Shareholders of the Company |
|
|
|
|
Nine Months Ended |
|
September 30, |
000s except for per share amounts |
2022 |
|
$ CAD |
Earnings Per Share – Basic |
Earnings Per Share – Diluted |
Net Income(a) |
36,424 |
0.52 |
0.52 |
Adjustments (before tax): |
|
|
|
Share-based incentive compensation cost |
14,873 |
|
|
Foreign exchange gain |
(11,127) |
|
|
Gain on sale of land and other |
(43,017) |
|
|
Loss on sale of operating unit and subsidiary |
5,932 |
|
|
Adjustment on Defined Benefit plan |
- |
|
|
Hyperinflation adjustment for Argentina |
- |
|
|
Impairment |
20,269 |
|
|
Restructuring costs and other, net |
6,272 |
|
|
Tax effect of above adjustments |
(2,005) |
|
|
Adjusted Net Income (non-GAAP)(a) |
27,621 |
0.39 |
0.39 |
(a) attributable to Shareholders of the Company |
|
|
|
Total Net debt-to-Adjusted EBITDA
Total net debt-to-Adjusted EBITDA is a non-GAAP
measure defined as the sum of long-term debt, current lease
liabilities and long-term lease liabilities, less cash and cash
equivalents, divided by the Consolidated Adjusted EBITDA
(Continuing and Discontinued Operations), as defined above, for the
trailing twelve-month period. The Company believes total net
debt-to-Adjusted EBITDA is a useful supplementary measure to assess
the borrowing capacity of the Company. Total net debt-to-Adjusted
EBITDA is used by many analysts as one of several important
analytical tools to evaluate how long a company would need to
operate at its current level to pay of all its debt. It is also
considered important by credit rating agencies to determine the
probability of a company defaulting on its debt.
See discussion above for the changes in
composition of Adjusted EBITDA. The table below reflects restated
figures for the prior year quarters to align with the updated
composition.
(in thousands of Canadian dollars, except Net debt-to-EBITDA
ratio) |
|
September 30, |
|
|
December 31, |
|
|
2023 |
|
|
2022 |
|
Long-term debt |
$ |
173,585 |
|
$ |
210,832 |
|
Lease liabilities |
|
76,405 |
|
|
59,439 |
|
Cash and cash equivalents |
|
(97,977) |
|
|
(263,990) |
|
Total Net Debt |
$ |
152,013 |
|
$ |
6,281 |
|
|
|
|
|
|
Q1 2022 Adjusted EBITDA |
$ |
– |
|
$ |
19,683 |
|
Q2 2022 Adjusted EBITDA |
|
– |
|
|
32,688 |
|
Q3 2022 Adjusted EBITDA |
|
– |
|
|
42,909 |
|
Q4 2022 Adjusted EBITDA |
|
56,454 |
|
|
56,454 |
|
Q1 2023 Adjusted EBITDA |
|
54,528 |
|
|
– |
|
Q2 2023 Adjusted EBITDA |
|
67,275 |
|
|
– |
|
Q3 2023 Adjusted EBITDA |
|
128,440 |
|
|
– |
|
Trailing twelve-month Adjusted EBITDA |
$ |
306,697 |
|
$ |
151,734 |
|
|
|
|
|
|
Total Net debt-to-Adjusted EBITDA |
|
0.50 |
|
|
0.04 |
|
Total Interest Coverage Ratio
Total Interest Coverage Ratio is a non-GAAP
measure defined as Consolidated Adjusted EBITDA (Continuing and
Discontinued Operations), as defined above, for the trailing
twelve-month period, divided by Finance costs, net, for the
trailing twelve-month period. The Company believes Total Interest
Coverage Ratio is a useful supplementary measure to assess the
Company’s ability to honour its debt payments. Total Interest
Coverage Ratio is used by many analysts as one of several important
analytical tools to judge a company’s ability to pay interest on
its outstanding debt. It is also considered important by credit
rating agencies to determine a company’s riskiness relative to its
current debt or for future borrowing.
(in thousands of Canadian dollars, except Net debt-to-EBITDA
ratio) |
|
September 30 |
|
|
December 31, |
|
|
2023 |
|
|
2022 |
|
Q1 2022 Adjusted EBITDA |
$ |
– |
|
$ |
19,683 |
|
Q2 2022 Adjusted EBITDA |
|
– |
|
|
32,688 |
|
Q3 2022 Adjusted EBITDA |
|
– |
|
|
42,909 |
|
Q4 2022 Adjusted EBITDA |
|
56,454 |
|
|
56,454 |
|
Q1 2023 Adjusted EBITDA |
|
54,528 |
|
|
– |
|
Q2 2023 Adjusted EBITDA |
|
67,275 |
|
|
– |
|
Q3 2023 Adjusted EBITDA |
|
128,440 |
|
|
– |
|
Trailing twelve-month Adjusted EBITDA |
$ |
306,697 |
|
$ |
151,734 |
|
|
|
|
|
|
|
|
Q1 2022 Finance costs, net |
$ |
– |
|
$ |
4,345 |
|
Q2 2022 Finance costs, net |
|
– |
|
|
6,062 |
|
Q3 2022 Finance costs, net |
|
– |
|
|
6,495 |
|
Q4 2022 Finance costs, net |
|
4,813 |
|
|
4,813 |
|
Q1 2023 Finance costs, net |
|
5,144 |
|
|
– |
|
Q2 2023 Finance costs, net |
|
5,528 |
|
|
– |
|
Q3 2023 Finance costs, net |
|
5,744 |
|
|
– |
|
Trailing twelve-month finance costs, net |
$ |
21,229 |
|
$ |
21,715 |
|
|
|
|
|
|
|
|
Total Interest Coverage Ratio |
|
14.45 |
|
|
6.99 |
|
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