Montréal, Québec, May 3, 2023 – LOGISTEC Corporation (“LOGISTEC”) [TSX: LGT.A and LGT.B] (the “Company”), a marine and environmental services provider, today announced its financial results for the first quarter ended March 25, 2023. As part of its strategic plan, LOGISTEC expanded its network of port terminals and marine services with the announcement of an important acquisition, bringing its total to 90 terminals and 60 ports across North America.
Highlights From the First Quarter of 2023
- Consolidated revenue reached $158.9 million, up $17.5 million or 12.3%;
- Adjusted EBITDA (1) reached $7.9 million, up $0.1 million;
- Total basic loss per share closed at $0.71;
- Finalization of acquisition of Fednav’s Federal Marine Terminals, Inc. and Fednav Direct, its logistics division, (collectively, “FMT”);
- Start of major environmental remediation project of the former Rayrock mine in Northern Canada.
“LOGISTEC completed the acquisition of FMT, expanding our network of ports across North America and allowing us to gain a significant foothold in key markets,” said Madeleine Paquin, President and Chief Executive Officer of LOGISTEC. “We will leverage the strength of our terminal reach to support reliable supply chains for our customers and continue to drive growth. In our environmental services segment, the year started strong with the major environmental remediation project of the former Rayrock uranium mine in Northern Canada, contributing directly to a sustainable future.”
“LOGISTEC reported revenue growth for the quarter, a continuation of the momentum gained in 2022. During the quarter, we invested resources to finalize the largest acquisition in our history, a strategic move for our marine services segment,” added Carl Delisle, Chief Financial Officer and Treasurer of LOGISTEC. “Strong volumes in our cargo handling activities in the U.S. Gulf Coast region contributed to increased revenue. Our environmental services segment is capitalizing on key imperatives and market trends, and has a solid order book of over $192.9 million for the upcoming season. Both segments are well positioned for growth.”
Results From the First Quarter of 2023
During the first quarter of 2023, consolidated revenue totalled $158.9 million, an increase of $17.5 million or 12.3% over the same period in 2022. Revenue from the marine services segment reached $121.5 million in 2023, up $9.8 million or 8.7% compared with $111.7 million for the comparative period of 2022. Revenue from the environmental services segment was $37.4 million, up $7.7 million or 25.8% in the first quarter of 2023.
Adjusted EBITDA (1) for the quarter reached $7.9 million, an increase of $0.1 million compared with $7.8 million recorded in the comparative period. Adjusted EBITDA (1) was impacted by professional fees incurred in relation with the acquisition of FMT and costs incurred to analyze other business development opportunities. Loss attributable to owners of the Company for the first quarter amounted to $9.1 million, higher than last year’s loss of $6.0 million. The loss attributable to owners of the Company translated into a total basic and diluted loss per share of $0.71, of which $0.68 was attributable to Class A Common Shares and $0.75 to Class B Subordinate Voting Shares.
(1) Adjusted EBITDA is a non-IFRS measure, please refer to the non-IFRS measure section.
Marine Services
Our marine services segment continued to see strong demand in the energy sector in the U.S. Gulf Coast region, which compensated for the slower start to the year in other ports. In terms of containers, our terminals suffered from lower volumes, which can be explained by significant inventories in the retail market. These are largely being depleted and we do expect volumes to resume at more normal levels in the coming quarters. With respect to bulk and general cargoes, we are confident with the remainder of the year given the diverse nature of the products we handle and the breadth of our network reach, we are able to adjust to market fluctuations and are optimistic about sales volumes going forward. With 11 additional terminals from our FMT acquisition, we are well prepared to deliver operational excellence to marine shippers across North America.
Environmental Services
Our environmental services segment performed better than expected, with a strong project backlog on hand. Additional contracts have been secured and we forecast a positive outlook for the balance of the year. We announced major remediation projects, including the former Rayrock mine and Aleris industrial site rehabilitation. Our team of experts deployed our robust and effective polyfluoroalkyl substances (“PFAS”) concentration and removal technology, partnering with Waste Connections to remove PFAS from landfill leachates in North America. Our high-performing teams are positioned to accelerate profitable growth.
Outlook
“The outlook for 2023 is positive with good momentum for both our marine and environmental segments,” indicated Madeleine Paquin. “We will be focusing on a smooth integration of our FMT acquisition, while offering new options to customers and connecting them to broader markets. As mentioned, although we are seeing a slowdown in containers during the first quarter, we do expect volumes to return to more stable levels, albeit with substantially reduced storage revenue. The strength of our activities in the U.S. Gulf is expected to continue, and should make up for some expected shortfalls in other general cargo and bulk terminals. In our environmental services segment, we expect to execute on a strong book of business in 2023, in both site remediation and ALTRA Water Technologies. Furthermore, we have obtained outstanding results from our pilots using our ALTRA PFAS solution and expect to launch several multiyear contracts in 2023. All of these factors combined give us a high level of confidence for the year ahead.”
Dividends
On May 3, 2023, the Board of Directors declared a dividend of $0.11782 per Class A Common Share and $0.12959 per Class B Subordinate Voting Share, for a total consideration of $1.6 million. These dividends will be paid on July 7, 2023, to shareholders of record as of June 22, 2023.
About LOGISTEC
LOGISTEC Corporation is based in Montréal (QC) and provides specialized services to the marine community and industrial companies in the areas of bulk, break-bulk and container cargo handling in 60 ports and 90 terminals located in North America. LOGISTEC also offers marine transportation services geared primarily to the Arctic coastal trade as well as marine agency services to shipowners and operators serving the Canadian market. Furthermore, the Company operates in the environmental industry where it provides services to industrial, municipal and other governmental customers for the renewal of underground water mains, dredging, dewatering, contaminated soils and materials management, site remediation, risk assessment, and manufacturing of fluid transportation products.
The Company has been profitable and has paid regular dividends since becoming public and payments have grown steadily over the years. A public company since 1969, LOGISTEC’s shares are listed on the Toronto Stock Exchange under the ticker symbols LGT.A and LGT.B. More information can be obtained on the Company’s website at www.logistec.com.
Non-IFRS measure
Adjusted earnings before interest expense, income taxes, depreciation and amortization expense (“adjusted EBITDA”) is not defined by IFRS and cannot be formally presented in financial statements. The definition of adjusted EBITDA excludes the configuration and customization costs related to the implementation of an Enterprise Resource Planning (“ERP”) system. The definition of adjusted EBITDA used by the Company may differ from those used by other companies. Even though adjusted EBITDA is a non-IFRS measure, it is used by managers, analysts, investors, and other financial stakeholders to analyze and assess the Company’s performance and management from a financial and operational standpoint.
The following table provides a reconciliation of profit for the year to adjusted EBITDA:
|
For the three months ended |
||
|
(in thousands of dollars) |
March 25, 2023 $ |
March 26, 2022 $ |
|
Loss for the period |
(8,937) |
(5,898) |
|
PLUS: |
|
|
|
Depreciation and amortization expense |
14,454 |
12,797 |
|
Net finance expense |
4,427 |
2,829 |
|
Income taxes |
(3,207) |
(2,410) |
|
Configuration and customization costs in a cloud computing arrangement |
1,136 |
483 |
|
Adjusted EBITDA |
7,873 |
7,801 |
Forward-looking statements
For the purpose of informing shareholders and potential investors about the Company’s prospects, sections of this document may contain forward-looking statements, within the meaning of securities legislation, about the Company’s activities, performance and financial position and, in particular, hopes for the success of the Company’s efforts in the development and growth of its business. These forward-looking statements express, as of the date of this document, the estimates, predictions, projections, expectations, or opinions of the Company about future events or results. Although the Company believes that the expectations produced by these forward-looking statements are founded on valid and reasonable bases and assumptions, these forward-looking statements are inherently subject to important uncertainties and contingencies, many of which are beyond the Company’s control, such that the Company’s performance may differ significantly from the predicted performance expressed or presented in such forward-looking statements. The important risks and uncertainties that may cause the actual results and future events to differ significantly from the expectations currently expressed are examined under business risks in the Company’s 2022 annual report and include (but are not limited to) the performances of domestic and international economies and their effect on shipping volumes, weather conditions, labour relations, pricing, and competitors’ marketing activities. The reader of this document is thus cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to update or revise these forward-looking statements, except as required by law.