Montréal, Québec, August 4th, 2022 – LOGISTEC Corporation (“LOGISTEC”) [TSX: LGT.A and LGT.B] (the “Company”), a marine and environmental services provider, announced today its financial results for the three-month and six-month periods ended June 25, 2022. LOGISTEC reports record results for a fifth consecutive quarter as it pursues its bold growth strategy in strong markets.
Highlights From the Second Quarter of 2022:
- Consolidated revenue totalled $219.0 million, up $46.5 million or 26.9%.
- Adjusted EBITDA (1) closed at $34.2 million, up $6.9 million.
- Total diluted earnings per share of $1.00, up $0.22.
- Environmental services’ backlog stood at $168.0 million.
Highlights From the First Half of 2022:
- Consolidated revenue totalled $360.4 million, up $83.0 million or 29.9%.
- Adjusted EBITDA (1) closed at $42.0 million, up $8.5 million.
- Total diluted earnings per share of $0.54, up $0.20.
“The growth we achieved in both the second quarter and the first half of the year reflects our ability to capitalize on our sectors’ strong market fundamentals, which continue to be spurred by the pandemic recovery, the ongoing public infrastructure spending, and the increasing private investments,” said Carl Delisle, Chief Financial Officer. “We expect that this favorable backdrop will drive more growth as we are uniquely well positioned to take advantage of the long-term major trends, including the global infrastructure investments, the strengthening of our supply chain resilience, Environmental, Social and Governance (“ESG”) priorities, and the related energy transition”.
“I am proud of the way the LOGISTEC team, leaders in the field, managed the dynamic operating environment they faced in the second quarter of 2022 and once again we delivered a record performance,” reinforced Madeleine Paquin, President and CEO. “And I am very pleased that as we continue to improve on our sustainability footprint by increasing revenues aligned with the United Nation Sustainability Development Goals (“SDGs”). In our recently published Sustainable Development Report, we disclosed that 40% of our 2021 revenue relates to clean revenue, demonstrating our commitment to a sustainable future.”
Results From the Period
We delivered strong results for the second quarter of 2022. Consolidated revenue was $219.0 million for the period, an increase of $46.5 million or 26.9% over the same period in 2021. Our core markets are as robust as they have ever been, both in the U.S. and Canada. The diversification of LOGISTEC’s activities, our scale, our reach, our deep expertise in the field and solid execution capabilities are leading to our success in essential and evolving supply chains and complex environmental projects.
Marine Services Segment
Revenue from the marine services segment reached $138.8 million in the second quarter of 2022, up $34.3 million or 32.8% compared with the same period in 2021. Our marine services segment continued to deliver excellent performance due to booming trade volumes in our core markets. We seized opportunities in this buoyant market to leverage our network and bring new solutions to today’s supply chain challenges for the greater benefit of our customers.
- Adjusted EBITDA is a non-IFRS measure, please refer to the non-IFRS measure section.
Opportunities for growth also included the expansion of our operations into the heartland of the U.S., in Lemont (IL), a strategically located gateway to serve markets in the greater Chicago area. Our operations are already up and running at Lemont with the recent handling of steel pipes destined for the oil and gas market in southern U.S.
We strengthened our partnerships with strategic ports, signing productive long-term agreements across our network. We also made infrastructure improvements for our customers and communities through the purchase of new ecoefficient cranes. By investing in ecofriendly equipment, we are delivering on our ESG plan to reduce our carbon footprint and protect our environment for future generations.
Environmental Services Segment
Revenue from the environmental services segment was $80.1 million, up $12.1 million or 17.8% in the second quarter of 2022.
Although we were fortunate to start the season earlier with respect to our ALTRA water services in Toronto and Montréal, these benefits were somewhat offset by delays and project changes, particularly in American Process Group (“APG”), which led to lower than expected revenue and margins. However, we are now entering into our busy season and the overall book of business remains strong until the end of the year. Furthermore, we recently signed our first Construction, Renovation and Demolition (“CRD”) contract, to revalorize residual materials, taking another important step as an environmental leader in deploying new circular economy solutions. The results of our per- and polyfluoroalkyl (“PFAS”) pilots were excellent, as our proprietary solution was able to remove more than 99% of the PFAS compounds found in highly contaminated landfill sites.
During this quarter, our environmental team also received the prestigious “Distinction Award for Best Company and Organization” from Réseau Environnement, highlighting excellence in the development of technologies and recognizing the exceptional work of our team to preserve and renew natural resources.
Outlook
As we look forward, we are optimistic for the remainder of 2022. LOGISTEC is well positioned to face the headwinds, thanks to its financial strength, diversification, unique business model, wide-reaching North American network of terminals, and innovative environmental technologies.
Investments in infrastructure and upcoming ambitious ESG initiatives will provide strong growth opportunities over the coming years. Increased cargo handling activities are driven by strong demand, particularly in the U.S. Gulf Coast for the energy sector. Our environmental business is also off to a good start with a solid backlog of over $168.0 million for the second half the year. We are confident that we will continue to deliver a strong financial performance.
Dividends
On August 4, 2022, the Board of Directors elected to increase the dividend payment by 20.0% and 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 October 7, 2022 to shareholders of record as of September 23, 2022.
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 53 ports and 79 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 and the Company’s impairment charge. 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 period to adjusted EBITDA:
|
(in thousands of Canadian dollars) |
|
||||
|
|
For the three months ended |
For the six months ended |
|||
|
|
June 25, 2022 |
June 26, 2021 |
June 25, 2022 $ |
June 26, 2021 |
|
|
Profit for the period |
13,150 |
10,287 |
7,252 |
4,666 |
|
|
PLUS: |
|
|
|
|
|
|
Depreciation and amortization expense |
14,037 |
11,883 |
26,834 |
23,244 |
|
|
Net finance expense |
3,105 |
2,522 |
5,934 |
4,955 |
|
|
Income taxes |
2,049 |
2,542 |
(361) |
616 |
|
|
Configuration and customization costs in a cloud computing arrangement |
1,881 |
— |
2,364 |
— |
|
|
Adjusted EBITDA |
34,222 |
27,234 |
42,023 |
33,481 |
|
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 2021 annual report and include (but are not limited to) the impact of the COVID-19 pandemic on the Company’s business and results of operations, 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.