TSX Symbol: WJX
Expanded Relationship with Hitachi,
Continued Growth in Industrial Parts and Engineered Repair
Services, Drive 14.7% Year-Over-Year Revenue Increase and 37.7%
Increase in Adjusted Net Earnings(1)
TORONTO, Aug. 10,
2023 /CNW/ - Wajax Corporation ("Wajax" or the
"Corporation") today announced its 2023 second quarter
results. All monetary amounts are in Canadian dollars unless
otherwise noted.
Selected Highlights for the Second Quarter
- Second quarter revenue of $586.2
million, up 14.7% over 2022;
- Second quarter adjusted EBITDA of $57.2
million, up 26.6% over 2022;(1)
- Second quarter adjusted net earnings of $27.1 million, up 37.7% over 2022;(1)
and
- Ended the quarter with backlog of $551.2
million, up $20.5 million from
March 31, 2023.(1)
"Our strong financial performance in the second quarter was
driven by clear execution against our core strategic priorities,"
said Iggy Domagalski, President and
Chief Executive Officer. "Top line growth was supported by
sustained customer demand across all regions, including continued
positive momentum in central Canada. Solid year-over-year growth in
equipment and product support sales was complemented by even
greater strength in industrial parts and engineered repair services
revenue, and improved operating leverage saw adjusted basic
earnings per share grow 26.4% to $2.09 for the first half of the year. Our robust
backlog, up $20.5 million
sequentially from the first quarter, as well as solid fundamentals
across many of our key markets, supports confidence in our
prospects as we advance further into 2023 and
beyond."(1)
"We continue to invest in working capital, most notably in
inventory, to support customer orders and forecasted demand. We
continue to believe that our strong financial results and balance
sheet give us the flexibility to further invest in our expanded
Hitachi relationship, additional organic initiatives and
acquisition opportunities to help drive future growth. With respect
to acquisitions and the growth of our industrial parts and
engineered repair services businesses, subsequent to quarter end,
we were very pleased to announce we have acquired Polyphase
Engineered Controls, a specialized provider of custom electrical
and instrumentation equipment that enhances our ability to
undertake large scale time-critical integration
projects."(1)
|
(Dollars in
millions, except per share data)
|
Three Months
Ended
June 30
|
Six Months
Ended
June 30
|
|
2023
|
2022
|
%
change
|
2023
|
2022
|
%
change
|
|
CONSOLIDATED
RESULTS
|
|
|
|
|
|
|
|
Revenue
|
$586.2
|
$511.2
|
14.7 %
|
$1,102.3
|
$950.7
|
15.9 %
|
|
Equipment
sales
|
$190.4
|
$172.2
|
10.6 %
|
$322.6
|
$289.4
|
11.5 %
|
|
Product
support
|
$140.6
|
$122.2
|
15.0 %
|
$275.4
|
$246.8
|
11.6 %
|
|
Industrial
parts
|
$154.9
|
$133.9
|
15.7 %
|
$308.2
|
$263.1
|
17.1 %
|
|
Engineered repair
services (ERS)
|
$89.0
|
$73.0
|
21.9 %
|
$174.0
|
$132.8
|
31.0 %
|
|
Equipment
rental
|
$11.4
|
$9.9
|
16.0 %
|
$22.2
|
$18.6
|
19.2 %
|
|
|
|
|
|
|
|
|
Net
earnings
|
$29.0
|
$21.7
|
33.5 %
|
$46.5
|
$37.8
|
23.0 %
|
|
Basic earnings per
share(2)
|
$1.35
|
$1.01
|
33.1 %
|
$2.16
|
$1.76
|
22.6 %
|
|
|
|
|
|
|
|
|
Adjusted net
earnings(1)(3)
|
$27.1
|
$19.7
|
37.7 %
|
$44.9
|
$35.4
|
26.8 %
|
|
Adjusted basic
earnings per share(1)(2)(3)
|
$1.26
|
$0.92
|
37.3 %
|
$2.09
|
$1.65
|
26.4 %
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
$57.2
|
$45.2
|
26.6 %
|
$100.2
|
$84.5
|
18.6 %
|
Outlook
After the first half of 2023, the Corporation continues to see
solid fundamentals in many of the markets it serves - particularly
mining, energy and construction - supported by relatively elevated
key commodity prices and sustained customer budgeting for capital
projects. The Corporation's strong backlog also continues to
support management's confidence as Wajax advances into the second
half of the year.(1) In addition to expected growth in
its heavy equipment business, Wajax anticipates further strong
demand in its less cyclical industrial parts and ERS businesses.
For the balance of 2023, Wajax continues to expect challenges
associated with supply chain volatility, although some improvements
are anticipated. Higher interest rates, wage and price inflation,
and a tight labour market are also expected to remain challenges,
and management continues to monitor market dynamics and customer
sentiment for signs of possible weakness.
The Corporation's core strategic priorities remain unchanged and
Wajax is focused on continuing to invest in its people and their
overall health and well-being, delivering exceptional customer
value, organically growing its business, transacting on its robust
acquisition pipeline, leveraging its enhanced relationship with
Hitachi, prudently managing its balance sheet, deploying its ERP
system, and entrenching sustainability into the business.
Dividend
The Corporation has declared a dividend of $0.33 per share for the third quarter of 2023,
payable on October 3, 2023, to shareholders of record on
September 15, 2023.
Second Quarter Highlights
- Revenue in the second quarter of 2023 increased $75.0 million, or 14.7%, to $586.2 million, from $511.2 million in the second quarter of 2022.
Regionally:
-
- Revenue in western Canada of
$269.4 million increased 19.2% from
the prior year due to strong mining equipment sales, including the
delivery of a large mining shovel, higher engineered repair
services ("ERS") and industrial parts sales, and higher
product support revenue in all categories.
- Revenue in central Canada of
$103.2 million increased 23.5% from
the prior year due primarily to higher equipment sales in the
material handling, and construction and forestry categories, as
well as strength in the industrial parts and ERS categories.
- Revenue in eastern Canada of
$213.7 million increased 5.9% from
the prior year due primarily to strength in the industrial parts
and ERS categories, offset partially by lower equipment sales in
the power systems category.
- Gross profit margin of 19.9% in the second quarter of 2023
decreased 20 basis points ("bps") compared to gross profit
margin of 20.1% in the same period of 2022.(1) The
decrease was driven primarily by lower product support and
industrial parts margins, offset partially by higher equipment and
ERS margins, and a higher proportion of ERS sales.
- Selling and administrative expenses as a percentage of revenue
decreased to 12.2% in the second quarter of 2023 from 13.4% in the
second quarter of 2022, driven by the 14.7% increase in
revenue.(1) Selling and administrative expenses in the
second quarter of 2023 increased $2.9
million compared to the second quarter of 2022 due primarily
to higher personnel costs as the volume of business increased over
the prior year.
- EBIT increased $11.2 million, or
32.9%, to $45.3 million in the second
quarter of 2023 versus $34.1 million
in the same period of 2022. The year-over-year increase in EBIT
resulted primarily from higher sales volumes, offset partially by
lower product support margins and higher selling and administrative
expenses.
- The Corporation generated net earnings of $29.0 million, or $1.35 per share, in the second quarter of 2023
versus $21.7 million, or $1.01 per share, in the same period of 2022. The
Corporation generated adjusted net earnings of $27.1 million, or $1.26 per share, in the second quarter of 2023
versus $19.7 million, or $0.92 per share, in the same period of 2022.
Adjusted net earnings in the second quarter of 2023 excludes
non-cash gains on mark to market of derivative instruments of
$1.9 million after-tax, or
$0.09 per share (2022 – gains of
$2.0 million, or $0.10 per share).(1)
- Adjusted EBITDA margin increased to 9.8% in the second quarter
of 2023 from 8.8% in the second quarter of 2022.(1)
- The Corporation's backlog at June 30,
2023 of $551.2 million
increased $20.5 million, or 3.9%,
compared to March 31, 2023 backlog of
$530.8 million due primarily to
higher material handling and ERS orders, offset partially by lower
construction and forestry orders. The Corporation's backlog at
June 30, 2023 of $551.2 million increased $16.4 million, or 3.1%, compared to June 30, 2022 due to higher ERS and material
handling orders, offset partially by lower construction and
forestry, and power systems orders.(1)
- Working capital of $480.6 million
at June 30, 2023 increased
$55.4 million from March 31, 2023 due primarily to higher inventory.
Working capital efficiency was 18.9%, an increase of 140 bps from
March 31, 2023, due to the higher
trailing four quarter average working capital.(1)
- Cash flows used in operating activities amounted to
$6.0 million in the second quarter of
2023, compared to cash flows generated from operating activities of
$34.0 million in the same quarter of
the previous year. The decrease in cash generated from operating
activities of $40.0 million was
mainly attributable to an increase in inventory of $40.7 million during the quarter compared to an
increase of $4.6 million in the prior
year.
- The Corporation's leverage ratio increased to 1.76 times at
June 30, 2023, compared to 1.74 times
at March 31, 2023. The increase in
leverage ratio was due to the higher debt level in the current
period, driven largely by the Corporation's investment in
inventory. The Corporation's senior secured leverage ratio was 1.38
times at June 30, 2023, compared to
1.33 times at March 31,
2023.(1)
- Effective June 23, 2023, André
Dubé was appointed to the role of Senior Vice President, Industrial
Parts and ERS. Mr. Dubé has 24 years of experience at Wajax, first
joining in 1999 as a strategic sourcing specialist. Since then, he
has held increasingly senior roles, including Vice President, Key
Accounts, and Vice President, End Market Mining. Most recently, he
was serving as Regional Vice President, Ontario and Quebec.
- As noted above, subsequent to quarter end, on July 4, 2023, the Corporation's wholly-owned
subsidiary, Tundra Process Solutions, Ltd. ("Tundra"),
acquired all of the issued and outstanding shares of Polyphase
Engineered Controls (1977) Ltd. ("Polyphase") for cash
consideration of approximately $17.8
million, plus a three-year performance-based earnout. The
purchase price is subject to normal post-closing net working
capital adjustments and the result of the three-year
performance-based earnout. As of the acquisition date, Polyphase
had trailing twelve-month revenue of approximately $26.0 million. For additional information
regarding the Polyphase acquisition, please see the Corporation's
press release dated July 4,
2023.
Conference Call Details
Wajax will webcast its Second Quarter Financial Results
Conference Call. You are invited to listen to the live webcast
on Friday, August 11, 2023 at 2:00 p.m.
EDT. To access the webcast, please visit our website
wajax.com, under "Investor
Relations", "Events and Presentations", "Q2 2023
Financial Results" and click on the "Webcast" link. An archive
of the webcast will be available following the live
presentation.
About Wajax Corporation
Founded in 1858, Wajax (TSX: WJX) is one of Canada's longest-standing and most diversified
industrial products and services providers. The Corporation
operates an integrated distribution system providing sales, parts
and services to a broad range of customers in diverse sectors of
the Canadian economy, including: construction, forestry, mining,
industrial and commercial, oil sands, transportation, metal
processing, government and utilities, and oil and gas.
The Corporation's goal is to be Canada's leading industrial products and
services provider, distinguished through its three core
capabilities: sales force excellence, the breadth and efficiency of
repair and maintenance operations, and the ability to work closely
with existing and new vendor partners to constantly expand its
product offering to customers. The Corporation believes that
achieving excellence in these three areas will position it to
create value for its customers, employees, vendors and
shareholders.
Notes:
|
(1)
|
"Adjusted net
earnings", "Adjusted basic earnings per share", "Adjusted EBITDA",
"Adjusted EBITDA margin", "Backlog", "Leverage ratio", "Senior
secured leverage ratio", "Working capital", "Working capital
efficiency", "Gross profit margin", and "Selling and administrative
expenses as a percentage of revenue" do not have standardized
meanings prescribed by generally accepted accounting principles
("GAAP"). See the Non-GAAP and Other Financial Measures
section later in this press release.
|
|
|
(2)
|
Weighted average
shares, net of shares held in trust, outstanding for calculation of
basic and diluted earnings per share for the three months ended
June 30, 2023 was 21,487,212 (2022 – 21,424,023) and 22,180,341
(2022 – 22,194,390), respectively.
|
|
|
Weighted average
shares, net of shares held in trust, outstanding for calculation of
basic and diluted earnings per share for the six months ended June
30, 2023 was 21,488,163 (2022 - 21,419,752) and 22,170,148 (2022 -
22,166,365),
respectively.
|
|
|
(3)
|
Net earnings excluding
the following:
|
|
|
a.
|
after-tax non-cash
gains on mark to market of derivative instruments of $1.9 million
(2022 – gains of $2.0 million), or basic and diluted earnings per
share of $0.09 (2022 – earnings per share of $0.10 and $0.09
respectively) for the three months ended June 30, 2023.
|
|
b.
|
after-tax non-cash
gains on mark to market of derivative instruments of $1.6 million
(2022 – gains of $2.4 million), or basic and diluted earnings per
share of $0.07 (2022 – earnings per share of $0.11) for the six
months ended June 30, 2023.
|
Non-GAAP and Other Financial Measures
The press release contains certain non-GAAP and other financial
measures that do not have a standardized meaning prescribed by
GAAP. Therefore, these financial measures may not be comparable to
similar measures presented by other issuers. Investors are
cautioned that these measures should not be construed as an
alternative to net earnings or to cash flow from operating,
investing, and financing activities determined in accordance with
GAAP as indicators of the Corporation's performance. The
Corporation's management believes that:
|
(i)
|
these measures are
commonly reported and widely used by investors and
management;
|
|
(ii)
|
the non-GAAP measures
are commonly used as an indicator of a company's cash operating
performance, profitability and ability to raise and service
debt;
|
|
(iii)
|
"Adjusted net
earnings", "Adjusted basic earnings per share" and
"Adjusted diluted earnings per share" provide indications of
the results by the Corporation's principal business activities
prior to recognizing non-recurring costs (recoveries) and non-cash
losses (gains) on mark to market of derivative instruments. These
adjustments to net earnings and basic and diluted earnings per
share allow the Corporation's management to consistently compare
periods by removing infrequent charges incurred outside of the
Corporation's principal business activities and the impact of
unrealized losses (gains) resulting from fluctuations in interest
rates and the Corporation's share price;
|
|
(iv)
|
"Adjusted
EBITDA" provides an indication of the results by the
Corporation's principal business activities prior to recognizing
non-recurring costs (recoveries) and non-cash losses (gains) on
mark to market of derivative instruments. These adjustments to net
earnings allow the Corporation's management to consistently compare
periods by removing infrequent charges incurred outside of the
Corporation's principal business activities, the impact of
unrealized losses (gains) resulting from fluctuations in interest
rates and the Corporation's share price, the impact of fluctuations
in finance costs related to the Corporation's capital structure,
the impact of tax rates, and the impact of depreciation and
amortization of long-term assets; and
|
|
(v)
|
"Pro-forma adjusted
EBITDA" provides the same utility as Adjusted EBITDA described
above, however pursuant to the terms of the bank credit facility,
is adjusted for the EBITDA of business acquisitions made during the
period as if they were made at the beginning of the trailing
12-month period, and for the deduction of payments of lease
liabilities. Pro-forma adjusted EBITDA is used in calculating the
Leverage ratio and Senior secured leverage ratio.
|
Non-GAAP financial measures are identified and defined below:
|
|
|
Funded net
debt
|
Funded net debt
includes bank indebtedness, debentures and total long-term debt,
net of cash. Funded net debt is relevant in calculating the
Corporation's funded net debt to total capital, which is a non-GAAP
ratio commonly used as an indicator of a company's ability to raise
and service debt.
|
|
Debt
|
Debt is funded net debt
plus letters of credit. Debt is relevant in calculating the
Corporation's leverage ratio, which is a non-GAAP ratio commonly
used as an indicator of a company's ability to raise and service
debt.
|
|
Total
capital
|
Total capital is
shareholders' equity plus funded net debt.
|
|
EBITDA
|
Net earnings (loss)
before finance costs, income tax expense, depreciation and
amortization.
|
|
Adjusted net
earnings (loss)
|
Net earnings (loss)
before any gains/losses recorded on the sale of properties,
restructuring and other related costs, non-cash gains/losses on
mark to market of derivative instruments, and acquisition-related
transaction costs.
|
|
Adjusted basic
earnings (loss) per share and adjusted diluted earnings (loss)
per share
|
Basic and diluted
earnings (loss) per share before any gains/losses recorded on the
sale of properties, restructuring and other related costs, non-cash
gains/losses on mark to market of derivative instruments, and
acquisition-related transaction costs.
|
|
Adjusted
EBIT
|
EBIT before any
gains/losses recorded on the sale of properties, restructuring and
other related costs, non-cash gains/losses on mark to market of
derivative instruments, and acquisition-related transaction
costs.
|
|
Adjusted
EBITDA
|
EBITDA before any
gains/losses recorded on the sale of properties, restructuring and
other related costs, non-cash gains/losses on mark to market of
derivative instruments, and acquisition-related transaction
costs.
|
|
Pro-forma adjusted
EBITDA
|
Defined as adjusted
EBITDA adjusted for the EBITDA of business acquisitions made during
the period as if they were made at the beginning of the trailing
12-month period pursuant to the terms of the bank credit facility
and the deduction of payments of lease liabilities.
|
|
Working
capital
|
Defined as current
assets less current liabilities, as presented in the condensed
consolidated interim statements of financial position.
|
|
Other working
capital amounts
|
Defined as working
capital less trade and other receivables and inventory plus
accounts payable and accrued liabilities, as presented in the
condensed consolidated interim statements of financial
position.
|
Non-GAAP ratios are identified and defined below:
|
EBITDA
margin
|
Defined as EBITDA
(defined above) divided by revenue, as presented in the condensed
consolidated interim statements of earnings.
|
|
Adjusted EBITDA
margin
|
Defined as adjusted
EBITDA (defined above) divided by revenue, as presented in the
condensed consolidated interim statements of earnings.
|
|
Leverage
ratio
|
The leverage ratio is
defined as debt (defined above) at the end of a particular quarter
divided by trailing 12-month pro-forma adjusted EBITDA (defined
above). The Corporation's objective is to maintain this ratio
between 1.5 times and 2.0 times.
|
|
Senior secured
leverage ratio
|
The senior secured
leverage ratio is defined as debt (defined above) excluding
debentures at the end of a particular quarter divided by trailing
12-month pro-forma adjusted EBITDA (defined above).
|
|
Funded net debt to
total capital
|
Defined as funded net
debt (defined above) divided by total capital (defined
above).
|
|
Working capital
efficiency
|
Trailing four-quarter
average working capital (defined above) as a percentage of the
trailing 12-month revenue.
|
Supplementary financial measures are identified and defined
below:
|
EBIT
margin
|
Defined as EBIT divided
by revenue, as presented in the condensed consolidated interim
statements of earnings.
|
|
Backlog
|
Backlog is a management
measure which includes the total sales value of customer purchase
commitments for future delivery or commissioning of equipment,
parts and related services, including ERS projects. There is no
directly comparable GAAP financial measure for Backlog.
|
|
Gross profit
margin
|
Defined as gross profit
divided by revenue, as presented in the condensed consolidated
interim statements of earnings.
|
|
Selling and
administrative expenses as a percentage of revenue
|
Defined as selling and
administrative expenses divided by revenue, as presented in the
condensed consolidated interim statements of earnings.
|
Reconciliation of the Corporation's net earnings to adjusted net
earnings, adjusted basic earnings per share and adjusted diluted
earnings per share is as follows:
|
Three months
ended
|
Six months
ended
|
|
June
30
|
June
30
|
|
2023
|
2022
|
2023
|
2022
|
|
Net earnings
|
$
29.0
|
$ 21.7
|
$
46.5
|
$
37.8
|
|
Non-cash gains on mark
to market of derivative instruments, after-tax
|
(1.9)
|
(2.0)
|
(1.6)
|
(2.4)
|
|
Adjusted net
earnings
|
$
27.1
|
$ 19.7
|
$
44.9
|
$
35.4
|
|
Adjusted basic
earnings per share(1)
|
$
1.26
|
$ 0.92
|
$
2.09
|
$
1.65
|
|
Adjusted diluted
earnings per share(1)
|
$
1.22
|
$ 0.89
|
$
2.03
|
$
1.60
|
|
(1)
|
For the three months
ended June 30, 2023, the number of weighted average basic and
diluted shares outstanding were 21,487,212 and 22,180,341,
respectively (2022 - 21,424,023 and 22,194,390,
respectively).
|
|
For the six months
ended June 30, 2023, the number of weighted average basic and
diluted shares outstanding were 21,488,163 and 22,170,148,
respectively (2022 - 21,419,752 and 22,166,365,
respectively).
|
Reconciliation of the Corporation's EBIT to EBITDA, Adjusted EBIT,
Adjusted EBITDA and Pro-forma adjusted EBITDA is as follows:
|
Three months
ended
|
Six months
ended
|
Twelve months
ended
|
|
June 30
2023
|
June 30
2022
|
June 30
2023
|
June 30
2022
|
June 30
2023
|
December 31
2022
|
|
EBIT
|
$
45.3
|
$ 34.1
|
$
73.9
|
$ 60.5
|
$
127.3
|
$
113.9
|
|
Depreciation and
amortization
|
14.5
|
13.9
|
28.4
|
27.3
|
56.7
|
55.5
|
|
EBITDA
|
$
59.8
|
$
48.0
|
$
102.3
|
$ 87.7
|
$
184.0
|
$
169.3
|
|
|
|
|
|
|
|
|
EBIT
|
$
45.3
|
$ 34.1
|
$
73.9
|
$ 60.5
|
$
127.3
|
$
113.9
|
|
Non-cash gains on mark
to market of derivative instruments(1)
|
(2.6)
|
(2.8)
|
(2.1)
|
(3.3)
|
(2.3)
|
(3.5)
|
|
Adjusted
EBIT
|
$
42.7
|
$ 31.3
|
$
71.8
|
$
57.2
|
$
125.0
|
$
110.4
|
|
Depreciation and
amortization
|
14.5
|
13.9
|
28.4
|
27.3
|
56.7
|
55.5
|
|
Adjusted
EBITDA
|
$
57.2
|
$ 45.2
|
$
100.2
|
$ 84.5
|
$
181.6
|
$
165.9
|
|
Payment of lease
liabilities(2)
|
(8.6)
|
(7.9)
|
(17.2)
|
(15.5)
|
(33.7)
|
(32.0)
|
|
Pro-forma adjusted
EBITDA
|
$
48.6
|
$
37.3
|
$
83.0
|
$ 69.0
|
$
147.9
|
$
133.9
|
|
(1)
|
Non-cash losses (gains)
on mark to market of non-hedged derivative instruments.
|
|
(2)
|
Effective with the
reporting period beginning on January 1, 2019 and the adoption of
IFRS 16, the Corporation amended the definition of Funded net debt
to exclude lease liabilities not considered part of debt. As a
result, the corresponding lease costs must also be deducted from
EBITDA for the purpose of calculating the leverage
ratio.
|
Calculation of the Corporation's funded net debt, debt, leverage
ratio and senior secured leverage ratio is as follows:
|
June 30
2023
|
March 31
2023
|
December 31
2022
|
|
Bank
indebtedness
|
$
4.4
|
$
19.0
|
$
5.2
|
|
Debentures
|
56.0
|
55.9
|
55.8
|
|
Long-term
debt
|
195.9
|
158.5
|
83.6
|
|
Funded net
debt
|
$
256.4
|
$
233.4
|
$
144.6
|
|
Letters of
credit
|
4.4
|
4.0
|
6.2
|
|
Debt
|
$
260.8
|
$
237.5
|
$
150.8
|
|
Pro-forma adjusted
EBITDA(1)
|
$
147.9
|
$
136.6
|
$
133.9
|
|
Leverage
ratio(2)
|
1.76
|
1.74
|
1.13
|
|
Senior secured
leverage ratio(3)
|
1.38
|
1.33
|
0.71
|
|
(1)
|
For the twelve months
ended June 30, 2023, March 31, 2023, and December 31,
2022.
|
|
(2)
|
Calculation uses debt
divided by the trailing four-quarter Pro-forma adjusted EBITDA.
This leverage ratio is calculated for purposes of monitoring the
Corporation's objective target leverage ratio of between 1.5 times
and 2.0 times, and is different from the leverage ratio calculated
under the Corporation's bank credit facility agreement.
|
|
(3)
|
Calculation uses debt
excluding debentures divided by the trailing four-quarter Pro-forma
adjusted EBITDA. While the calculation contains some differences
from the leverage ratio calculated under the Corporation's bank
credit facility agreement, the resulting leverage ratio under the
bank credit facility agreement is not significantly
different.
|
Calculation of total capital and funded net debt to total capital
is as follows:
|
June 30
2023
|
March 31
2023
|
December 31
2022
|
|
Shareholders'
equity
|
$
475.9
|
$
455.0
|
$
449.8
|
|
Funded net
debt
|
256.4
|
233.4
|
144.6
|
|
Total
capital
|
$
732.3
|
$
688.4
|
$
594.4
|
|
Funded net debt to
total capital
|
35.0 %
|
33.9 %
|
24.3 %
|
Calculation of the Corporation's working capital and other working
capital amounts is as follows:
|
June 30
2023
|
March 31
2023
|
December 31
2022
|
|
Total current
assets
|
$
1,042.9
|
$
981.1
|
$
860.1
|
|
Total current
liabilities
|
562.2
|
555.8
|
514.1
|
|
Working
capital
|
$
480.6
|
$
425.2
|
$
346.0
|
|
Trade and other
receivables
|
(308.4)
|
(301.1)
|
(307.1)
|
|
Inventory
|
(625.1)
|
(584.4)
|
(462.2)
|
|
Accounts payable and
accrued liabilities
|
487.3
|
470.8
|
423.8
|
|
Other working
capital amounts
|
$
34.4
|
$
10.6
|
$
0.7
|
Cautionary Statement Regarding Forward-Looking Information
This news release contains certain forward-looking statements
and forward-looking information, as defined in applicable
securities laws (collectively, "forward-looking
statements"). These forward-looking statements relate to future
events or the Corporation's future performance. All statements
other than statements of historical fact are forward-looking
statements. Often, but not always, forward looking statements can
be identified by the use of words such as "plans", "anticipates",
"intends", "predicts", "expects", "is expected", "scheduled",
"believes", "estimates", "projects" or "forecasts", or variations
of, or the negatives of, such words and phrases or state that
certain actions, events or results "may", "could", "would",
"should", "might" or "will" be taken, occur or be achieved.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors beyond the Corporation's ability to
predict or control which may cause actual results, performance and
achievements to differ materially from those anticipated or implied
in such forward-looking statements. To the extent any
forward-looking information in this news release constitutes
future-oriented financial information or financial outlook within
the meaning of applicable securities law, such information is being
provided to demonstrate the potential of the Corporation and
readers are cautioned that this information may not be appropriate
for any other purpose. There can be no assurance that any
forward-looking statement will materialize. Accordingly, readers
should not place undue reliance on forward-looking statements. The
forward-looking statements in this news release are made as of the
date of this news release, reflect management's current beliefs and
are based on information currently available to management.
Although management believes that the expectations represented in
such forward-looking statements are reasonable, there is no
assurance that such expectations will prove to be correct.
Specifically, this news release includes forward looking statements
regarding, among other things: our belief that our robust backlog,
as well as solid fundamentals across many of our key markets,
supports management's confidence in our prospects as we advance
further into 2023 and beyond; our continued belief that the
Corporation's strong financial results and balance sheet give us
the flexibility to further invest in our expanded Hitachi
relationship, additional organic initiatives and acquisition
opportunities to help drive future growth; our outlook after the
first half of 2023, including our view that solid fundamentals
persist in many of the markets Wajax serves – particularly mining,
energy and construction, and that our strong backlog also continues
to support our confidence as Wajax advances into the second half of
the year; our expectation that Wajax's heavy equipment business
will grow in 2023, and anticipated further strong demand in Wajax's
less cyclical industrial parts and ERS businesses; our continued
expectation that, for the balance of 2023, we will experience
challenges associated with supply chain volatility, although some
improvements are anticipated; our expectation that higher interest
rates, inflation, and a tight labour market will also remain
challenges, and our continued monitoring of market dynamics and
customer sentiment for signs of possible weakness; our core
strategic priorities, including our continued focus on investing in
Wajax's people and their overall health and well-being, delivering
exceptional customer value, organically growing our business,
transacting on our robust acquisition pipeline, leveraging our
enhanced relationship with Hitachi, prudently managing our balance
sheet, deploying our ERP system, and entrenching sustainability
into our business; our objective of managing our leverage ratio
within a range of 1.5 – 2.0 times; and our goal of being
Canada's leading industrial
products and services provider, distinguished by our sales force
excellence, the breadth and efficiency of our repair and
maintenance operations, and our ability to work closely with
existing and new vendor partners to constantly expand our product
offering to customers, together with our belief that achieving
excellence in these three areas will position us to create value
for our customers, employees, vendors and shareholders. These
statements are based on a number of assumptions which may prove to
be incorrect, including, but not limited to, assumptions regarding:
the absence of significant negative changes to general business and
economic conditions; limited negative fluctuations in the supply
and demand for, and the level and volatility of prices for, oil,
natural gas and other commodities; the stability of financial
market conditions, including interest rates; the ability of Hitachi
and Wajax to develop and execute successful sales, marketing and
other plans related to the expanded direct distribution
relationship which took effect on March 1,
2022; our continued ability to execute our One Wajax
strategy, including our ability to execute on our organic growth
priorities, complete and effectively integrate acquisitions, such
as Polyphase, and successfully implement new information technology
platforms, systems and software, such as our ERP system; the
receding effects of the COVID-19 pandemic and actions taken by
governments, public authorities, suppliers and customers in
response to the COVID-19 virus and its variants; the future
financial performance of the Corporation; limited fluctuations in
our costs; the level of market competition; our continued ability
to attract and retain skilled staff; our continued ability to
procure quality products and inventory; and our ongoing maintenance
of strong relationships with suppliers, employees and customers.
The foregoing list of assumptions is not exhaustive. Factors that
may cause actual results to vary materially include, but are not
limited to: a continued or prolonged deterioration in general
business and economic conditions, including as a result of new
COVID-19 variants or armed conflicts between nations; supply chain
disruptions and shortages related to or arising from the impacts of
COVID-19 or armed conflicts between nations; fluctuations in
financial market conditions, including interest rates; the impacts
of new COVID-19 variants, including the duration and severity of
travel, business and other restrictions imposed by governments and
public authorities in response to such variants; actions taken by
our suppliers and customers in relation to new COVID-19 variants,
including slowing, reducing or halting operations; the inability of
Hitachi and Wajax to develop and execute successful sales,
marketing and other plans related to the expanded direct
distribution relationship which took effect on March 1, 2022; negative fluctuations in the
supply and demand for, and the level of prices for, oil, natural
gas and other commodities; a continued or prolonged decrease in the
price of oil or natural gas; the level of demand for, and prices
of, the products and services we offer; a decrease in levels of
customer confidence and spending; decreased market acceptance of
the products we offer; the termination of distribution or original
equipment manufacturer agreements; unanticipated operational
difficulties (including failure of plant, equipment or processes to
operate in accordance with specifications or expectations, cost
escalation, our inability to reduce costs in response to slow-downs
in market activity, unavailability of quality products or
inventory, supply disruptions (including those caused by or related
to new COVID-19 variants), job action and unanticipated events
related to health, safety and environmental matters); our inability
to attract and retain skilled staff and our inability to maintain
strong relationships with our suppliers, employees and customers.
The foregoing list of factors is not exhaustive. Further
information concerning the risks and uncertainties associated with
these forward-looking statements and the Corporation's business may
be found in our MD&A for the year-ended December 31, 2022 (the "2022 MD&A"),
which has been filed under the Corporation's profile on SEDAR at
www.sedar.com, under the heading "Risk Management and
Uncertainties". The forward-looking statements contained in this
MD&A are expressly qualified in their entirety by this
cautionary statement. The Corporation does not undertake any
obligation to publicly update such forward-looking statements to
reflect new information, subsequent events or otherwise unless so
required by applicable securities laws.
Readers are cautioned that the risks described in the 2022
MD&A are not the only risks that could impact the Corporation.
Risks and uncertainties not currently known to the Corporation, or
currently deemed to be immaterial, may have a material effect on
the Corporation's business, financial condition or results of
operations.
Additional information, including Wajax's Annual Report, is
available on SEDAR at www.sedar.com.
SOURCE Wajax Corporation