Wajax Corporation · TSX:WJX
Wajax — Q2 2020 Earnings Presentation
25 slides from Wajax's earnings presentation, Aug 7, 2020
Slide 1: Wajax Financial Results – Q2 2020
Wajax Financial Results – Q2 2020 August 7, 2020
Slide 2: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding \\ Forward-Looking Information This presentation 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
Slide 3: Update Regarding COVID-19 Pandemic Response
Update Regarding COVID-19 Pandemic \\ Response • The coronavirus pandemic and the measures implemented to stop the spread of COVID-19 have continued to have a significant effect on Wajax • The Corporation’s focus is to manage the business according to the following four key objectives: 1. Protecting
Slide 4: Highlights – Second Quarter
\\ Highlights – Second Quarter • Revenue decline driven primarily by lower April and May sales attributable to the impact of COVID-19 -13% $356.9 (June sales improved year-over-year including the Revenue million effect of two large mining shovels originally scheduled for Q3); Western Canada volumes
Slide 5: CEWS Program
\\ CEWS Program • During the second quarter, the Corporation qualified for the CEWS program and recognized $15.5 million as a reimbursement of compensation expense allocated as follows: • Cost of sales: $7.1 million • Selling and administrative expenses: $8.4 million • Receipt of the subsidy support
Slide 6: Revenue by Region
\\ Revenue by Region Q2 20201 YTD 20201 • Revenue decreased $52.5 million, or 12.8%, to • For the six months ended June 30, 2020, revenue $356.9 million in Q2 2020 versus $409.4 million for decreased 10.6%, or $83.0 million, to $701.0 million the same period in 2019 versus $784.0 million in 2019 • D
Slide 7: Revenue Analysis
\\ Revenue Analysis Q2 2020 YTD 2020 • $9.0 million (-6.2%) decrease • $37.5 million (-14.6%) decrease Industrial Parts Product Support Equipment Sales C compared to Q2 2019 C compared to 2019 18% 21% • Lower forestry and engines and E • Lower forestry and engines and E transmissions sales across al
Slide 8: Revenue by Category
\\ Revenue by Category YTD* Category5 Q2 2020 Q2 2019 Change YTD 2020 YTD 2019 Change E W C Construction $ 62.7 $ 64.9 $ (2.2) $ 104.6 $ 120.3 $ (15.7) ↑ ↓ ↓ Material Handling 38.5 42.4 (3.9) 77.9 84.1 (6.2) ↓ ↑ ↑ ERS 42.8 37.9 4.9 87.8 75.0 12.8 ↑ ↑ ↑ Industrial Parts 81.6 93.9 (12.4) 173.3 187.4 (
Slide 9: Backlog
\\ Backlog1 1• Backlog decreased by $41.0 million (-18%) from Q1 2020 to $190.8 million • Equipment backlog decreased $29.8 million driven primarily by mining shovel deliveries in AB & QC 2• Backlog decreased by $105.7 million (-36%) compared to Q2 2019 • Equipment backlog decreased $85.5 million dr
Slide 10: Inventory
\\ Inventory 1• Inventory (including consignment) decreased by $51.0 million from Q1 2020 to $499.7 million6 • Net of consignment, balance sheet inventory decreased by $29.1 million as a result of lower equipment inventory in the construction and forestry categories and lower parts inventory in the
Slide 11: Cash Flow and Leverage
\\ Cash Flow and Leverage Cash Flow from Operating Activities ($20.9) ($16.3)7 Leverage1 Total committed credit facilities Wajax Financial Results – Q2 2020 (August 7, 2020) 11
Slide 12: Balance Sheet
\\ Balance Sheet Adjusted Return On Net Assets (RONA)1 15.0% • RONA decrease due primarily to higher trailing 12-month average Net Assets 10.0% 11.8% 11.2% • RONA is expected to improve as Net Assets 10.6% decline as a result of our efforts to reduce inventory and working capital 5.0% • Quarters wit
Slide 13: 2020 Outlook
\\ 2020 Outlook • Current business conditions, relating primarily to COVID-19 concerns and secondarily to weak resource markets in western Canada, continued to have a negative effect on the Corporation’s results during the second quarter of 2020. The volume declines in the first two months of the qu
Slide 14: Appendix
Appendix 1 -\\ Together We Get More Done:
Slide 15: Endnotes
\\ Endnotes 1. This measure does not have a standardized meaning prescribed by GAAP. See Non-GAAP and Additional GAAP measures in Appendix 2. 2. See the Results of Operations section of the Q2 2020 Management’s Discussion and Analysis. 3. Total Recordable Incident Frequency (“TRIF”) measures the com
Slide 16: Appendix
Appendix 2 -\\ Together We Get More Done:
Slide 17: Non-GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures Except where noted, all figures are in millions of Canadian dollars, except per share data and ratio calculations. This presentation contains certain non-GAAP and additional GAAP measures that do not have a standardized meaning prescribed by GAAP. Therefore,
Slide 18: Non-GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures EBITDA Net earnings (loss) before finance costs, income tax expense, depreciation and amortization. EBITDA is a non-GAAP measure commonly used as an indicator of a company’s cash operating performance. Adjusted net earnings (loss) Net earnings (loss) before
Slide 19: Non-GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures Net assets Net assets are defined as total current and non-current assets excluding cash, income taxes receivable, derivative instruments, deferred tax asset and lease assets, less total current and non-current liabilities excluding bank indebtedness, income
Slide 20: Non-GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures Reconciliation of the Corporation’s net earnings to adjusted net earnings and adjusted basic and diluted earnings per share is as follows: Three months ended Six months ended June 30 June 30 2020 2019 2020 2019 Net earnings $ 10.2 $ 11.9 $ 14.3 $ 19.8 Restru
Slide 21: Non-GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures Reconciliation of the Corporation’s net earnings to EBT, EBIT, EBITDA and Adjusted EBITDA is as follows: For the twelve months ended June 30 2020 Net earnings $ 34.0 Income tax expense 12.1 EBT 46.1 Finance costs 22.4 EBIT 68.4 Depreciation and amortization
Slide 22: Non-GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures Calculation of the Corporation’s funded net debt, debt and leverage ratio is as follows: June 30 2020 Bank indebtedness $ 11.5 Debentures 54.4 Long-term debt 217.1 Funded net debt $ 283.0 Letters of credit 6.5 Debt $ 289.5 Leverage ratio(1) 2.82 Senior secur
Slide 23: Non-GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures Reconciliation of the Corporation’s net earnings to EBT, EBIT and Adjusted EBIT and the calculation of the Corporation’s RONA is as follows: For the twelve For the twelve For the twelve months ended months ended months ended June 30 March 31 June 30 2020 202
Slide 24: Non-GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures (5) In 2019, the Corporation incurred professional fees relating to the CSC project. (6) For the twelve months ended June 30, 2020 – Includes the $1.2 million pro-forma occupancy costs that would be incurred in the second quarter of 2020, the $1.3 million pr
Slide 25: wajax.com
b viata \\ Together We Get More Done. Wajax.com