Slide 1: Wajax Financial Results Q4 2019
Wajax Financial Results Q4 2019 March 3, 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: Highlights – Strong Fourth Quarter
\\ Highlights – Strong Fourth Quarter • Higher revenue in eastern Canada due to sales gains in a majority of product categories, including higher forestry, material handling and power generation Revenue $403.9 equipment sales 4% million • Central and western Canada revenues were lower mostly due to
Slide 4: Revenue by Region
\\ Revenue by Region Q4 20191 YTD 20191 • Revenue increased $14.2 million, or 3.6%, to $403.9 • For the twelve months ended December 31, 2019, million in Q4 2019 versus $389.8 million for the revenue increased 4.8%, or $71.4 million, to same period in 2018 $1,553.0 million versus $1,481.6 million in
Slide 5: Revenue Analysis
\\ Revenue Analysis Q4 2019 YTD 2019 • $17.4 million (12.5%) increase • $19.1 million (-3.5%) decrease C compared to Q4 2018 C compared to 2018 Equipment Sales 19% 19% E • Higher material handling sales E • Lower construction sales in 34% in western and eastern western and central Canada, 38% $156.5
Slide 6: Revenue by Category
\\ Revenue by Category YTD* Category1 Q4 2019 Q4 2018 Change YTD 2019 YTD 2018 Change E W C Construction $ 54.8 $ 69.0 $ (14.2) $ 228.1 $ 273.2 $ (45.1) ↑ ↓ ↓ Material Handling 49.0 37.2 11.8 163.9 143.7 20.2 ↑ ↑ ↓ ERS 40.9 37.7 3.2 156.3 88.1 68.2 ↑ ↑ ↑ Industrial Parts 88.5 90.5 (2.0) 366.6 361.7
Slide 7: Adjusted Basic EPS
\\ Adjusted Basic EPS1 Q4 2019 YTD 2019 • Q4 adjusted net earnings of $10.1 million, or $0.51 • YTD 2019 adjusted net earnings of $41.9 million, or per share, representing a $1.8 million increase over $2.10 per share, representing a $2.0 million the prior year period1 increase over the prior year pe
Slide 8: Backlog
\\ Backlog1 1• Backlog decreased by $69.9 million (-24%) from Q3 2019 to $218.1 million • Equipment backlog decreased $63.3 million driven primarily by lower mining, forestry, power generation and material handling orders 2• Backlog increased by $11.2 million (5%) compared to Q4 2018 • Equipment bac
Slide 9: Inventory
\\ Inventory 1• Inventory (including consignment) decreased by $37.2 million from Q3 2019 to $538.2 million1 • Consignment inventory decreased $17.0 million and consists primarily of construction excavators 2• Inventory (including consignment) increased by $43.2 million compared to Q4 20181 • Net of
Slide 10: Balance Sheet
\\ Balance Sheet Credit Capacity Adjusted Return On Net Assets (RONA)1 15.0% 4.0x Available 12.9% Capacity 12.5% 3.0x 12.1% 11.8% 2.60x Leverage ratio1 10.0% Q4/18 Q3/19 Q4/19 Debt / EBITDA 2.0x 2.10x Working Capital Efficiency1 Senior secured leverage ratio1 Target Range 30% 3.5x 3.0x 1.0x 28% 3.0x
Slide 11: Leverage Target Range
\\ Leverage Target Range Description of leverage range has been revised in Q4 disclosure.1 Key points: • Target range 1.5 – 2X for working capital and normal-course capital investment programs • Tolerance to be outside of range: • During changes to economic cycle (consistent with prior range descrip
Slide 12: 2020 Outlook
\\ 2020 Outlook • The more challenging market conditions that emerged in 2019 are expected to continue in 2020 resulting in pressure on capital equipment demand. Equipment utilization rates, however, are expected to be generally stable on a full year basis, which will support parts and service volum
Slide 13: Appendix
Appendix -\\ Together We Get More Done:
Slide 14: Non-GAAP and Additional 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 15: Non-GAAP and Additional 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 Net earnings (loss) before after-t
Slide 16: Non-GAAP and Additional 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 17: Non-GAAP and Additional 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 Twelve months ended December 31 December 31 2019 2018 2019 2018 Net earnings $ 12.2 $ 6.1 $ 39.5 $ 3
Slide 18: Non-GAAP and Additional 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 December 31 2019 Net earnings $ 39.5 Income tax expense 14.3 EBT 53.8 Finance costs(1) 19.7 EBIT 73.5 Depreciation and amorti
Slide 19: Non-GAAP and Additional GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures Calculation of the Corporation’s funded net debt, debt and leverage ratio is as follows: December 31 2019 Cash $ (3.2) Debentures 54.1 Long-term debt 225.6 Funded net debt(1) $ 276.5 Letters of credit 5.5 Debt $ 282.0 Leverage ratio(2) 2.60 Senior secured le
Slide 20: Non-GAAP and Additional 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 months ended months ended ended December 31 September 30 December
Slide 21: Non-GAAP and Additional GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures (4) For the twelve months ended December 31, 2019 and September 30, 2019 – Includes the $0.4 million CSC project costs recorded in the second quarter of 2019 and the $0.7 million CSC project costs recorded in the first quarter of 2019. (5) For the twelve mon
Slide 22: wajax.com
b viata \\ Together We Get More Done. Wajax.com