Wajax Corporation · TSX:WJX
Wajax — Q3 2020 Earnings Presentation
22 slides from Wajax's earnings presentation, Nov 3, 2020
Slide 1: Wajax Financial Results – Q3 2020
Wajax Financial Results – Q3 2020 November 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: Non-GAAP and Additional GAAP Measures
\\ Non-GAAP and Additional GAAP Measures This presentation contains certain non-GAAP and additional GAAP 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 cautio
Slide 4: 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 5: Highlights – Third Quarter
\\ Highlights – Third Quarter • Revenue decline due to lower sales in western and -7% Revenue $340.6 eastern Canada offset partially by higher central million Canada sales 4% • EBIT decline was primarily attributable to lower -8% EBIT1 $14.3 revenue and higher restructuring costs, partially offset m
Slide 6: Adjusted Net Earnings Bridge
\\ Adjusted Net Earnings Bridge • In the third quarter of 2020, the Corporation implemented workforce reductions primarily in response to the economic conditions created by COVID-19 • A pre-tax restructuring cost of $7.7 million ($5.6 million after-tax) was recognized in the quarter relating primari
Slide 7: CEWS Program
\\ CEWS Program • During the third quarter, the Corporation qualified for the CEWS program and recognized $5.4 million as a reimbursement of compensation expense which was allocated as follows: • Cost of sales: $2.6 million • Selling and administrative expenses: $2.8 million Gross Profit • Excluding
Slide 8: Revenue by Region
\\ Revenue by Region Q3 20201 YTD 20201 • Revenue decreased $24.5 million, or 6.7%, to • For the nine months ended September 30, 2020, $340.6 million in Q3 2020 versus $365.1 million for revenue decreased 9.4%, or $107.5 million, to the same period in 2019 $1,041.6 million versus $1,149.1 million in
Slide 9: Revenue Analysis
\\ Revenue Analysis Q3 2020 YTD 2020 • $3.5 million (-3.2%) decrease • $41.0 million (-11.2%) decrease Equipment Sales C compared to Q3 2019 C compared to 2019 22% E • Lower forestry and engines and 21% • Lower forestry and engines and E 34% transmissions sales across all regions, 37% transmissions
Slide 10: Revenue by Category
\\ Revenue by Category YTD* Category5 Q3 2020 Q3 2019 Change YTD 2020 YTD 2019 Change E W C Construction $ 53.0 $ 53.0 $ - $ 157.6 $ 173.3 $ (15.7) ↑ ↓ ↓ Material Handling 36.1 30.8 5.3 114.0 114.9 (0.9) ↓ ↑ ↑ ERS 44.4 40.4 4.0 132.2 115.4 16.8 - ↑ ↑ Industrial Parts 83.8 90.7 (6.9) 257.1 278.1 (21.
Slide 11: Backlog
\\ Backlog1 1• Backlog decreased by $18.5 million (-10%) from Q2 2020 to $172.2 million • Equipment backlog decreased $15.3 million driven primarily by lower orders in most categories, but most notably in the construction, material handling and ERS categories 2• Backlog decreased by $115.7 million (
Slide 12: Inventory
\\ Inventory 1• Inventory (including consignment) decreased by $39.2 million (-8%) from Q2 2020 to $463.2 million6 • Net of consignment, balance sheet inventory decreased by $23.7 million (-6%) as a result of lower equipment inventory in the construction, power generation and mining categories • Con
Slide 13: Cash Flow and Leverage
\\ Cash Flow and Leverage Cash Flow from Operating Activities (20.9) (16.3)7 ($16.3)7 Leverage1 Total committed credit facilities Wajax Financial Results – Q3 2020 (November 3, 2020) 13
Slide 14: Balance Sheet
\\ Balance Sheet Adjusted Return On Net Assets (RONA)1 15.0% • RONA decreased slightly from Q2 2020 • RONA decrease from Q3 2019 due primarily to 11.8% higher trailing 12-month average net assets 10.0% 10.6% 10.4% • RONA is expected to improve as net assets decline as a result of our efforts to redu
Slide 15: 2020 Outlook
\\ 2020 Outlook • Current business conditions, relating primarily to COVID-19 and secondarily to weak resource markets in western Canada, continued to have a negative effect on the Corporation’s results during the third quarter of 2020. Volume trends in comparison to last year improved as the quarte
Slide 16: Appendix 1
Appendix 1 -\\ Together We Get More Done:
Slide 17: Endnotes
\\ Endnotes 1. This measure does not have a standardized meaning prescribed by GAAP. Please see Wajax’s Management’s Discussion and Analysis for the three and nine months ended September 30, 2020 under the heading “Non-GAAP and Additional GAAP Measures”, which is available on SEDAR at www.sedar.com
Slide 18: Appendix 2
Appendix 2 -\\ Together We Get More Done:
Slide 19: 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 the following non-GAAP and additional GAAP measures that do not have a standardized meaning prescribed by GAAP and a
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 ended months ended months ended September 30 June 30 September 30
Slide 21: Non-GAAP and Additional 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 September 30, 2020 – Includes the $1.0 million pro-forma occupancy costs that would be incurred in the third quarter of 2020, the $1.2 millio
Slide 22: Wajax.com
b viata \\ Together We Get More Done. Wajax.com