Wajax Corporation · TSX:WJX
Wajax — Q1 2019 Earnings Presentation
21 slides from Wajax's earnings presentation, May 7, 2019
Slide 1: Wajax Financial Results Q1 2019
Wajax Financial Results Q1 2019 May 7, 2019
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 First Quarter
\\ Highlights – Strong First Quarter • Up 9% on gains in Eastern and Central Canada, led Revenue1 $374.6 by ERS and material handling, plus strong mining 9% million parts and service sales in western Canada • SG&A as a percentage of revenue increased 100bps EBIT1,2 $15.4 to 15.2% from 14.2% in the p
Slide 4: Revenue by Region
\\ Revenue by Region Q1 20191,2 • Revenue increased $32.1 million, or 9.4%, to $374.6 million in Q1 2019 versus $342.4 million for the same period in 2018 • Increase due to higher sales in Central and Eastern regions, led by strong gains in the ERS, mining and material handling categories $74 $72 3%
Slide 5: Revenue Analysis
\\ Revenue Analysis Q1 2019 • $11.8 million (9.5%) decrease Equipment Sales C compared to Q1 20181 18% E • Lower construction sales in 37% western and central Canada $112.1 and lower mining sales in million western Canada, offset W partially by higher power 45% generation sales in central and easter
Slide 6: Revenue by Category
\\ Revenue by Category YTD* Category1 Q1 2019 Q1 2018 Change YTD 2019 YTD 2018 Change E W C Construction $ 55.4 $ 64.6 $ (9.2) ↑ ↓ ↓ Material Handling 41.7 35.6 6.1 ↑ ↑ - ERS 37.1 16.8 20.3 ↑ ↑ ↑ Industrial Parts 93.4 88.9 4.5 ↑ ↓ ↑ Forestry 33.2 31.8 1.4 ↑ ↓ - On-Highway 25.1 26.7 (1.6) ↓ ↓ ↑ Power
Slide 7: Adjusted Basic EPS
\\ Adjusted Basic EPS1 Q4 2018 Q1 2019 • Q1 2019 adjusted net earnings of $8.7 million, or $0.43 per share, representing a $0.9 million decrease over the prior year period1,2 • Decrease is primarily attributable to higher finance costs and SG&A expenses • SG&A as a percentage of revenue increased 10
Slide 8: Backlog
\\ Backlog1 1• Backlog increased by $48.3 million (23%) from Q4 2018 to $255.3 million • Equipment backlog increased $41.9 million due primarily to higher mining, material handling and forestry orders 2• Backlog increased by $49.9 million (24%) compared to Q1 2018 • Equipment backlog increased $41.4
Slide 9: Inventory
\\ Inventory 1• Inventory (including consignment) increased by $53.0 million from Q4 2018 to $548.0 million1 • Consignment inventory increased $26.7 million and consists primarily of construction excavators ordered to meet our 2019 sales objectives • Net of consignment and additions from Delom, bala
Slide 10: Robust Balance Sheet
\\ Robust Balance Sheet Credit Capacity Adjusted Return On Net Assets (RONA)1,2 15.0% 4.0x Available 13.0% 12.9% Capacity 12.5% 12.1% 3.0x 2.89x Q1 2019 10.0% Q1/18 Q4/18 Q1/19 Debt / EBITDA 2.0x Working Capital Efficiency1 Target Range 25% 2.9x 3.0x 2.7x 2.5x 2.5x 1.0x 23% 22.8% 21.9% 2.0x 21.3% 20
Slide 11: IFRS Impacts
\\ IFRS 16 Impacts IFRS 16 Adjustments Q1 2019 Opening Q1 2019 Q1 Impact ($ thousands) (before adjustments) Adjustments (as reported) Balance Sheet Current assets $ 678,706 $- $- $ 678,706 Non-current assets 205,233 81,222 (4,433) 282,022 Total assets $ 883,939 $ 81,222 $ (4,433) $ 960,728 Current l
Slide 12: 2019 Outlook
\\ 2019 Outlook • Our plans are based on an expectation of generally stable market conditions in eastern and central Canada • Market conditions in western Canada are expected to be less favorable than 2018. In western Canada, activity remains stable to positive in important end markets such as the o
Slide 13: Appendix
Appendix \\ Together We Get More Done?
Slide 14: 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 15: Non-GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures EBITDA Net earnings 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-tax res
Slide 16: 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 17: 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 March 31 2018 2019 (As adjusted)(3) Net earnings $ 7.9 $ 9.3 Restructuring and other related costs (
Slide 18: 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 March 31 2019 Net earnings $ 34.5 Income tax expense 13.4 EBT 47.9 Finance costs 11.6 EBIT 59.5 Depreciation and amortization
Slide 19: Non-GAAP Measures
\\ Non-GAAP1 and Additional GAAP Measures Calculation of the Corporation’s funded net debt, debt and leverage ratio is as follows: March 31 2019 Cash $ (5.8) Long-term debt 278.2 Funded net debt(1) $ 272.4 Letters of credit 5.6 Debt $ 278.1 Leverage ratio(2) 2.89 (1) Effective with the reporting per
Slide 20: 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 March 31 December 31 March 31 201
Slide 21: Wajax.com
bial \\ Together We Get More Done. Wajax.com