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MISSISSAUGA, ONTARIO -- (Marketwire) -- 03/19/13 -- Strongco Corporation (TSX: SQP) today reported financial results for the fourth quarter and year ended December 31, 2012.
Highlights(i)
-- Total revenues increased by 10% to $464.2 million-- Gross margin increased by 7% to $86.5 million-- Operating earnings increased by 9% to $18.5 million-- EBITDA increased to $49.1 million from $43.1 million-- Net income totalled $7.6 million compared to $9.9 million-- Earnings per share of $0.58 compared to $0.76 per share
(i) Comparisons are between full year 2012 and full year 2011
"In 2012, Strongco increased revenues, gross margin and EBITDA. At the same time, we expanded our market presence with the opening of four new branches in regional markets across Canada. We are already seeing the benefit of the investment in these new branches as our clients have responded positively to our greater commitment to better service," said Robert Dryburgh, President and Chief Executive Officer of Strongco. "However, we have accumulated a higher level of inventory to mitigate our concerns arising from the poor delivery of equipment we experienced in 2011. As a result, related equipment notes were higher than planned as was the corresponding interest that offset the gains we made in operating profits, reducing net income year over year."
Financial Highlights(i)($ millions except per share amounts)----------------------------------------------------------------------------Period ended December 31 3 months 12 months---------------------------------------------------------------------------- 2012 2011 2012 2011----------------------------------------------------------------------------Revenues $ 115.9 $ 113.2 $ 464.2 $ 423.2----------------------------------------------------------------------------Gross margin 20.7 20.8 86.5 80.6----------------------------------------------------------------------------EBITDA 13.1 12.5 49.1 43.1----------------------------------------------------------------------------Net income 0.6 2.1 7.6 9.9----------------------------------------------------------------------------Basic and diluted earnings per share $ 0.05 $ 0.15 $ 0.58 $ 0.76----------------------------------------------------------------------------(i) All financial information conforms to International Financial Reporting Standards.
Fourth Quarter 2012 Review
Total revenues in the three months ended December 31, 2012 were $115.9 million, up 2% from the fourth quarter of 2011. Equipment sales increased by 1% from last year to $75.0 million; rental revenues were $10.4 million, up 17% from $8.9 million; and product support revenues totalled $30.5 million compared to $29.8 million from the same period in the prior year.
Gross margin decreased by $0.1 million to $20.7 million during the fourth quarter of 2012. As a percentage of revenue, the overall gross margin was 17.9%, down from 18.4% last year due primarily to a lower margin on equipment sales.
