News Column

TerraVest announces continued growth in EBITDA, closing of the NWP Acquisition, Declaration of its Quarterly Dividend and Quarterly Conference Call

August 13, 2014

VEGREVILLE, AB, Aug. 13, 2014 /CNW/ - TerraVest Capital Inc. (TSX: TVK) ("TerraVest" or the "Company") a manufacturer of fuel containment and pressure vessels as well as an oil field service provider is pleased to announce growth in EBITDA for the three and nine months ended June 30th, 2014; the closing of the acquisition of substantially all the operating assets and liabilities from NWP Industries Inc. ("NWP"); and the declaration of its quarterly dividend.

As previously announced, on August 8th 2014, TerraVest successfully closed the acquisition of substantially all the operating assets and liabilities from NWP.  Management believes the transaction will be immediately accretive to cash available for distribution by approximately 10%.  In addition, management anticipates material operating efficiencies to accrue over the next 12 to 18 months.

The integration of Gestion Jerico Inc. ("Jerico"), TerraVest's acquisition completed on February 15th 2014, continues to move forward as planned.  Jerico made a significant contribution to TerraVest's EBITDA in the quarter and management anticipates even greater contribution for the remainder of the fiscal year.

"We continue to take the necessary steps to deliver on what we conveyed to the market place; which was to enhance shareholder value" said Charles Pellerin, Executive Chairman of Gestion Jerico and TerraVest.

The quarter ended June 30th is generally TerraVest's weakest quarter as two out of three of its businesses are subject to seasonal effects known as spring breakup and Jerico prepares for greater retail sales in the winter months.

FINANCIAL INFORMATION

All amounts in this news release are stated in thousands of Canadian dollars, except per share data.

For the three months ended June 30th, 2014 TerraVest reported:















Three months ended June 30, 2014



Fabrication

Service

Fuel Containment 

Corporate 1

Consolidated



$

$

$

$

$

Revenue

7,921

6,123

15,688

-

29,732

EBITDA

1,065

973

2,839

(546)

4,331

EBIT 2

936

334

1,941

(549)

2,662

Non-cash items

48

53

(406)

18

(287)

Financial expense

88

73

206

418

785

Income tax expense (recovery)3

-

(59)

(3,344)

3,729

326

Net income (loss) for the period5

800

267

5,485

(4,714)

1,838

Cash Flow before changein Working Capital

952

900

2,390

(927)

3,315

Change in Working Capital

4,500

745

(3,064)

181

2,362

Cash flow from operations

5,452

1,645

(674)

(746)

5,677

Purchase of property, plant and equipment

(190)

(417)

(414)

-

(1,021)

Proceeds of disposal of property, plant and equipment

55

334

(1)

-

388

Free Cash Flow

5,317

1,562

(1,089)

(746)

5,044















 







Three months ended June 30, 2013



Fabrication

Service

Fuel Containment 4

Corporate 1

Consolidated



$

$

$

$

$

Revenue

6,662

4,766

-

-

11,428

EBITDA

1,172

577



(258)

1,491

EBIT 2

1,031

100

-

(257)

874

Financial expense

74

97

-

-

171

Income tax expense (recovery) 3

-

178

-

71

249

Net income (loss) for the period5

957

(175)

0

(328)

454

Cash Flow before changein Working Capital

1,099

417

-

(346)

1,170

Change in Working Capital

3,764

454

-

(256)

3,962

Cash flow from operations

4,863

871

-

(602)

5,132

Purchase of property, plant and equipment

(14)

(967)

-

2

(979)

Free Cash Flow

4,849

(96)

-

(600)

4,153



 

Note 1: Corporate is not a separate reportable segment. It includes expenses incurred by at the head-office of the Company and is present for reconciliation purposes.

Note 2: Earnings Before Interest and Taxes ("EBIT") includes the cost of sales, general and administration expenses, depreciation and amortization. 

Note 3: Income taxes include both current income taxes and deferred income taxes, the latter of which are primarily included in Corporate.

Note 4: There are no comparative numbers for the Fuel Containment segment as the business in that segment was acquired on February 15, 2014.

Note 5: Net Income after deducting non-controlling interest.

TerraVest's third quarter of fiscal 2014 saw increases in both revenues and EBITDA of approximately 160% and 190% versus the prior comparable period.

Free Cash Flow increased primarily as a result improved operating performance and decreases in working capital in the quarter associated with TerraVest's Western Canadian businesses.

Outlook

All three of the Company's operating subsidiaries are performing well and management expects this to continue for the remainder of the fiscal year 2014.  Heightened levels of activity continue to persist in the oil and gas industry in Western Canada, which RJV and Diamond are benefitting from.  Jerico also anticipates a strong year end as a result of higher activity driven by additional product deliveries that were delayed due to poor weather conditions earlier in the year and continued demand for propane distribution products.

Opportunistic acquisitions meeting the Company's criteria continue to be sought out.

Conference Call

TerraVest will hold a conference call on Thursday August 14th at 10:00am Eastern Standard Time to discuss its financial results for the quarter ended June 30th, 2014.

To participate in the call, please dial: 416.340.2217 or 888.789.9572 using Participant code: 5293071

For those unable to attend the call, an instant replay of the call will be available until August 21st, 2014 at 905.694.9451 using passcode 6824869.

Dividend

TerraVest is also pleased to announce that The Board of Directors has declared its quarterly dividend of 10 cents per share upon the outstanding Common Shares in the capital stock of the Company being payable on October 10th, 2014 to shareholders of record as at the close of business on September 30th, 2014. The ex-dividend date is September 26th, 2014. The dividend is designated an "eligible dividend" for Canadian income tax purposes.

Additional information can be found in TerraVest's unaudited interim condensed consolidated financial statements and MD&A which are available on SEDAR at www.sedar.com.

Caution Regarding Forward-Looking Statements

This news release contains forward-looking statements.  All statements other than statements of historical fact contained in this news release are forward-looking statements, including, without limitation, statements regarding our strategic direction and evaluation of the business segments and TerraVest as a whole, and other plans and objectives of or involving TerraVest. Readers can identify many of these statements by looking for words such as "expects" and "will" and similar words or the negative thereof. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

By their nature, forward-looking statements require us to make assumptions and, accordingly, forward looking statements are subject to inherent risks and uncertainties. There is significant risk that the forward-looking statements will not prove to be accurate. We caution readers of this news release not to place undue reliance on our forward-looking statements because a number of factors may cause actual future circumstances, results, conditions, actions or events to differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements and the assumptions underlying the forward-looking statements. 

Assumptions and analysis about the performance of TerraVest as a whole and its business segments, the markets in which the business segments compete and the prospects and values of the business segments are considered in setting the business plan for TerraVest, plans and/or ability to pay dividends, outlook for operations, financial position, results and cash flow, other plans and objectives and in making related forward-looking statements. Such assumptions include, without limitation, demand for products and services of the business segments in respect of the Canadian and other markets in which the businesses are active will be stable, and that input costs to business segments do not vary significantly from levels experienced historically. Should any of these factors or assumptions vary, actual results may differ materially from the forward-looking statements.

The information set forth under "Risk Factors" in the annual information form of TerraVest dated December 11, 2013 and under "Risk Factors" in the MD&A of TerraVest for the three December 31, 2013, identifies risk factors that could affect the operating results and performance of TerraVest and its business segments and the values of the business segments and TerraVest as a whole. We caution that the lists of factors discussed in such information is not exhaustive and that, when relying on forward-looking statements to make decisions with respect to TerraVest, investors and others should carefully consider the factors discussed, as well as other uncertainties and potential events, and the inherent risks and uncertainties of forward-looking statements.  The forward-looking statements herein are made based on the assumption that TerraVest will not be affected by such risks, but that, if TerraVest is affected by such risks, the forward-looking statements may become inaccurate.

The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.  The forward-looking statements included in this news release are made as of the date of this news release.  Except as required by applicable securities laws, TerraVest does not undertake to update such forward-looking statements.


Non-GAAP Financial Measures

For Non-GAAP financial measures please refer to the definitions outlined the TerraVest Management's Discussion and Analysis dated August 13, 2014.

 

SOURCE TerraVest Capital Inc.


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