Armtec Reports Financial Results for the Second Quarter 2014

CONCORD, ON, Aug. 7, 2014 /CNW/ - Armtec Infrastructure Inc. ("Armtec" or the "Company") (TSX: ARF; ARF.DB) ("Armtec") today reported financial results for the second quarter ended June 30, 2014.

 

Summary

 

• Revenue for the three months ended June 30, 2014 was $117.8 million, a $6.1 million or 5.0% decrease over the same period in 2013. Revenue in Drainage Solutions ("Drainage") was $42.3 million, down 5.8% from the same period last year. Revenue in Precast Concrete Solutions ("Precast") was $75.4 million, or 4.5% below 2013 levels. Year to date, revenue was $187.3 million, a $15.5 million or 7.7% decrease over the first six months of 2013. Drainage revenue was $58.2 million, a decrease of 7.8% compared to the same period in 2013. Precast revenue of $129.1 million represents a decrease of 7.6% over 2013 levels.
 

• Earnings from operations for the second quarter of 2014 were $9.1 million, compared to $12.1 million in the same period of 2013. Performance in both of the business units ("BU or BUs") was impacted by lower revenue, unfavourable product mix and, in Drainage, increased raw material input costs and competition that compressed margins. Year to date, the loss from operations was $1.4 million, compared to earnings of $9.1 million in the same period of 2013.
 

• Gross margin in the second quarter was $23.0 million, a reduction of $3.4 million over the comparative period in 2013. As a percentage of revenue, gross margin was 19.5%, compared to 21.3% in the prior year. Year to date, gross margin was $26.1 million, or 13.9% of revenue, a reduction of $10.5 million as compared to $36.6 million, or 18.0% of revenue, for the first half of 2013.
 

• Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") for the second quarter of 2014 was $12.0 million compared to $15.1 million in the year prior. In the first half of 2014, EBITDA was $4.4 million, compared to $15.1 million in 2013 (please see the section entitled "Non-GAAP Measure").
 

• The full year EBITDA is estimated to range from $30 to $34 million ($16 to $18 million for the three months ended September 30, 2014). The timing of engineered precast projects in the Prairies and Soundwall markets combined with the degree of success of recently announced price increases in the Drainage BU are projected as the main variables influencing second half profitability. The Company remains focused on executing its performance improvement plans to improve EBITDA in the second half of the year.
 

"Despite the challenging first half of the year, management remains focused on delivering improved results in the second half of 2014," said Mark Anderson, President and Chief Executive Officer. "Looking ahead, we remain excited about Armtec's role in Canada's infrastructure market and the opportunities that lie ahead - like the $70 million soundwall project announced in July - that will contribute to our financial performance and strengthen our market position going forward." (Note that this is forward-looking information and for more information please see the section entitled "Caution Regarding Forward-Looking Statements.")

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