Finning Delivers Record Product Support Revenues in Q1 2012 and Confirms Strong Outlook
(firmenpresse) - VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 05/08/12 -- Finning International Inc. (TSX: FTT) -
Q1 2012 HIGHLIGHTS
Finning International Inc. (TSX: FTT) reported a 16% increase in quarterly revenues to $1.5 billion over Q1 2011, driven by strong new equipment sales in Canada and record product support revenues in South America and UK and Ireland in local currency. Earnings before finance costs and income taxes (EBIT) declined by 7% to $99 million, and EBIT margin was 6.7% compared to 8.4% in Q1 and 5.9% in Q4 2011. Basic earnings per share (EPS) was $0.39 compared to $0.42 in Q1 2011.
"Strong prevailing market conditions across our regions are reflected in our excellent start to the year and provide a solid platform for growth throughout 2012. We posted another quarter of record product support revenues as robust customer activity and the large installed equipment base in our territories drove demand for parts, service and rebuilds," said Mike Waites, President and CEO of Finning International. "With the acquisition of the former Bucyrus distribution business just completed in Finning South America and the UK and Ireland, we are already seizing sales and service opportunities related to our expanded product portfolio."
"Based on our confidence in our growth prospects, we are pleased to increase our quarterly dividend. We will continue to drive long-term shareholder value and meet our mid-term EBIT margin targets through disciplined execution of our strategy and achievement of our priorities," continued Mr. Waites. "This year we are relentlessly focused on realizing improved profitability in Canada, successfully integrating the former Bucyrus business and strengthening the balance sheet. I am excited about a bright future ahead as Finning stands poised to capitalize on our company's vast growth opportunities in 2012 and beyond."
Q1 2012 FINANCIAL SUMMARY
Q1 2012 HIGHLIGHTS BY OPERATIONS
Canada
South America
United Kingdom and Ireland
CORPORATE AND BUSINESS DEVELOPMENTS
Dividend
The Board of Directors has approved an increase in the quarterly dividend to $0.14 per share from $0.13 per share, payable on June 8, 2012 to shareholders of record on May 25, 2012. The increase in dividend reflects the Company's confidence in the outlook and expectation for revenue and earnings growth. The Company remains committed to increasing the dividend component of the total shareholder return commensurate with sustainable earnings growth. This dividend will be considered an eligible dividend for Canadian income tax purposes.
Finning completes acquisition of Bucyrus distribution business in South America and the U.K.
On May 2, 2012 the Company announced that it completed the previously announced acquisition from Caterpillar of the former Bucyrus distribution and support business in portions of South America and in the U.K. The transaction is valued at US$306 million for Finning in South America and the U.K. An estimated US$159 million will be paid upon completion of the transaction for Finning Canada. The acquisition will be financed with debt and is expected to be accretive to earnings in 2012. As part of the Company's sequenced integration approach, the acquisition of the Canadian portion is now tracking to close at the end of the third quarter of 2012 to ensure a smooth transition of the business. The acquired distribution and support business expands Finning's mining product offerings, provides additional product support opportunities and adds complementary customer service capabilities.
Finning employees in South America reach labour agreement
On April 5, 2012, the Company announced that its South American division and the three unions representing approximately 90 percent of its unionized workforce in Chile reached a new four-year collective agreement. The agreement replaces the previous four-year agreement, and is set to expire April 1, 2016.
Finning announces issuance of US $300 Million of Notes in the US Private Placement Market
On April 3, 2012, Finning announced that it completed a US private placement of US $300 million aggregate principal amount of senior unsecured notes, which will rank pari passu with Finning's existing senior unsecured obligations. Proceeds were used to fund the May 2, 2012 purchase from Caterpillar of the distribution and support business formerly carried on by Bucyrus in Finning's territories in South America.
To download Finning's complete Q1 2012 results in PDF, please open the following link:
To download the CEO and CFO certification letters once they have been filed on SEDAR, please open the following link:
Q1 2012 RESULTS INVESTOR CALL
Management will hold an investor conference call on Wednesday, May 9 at 11:00 am Eastern Time. Dial-in numbers: 1-866-223-7781 (anywhere within Canada and the U.S.) or (416) 340-8018 (for participants dialing from Toronto and overseas).
The call will be webcast live and subsequently archived at . Playback recording will be available at 1-800-408-3053 from 1:00 pm Eastern Time on May 9 until May 16. The pass code to access the playback recording is 4463383 followed by the number sign.
ABOUT FINNING
Finning International Inc. (TSX: FTT) is the world's largest Caterpillar equipment dealer delivering unrivalled service to customers since 1933. Finning sells, rents and services equipment and engines to help customers maximize productivity. Headquartered in Vancouver, B.C., the Company operates in western Canada, Chile, Argentina, Bolivia, Uruguay, as well as in the United Kingdom and Ireland.
Footnotes
Forward-Looking Disclaimer
This report contains statements about the Company's business outlook, objectives, plans, strategic priorities and other statements that are not historical facts. A statement Finning makes is forward-looking when it uses what the Company knows and expects today to make a statement about the future. Forward-looking statements may include words such as aim, anticipate, assumption, believe, could, expect, goal, guidance, intend, may, objective, outlook, plan, project, seek, should, strategy, strive, target, and will. Forward-looking statements in this report include, but are not limited to, statements with respect to: expectations with respect to the economy and associated impact on the Company's financial results; expected revenue and SG&A levels and EBIT growth; anticipated generation of free cash flow (including projected net capital and rental expenditures), and its expected use; anticipated defined benefit plan contributions; the expected target range of Debt Ratio; the impact of new and revised IFRS that have been issued but are not yet effective; the expected timetable for completion of the proposed transaction between the Company and Caterpillar to acquire the distribution and support business formerly operated by Bucyrus in Finning's Canadian dealership territory; growth prospects for the former Bucyrus business being acquired by the Company in Finning's dealership territories (Bucyrus) and the competitive advantages of the business being acquired; expected future financial and operating results generated from Bucyrus; anticipated benefits and synergies of Bucyrus; the expected financing structure for the Bucyrus transaction in Finning (Canada); and the expected impact of Bucyrus on Finning's earnings. All such forward-looking statements are made pursuant to the 'safe harbour' provisions of applicable Canadian securities laws.
Unless otherwise indicated by us, forward-looking statements in this report describe Finning's expectations at May 8, 2012. Except as may be required by Canadian securities laws, Finning does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
Forward-looking statements, by their very nature, are subject to numerous risks and uncertainties and are based on several assumptions which give rise to the possibility that actual results could differ materially from the expectations expressed in or implied by such forward-looking statements and that Finning's business outlook, objectives, plans, strategic priorities and other statements that are not historical facts may not be achieved. As a result, Finning cannot guarantee that any forward-looking statement will materialize. Factors that could cause actual results or events to differ materially from those expressed in or implied by these forward-looking statements include: general economic and market conditions; foreign exchange rates; commodity prices; the level of customer confidence and spending, and the demand for, and prices of, Finning's products and services; Finning's dependence on the continued market acceptance of Caterpillar's products and Caterpillar's timely supply of parts and equipment; Finning's ability to continue to improve productivity and operational efficiencies while continuing to maintain customer service; Finning's ability to manage cost pressures as growth in revenues occur; Finning's ability to attract sufficient skilled labour resources to meet growing product support demand; Finning's ability to negotiate and renew collective bargaining agreements with satisfactory terms for Finning's employees and the Company; the intensity of competitive activity; Finning's ability to successfully integrate the distribution and support business formerly operated by Bucyrus after that transaction closes; Finning's ability to raise the capital needed to implement its business plan; regulatory initiatives or proceedings, litigation and changes in laws or regulations; stock market volatility; changes in political and economic environments for operations; the integrity, reliability, and availability of information technology and the data processed by that technology; operational benefits from the new ERP system. Forward-looking statements are provided in this report for the purpose of giving information about management's current expectations and plans and allowing investors and others to get a better understanding of Finning's operating environment. However, readers are cautioned that it may not be appropriate to use such forward-looking statements for any other purpose.
Forward-looking statements made in this report are based on a number of assumptions that Finning believed were reasonable on the day the Company made the forward-looking statements. Refer in particular to the Outlook section of the MD&A. Some of the assumptions, risks, and other factors which could cause results to differ materially from those expressed in the forward-looking statements contained in this report are discussed in the Company's current Annual Information Form (AIF) in Section 4.
Finning cautions readers that the risks described in the AIF are not the only ones that could impact the Company. Additional risks and uncertainties not currently known to the Company or that are currently deemed to be immaterial may also have a material adverse effect on Finning's business, financial condition, or results of operations.
Except as otherwise indicated, forward-looking statements do not reflect the potential impact of any non-recurring or other unusual items or of any dispositions, mergers, acquisitions, other business combinations or other transactions that may be announced or that may occur after the date hereof. The financial impact of these transactions and non-recurring and other unusual items can be complex and depends on the facts particular to each of them. Finning therefore cannot describe the expected impact in a meaningful way or in the same way Finning presents known risks affecting its business.
Contacts:
Finning International Inc.
Mauk Breukels
Vice President, Investor Relations and Corporate Affairs
(604) 331-4934
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Datum: 08.05.2012 - 20:15 Uhr
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Machinery & Tools
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