Finning Reports Record Earnings in Q3 2012
(firmenpresse) - VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/08/12 -- Finning International Inc. (TSX: FTT) -
Q3 2012 HIGHLIGHTS
Finning International Inc. (TSX: FTT) reported third quarter revenues of $1.6 billion, a 21% increase over Q3 2011. Quarterly revenues were higher in all operations and across all business lines compared to the third quarter of 2011. Growth in new equipment sales was driven by Canada and the UK and Ireland. Product support revenues increased in all regions, particularly in Canada. Quarterly earnings before finance costs and income taxes (EBIT) increased to a new record of $126 million. Quarterly EBIT margin continued to show sequential improvement over the last four quarters and reached 7.8% compared to 3.5% in Q3 2011. Basic earnings per share (EPS) was $0.49 compared to $0.21 in Q3 2011, and was the highest quarterly EPS on record.
"Our focus on executing our strategy and healthy demand in our key markets enabled us to deliver record quarterly earnings. We have continued to drive sequential improvement in our operating profitability and remain on track to deliver record revenue and earnings in 2012," said Mike Waites, president and CEO of Finning International. "In October, we completed a significant strategic milestone with Finning Canada successfully closing the last phase in our acquisition of the former Bucyrus distribution and support business."
"Given indications of demand softening in some markets, we are operating with caution and continue to monitor business conditions closely. Looking ahead, we remain confident in our ability to drive revenues even if equipment sales weaken. We have the benefit of a resilient product support business, more service capacity coming on stream to support the ever increasing machine population, and an expanded product and service offering," continued Mr. Waites. "Our ability to deliver value is also supported by our continued focus on the disciplined execution of our strategic priorities to further improve operating profitability and strengthen our balance sheet."
Q3 2012 FINANCIAL SUMMARY
Q3 2012 HIGHLIGHTS BY OPERATIONS
Canada
South America
United Kingdom and Ireland
CORPORATE AND BUSINESS DEVELOPMENTS
Dividend
The Board of Directors has approved a quarterly dividend of $0.14 per share, payable on December 7, 2012 to shareholders of record on November 23, 2012. This dividend will be considered an eligible dividend for Canadian income tax purposes.
Mike Wilson joins Finning Board of Directors
Mr. Doug Whitehead, Chairman of the Board of Finning, is pleased to announce the appointment of Mr. Mike Wilson as a member of its Board of Directors, effective January 2013. Mr. Wilson has more than 30 years of international and executive management experience in the agricultural and chemical industries and currently serves as President and CEO of Agrium Inc. Prior to joining Agrium, Mr. Wilson gained senior leadership experience as President of Methanol, President and Chief Operating Officer for Methanex Corporation, as well as various senior positions in North America and Asia during his 18 years with Dow Chemical. Mr. Wilson, a resident of Canada, also serves as director on the public boards of Agrium Inc. and Celestica Inc. and is a director of the Alberta Economic Development Authority and the Calgary Prostate Cancer Institute. As a result of his appointment, effective January 2013, Finning's Board membership will be increased to eleven directors.
Finning Awarded Mining Contracts in Chile
Finning announced today that its South American operations have been awarded three significant contracts to provide equipment and maintenance services to leading mining companies in Chile. The combined value of the contracts is U.S. $497 million, comprised of U.S. $247 million in new equipment and U.S. $250 million in maintenance services.
Finning completes acquisition of Bucyrus distribution business in Western Canada
On October 1, 2012, Finning completed its previously announced acquisition from Caterpillar of the former Bucyrus distribution and support business in its dealership territory across Western Canada. This represented the final stage in the Company's phased acquisition, following the successful completion of the transaction for Finning in South America and the U.K. on May 2, 2012. The total value of Finning's acquisition of the Bucyrus business is approximately U.S. $465 million (subject to customary closing adjustments), and is comprised of approximately U.S. $306 million for Finning in South America and the U.K. and U.S. $159 million for Finning Canada. The acquisition was financed with debt, and is accretive to earnings in 2012.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(C$ millions, except per share amounts)
n/m = not meaningful as percentage change is significantly large or not applicable
To download Finning's complete Q3 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:
Q3 2012 RESULTS INVESTOR CALL
Management will hold an investor conference call on Thursday, November 8 at 10:00 am Eastern Time. Dial-in numbers: 1-866-226-1793 (anywhere within Canada and the U.S.) or (416) 340-2218 (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 12:00 pm Eastern Time on November 8 until November 15. 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 the Company's Debt Ratio; the impact of new and revised IFRS that have been issued but are not yet effective; growth prospects for the former Bucyrus business 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; 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 November 7, 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 reduce costs in response to slowing activity levels; 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; 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; expected 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: 08.11.2012 - 13:00 Uhr
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