TSX Symbol: WJX
--Expanded Relationship with Hitachi, and
Growth in Industrial Parts and Engineered Repair Services, Drove
Record Revenue in 2022--
TORONTO, March 6,
2023 /CNW/ - Wajax Corporation ("Wajax" or the
"Corporation") today announced its 2022 fourth quarter and
annual results. All monetary amounts are in Canadian dollars unless
otherwise noted.
Selected Highlights for the Fourth Quarter and Full
Year
- Fourth quarter revenue of $541.3
million and full year revenue of $1.963 billion up 34.4% and 19.9%, respectively,
over 2021;
- Fourth quarter adjusted EBITDA of $42.3
million and full year adjusted EBITDA of $165.9 million up 48.6% and 13.9%, respectively,
over 2021(1);
- Fourth quarter adjusted net earnings of $17.8 million and full year adjusted net earnings
of $69.8 million up 154.2% and 35.7%,
respectively, over 2021(1); and
- Exited 2022 with backlog of $468.8
million.(1)
"In 2022 we delivered record revenue of nearly $2 billion and strong adjusted earnings per share
growth of nearly 35% on a fully diluted basis", said Iggy Domagalski, President and Chief Executive
Officer. "In addition to benefiting from our enhanced relationship
with Hitachi, industrial parts and engineered repair services sales
demonstrated robust year-over-year growth due, in part, to elevated
commodity prices and sustained capital spending by customers across
all regions.(1)
"During the first half of the year, improved cash flow from
operations allowed us to make early repayment of our acquisition
credit facility and fund two tuck-in acquisitions, further
expanding our ERS footprint and service offerings. In 2022, we
generated $69.1 million in cash flow
from operations, reflecting investments in inventory and increases
in receivables to support a growing business. We continue to manage
our balance sheet prudently, and saw our leverage ratio decline to
a 10-year low of 1.10 times during the year, before rising slightly
to 1.13 times at year-end. Our strong balance sheet gives us the
flexibility to invest in our expanded Hitachi relationship,
additional organic initiatives and acquisition opportunities to
help drive future growth."(1)
(Dollars in millions, except per share
data)
|
Three Months Ended
December 31
|
Year Ended
December 31
|
|
2022
|
2021
|
% change
|
2022
|
2021
|
% change
|
CONSOLIDATED RESULTS
|
|
|
|
|
|
|
Revenue
|
$541.3
|
$402.8
|
34.4 %
|
$1,962.8
|
$1,637.3
|
19.9 %
|
Equipment sales
|
$202.2
|
$119.8
|
68.8 %
|
$628.6
|
$484.2
|
29.8 %
|
Product support
|
$118.3
|
$102.8
|
15.1 %
|
$483.9
|
$437.6
|
10.6 %
|
Industrial parts
|
$137.9
|
$108.7
|
26.9 %
|
$535.8
|
$438.1
|
22.3 %
|
Engineered repair services
(ERS)
|
$72.6
|
$61.9
|
17.2 %
|
$275.5
|
$241.7
|
14.0 %
|
Equipment rental
|
$10.2
|
$9.6
|
7.1 %
|
$39.1
|
$35.5
|
10.0 %
|
|
|
|
|
|
|
|
Net earnings
|
$16.6
|
$8.0
|
108.9 %
|
$72.4
|
$53.2
|
36.0 %
|
Basic earnings per
share(2)
|
$0.78
|
$0.37
|
108.5 %
|
$3.38
|
$2.50
|
35.4 %
|
|
|
|
|
|
|
|
Adjusted net
earnings(1)(3)
|
$17.8
|
$7.0
|
154.2 %
|
$69.8
|
$51.5
|
35.7 %
|
Adjusted basic earnings per
share(1)(2)(3)
|
$0.83
|
$0.33
|
153.7 %
|
$3.26
|
$2.41
|
35.1 %
|
|
|
|
|
|
|
|
Adjusted EBITDA(1)
|
$42.3
|
$28.5
|
48.6 %
|
$165.9
|
$145.6
|
13.9 %
|
Outlook
Moving into 2023, Wajax continues to see solid fundamentals in
many of the markets it serves - particularly mining, energy and
construction - supported by relatively elevated key commodity
prices and sustained budgeting for capital projects. The
Corporation started 2023 with a strong backlog of $468.8 million, up 10.5% from 2022, which
supports management's confidence in the near-term future. In
addition to expected growth in its heavy equipment business, Wajax
anticipates further strong demand in its less cyclical industrial
parts and engineered repair services businesses, building on the
22.3% and 14.0% top-line growth seen in those categories,
respectively, in 2022. Wajax expects the challenges of 2023 to be
similar to those of 2022 – ongoing supply chain volatility, higher
interest rates, inflation, and a tight labour
market.(1)
The Corporation's core strategic priorities remain unchanged and
Wajax is focused on continuing to invest in its people and their
overall health and well-being, delivering exceptional customer
value, organically growing its business, transacting on a robust
acquisition pipeline, leveraging its enhanced relationship with
Hitachi, prudently managing its balance sheet, deploying its ERP
system, and entrenching sustainability into the business.
Dividend Increase
Wajax also today announced that its Board of Directors has
approved a 32% increase in the Corporation's quarterly dividend.
The Corporation has declared a dividend of $0.33 per share for the first quarter of 2023,
payable on April 4, 2023, to shareholders of record on
March 15, 2023.
"The increase in our quarterly dividend, representing an
additional annual outlay of approximately $6.9 million, reflects growing confidence
in both our near- and longer-term outlooks, which is being driven
by our expanded relationship with Hitachi, as well as solid demand
for the full suite of products and services we offer across our
business," said Mr. Domagalski. "Our strong ability to generate
cash flow, coupled with over $300
million in availability on our bank credit facility, allows
us to invest in organic growth and acquisition opportunities, while
supporting this increased distribution to our shareholders."
Fourth Quarter Highlights
- Revenue in the fourth quarter of 2022 increased $138.5 million, or 34.4%, to $541.3 million, from $402.8 million in the fourth quarter of
2021. Regionally:
-
-
- Revenue in western Canada of
$278.8 million increased 64.3% from
the prior year due primarily to robust growth in equipment and
product support sales in the mining, and construction and forestry
categories, and strength in the engineered repair services
("ERS") and industrial parts categories.
- Revenue in central Canada of
$86.9 million increased 14.4% from
the prior year mainly due to organic growth in industrial parts
sales.
- Revenue in eastern Canada of
$175.6 million increased 11.8% from
the prior year due primarily to organic industrial parts growth
driven by higher bearings sales, and higher equipment sales in the
construction and forestry, and material handling categories.
- Gross profit margin of 18.1% in the fourth quarter of 2022
decreased 220 basis points ("bps") compared to the same
period of 2021. The decrease in margin was driven primarily by
lower product support margins and a higher proportion of equipment
sales, largely due to the sale of several large mining shovels in
the fourth quarter of 2022 without any similar sales in the same
period of the prior year. These factors contributing to the
decrease in margin were partially offset by higher equipment
margins.(1)
- Selling and administrative expenses as a percentage of revenue
decreased to 13.2% in the fourth quarter of 2022 from 16.5% in the
fourth quarter of 2021, driven by the 34.4% increase in revenue
over the prior year. Selling and administrative expenses in the
fourth quarter of 2022 increased $4.9
million, or 7.4%, compared to the fourth quarter of 2021,
due primarily to higher personnel costs as the volume of business
increased over the prior year.(1)
- EBIT increased $11.4 million, or
74.4%, to $26.7 million in the fourth
quarter of 2022 versus $15.3 million
in 2021. The year-over-year increase in EBIT resulted primarily
from higher sales volumes and equipment margins, offset partially
by lower product support margins, a higher proportion of equipment
sales, and increased selling and administrative expenses.
- The Corporation generated net earnings of $16.6 million, or $0.78 per share, in the fourth quarter of 2022
versus $8.0 million, or $0.37 per share, in 2021. The Corporation
generated adjusted net earnings of $17.8
million, or $0.83 per share,
in the fourth quarter of 2022 versus $7.0
million, or $0.33 per share,
in 2021. Adjusted net earnings for the quarter excludes
non-cash losses on mark to market of derivative instruments of
$1.1 million after-tax, or
$0.05 per share (2021 – losses of
$0.2 million after-tax, or
$0.01 per share). Adjusted net
earnings in the same period of 2021 also excluded a gain recorded
on the sale of properties of $1.2
million after-tax, or $0.06
per share.(1)
- Adjusted EBITDA margin increased to 7.8% in the fourth quarter
of 2022 from 7.1% in 2021.(1)
- Cash flows generated from operating activities amounted to
$19.1 million in the fourth quarter
of 2022, compared to $36.0 million in
the same quarter of the previous year. The decrease of $16.9 million was mainly attributable to a
decrease in cash generated from changes in non-cash operating
working capital of $30.3 million,
which was driven largely by an increase in accounts receivable of
$33.0 million in the fourth quarter
of 2022 as compared to an increase in accounts receivable of
$1.9 million in the same quarter of
the previous year. This decrease in cash generated was partially
offset by an increase in net earnings excluding items not affecting
cash flow of $14.5 million.
- The Corporation's backlog at December
31, 2022 of $468.8 million
decreased $90.0 million, or 16.1%,
compared to September 30, 2022 due
primarily to deliveries of multiple mining shovels that were in the
prior quarter's backlog, along with most other categories
completing more deliveries in the quarter versus new orders added
to backlog, most notably in the construction and forestry category.
These decreases were partially offset by higher ERS
orders.(1)
- Working capital of $346.0 million
at December 31, 2022 increased
$3.4 million from September 30, 2022, due primarily to higher trade
and other receivables and inventory, partially offset by higher
accounts payable and accrued liabilities and income taxes payable.
Working capital efficiency was 16.8%, a decrease of 80 bps from
September 30, 2022, due to the higher
trailing 12-month revenue.(1)
- The Corporation's leverage ratio decreased to 1.13 times at
December 31, 2022, compared to 1.28
times at September 30, 2022. The
decrease in the leverage ratio was due to the combination of the
lower debt level in the current period driven by cash generated
from operating activities, and the higher trailing 12-month
pro-forma adjusted EBITDA. The Corporation's senior secured
leverage ratio was 0.71 times at December
31, 2022, compared to 0.81 times at September 30, 2022.(1)
- Effective October 6, 2022, the
Corporation amended its $400.0
million bank credit facility to extend the maturity date
from October 1, 2026 to October 1, 2027. At December 31, 2022, Wajax had borrowed
$85.0 million and issued $6.2 million of letters of credit for a total
utilization of $91.1 million of its
$400.0 million bank credit
facility.
- Subsequent to quarter-end and effective January 23, 2023, Mark
Edgar was appointed to the role of Chief People Officer.
Prior to joining Wajax, Mr. Edgar's career has included extensive
human resources experience gained as Senior Vice President, Human
Resources for Royal Sun Alliance Canada, Head of Human Resources -
Corporate, for Centrica plc, the parent company of British Gas, and
Head of Human Resources - Customer Group, for British Sky
Broadcasting plc (now Sky plc).
Conference Call Details
Wajax will webcast its Fourth Quarter Financial Results
Conference Call. You are invited to listen to the live webcast on
Tuesday, March 7, 2023 at
2:00 p.m. ET. To access the webcast,
please visit our website wajax.com, under "Investor
Relations", "Events and Presentations", "Q4 and
Full Year 2022 Financial Results" and click on the "Webcast"
link. An archive of the webcast will be available following the
live presentation.
About Wajax Corporation
Founded in 1858, Wajax (TSX: WJX) is one of Canada's longest-standing and most diversified
industrial products and services providers. The Corporation
operates an integrated distribution system providing sales, parts
and services to a broad range of customers in diverse sectors of
the Canadian economy, including: construction, forestry, mining,
industrial and commercial, oil sands, transportation, metal
processing, government and utilities, and oil and gas.
The Corporation's goal is to be Canada's leading industrial products and
services provider, distinguished through its three core
capabilities: sales force excellence, the breadth and efficiency of
repair and maintenance operations, and the ability to work closely
with existing and new vendor partners to constantly expand its
product offering to customers. The Corporation believes that
achieving excellence in these three areas will position it to
create value for its customers, employees, vendors and
shareholders.
Notes:
(1)
|
"Adjusted net
earnings", "Adjusted basic and diluted earnings per share",
"Adjusted EBITDA", "Adjusted EBITDA margin", "Backlog", "Leverage
ratio", "Senior secured leverage ratio", "Working capital", "Gross
profit margin", "Selling and administrative expenses as a
percentage of revenue" and "Pro-forma adjusted EBITDA" do not have
standardized meanings prescribed by generally accepted accounting
principles ("GAAP"). See the Non-GAAP and Other Financial
Measures section later in this press release.
|
(2)
|
Weighted average
shares, net of shares held in trust, outstanding for calculation of
basic and diluted earnings per share for the three months ended
December 31, 2022 was 21,453,250 (2021 – 21,409,323) and 22,228,401
(2021 – 22,145,597),
respectively.
|
|
Weighted average
shares, net of shares held in trust, outstanding for calculation of
basic and diluted earnings per share for the year ended December
31, 2022 was 21,423,140 (2021 – 21,328,093) and 22,196,918 (2021 –
22,026,875), respectively.
|
(3)
|
Net earnings excluding
the following:
|
|
a.
|
after-tax non-cash
losses on mark to market of derivative instruments of $1.1 million
(2021 – losses of $0.2 million), or basic and diluted loss per
share of $0.05 (2021 – loss per share of $0.01) for the three
months ended December 31, 2022.
|
|
b.
|
after-tax non-cash
gains on mark to market of derivative instruments of $2.6 million
(2021 – losses of less than $0.1 million), or basic and diluted
earnings per share of $0.12 (2021 – loss of less than $0.01) for
the year ended December 31, 2022.
|
|
c.
|
after-tax gain recorded
on the sale of properties of nil (2021 – $1.2 million), or basic
and diluted earnings per share of nil (2021 – $0.06 and $0.05
respectively) for the three months ended December 31,
2022.
|
|
d.
|
after-tax gain recorded
on the sale of properties of nil (2021 – $2.1 million), or basic
and diluted earnings per share of nil (2021 – $0.10) for the year
ended December 31, 2022.
|
|
e.
|
after-tax Tundra
Process Solutions Ltd. ("Tundra") transaction costs of nil
(2021 – $0.3 million), or basic and diluted earnings per share of
nil (2021 – $0.01) for the year ended December 31, 2022.
|
|
|
|
Non-GAAP and Other Financial Measures
The press release contains certain non-GAAP and other financial
measures that do not have a standardized meaning prescribed by
GAAP. Therefore, these financial measures may not be comparable to
similar measures presented by other issuers. Investors are
cautioned that these measures should not be construed as an
alternative to net earnings or to cash flow from operating,
investing, and financing activities determined in accordance with
GAAP as indicators of the Corporation's performance. The
Corporation's management believes that:
(i)
|
these measures are
commonly reported and widely used by investors and
management;
|
(ii)
|
the non-GAAP measures
are commonly used as an indicator of a company's cash operating
performance, profitability and ability to raise and service
debt;
|
(iii)
|
"Adjusted net
earnings" and "Adjusted basic and diluted earnings per
share" provide indications of the results by the Corporation's
principal business activities prior to recognizing non-recurring
costs (recoveries) and non-cash losses (gains) on mark to market of
derivative instruments. These adjustments to net earnings and basic
and diluted earnings per share allow the Corporation's management
to consistently compare periods by removing infrequent charges
incurred outside of the Corporation's principal business activities
and the impact of unrealized losses (gains) resulting from
fluctuations in interest rates and the Corporation's share
price;
|
(iv)
|
"Adjusted
EBITDA" provides an indication of the results by the
Corporation's principal business activities prior to recognizing
non-recurring costs (recoveries) and non-cash losses (gains) on
mark to market of derivative instruments. These adjustments to net
earnings allow the Corporation's management to consistently compare
periods by removing infrequent charges incurred outside of the
Corporation's principal business activities, the impact of
unrealized losses (gains) resulting from fluctuations in interest
rates and the Corporation's share price, the impact of fluctuations
in finance costs related to the Corporation's capital structure,
the impact of tax rates, and the impact of depreciation and
amortization of long-term assets; and
|
(v)
|
"Pro-forma adjusted
EBITDA" provides the same utility as Adjusted EBITDA described
above, however pursuant to the terms of the bank credit facility,
is adjusted for the EBITDA of business acquisitions made during the
period as if they were made at the beginning of the trailing
12-month period, and for the deduction of payments of lease
liabilities. Pro-forma adjusted EBITDA is used in calculating the
Leverage ratio and Senior secured leverage ratio.
|
Non-GAAP financial measures are identified and defined below:
|
|
Funded net debt
|
Funded net debt
includes bank indebtedness, debentures and total long-term debt,
net of cash. Funded net debt is relevant in calculating the
Corporation's funded net debt to total capital, which is a non-GAAP
ratio commonly used as an indicator of a company's ability to raise
and service debt.
|
|
|
Debt
|
Debt is funded net
debt plus letters of credit. Debt is relevant in calculating the
Corporation's leverage ratio, which is a non-GAAP ratio commonly
used as an indicator of a company's ability to raise and service
debt.
|
|
|
Total capital
|
Total capital is
shareholders' equity plus funded net debt.
|
|
|
EBITDA
|
Net earnings (loss)
before finance costs, income tax expense, depreciation and
amortization.
|
|
|
Adjusted net earnings (loss)
|
Net earnings (loss)
before (gain) loss recorded on the sale of properties, non-cash
losses (gains) on mark to market of derivative instruments and
Tundra transaction costs.
|
|
|
Adjusted basic and diluted earnings (loss)
per share
|
Basic and diluted
earnings (loss) per share before (gain) loss recorded on the sale
of properties, non-cash losses (gains) on mark to market of
derivative instruments and Tundra transaction costs.
|
|
|
Adjusted EBITDA
|
EBITDA before (gain)
loss recorded on the sale of properties, non-cash losses (gains) on
mark to market of derivative instruments and Tundra transaction
costs.
|
|
|
Pro-forma adjusted EBITDA
|
Defined as adjusted
EBITDA adjusted for the EBITDA of business acquisitions made during
the period as if they were made at the beginning of the trailing
12-month period pursuant to the terms of the bank credit facility
and the deduction of payments of lease liabilities.
|
|
|
Working capital
|
Defined as current
assets less current liabilities, as presented in the consolidated
statements of financial position.
|
|
|
Other working capital amounts
|
Defined as working
capital less trade and other receivables and inventory plus
accounts payable and accrued liabilities, as presented in the
consolidated statements of financial position.
|
Non-GAAP ratios are identified and defined below:
EBITDA margin
|
Defined as EBITDA
(defined above) divided by revenue, as presented in the
consolidated statements of earnings.
|
|
|
Adjusted EBITDA margin
|
Defined as adjusted
EBITDA (defined above) divided by revenue, as presented in the
consolidated statements of earnings.
|
|
|
Leverage ratio
|
The leverage ratio is
defined as debt (defined above) at the end of a particular quarter
divided by trailing 12-month pro-forma adjusted EBITDA (defined
above). The Corporation's objective is to maintain this ratio
between 1.5 times and 2.0 times.
|
|
|
Senior secured leverage ratio
|
The senior secured
leverage ratio is defined as debt (defined above) excluding
debentures at the end of a particular quarter divided by trailing
12-month pro-forma adjusted EBITDA (defined above).
|
|
|
Funded net debt to total
capital
|
Defined as funded net
debt (defined above) divided by total capital (defined
above).
|
|
|
Working capital efficiency
|
Trailing four-quarter
average working capital (defined above) as a percentage of the
trailing 12-month revenue.
|
Supplementary financial measures are identified and defined
below:
EBIT margin
|
Defined as EBIT
divided by revenue, as presented in the consolidated statements of
earnings.
|
|
|
Backlog
|
Backlog is a
management measure which includes the total sales value of customer
purchase commitments for future delivery or commissioning of
equipment, parts and related services, including ERS projects. This
differs from the remaining performance obligations as defined by
IFRS 15 Revenue from Contracts with Customers. There is no
directly comparable GAAP financial measure for Backlog.
|
|
|
Gross profit margin
|
Defined as gross
profit divided by revenue, as presented in the consolidated
statements of earnings.
|
|
|
Selling and administrative expenses as a percentage
of revenue
|
Defined as selling
and administrative expenses divided by revenue, as presented in the
consolidated statements of earnings.
|
Reconciliation of the Corporation's net earnings to adjusted net
earnings and adjusted basic and diluted earnings per share is as
follows:
|
Three months ended
|
Year ended
|
|
December 31
|
December 31
|
|
2022
|
2021
|
2022
|
2021
|
Net earnings
|
$
16.6
|
$
8.0
|
$
72.4
|
$
53.2
|
Gain recorded on the
sale of properties, after-tax
|
—
|
(1.2)
|
—
|
(2.1)
|
Non-cash losses (gains)
on mark to market of derivative instruments, after-tax
|
1.1
|
0.2
|
(2.6)
|
—
|
Tundra transaction
costs, after-tax
|
—
|
—
|
—
|
0.3
|
Adjusted net earnings
|
$
17.8
|
$
7.0
|
$
69.8
|
$
51.5
|
Adjusted basic earnings per
share(1)
|
$
0.83
|
$
0.33
|
$
3.26
|
$
2.41
|
Adjusted diluted earnings per
share(1)
|
$
0.80
|
$
0.32
|
$
3.15
|
$
2.34
|
(1)
|
For the three months
ended December 31, 2022, the numbers of basic and diluted shares
outstanding were 21,453,250 and 22,228,401, respectively (2021 –
21,409,323 and 22,145,597, respectively).
For the year ended December 31, 2022, the numbers of basic and
diluted shares outstanding were 21,423,140 and 22,196,918,
respectively (2021 – 21,328,093 and 22,026,875,
respectively).
|
Reconciliation of the Corporation's EBIT to EBITDA, Adjusted EBITDA
and Pro-forma adjusted EBITDA is as follows:
|
Three months ended
|
Year ended
|
|
December 31
2022
|
December
31 2021
|
December 31
2022
|
December
31 2021
|
EBIT
|
$
26.7
|
$
15.3
|
$
113.9
|
$
92.3
|
Depreciation and
amortization
|
14.1
|
14.3
|
55.5
|
55.4
|
EBITDA
|
$
40.8
|
$
29.7
|
$
169.3
|
$
147.7
|
Gain recorded on the
sale of properties
|
—
|
(1.5)
|
—
|
(2.5)
|
Non-cash losses (gains)
on mark to market of derivative
instruments(1)
|
1.5
|
0.3
|
(3.5)
|
—
|
Tundra transaction
costs(2)
|
—
|
—
|
—
|
0.4
|
Adjusted EBITDA
|
$
42.3
|
$
28.5
|
$
165.9
|
$
145.6
|
Payment of lease
liabilities(3)
|
(8.3)
|
(7.8)
|
(32.0)
|
(28.9)
|
Pro-forma adjusted EBITDA
|
$
34.0
|
$
20.6
|
$
133.9
|
$
116.7
|
(1)
|
Non-cash losses (gains)
on mark to market of non-hedged derivative instruments.
|
(2)
|
In 2021, the
Corporation incurred transaction costs relating to the Tundra
acquisition. These costs were primarily for advisory
services.
|
(3)
|
Effective with the
reporting period beginning on January 1, 2019 and the adoption of
IFRS 16, the Corporation amended the definition of Funded net debt
to exclude lease liabilities not considered part of debt. As a
result, the corresponding lease costs must also be deducted from
EBITDA for the purpose of calculating the leverage
ratio.
|
Calculation of the Corporation's funded net debt, debt, leverage
ratio and senior secured leverage ratio is as follows:
|
December 31
2022
|
December
31 2021
|
Bank indebtedness
(cash)
|
$
5.2
|
$
(10.0)
|
Debentures
|
55.8
|
55.2
|
Long-term
debt
|
83.6
|
98.2
|
Funded net debt
|
$
144.6
|
$
143.5
|
Letters of
credit
|
6.2
|
7.3
|
Debt
|
$
150.8
|
$
150.7
|
Pro-forma adjusted
EBITDA(1)
|
$
133.9
|
$
116.7
|
Leverage ratio(2)
|
1.13
|
1.29
|
Senior secured leverage
ratio(3)
|
0.71
|
0.82
|
(1)
|
For the year ended
December 31, 2022 and December 31, 2021.
|
(2)
|
Calculation uses debt
divided by the trailing four-quarter Pro-forma adjusted EBITDA.
This leverage ratio is calculated for purposes of monitoring the
Corporation's objective target leverage ratio of between 1.5 times
and 2.0 times, and is different from the leverage ratio calculated
under the Corporation's bank credit facility agreement.
|
(3)
|
Calculation uses debt
excluding debentures divided by the trailing four-quarter Pro-forma
adjusted EBITDA. While the calculation contains some differences
from the leverage ratio calculated under the Corporation's bank
credit facility agreement, the resulting leverage ratio under the
bank credit facility agreement is not significantly
different.
|
Calculation of total capital and funded net debt to total capital
is as follows:
|
December 31
2022
|
December
31 2021
|
Shareholders'
equity
|
$
449.8
|
$
389.9
|
Funded net
debt
|
144.6
|
143.5
|
Total capital
|
$
594.4
|
$
533.4
|
Funded net debt to total
capital
|
24.3 %
|
26.9 %
|
Calculation of the Corporation's working capital and other working
capital amounts is as follows:
|
December 31
2022
|
December
31 2021
|
Total current
assets
|
$
860.1
|
$
681.4
|
Total current
liabilities
|
514.1
|
367.9
|
Working capital
|
$
346.0
|
$
313.5
|
Trade and other
receivables
|
(307.1)
|
(223.5)
|
Inventory
|
(462.2)
|
(388.7)
|
Accounts payable and
accrued liabilities
|
423.8
|
305.8
|
Other working capital amounts
|
$
0.7
|
$
7.1
|
Cautionary Statement Regarding Forward-Looking Information
This news release contains certain forward-looking statements
and forward-looking information, as defined in applicable
securities laws (collectively, "forward-looking
statements"). These forward-looking statements relate to future
events or the Corporation's future performance. All statements
other than statements of historical fact are forward-looking
statements. Often, but not always, forward looking statements can
be identified by the use of words such as "plans", "anticipates",
"intends", "predicts", "expects", "is expected", "scheduled",
"believes", "estimates", "projects" or "forecasts", or variations
of, or the negatives of, such words and phrases or state that
certain actions, events or results "may", "could", "would",
"should", "might" or "will" be taken, occur or be achieved.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors beyond the Corporation's ability to
predict or control which may cause actual results, performance and
achievements to differ materially from those anticipated or implied
in such forward-looking statements. To the extent any
forward-looking information in this news release constitutes
future-oriented financial information or financial outlook within
the meaning of applicable securities law, such information is being
provided to demonstrate the potential of the Corporation and
readers are cautioned that this information may not be appropriate
for any other purpose. There can be no assurance that any
forward-looking statement will materialize. Accordingly, readers
should not place undue reliance on forward looking statements. The
forward-looking statements in this news release are made as of the
date of this news release, reflect management's current beliefs and
are based on information currently available to management.
Although management believes that the expectations represented in
such forward-looking statements are reasonable, there is no
assurance that such expectations will prove to be correct.
Specifically, this news release includes forward looking statements
regarding, among other things: our belief that the Corporation's
strong balance sheet gives us the flexibility to invest in our
expanded Hitachi relationship, additional organic initiatives and
acquisition opportunities to help drive future growth; our outlook
for 2023, including the view that solid fundamentals persist in
many of the markets Wajax serves – particularly, mining, energy and
construction, and that our strong start-of-year backlog is
supportive of our confidence in the near-term future; our
expectation that Wajax's heavy equipment business will grow in
2023, and our anticipation of further strong demand in Wajax's less
cyclical industrial parts and ERS businesses; our expectation that
that the challenges of 2023 will be similar to 2022 - ongoing
supply chain volatility, higher interest rates, inflation, and a
tight labour market; our continued focus on investing in Wajax's
people and their overall health and well-being, delivering
exceptional customer value, organically growing the business,
transacting on a robust acquisition pipeline, leveraging our
enhanced relationship with Hitachi, prudently managing our balance
sheet, deploying our new ERP system, and entrenching sustainability
into our business; our growing confidence in Wajax's near- and
longer- term outlooks, driven by Wajax's expanded relationship with
Hitachi, as well as solid demand for the full suite of products and
services offered across our business; our belief that our strong
ability to generate cash flow, coupled with over $300 million available on our bank credit
facility, allows us to invest in organic growth and acquisition
opportunities, while supporting the increased distribution to
shareholders announced above; and our goal of being Canada's leading industrial products and
services provider, distinguished by our sales force excellence, the
breadth and efficiency of our repair and maintenance operations,
and our ability to work closely with existing and new vendor
partners to constantly expand our product offering to customers,
together with our belief that achieving excellence in these three
areas will position us to create value for our customers,
employees, vendors and shareholders. These statements are based on
a number of assumptions which may prove to be incorrect, including,
but not limited to, assumptions regarding: general business and
economic conditions; the supply and demand for, and the level and
volatility of prices for, oil, natural gas and other commodities;
financial market conditions, including interest rates; the ability
of Hitachi and Wajax to develop and execute successful sales,
marketing and other plans related to the expanded direct
distribution relationship which took effect on March 1, 2022; our ability to execute our One
Wajax strategy, including our ability to execute on our organic
growth priorities, complete and effectively integrate acquisitions,
and successfully implement new information technology platforms,
systems and software, such as our new ERP system; the continuing
effects of the COVID-19 pandemic and actions taken by governments,
public authorities, suppliers and customers in response to the
novel coronavirus and its variants; the future financial
performance of the Corporation; our costs; market competition; our
ability to attract and retain skilled staff; our ability to procure
quality products and inventory; and our ongoing relations with
suppliers, employees and customers. The foregoing list of
assumptions is not exhaustive. Factors that may cause actual
results to vary materially include, but are not limited to: a
continued or prolonged deterioration in general business and
economic conditions, including as a result of new coronavirus
variants or armed conflicts between nations; supply chain
disruptions and shortages related to or arising from the impacts of
COVID-19 or armed conflicts between nations; fluctuations in
financial market conditions, including interest rates; the
continuing impacts of the COVID-19 pandemic, including the duration
and severity of travel, business and other restrictions imposed by
governments and public authorities in response to COVID-19 and its
variants; actions taken by our suppliers and customers in relation
to the COVID-19 pandemic, including slowing, reducing or halting
operations; the inability of Hitachi and Wajax to develop and
execute successful sales, marketing and other plans related to the
expanded direct distribution relationship which took effect on
March 1, 2022; volatility in the
supply and demand for, and the level of prices for, oil, natural
gas and other commodities; a continued or prolonged decrease in the
price of oil or natural gas; the level of demand for, and prices
of, the products and services we offer; levels of customer
confidence and spending; market acceptance of the products we
offer; termination of distribution or original equipment
manufacturer agreements; unanticipated operational difficulties
(including failure of plant, equipment or processes to operate in
accordance with specifications or expectations, cost escalation,
our inability to reduce costs in response to slow-downs in market
activity, unavailability of quality products or inventory, supply
disruptions (including those caused by or related to the COVID-19
pandemic), job action and unanticipated events related to health,
safety and environmental matters); our ability to attract and
retain skilled staff and our ability to maintain our relationships
with suppliers, employees and customers. The foregoing list of
factors is not exhaustive. Further information concerning the risks
and uncertainties associated with these forward-looking statements
and the Corporation's business may be found in our annual MD&A,
which has been filed on SEDAR. The forward-looking statements
contained in this news release are expressly qualified in their
entirety by this cautionary statement. The Corporation does not
undertake any obligation to publicly update such forward-looking
statements to reflect new information, subsequent events or
otherwise unless so required by applicable securities laws.
Readers are cautioned that the risks described in our annual
MD&A, are not the only risks that could impact the Corporation.
Risks and uncertainties not currently known to the Corporation, or
currently deemed to be immaterial, may have a material effect on
the Corporation's business, financial condition or results of
operations.
Additional information, including Wajax's Annual Report, is
available on SEDAR at www.sedar.com.
SOURCE Wajax Corporation