TSX Symbol: WJX
TORONTO, Nov. 7, 2022
/CNW/ - Wajax Corporation ("Wajax" or the
"Corporation") today announced its 2022 third quarter
results.
In commenting on the Corporation's performance, Iggy Domagalski, President and Chief Executive
Officer, stated "Wajax delivered excellent operational results
in the third quarter, with revenues of $470.8 million and adjusted EBITDA of
$39.1 million. The business continues
to perform strongly, with robust heavy equipment sales,
particularly in the construction and forestry category. This is due
in part to our expanded direct distribution relationship with
Hitachi, which took effect on March 1,
2022. To date, we have been exceptionally pleased with the
growth enabled by this enhanced relationship with Hitachi, and
continue to see even further potential, expecting that the
relationship will continue to expand and drive greater equipment
sales and product support revenue."(1)
Mr. Domagalski continued, "Industrial parts and ERS sales have
also shown robust year-over-year growth, due in part to elevated
commodity prices and capital spending by customers across all
regions. During the first half of 2022, 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."
Mr. Domagalski added, "During the quarter, we continued to see
overall strength in our backlog, which increased to a record
$558.8 million. This momentum is
being driven by sound fundamentals in many of our key markets,
supported by higher commodity prices and capital spending as
customers work to source equipment and services that were
constrained during the COVID-19 pandemic."(1)
(Dollars in
millions, except per share data)
|
Three Months
Ended
September 30
|
Nine Months
Ended
September 30
|
|
2022
|
2021
|
%
change
|
2022
|
2021
|
%
change
|
CONSOLIDATED
RESULTS
|
|
|
|
|
|
|
Revenue
|
$470.8
|
$401.3
|
17.3 %
|
$1,421.5
|
$1,234.5
|
15.1 %
|
Equipment
sales
|
$136.9
|
$104.7
|
30.8 %
|
$426.3
|
$364.5
|
17.0 %
|
Product
support
|
$118.8
|
$114.3
|
3.9 %
|
$365.6
|
$334.8
|
9.2 %
|
Industrial
parts
|
$134.7
|
$111.1
|
21.2 %
|
$397.9
|
$329.4
|
20.8 %
|
Engineered repair
services
|
$70.1
|
$62.1
|
12.9 %
|
$202.9
|
$179.8
|
12.8 %
|
Equipment
rental
|
$10.3
|
$9.2
|
12.0 %
|
$28.9
|
$26.0
|
11.2 %
|
|
|
|
|
|
|
|
Net
earnings
|
$18.0
|
$14.7
|
22.4 %
|
$55.8
|
$45.3
|
23.2 %
|
Basic earnings per
share(2)
|
$0.84
|
$0.68
|
23.5 %
|
$2.60
|
$2.13
|
22.1 %
|
|
|
|
|
|
|
|
Adjusted net
earnings(1)(3)
|
$16.7
|
$15.5
|
7.7 %
|
$52.0
|
$44.5
|
16.9 %
|
Adjusted basic
earnings per share(1)(2)(3)
|
$0.78
|
$0.72
|
8.3 %
|
$2.43
|
$2.09
|
16.3 %
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
$39.1
|
$40.7
|
(3.9 %)
|
$123.6
|
$117.2
|
5.5 %
|
As Wajax moves into the last quarter of 2022, it continues to
see sound fundamentals in many of its key markets, bolstered by
elevated commodity prices and capital spending. This positive view
of the market remains counterbalanced primarily by rising interest
rates, inflation, labour availability and ongoing supply chain
issues. Wajax continues to manage these challenges through frequent
dialogue with key suppliers and customers.
The Corporation's robust balance sheet and record quarter end
backlog of $558.8 million,
approximately two-thirds of which is expected to be converted in
2022, continue to show momentum in the business.(1) To
maintain this momentum and increase shareholder value, Wajax plans
to maintain focus on the following priorities:
- Developing its "people first" culture; by investing in its team
and their safety and delivering exceptional customer
experiences.
- Setting the stage for growth - organically through strategic
investments, continuing to build its acquisition pipeline with a
focus on ERS and industrial parts businesses, continuing to support
its enhanced relationship with Hitachi, and prudently managing its
balance sheet.
- Deploying its ERP and remote diagnostic systems and continuing
to build sustainability into its business.
Looking ahead, Wajax believes its strong balance sheet, ability
to generate cash flow, abundant organic growth opportunities and
acquisition program will allow its business to grow meaningfully
over the long term.
The Corporation also announced the declaration of a dividend of
$0.25 per share for the fourth
quarter of 2022 payable on January 4, 2023 to shareholders of
record on December 15, 2022.
Third Quarter Highlights
- Revenue in the third quarter of 2022 increased $69.5 million, or 17.3%, to $470.8 million, from $401.3 million in the third quarter of 2021.
Regionally:
-
- Revenue in western Canada of
$224.3 million increased 26.4% from
the prior year due to robust construction and forestry and mining
equipment sales, and strength in the engineering repair services
("ERS") and industrial parts categories.
- Revenue in central Canada of
$71.0 million decreased 4.3% from the
prior year due primarily to lower material handling and power
systems equipment sales, and lower mining and power systems product
support revenue, offset partially by strength in industrial parts
sales.
- Revenue in eastern Canada of
$175.5 million increased 17.3% from
the prior year due primarily to higher bearings sales driving
higher industrial parts revenue, higher construction and forestry
equipment revenue, and higher product support revenue in the mining
category.
- Gross profit margin of 20.3% in the third quarter of 2022
decreased 90 basis points ("bps") compared to gross profit
margin of 21.2% in the same period of 2021. The decrease was driven
by a less favourable sales mix and lower product support and ERS
margins, partially offset by higher industrial parts, equipment and
equipment rental margins.
- Selling and administrative expenses as a percentage of revenue
decreased to 14.7% in the third quarter of 2022 from 15.1% in the
third quarter of 2021. Selling and administrative expenses in the
third quarter of 2022 increased $8.7
million compared to the third quarter of 2021 due mainly to
higher personnel costs as the volume of business increased over the
prior year.
- EBIT increased $2.0 million, or
8.0%, to $26.7 million in the third
quarter of 2022 versus $24.7 million
in the same period of 2021. The year-over-year increase in EBIT was
due primarily to higher sales volumes, offset partially by
increased selling and administrative expenses.
- The Corporation generated net earnings of $18.0 million, or $0.84 per share, in the third quarter of 2022
versus $14.7 million, or $0.68 per share, in the same period of 2021. The
Corporation generated adjusted net earnings of $16.7 million, or $0.78 per share, in the third quarter of 2022
versus $15.5 million, or $0.72 per share, in the same period of 2021.
Adjusted net earnings in the third quarter of 2022 excludes
non-cash gains on mark to market of derivative instruments of
$1.3 million after-tax, or
$0.06 per share (2021 – losses of
$0.9 million after-tax, or
$0.04 per share). Adjusted net
earnings in the same period of 2021 also excludes a gain recorded
on the sale of properties of $0.1
million after-tax, or less than $0.01 per share.(1)
- Adjusted EBITDA margin decreased to 8.3% in the third quarter
of 2022 from 10.1% in the third quarter of 2021.(1)
- The Corporation's record backlog at September 30, 2022 of $558.8 million increased $23.9 million, or 4.5%, compared to June 30, 2022 backlog of $534.8 million due to more mining, material
handling and ERS orders. Compared to September 30, 2021, backlog increased
$187.2 million, or 50.4%, due to
increased volume of orders in most categories, most notably
construction and forestry, industrial parts and ERS.(1)
- Working capital of $342.7 million
at September 30, 2022 increased
$34.8 million from June 30, 2022 due to higher trade and other
receivables and higher inventory, offset partially by increased
accounts payable and accrued liabilities. Trailing four-quarter
average working capital as a percentage of the trailing 12-month
sales was 17.6%, a decrease of 50 bps from June 30, 2022, due to the higher trailing
12-month sales.(1)
- Cash flows used in operating activities amounted to
$3.4 million in the third quarter of
2022, compared to cash flows generated from operating activities of
$40.2 million in the same quarter of
the previous year. The decrease in cash generated from operating
activities of $43.6 million was
mainly attributable to a decrease in cash generated from changes in
non-cash operating working capital of $44.0
million, which was driven largely by an increase in
inventory of $32.7 million in the
third quarter of 2022 as compared to a decrease in inventory of
$5.6 million in the same quarter of
the previous year.
- The Corporation's leverage ratio increased to 1.28 times at
September 30, 2022, compared to 1.10
times at June 30, 2022. The increase
in the leverage ratio was due primarily to the higher debt level in
the current period. The Corporation's senior secured leverage ratio
was 0.81 times at September 30, 2022,
compared to 0.65 times at June 30,
2022.(1)
- Effective October 6, 2022, the
Corporation amended its bank credit facility to extend the maturity
date from October 1, 2026 to
October 1, 2027. The bank credit
facility has a $400.0 million credit
limit as at September 30, 2022,
composed of a $50.0 million
non-revolving term facility and a $350.0
million revolving term facility.
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.
Wajax will webcast its Third Quarter Financial Results
Conference Call. You are invited to listen to the live webcast on
Tuesday, November 8, 2022 at
2:00 p.m. ET. To access the webcast,
please visit our website wajax.com, under "Investor
Relations", "Events and Presentations", "Q3 2022
Financial Results" and click on the "Webcast" link.
Notes:
|
(1)
|
"Adjusted net
earnings", "Adjusted basic earnings per share", "Adjusted EBITDA",
"Adjusted EBITDA margin", "backlog", "leverage ratio", "senior
secured leverage ratio" and "working capital" 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
September 30, 2022 was 21,399,694 (2021 – 21,409,323) and
22,217,478 (2021 – 22,075,170),
respectively.
|
|
|
Weighted average
shares, net of shares held in trust, outstanding for calculation of
basic and diluted earnings per share for the nine months ended
September 30, 2022 was 21,412,993 (2021 – 21,300,718) and
22,186,152 (2021 – 21,937,073), respectively.
|
|
(3)
|
Net earnings excluding
the following:
|
|
|
a.
|
after-tax gain recorded
on the sale of properties of nil (2021 – $0.1 million), or basic
and diluted earnings per share of nil (2021 – less than $0.01) for
the three months ended September 30, 2022.
|
|
b.
|
after-tax gain recorded
on the sale of properties of nil (2021 – $0.8 million), or basic
and diluted earnings per share of nil (2021 – $0.04) for the nine
months ended September 30, 2022.
|
|
c.
|
after-tax non-cash
gains on mark to market of derivative instruments of $1.3 million
(2021 – losses of $0.9 million), or basic and diluted earnings per
share of $0.06 (2021 – loss of $0.04) for the three months ended
September 30, 2022.
|
|
d.
|
after-tax non-cash
gains on mark to market of derivative instruments of $3.7 million
(2021 – gains of $0.2 million), or basic and diluted earnings per
share of $0.17 (2021 – $0.01) for the nine months ended September
30, 2022.
|
|
e.
|
after-tax Tundra
transaction costs of nil (2021 – $0.3 million), or basic and
diluted earnings per share of nil (2021 – $0.01) for the nine
months ended September 30, 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 condensed
consolidated interim 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
condensed consolidated interim statements of financial
position.
|
|
|
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.
|
Non-GAAP ratios are identified and defined below:
EBITDA
margin
|
Defined as EBITDA
divided by revenue, as presented in the condensed consolidated
interim statements of earnings.
|
Adjusted EBITDA
margin
|
Defined as adjusted
EBITDA divided by revenue, as presented in the condensed
consolidated interim statements of earnings.
|
Leverage
ratio
|
The leverage ratio is
defined as debt at the end of a particular quarter divided by
trailing 12-month pro-forma adjusted EBITDA. 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 excluding debentures at the end
of a particular quarter divided by trailing 12-month pro-forma
adjusted EBITDA.
|
|
|
Funded net debt to
total capital
|
Defined as funded net
debt divided by total capital. Total capital is the funded net debt
plus shareholder's equity.
|
Supplementary financial measures are identified and defined
below:
EBIT margin
|
Defined as EBIT divided
by revenue, as presented in the condensed consolidated interim
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
|
Nine months
ended
|
|
September
30
|
September
30
|
|
2022
|
2021
|
2022
|
2021
|
Net earnings
|
$
18.0
|
$
14.7
|
$
55.8
|
$
45.3
|
Gain recorded on the
sale of properties, after-tax
|
—
|
(0.1)
|
—
|
(0.8)
|
Non-cash (gains) losses
on mark to market of derivative instruments, after-tax
|
(1.3)
|
0.9
|
(3.7)
|
(0.2)
|
Tundra transaction
costs, after-tax
|
—
|
—
|
—
|
0.3
|
Adjusted net
earnings
|
$
16.7
|
$
15.5
|
$
52.0
|
$
44.5
|
Adjusted basic
earnings per share(1)
|
$
0.78
|
$
0.72
|
$
2.43
|
$
2.09
|
Adjusted diluted
earnings per share(1)
|
$
0.75
|
$
0.70
|
$
2.34
|
$
2.03
|
(1)
|
For the three months
ended September 30, 2022, the numbers of basic and diluted shares
outstanding were 21,399,694 and 22,217,478, respectively (2021 –
21,409,323 and 22,075,170,
respectively).
|
|
For the nine months
ended September 30, 2022, the numbers of basic and diluted shares
outstanding were 21,412,993 and 22,186,152, respectively (2021 –
21,300,718 and 21,937,073, respectively).
|
Reconciliation of the Corporation's EBIT to EBITDA, Adjusted
EBITDA and Pro-forma adjusted EBITDA is as follows:
|
Three months
ended
|
Nine months
ended
|
Twelve months
ended
|
|
September 30
2022
|
September 30
2021
|
September 30
2022
|
September 30
2021
|
September 30
2022
|
June 30
2022
|
December 31
2021
|
EBIT
|
$
26.7
|
$ 24.7
|
$
87.1
|
$ 77.0
|
$
102.5
|
$
100.5
|
$
92.3
|
Depreciation and
amortization
|
14.2
|
14.8
|
41.4
|
41.1
|
55.7
|
56.4
|
55.4
|
EBITDA
|
$
40.8
|
$ 39.5
|
$ 128.5
|
$ 118.0
|
$
158.2
|
$
156.8
|
$
147.7
|
Gain recorded on the
sale of properties
|
—
|
(0.1)
|
—
|
(1.0)
|
(1.5)
|
(1.5)
|
(2.5)
|
Non-cash (gains) losses
on mark to market of derivative
instruments(1)
|
(1.7)
|
1.3
|
(5.0)
|
(0.3)
|
(4.7)
|
(1.7)
|
—
|
Tundra transaction
costs(2)
|
—
|
—
|
—
|
0.4
|
—
|
—
|
0.4
|
Adjusted
EBITDA
|
$
39.1
|
$ 40.7
|
$ 123.6
|
$ 117.2
|
$
152.1
|
$
153.6
|
$
145.6
|
Payment of lease
liabilities(3)
|
(8.1)
|
(7.0)
|
(23.6)
|
(21.1)
|
(31.4)
|
(30.3)
|
(28.9)
|
Pro-forma adjusted
EBITDA
|
$
31.0
|
$ 33.7
|
$ 100.0
|
$ 96.1
|
$
120.6
|
$
123.3
|
$
116.7
|
(1)
|
Non-cash (gains) losses
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:
|
September 30
2022
|
June 30
2022
|
December 31
2021
|
Cash
|
$
(1.7)
|
$
(3.5)
|
$
(10.0)
|
Debentures
|
55.6
|
55.5
|
55.2
|
Long-term
debt
|
93.8
|
77.7
|
98.2
|
Funded net
debt
|
$
147.7
|
$
129.7
|
$
143.5
|
Letters of
credit
|
6.2
|
6.3
|
7.3
|
Debt
|
$
153.9
|
$
135.9
|
$
150.7
|
Pro-forma adjusted
EBITDA(1)
|
$
120.6
|
$
123.3
|
$
116.7
|
Leverage
ratio(2)
|
1.28
|
1.10
|
1.29
|
Senior secured
leverage ratio(3)
|
0.81
|
0.65
|
0.82
|
(1)
|
For the twelve months
ended September 30, 2022, June 30, 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:
|
September 30
2022
|
June 30
2022
|
December 31
2021
|
Shareholders'
equity
|
$
438.3
|
$
421.4
|
$
389.9
|
Funded net
debt
|
147.7
|
129.7
|
143.5
|
Total
capital
|
$
586.0
|
$
551.0
|
$
533.4
|
Funded net debt to
total capital
|
25.2 %
|
23.5 %
|
26.9 %
|
Calculation of the Corporation's working capital and other
working capital amounts is as follows:
|
September 30
2022
|
June 30
2022
|
December 31
2021
|
Total current
assets
|
$
814.0
|
$
728.5
|
$
681.4
|
Total current
liabilities
|
471.3
|
420.6
|
367.9
|
Working
capital
|
$
342.7
|
$
307.9
|
$
313.5
|
Trade and other
receivables
|
(274.2)
|
(236.8)
|
(223.5)
|
Inventory
|
(446.7)
|
(414.0)
|
(388.7)
|
Accounts payable and
accrued liabilities
|
384.7
|
343.9
|
305.8
|
Other working
capital amounts
|
$
6.5
|
$
1.0
|
$
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 view that our enhanced
relationship with Hitachi has even further growth potential, and
our expectation that the relationship will continue to expand and
drive greater equipment sales and product support revenues; our
view that, as we move into the last quarter of 2022, we are
continuing to see sound fundamentals in many of our key markets,
bolstered by elevated commodity prices and capital spending, and
that this positive view of the market is counterbalanced primarily
by rising interest rates, inflation, labour availability and
ongoing supply chain issues; our plans to continue to manage these
challenges through frequent dialogue with key suppliers and
customers; our belief that our robust balance sheet and record
quarter-end backlog continue to show momentum in our business,
together with our expectation that approximately two-thirds of such
quarter-end backlog will be converted in 2022; our plans to
maintain such momentum and increase shareholder value by
maintaining our focus on the following priorities: (1) developing
our "people first" culture by investing in our team and their
safety, and delivering exceptional customer experiences, (2)
setting the stage for growth – organically through strategic
investments, continuing to build our acquisition pipeline with a
focus on ERS and industrial parts businesses, continuing to support
our enhanced relationship with Hitachi, and prudently managing our
balance sheet, and (3) deploying our ERP and remote diagnostic
systems, and continuing to build sustainability into our business;
our belief that our strong balance sheet, ability to generate cash
flow, abundant growth opportunities and acquisition program will
allow our business to grow meaningfully over the long-term; our
objective of managing our working capital and normal course capital
investment programs within a leverage range of 1.5 – 2.0 times; 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; our ability to successfully manage our business
through the COVID-19 pandemic and actions taken by governments,
public authorities, suppliers and customers in response to the
novel coronavirus and its variants; 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
ERP system; 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
the COVID-19 pandemic 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 impact of the COVID-19 virus and its
variants, 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 their expanded direct
distribution relationship; 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 Information Form for the year ended
December 31, 2021 (the "AIF"),
in our annual MD&A for financial risks, and in our most recent
quarterly MD&A, all of which have 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 the AIF, and
in our annual and quarterly 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