ShawCor Ltd. Announces Third Quarter 2012 Results
(TSX: SCL.A, SCL.B)
TORONTO, Nov. 8, 2012 /PRNewswire/ -
- Revenue in the third quarter of $395.3
million increased by 21% from the $326.9 million reported in the second quarter of
2012 and increased by 46% from the $271.5
million reported in the third quarter a year ago.
- EBITDA in the third quarter of 2012 was $84.1 million, an improvement of $49.1 million from the second quarter of 2012 and
an improvement of over $72 million
from the same period of the prior year.
- The EBITDA margin on a consolidated basis reached 21.3% as a
result of favourable revenue mix and the benefits of significantly
higher facility utilization from the growth in revenue in the
Company's Latin America and
Asia Pacific operations.
- Net income (attributable to shareholders of the Company) in the
third quarter was $53.4 million (or
$0.75 per share diluted) compared
with net income of $21.4 million, (or
$0.30 per share diluted) in the
second quarter of 2012 and a net loss of $3.1 million in the third quarter of the prior
year.
Mr. Bill Buckley,
President and CEO of ShawCor Ltd. remarked "Strong revenue growth
coupled with excellent execution enabled the Company to achieve a
significant increase in earnings this quarter. The ramp-up in
production on the major contracts in the Asia Pacific region of Bredero Shaw has
progressed very well. It should be noted that all regions of
Bredero Shaw, as well as Flexpipe and ShawFlex, achieved
significant year over year improvement in profitability. The
Company's backlog remains strong and new project bidding activity
is very robust."
Mr. Buckley added "Consistent with ShawCor's
growth agenda, our Guardian OCTG pipe inspection and refurbishment
business expanded into the Eagle Ford shale region of Texas during the quarter. In addition,
subsequent to the quarter end, we announced that we had acquired
the remaining shares of Fineglade and as a result we are pleased to
welcome Socotherm, a leading pipe coating company with unique
locations and technologies, as the eighth division of ShawCor."
Selected Financial Highlights
|
|
|
|
|
|
|
(in thousands of
Canadian dollars, except per share
amounts and percentages) |
|
Three Months ended
September 30, |
|
Nine
Months ended
September 30, |
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
|
|
|
|
|
|
|
|
Revenue |
$ |
395,275 |
|
271,478 |
$ |
1,034,465 |
$ |
815,485 |
|
|
|
|
|
|
|
|
|
Gross profit |
|
164,009 |
|
91,504 |
|
396,146 |
|
291,204 |
Gross profit % |
|
41.5% |
|
33.7% |
|
38.3% |
|
35.7% |
|
|
|
|
|
|
|
|
|
EBITDA(a) |
|
84,120 |
|
12,548 |
|
161,712 |
|
89,686 |
|
|
|
|
|
|
|
|
|
Income (Loss) from
operations |
|
67,277 |
|
(60) |
|
120,927 |
|
52,695 |
|
|
|
|
|
|
|
|
|
Net income (loss) for the
period(b) |
$ |
53,438 |
|
(3,144) |
$ |
98,116 |
$ |
33,044 |
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.76 |
|
(0.04) |
$ |
1.39 |
$ |
0.47 |
|
Fully diluted |
$ |
0.75 |
|
(0.04) |
$ |
1.38 |
$ |
0.46 |
(a) |
EBITDA is a non-GAAP measure calculated by adding back to net
income the sum of net interest
expense, taxes, depreciation/amortization of property, plant and
equipment and intangible assets,
impairment of assets, investment losses and gains and accounting
gain on acquisition. EBITDA
does not have a standardized meaning prescribed by GAAP and is not
necessarily comparable to
similar measures provided by other companies. EBITDA is used
by many analysts in the oil and
gas industry as one of several important analytical tools.
The above is the calculation of EBITDA
for the periods presented. |
(b) |
Attributable to shareholders of the Company
|
1.0 KEY
DEVELOPMENTS
Strategic Review
On September 5,
2012, Ms. Virginia Shaw, the
Chair of the ShawCor Board of Directors and the controlling
shareholder of the Company (indirectly through a holding company),
advised the Board of Directors that she is prepared to consider a
possible sale of her shares of ShawCor as part of a sale of the
company.
The Board has struck a committee of independent
directors to conduct a strategic review of alternatives, including
canvassing potentially interested third parties to determine if an
appropriate transaction is available that would be acceptable to
Ms. Shaw and would be in the best interests of ShawCor and its
shareholders. The independent committee has engaged Credit Suisse
Canada as financial advisors and the strategic review is currently
in progress.
There can be no assurance that a sale or any
other transaction will occur. There is no defined timeline
for the completion of the strategic review. In addition, the
Company does not intend to comment further regarding the strategic
review until such time, if any, as the Company enters into a
definitive agreement in respect of a particular transaction or
otherwise determines that disclosure is appropriate or
required.
Acquisition of Fineglade
On October 24,
2012, ShawCor Ltd., through one of its subsidiaries,
acquired the remaining 60% of Fineglade Limited. Fineglade
Limited, which currently holds approximately 96% of the outstanding
shares of Socotherm S.p.A, was previously owned 40% by ShawCor Ltd.
and 60% by an entity controlled by Sophia Capital.
The purchase price to acquire Sophia Capital's
interest in Fineglade was approximately C$135 million and was satisfied by a cash payment
of approximately C$77 million and the
set-off of a pre-existing loan from ShawCor to Sophia Capital in
the amount of approximately C$58
million.
Socotherm S.p.A., headquartered in Italy, is an international pipe coating
contractor primarily serving the oil and gas industry from active
operations in Brazil, Argentina, Venezuela, the Gulf
of Mexico and Italy.
1.1 OUTLOOK
The outlook for market activity in the Company's
Pipeline segment by region and in the Petrochemical and Industrial
segment is outlined below:
Pipeline Segment - North America
The Company expects that revenues from the
pipeline segment businesses in North
America in the fourth quarter of 2012 will be consistent
with the third quarter. The Company expects that increasing market
share gains in spoolable composite pipe and at ShawCor's Guardian
OCTG pipe inspection and refurbishment business, where the
previously announced expansion into the Eagleford region of
Texas is underway, should offset
any weakness in well drilling and completions. Furthermore, the
Company is expecting to see an increase in large diameter pipe
coating projects in Canada based
on bidding activity and a recently awarded project with a value in
excess of $30 million. In the fourth
quarter, this pick up in large diameter pipe coating activity will
largely offset the reduction in offshore activity following the
completion of the Jack St. Malo and Cardon IV projects.
Pipeline Segment - Latin America
The Company's Latin
America region delivered the expected growth in revenue in
the third quarter from the launch of full production at the
Company's mobile concrete coating site in Trinidad for the $90
million Technip project as well as the $40 million Linea 5 project at the Company's
concrete coating facility in Mexico. Production on these orders will
continue in the fourth quarter and into 2013 and will be
complemented by higher production levels at ShawCor's pipe coating
facility in Belo Horizonte,
Brazil.
Pipeline Segment - EMAR
The Company's Europe, Middle
East, Africa, Russia ("EMAR") region has experienced strong
project revenues from the pipe coating facilities in Orkanger,
Norway and Ras Al Khaimah, UAE and this is expected to
continue in the fourth quarter at a modestly reduced level due to
the completion of the $45 million
Barzan project.
Pipeline Segment - Asia Pacific
The Company's Asia
Pacific region commenced full production of the Pearl Energy
and Wheatstone gas supply trunk line pipeline projects in the third
quarter and is on schedule to commence production on the Ichthys
gas export pipeline in the fourth quarter. With the successful ramp
up in production volumes, the Company's Asia Pacific facilities reached record revenue
and operating income levels in the third quarter. With the addition
of the Ichthys project volumes in the fourth quarter, further gains
in revenue and operating income are expected.
Petrochemical and Industrial
Segment
ShawCor's Petrochemical and Industrial segment
businesses are significantly exposed to demand in the North
American and European automotive and industrial markets. As a
result, the onset of recession in Europe and any deceleration of economic
activity in North America will
negatively impact segment revenue and profit. Although order
backlogs continue to be at high levels, the prospect for a
weakening trend has increased and the Company will be focused on
seeking to capture market opportunities in areas less sensitive to
the performance of the developed economies, such as growth in
Asia at the DSG-Canusa China
facility and the demand for highly engineered wire and cable
systems related to continued oil sands development.
Order Backlog
The Company's order backlog consists of firm
customer orders only and represents the revenue the Company expects
to realize on booked orders over the succeeding twelve months. The
Company reports the twelve month billable backlog because it
provides a leading indicator of significant changes in consolidated
revenue. The order backlog at September 30,
2012 was $722 million, down
3.6% from the record level of $749
million at June 30, 2012, but
up 93.0% from the $374 million level
reported one year ago. The small decline in the reported backlog
over the quarter is due to the appreciation of the Canadian dollar
as the backlog in US dollars has continued to grow from the level
at the start of the third quarter. Including the value of booked
projects that are expected to be executed beyond the next twelve
months, the Company's order book at September 30, 2012 is approximately one billion dollars. This order backlog and
longer term order book supports our outlook for continued strong
performance in the quarters ahead.
2.0 CONSOLIDATED
INFORMATION AND RESULTS FROM OPERATIONS
2.1 Revenue
The following table sets forth revenue by
reportable operating segment for the following periods:
|
|
|
|
|
|
(in thousands of Canadian
dollars) |
|
Three Months ended |
Nine Months ended |
|
|
September
30, 2012 |
|
June 30,
2012 |
|
September
30, 2011 |
|
September
30, 2012 |
|
September
30, 2011 |
Pipeline and Pipe Services |
$ |
359,591 |
$ |
287,931 |
$ |
240,360 |
$ |
922,419 |
$ |
715,292 |
Petrochemical and Industrial |
|
36,374 |
|
39,528 |
|
32,468 |
|
113,655 |
|
101,543 |
Elimination |
|
(690) |
|
(536) |
|
(1,350) |
|
(1,609) |
|
(1,350) |
|
$ |
395,275 |
$ |
326,923 |
$ |
271,478 |
$ |
1,034,465 |
$ |
815,485 |
Third Quarter 2012 versus Third Quarter
2011
Consolidated revenue increased 46%, or
$123.8 million, from $271.5 million during the third quarter of 2011
to $395.3 million during the third
quarter of 2012, due to increases of $119.2
million, or 50%, in the Pipeline and Pipe Services segment
and $3.9 million, or 12%, in the
Petrochemical and Industrial segment.
Revenue for the Pipeline and Pipe Services
segment was significantly higher in the third quarter of 2012 than
in the third quarter of 2011, because of increased activity in all
regions, particularly in Latin
America and Asia
Pacific. See section 3.1 - Pipeline and Pipe
Services segment for additional disclosure with respect to the
change in revenue in the Pipeline and Pipe Services segment.
Revenue for the Petrochemical and Industrial
segment was higher in the third quarter of 2012 than in the third
quarter of 2011, mainly because of an increase of 27% in North
American revenues, partially offset by decreased activity in EMAR.
See section 3.2 - Petrochemical and Industrial segment for
additional disclosure with respect to the change in revenue in the
Petrochemical and Industrial segment.
Third Quarter 2012 versus Second Quarter
2012
Consolidated revenue increased by $68.4 million, or 21%, from $326.9 million during the second quarter of 2012
to $395.3 million during the
third quarter of 2012, due to an increase of $71.7 million, or 25%, in the Pipeline and Pipe
Services segment, partially offset by a decrease of $3.2 million, or 8%, in the Petrochemical and
Industrial segment.
Revenue for the Pipeline and Pipe Services
segment in the third quarter of 2012 was $359.6 million, or $71.7
million higher than in the second quarter of 2012, primarily
due to increased activity in Latin
America, Asia Pacific and
North America, partially offset by
lower revenue in EMAR. See section 3.1 - Pipeline and Pipe
Services segment for additional disclosure with respect to the
change in revenue in the Pipeline and Pipe Services segment.
Revenue for the Petrochemical and Industrial
segment decreased by $3.2 million
during the third quarter of 2012 compared to the second quarter of
2012, primarily due to lower activity levels in North America and EMAR. See section 3.2 -
Petrochemical and Industrial segment for additional
disclosure with respect to the change in revenue in the
Petrochemical and Industrial segment.
Nine Months ended September 30, 2012 versus Nine Months ended
September 30, 2011
Consolidated revenue increased by $219.0 million, or 27%, from $815.5 million for the nine month period ended
September 30, 2011 to
$1,034.5 million for the nine month
period ended September 30, 2012, due
to an increase of $ 207.1 million, or
29 %, in the Pipeline and Pipe Services segment and $12.1 million, or 12%, in the Petrochemical and
Industrial segment.
Revenue for the Pipeline and Pipe Services
segment in 2012 was $922.4 million,
or $207.1 million higher than in
2011, due to higher revenue in all regions, in particular
North America and Latin America. See section 3.1 - Pipeline
and Pipe Services segment for additional disclosure with
respect to the change in revenue in the Pipeline and Pipe Services
segment.
Revenue for the Petrochemical and Industrial
segment increased by $12.1 million in
2012 compared to 2011, primarily due to higher activity levels in
North America and Asia Pacific, partially offset by lower
revenue in EMAR. See section 3.2 - Petrochemical and Industrial
segment for additional disclosure with respect to the change in
revenue in the Petrochemical and Industrial segment.
2.2 Income from Operations
The following table sets forth income from
operations ("Operating Income") and Operating Margin for the
following periods:
|
|
|
|
(in thousands of Canadian dollars) |
|
Three Months ended |
Nine Months ended |
|
|
September
30, 2012 |
|
June 30,
2012 |
|
September
30, 2011 |
|
September
30, 2012 |
|
September
30, 2011 |
Operating Income |
$ |
67,277 |
$ |
22,795 |
$ |
(60) |
$ |
120,927 |
$ |
52,695 |
Operating
Margin(a) |
|
17.0% |
|
7.0% |
|
0.0% |
|
11.7% |
|
6.5% |
(a) Operating Margin is defined as
Operating Income divided by revenue. |
Third Quarter 2012 versus Third Quarter
2011
Operating Income increased by $67.4 million, from an operating loss of
$0.1 million during the third quarter
of 2011 to operating income of $67.3
million during the third quarter of 2012. Gross profit
increased by $72.5 million, primarily
due to higher revenue and a higher gross margin percentage and a
foreign exchange gain of $0.5 million
recorded in the third quarter of 2012 compared to a foreign
exchange loss of $6.5 million in the
third quarter of 2011, partially offset by an increase in selling,
general and administration expenses ("SG&A") of $7.2 million and an impairment loss on property,
plant and equipment of $3.9
million.
Higher revenue of $123.8
million, as explained above, combined with a 7.8 percentage
point increase in gross margin, generated the increased gross
profit, with the gross margin percentage improvement driven by
favourable product and project mix and better facility utilization
and absorption of overheads.
SG&A expenses increased by $7.2 million compared with the third quarter of
2011 primarily due to a $5.3 million
increase in salaries and other personnel related costs, and a
$11.9 million increase in short and
long term management incentive compensation accruals. These cost
increases were partially offset by the fact that the third quarter
of 2011 SG&A had included a provision for bad debts of
$9.6 million.
A $3.9 million
impairment charge was recorded in the third quarter of 2012 to
provide for the costs to dismantle plant and machinery at the
Kembla Grange, Australia facility
in anticipation of the sale of that facility's land and building
that is expected to be completed in the next few months.
Third Quarter 2012 versus Second Quarter
2012
Operating Income increased by $44.5 million from the second quarter of 2012 to
$67.3 million during the third
quarter of 2012. Gross profit increased by $50.4 million, primarily due to higher revenue,
and a higher gross margin percentage and a foreign exchange gain of
$0.5 million recorded in the third
quarter of 2012 compared to a foreign exchange loss of $0.4 million in the second quarter of 2012,
partially offset by an increase in SG&A expenses of
$2.5 million and an impairment loss
on property plant and equipment of $3.9
million.
Higher revenue of $68.4
million, as explained above, combined with a 6.7 percentage
point increase in gross margin, generated the increased gross
profit, with the gross margin percentage improvement driven by
favourable product and project mix and better facility utilization
and absorption of overheads.
SG&A expenses increased by $2.5 million compared with the second quarter of
2012 due to a $4.3 million increase
in short and long term management incentive compensation accruals
partially offset by reduced building rental costs and various other
provisions. In addition, a $3.9
million impairment charge was recorded in the third quarter
2012 as noted above.
Nine Months ended September 30, 2012 versus Nine Months ended
September 30, 2011
Operating Income increased by $68.2 million during the nine month period ended
September 30, 2011 to $120.9 million, with gross profit increasing by
$104.9 million on higher revenues and
a higher gross margin percentage, partially offset by an increase
in SG&A expenses of $32.1 million
and an impairment loss on property plant and equipment of
$3.9 million.
The increase in gross profit resulted from
higher revenue of $219.0 million, as
explained above, and an increase in gross margin of 2.6 percentage
points due to favourable product and project mix and better
facility utilization and absorption of overheads.
SG&A expenses increased by $32.1 million in 2012 compared with 2011
primarily due to a $12.3 million
increase in salaries and other personnel related costs, a
$20.4 increase in short and long term
management incentive compensation accruals, an increase in pension
accruals of $3.0 million, higher
building and land rental expenses of $3.5
million and restructuring charges for personnel reductions
at the Leith, Scotland and Kembla Grange, Australia facilities totaling $1.9 million. These cost increases were partially
offset by the fact that the 2011 SG&A had included a provision
for bad debts of $9.6 million.
A $3.9 million
impairment charge was recorded in the third quarter of 2012 to
provide for the costs to dismantle plant and machinery at the
Kembla Grange, Australia facility
in anticipation of the sale of that facility's land and building
that is expected to be completed in the next few months.
2.3 Finance Costs, net
The following table sets forth the components of
finance costs, net for the following periods:
|
|
|
|
|
|
(in thousands of Canadian
dollars) |
|
|
|
Three Months ended |
Nine Months ended |
|
|
|
|
September
30, 2012 |
|
June 30,
2012 |
|
September
30, 2011 |
|
September
30, 2012 |
|
September
30, 2011 |
Interest income in short-term deposits |
|
|
$ |
(940) |
$ |
(1,001) |
$ |
(229) |
$ |
(2,033) |
$ |
(731) |
Interest expense, other |
|
|
|
781 |
|
397 |
|
1,384 |
|
1,683 |
|
3,417 |
Interest expense on long-term debt |
|
|
|
- |
|
- |
|
(15) |
|
- |
|
667 |
Finance (income) cost, net |
|
|
$ |
(159) |
$ |
(604) |
$ |
1,140 |
$ |
(350) |
$ |
3,353 |
Third Quarter 2012 versus Third Quarter
2011
In the third quarter of 2012, net finance income
was $0.2 million, compared to a net
finance cost of $1.1 million during
the third quarter of 2011, as a result of lower accretion expense
on certain non-current liabilities and higher interest income on
short-term deposits.
Third Quarter 2012 versus Second Quarter
2012
In the third quarter of 2012, net finance income
was $0.2 million, compared to a net
finance income of $0.6 million during
the second quarter of 2012, as a result of higher accretion expense
on certain non-current liabilities.
Nine Months ended September 30, 2012 versus Nine Months ended
September 30, 2011
In the nine months ended September 30, 2012, net finance income was
$0.4 million, compared to a net
finance cost of $3.4 million during
the comparable period of 2011, as a result of lower accretion
expense on certain non-current liabilities, no interest expense on
long term debt and higher interest income on short-term
deposits.
2.4 Income Taxes
Third Quarter 2012 versus Third Quarter
2011
The Company recorded an income tax expense of
$14.0 million (21% of income before
income taxes) in the third quarter of 2012, compared to an income
tax recovery of $1.2 million (27% of
loss before income taxes) in the third quarter of
2011. The effective tax rate in the third quarter
of 2012 was lower than the Company's expected effective income tax
rate of 27%, due to the significant portion of the Company's
taxable income that was earned in the Trinidad Free Zone,
Asia Pacific, the Middle East and other jurisdictions where the
expected tax rate is 25% or less.
Third Quarter 2012 versus Second Quarter
2012
The Company recorded an income tax expense of
$14.0 million (21% of income before
income taxes) in the third quarter of 2012, compared to an income
tax expense of $4.3 million (17% of
income before income taxes) in the second quarter of 2012. The
effective income tax rate in the second quarter of 2012 was lower
than in the third quarter of 2012 due to the reversal of tax
reserves resulting from the favourable settlement of certain items
in dispute with tax authorities.
Nine Months ended September 30, 2012 versus Nine Months ended
September 30, 2011
The Company recorded an income tax expense of
$25.9 million (21% of income before
income taxes) during the nine-month period ended September 30, 2012, compared to an income tax
expense of $8.2 million (20% of
income before income taxes) during the nine-month period ended
September 30, 2011. The effective
income tax rate for the nine months ending September 30, 2012 is much lower than the
expected income tax rate of 27% for the reasons discussed
above.
2.5 Foreign Exchange
Impact
The following table sets forth the significant
currencies in which the Company operates and the average foreign
exchange rates for these currencies versus Canadian dollars, for
the following periods:
|
|
|
|
|
|
|
|
|
Three Months
ended
September 30, |
|
Nine Months
ended
September 30, |
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
|
|
|
|
|
|
|
|
U.S. dollar |
|
1.0038 |
|
0.9854 |
|
1.0058 |
|
0.9833 |
Euro |
|
1.2584 |
|
1.3925 |
|
1.2904 |
|
1.3757 |
British Pounds |
|
1.5856 |
|
1.5818 |
|
1.5846 |
|
1.5800 |
The following table sets forth the impact on
revenue, income from operations and net income, compared with the
prior year period, as a result of foreign exchange fluctuations on
the translation of foreign currency operations:
|
|
|
|
|
|
|
(in thousands of Canadian
dollars) |
|
Q3-2012
Versus
Q2-2012 |
|
Q3-2012
versus
Q3-2011 |
|
Q3-2012
YTD
versus
Q3-2011
YTD |
Revenue |
$ |
(2,278) |
$ |
1,028 |
$ |
6,217 |
Income from operations |
|
(513) |
|
1,240 |
|
3,109 |
Net income |
|
(335) |
$ |
1,137 |
$ |
3,386 |
In addition to the translation impact noted
above, the Company recorded a foreign exchange gain of $0.5 million in the third quarter of 2012,
compared to a loss of $6.5 million
for the comparable period in the prior year, as a result of the
impact of changes in foreign exchange rates on monetary assets and
liabilities and short term foreign currency intercompany loans
within the group, net of hedging activities. The Company recorded a
foreign exchange loss of $0.7 million
for the nine months ended September 30,
2012 compared to a loss of $0.8
million in the comparable period in 2011.
2.6 Net Income
Third Quarter 2012 versus Third Quarter
2011
Net income increased by $56.6 million, from a net loss of
$3.1 million during the quarter ended
September 30, 2011 to $53.4 million during the quarter ended
September 30, 2012, mainly due to
higher revenue and gross profit margins as explained above, a small
gain on investment in associate and finance income of $0.2 million during the third quarter of 2012,
compared to a loss on investment in associate of $3. 1 million and finance costs of $1.2 million during the third quarter of 2011,
partially offset by higher income taxes of $15.2 million.
Third Quarter 2012 versus Second Quarter
2012
Net income increased by $32.0 million, from $21.4
million during the quarter ended June
30, 2012 to $53.4 million
during the quarter ended September 30,
2012, mainly due to higher revenue and gross profit margins
as explained above and a foreign exchange gain of $0.5 million during the third quarter of 2012,
compared to a loss of $0.4 million
during the second quarter of 2012, partially offset by a lower gain
on investment in associate of $1.4
million and lower finance income of $0.4 million.
Nine Months ended September 30, 2012 versus Nine Months ended
September 30, 2011
Net income increased by $65.1 million from $33.0
million during the nine months ended September 30, 2011 to $98.1 million during the nine months ended
September 30, 2012, mainly due to
higher revenue and gross profit margins as explained above, a gain
on investment in associate of $2.7
million and finance income of $0.4
million during 2012, compared to a loss on investment in
associate of $8.2 million and finance
costs of $3.4 million during 2011,
partially offset by higher income taxes of $17.7 million.
3.0 SEGMENT
INFORMATION
3.1 Pipeline and Pipe Services
segment
The following table sets forth, by geographic
location, the Revenue, Operating Income and Operating Margin for
the Pipeline and Pipe Services segment for the following
periods:
|
|
|
|
(in thousands of
Canadian dollars) |
|
Three Months ended |
Nine Months ended |
|
|
September
30, 2012 |
|
June 30,
2012 |
|
September
30, 2011 |
|
September
30, 2012 |
|
September
30, 2011 |
North America |
$ |
162,633 |
$ |
146,054 |
$ |
145,852 |
$ |
463,001 |
$ |
386,445 |
Latin America |
|
58,391 |
|
21,990 |
|
9,635 |
|
95,314 |
|
20,051 |
EMAR |
|
54,489 |
|
68,661 |
|
49,378 |
|
181,580 |
|
160,950 |
Asia Pacific |
|
84,078 |
|
51,226 |
|
35,495 |
|
182,524 |
|
147,846 |
Total Revenue |
$ |
359,591 |
$ |
287,931 |
$ |
240,360 |
$ |
922,419 |
$ |
715,292 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
$ |
74,192 |
$ |
26,309 |
$ |
9,183 |
$ |
138,047 |
$ |
62,278 |
|
Operating Margin |
|
20.6% |
|
9.1% |
|
3.8% |
|
15.0% |
|
8.7% |
Third Quarter 2012 versus Third Quarter
2011
Revenue in the third quarter of 2012 was
$359.6 million, an increase of
$119.2 million, or 50%, over the
third quarter of 2011. This was driven by revenue increases in all
regions with significant volume improvements in Asia Pacific and Latin America:
- In North America, revenue
increased by $16.8 million, or 12%,
as a result of strong growth in flexible composite pipe volumes,
significantly increased activity from the Cardon IV, Enbridge Line
6B and Jack St. Malo projects, and increased market share in
tubular management services in the US. These increases were
partially offset by lower large diameter activity in Canada.
- Revenue in Latin America
increased by $48.8 million as a
result of the increased production on the Technip project in
Trinidad, plus increased activity
on the Linea 5 project in Mexico.
- EMAR revenue increased by $5.1
million, or 10%, due to increased volume from the Barzan
project at Ras Al Khaimah, UAE
("RAK") and increased project activity in Orkanger, Norway and Russia, partially offset by lower volumes at
Leith, Scotland.
- In Asia Pacific, revenue
increased $48.6 million, or 137%,
from the third quarter of 2011, mainly due to an increase in large
project volumes with the Pearl Energy Ruby and Wheatstone projects
reaching full production. This was partially offset by the closure
of the Kembla Grange, Australia
facility in early 2012.
Operating Income in the third quarter of 2012
was $74.2 million compared to
$9.2 million in the third quarter of
2011, an increase of $65.0 million,
or 708%, primarily due to the increase in revenue as explained
above and an increase in the gross margin by 8.4 percentage points
due to significantly better facilities utilization and the
absorption of overheads in all regions. The increase in gross
profit was partially offset by higher SG&A expenses in 2012, as
explained in section 2.2 above. Finally, third quarter 2011 results
had included a $9.6 million provision
for bad debts.
Third Quarter 2012 versus Second Quarter
2012
Revenue was $359.6
million in the third quarter of 2012, an increase of
$71.7 million, or 25%, from
$287.9 million in the second quarter
of 2012. Revenues in Asia Pacific,
Latin America and North America were significantly higher in the
third quarter of 2012 compared to the second quarter of 2011,
partially offset by a decrease in EMAR revenue:
- Revenue in North America
increased by $16.6 million, or 11%,
due to strong sales of flexible composite pipe, particularly in
Canada, after the weather impacted
second quarter, and increased large diameter pipe coating volumes
at the Canadian facilities.
- In Latin America, revenue was
higher by $36.4 million, or 166%, due
to full production volumes from the Technip project in Trinidad and Linea 5 project in Mexico.
- EMAR revenue decreased by $14.2
million, or 21%, primarily due to decreased volumes from the
Barzan project in RAK and the Skuld and Tordis projects in
Orkanger, Norway, partially offset
by higher activity in Russia at
the Arkangelsk joint venture facility.
- Revenue in Asia Pacific
increased by $32.9 million, or 64%,
mainly due to an increase in large project volumes with the Pearl
Energy Ruby and Wheatstone projects reaching full production.
Operating Income in the third quarter of 2012
was $74.2 million compared to
$26.3 million in the second quarter
of 2012, an increase of $47.9
million, or 182%, with the operating margin increasing by
11.5 percentage points to 20.6%. The increase in operating income
is primarily due to an 8.0 percentage point increase in gross
profit margin due to a favourable change in project mix and
significantly better facilities utilization and absorption of
overheads on higher revenues, as explained above.
Nine Months ended September 30, 2012 versus Nine Months ended
September 30, 2011
Revenue in the Pipeline and Pipe Services
segment for the nine month period ended September 30, 2012 was $922.4 million, an increase of $207.1 million, or 29%, from $715.3 million in the comparable period in the
prior year. Activity level in all regions was significantly higher
in 2012 compared to 2011:
- Revenue in North America
increased by $76.6 million, or 20%,
due to increased sales of small diameter pipe coating, flexible
composite pipe, tubular management services, the CSI acquisition,
and increased large project activity particularly with the
execution of the Jack St. Malo and Cardon IV projects at mobile
plants in Beaumont Texas.
- In Latin America, revenue was
higher by $75.3 million, or 375%, due
to higher activity levels on the P55 Risers project in Brazil, the Technip project in Trinidad and the Linea 5 project at the
Veracruz and Monterrey facilities in Mexico.
- EMAR revenue increased by $20.6
million, or 13%, primarily due to increased activity levels
on the Barzan project in RAK and higher flow assurance pipe coating
volumes in Orkanger, Norway,
partially offset by the reduction in volumes at the Leith, Scotland facility where the Total Laggan
project had been executed in 2011.
- Revenue in Asia Pacific
increased by $34.7 million, or 24%,
in 2012, mainly due to increased production levels on large
offshore concrete weight coating projects such as M9 Zawtika, Pearl
Energy Ruby and Wheatstone. This was partially offset by closure of
the Kremla Grange, Australia
facility in early 2012.
Operating Income for the nine month period ended
September 30, 2012 was $138.1 million compared to $62.3 million for the nine month period ended
September 30, 2011, an increase of
$75.8 million, or 122%, with the
operating margin increasing by 6.3 percentage points to 15.0%. The
increase in operating income is primarily due to a 2.6 percentage
point increase in gross profit margin due to a favourable change in
project mix and better utilization of facilities and absorption of
overheads on higher revenues, as explained above, partially offset
by higher SG&A expenses as explained in section 2.2.
3.2 Petrochemical and Industrial
segment
The following table sets forth, by geographic
location, the Revenue, Operating Income and Operating Margin for
the Petrochemical and Industrial segment for the following
periods:
|
|
|
|
(in thousands of Canadian
dollars) |
|
Three Months ended |
Nine Months ended |
|
|
September
30, 2012 |
|
June 30,
2012 |
|
September
30, 2011 |
|
September
30, 2012 |
|
September
30, 2011 |
North America |
$ |
23,827 |
$ |
25,313 |
$ |
18,823 |
$ |
71,733 |
$ |
57,295 |
EMAR |
|
11,468 |
|
13,220 |
|
13,020 |
|
39,062 |
|
41,857 |
Asia Pacific |
$ |
1,079 |
$ |
995 |
$ |
625 |
$ |
2,860 |
$ |
2,391 |
Total Revenue |
|
36,374 |
|
39,528 |
|
32,468 |
|
113,655 |
|
101,543 |
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
$ |
4,911 |
$ |
5,424 |
|
3,544 |
$ |
15,375 |
$ |
11,540 |
Operating Margin |
|
13.5% |
|
13.7% |
|
10.9% |
|
13.5% |
|
11.4% |
Third Quarter 2012 versus Third Quarter
2011
Revenue increased in the third quarter by
$3.9 million, or 12 %, to
$36.4 million, compared to the third
quarter of 2011 due to increased heat shrinkable product shipments
in North America and higher
shipments of wire and cable products to the oil sands markets and
North American electrical utilities, partially offset by softness
in EMAR due to reduced automotive shipments.
Operating Income of $4.9
million in the third quarter of 2012 increased by
$1.4 million, or 38%, compared to
$3.5 million in the third quarter of
2011. The increase was primarily due to the higher revenue as
explained above and a 2.6 percentage point increase in operating
margin due to favourable product mix on wire and cable
products.
Third Quarter 2012 versus Second Quarter
2012
In the third quarter of 2012, revenue totaled
$36.4 million compared to
$39.5 million in the second quarter
of 2012, a decrease of $3.1 million,
or 8%. The decrease was driven by slightly lower shipments of wire
and cable products to North American electrical utilities and lower
revenues in the EMAR automotive market.
Operating Income in the third quarter of 2012
was $4.9 million compared to
$5.4 million in the second quarter of
2012, primarily due to the lower revenue as explained above.
Nine Months ended September 30, 2012 versus Nine Months ended
September 30, 2011
Revenue increased in the nine months ended
September 30, 2012 by $12.1 million, or 12%, to $113.7 million, compared to the comparable period
in 2011 due to increased shipments of wire and cable products to
the oil sands and electrical utilities markets and increased heat
shrinkable product shipments in North
America. This was partially offset by lower volumes in EMAR
due to reduced automotive shipments.
Operating Income for the nine months ended
September 30, 2012 was $15.4 million compared to $11.5 million for the nine months ended
September 30, 2011, an increase of
$3.8 million, or 33%. The increase
was primarily due to higher revenue, as explained above, and a 2.1
percentage point increase in operating margin due to improved
overhead absorption from better facility utilization favourable
product mix on wire and cable products.
3.3 Financial and
Corporate
Financial and corporate costs include corporate
expenses not allocated to the operating segments and other
non-operating items, including foreign exchange gains and losses on
foreign currency denominated cash and working capital balances. The
corporate division of the Company only earns revenue that is
considered incidental to the activities of the Company. As a
result, it does not meet the definition of a reportable operating
segment as defined under IFRS.
The following table sets forth the Company's
unallocated financial and corporate expenses, before foreign
exchange gains and losses, for the following periods:
|
|
|
|
(in thousands of Canadian
dollars) |
|
Three Months
ended |
Nine Months
ended |
|
|
September
30, 2012 |
|
June 30,
2012 |
|
September
30, 2011 |
|
September
30, 2012 |
|
September
30, 2011 |
Loss from operations |
$ |
(12,354) |
$ |
(8,539) |
$ |
(6,277) |
$ |
(31,779) |
$ |
(20,328) |
Third Quarter 2012 versus Third Quarter
2011
Financial and corporate costs increased by
$6.1 million from $6.3 million during the third quarter of 2011, to
$12.4 million during the third
quarter of 2012, primarily as a result of an increase in the
recorded expense for short and long term management incentive
compensation of $6.9 million.
Third Quarter 2012 versus Second Quarter
2012
Financial and corporate costs increased by
$3.9 million from the second quarter
of 2012 to $12.4 million in the third
quarter of 2012, primarily due to an increase in the recorded
expense for short and long term management incentive compensation
of $2.0 million, changes in various
provisions of $1.2 million, and the
reclassification of decommissioning obligation costs to the
Pipeline and Pipe Services segment in the second quarter of 2012,
which were previously recorded in the Financial and Corporate
segment.
Nine Months ended September 30, 2012 versus Nine Months ended
September 30, 2011
Financial and corporate costs increased by
$11.5 million from the nine month
period ended September 30, 2011 to
$31.8 million for the nine month
period ended September 30, 2012,
primarily due to an increase in the recorded expense for short and
long term management incentive compensation of $9.1 million, and higher personnel related
expenses in 2012 as compared to 2011 of $1.8
million.
4.0 FORWARD-LOOKING
INFORMATION
This document includes certain statements that
reflect management's expectations and objectives for the Company's
future performance, opportunities and growth, which statements
constitute forward-looking information under applicable securities
laws. Such statements, other than statements of historical
fact, are predictive in nature or depend on future events or
conditions. Forward looking information involves estimates,
assumptions, judgments and uncertainties. These statements
may be identified by the use of forward-looking terminology such as
″may″, ″will″, ″should″, ″anticipate″, ″expect″, ″believe″,
″predict″, ″estimate″, ″continue″, ″intend″, ″plan″ and variations
of these words or other similar expressions. Specifically,
this document includes forward looking information in the Outlook
section and elsewhere in respect of, among other things, the timing
of major project activity, the completion of the sale of the Kembla
Grange facility, the impact of the existing order backlog and other
factors on the Company's revenue and operating income, the impact
of global economic activity on the demand for the Company's
products, the impact of changing energy demand, supply and prices,
the impact and likelihood of changes in competitive conditions in
the markets in which the Company participates, the impact of
changing laws for environmental compliance on the Company's capital
and operating costs, and the adequacy of the Company's existing
accruals in respect thereof and in respect of litigation matters
generally, the level of payments under the Company's performance
bonds, the outlook for revenue and operating income and the
expected development in the Company's order backlog.
Forward looking information involves known and
unknown risks and uncertainties that could cause actual results to
differ materially from those predicted by the forward-looking
information. We caution readers not to place undue reliance
on forward looking information as a number of factors could cause
actual events, results and prospects to differ materially from
those expressed in or implied by the forward looking
information. Significant risks facing the Company include,
but are not limited to: changes in global or regional economic
activity and changes in energy supply and demand, which impact on
the level of drilling activity and pipeline construction; exposure
to product and other liability claims; shortages of or significant
increases in the prices of raw materials used by the Company;
compliance with environmental, trade and other laws; political,
economic and other risks arising from the Company's international
operations; fluctuations in foreign exchange rates, as well as
other risks and uncertainties, as more fully described under the
heading "Risks and Uncertainties" in the Company's annual
MD&A.
These statements of forward looking information
are based on assumptions, estimates and analysis made by management
in light of its experience and perception of trends, current
conditions and expected developments as well as other factors
believed to be reasonable and relevant in the circumstances.
These assumptions include those in respect of continued global
economic recovery, increased investment in global energy
infrastructure, the Company's ability to execute projects under
contract, the continued supply of and stable pricing for
commodities used by the Company, the availability of personnel
resources sufficient for the Company to operate its businesses and
the maintenance of operations in major oil and gas producing
regions. The Company believes that the expectations reflected in
the forward looking information are based on reasonable assumptions
in light of currently available information. However, should
one or more risks materialize or should any assumptions prove
incorrect, then actual results could vary materially from those
expressed or implied in the forward looking information included in
this document and the Company can give no assurance that such
expectations will be achieved.
When considering the forward looking information
in making decisions with respect to the Company, readers should
carefully consider the foregoing factors and other uncertainties
and potential events. The Company does not assume the
obligation to revise or update forward looking information after
the date of this document or to revise it to reflect the occurrence
of future unanticipated events, except as may be required under
applicable securities laws.
ShawCor will be hosting a Shareholder and
Analyst Conference Call and Webcast on Friday, November 9th, 2012, at 10:00 AM EDT, which will discuss the Company's
third quarter financial results.
Additional information relating to the Company,
including its Annual Information Form, is available on SEDAR at
www.sedar.com.
Please visit our website at www.shawcor.com for
further details.
ShawCor Ltd.
Consolidated Balance Sheets
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
(in thousands of Canadian dollars) |
|
|
|
|
|
September 30, 2012 |
|
|
|
December 31, 2011 |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
$ |
133,613 |
|
|
$ |
56,731 |
Short-term investments |
|
|
|
|
|
211,887 |
|
|
|
10,545 |
Loan receivable |
|
|
|
|
|
61,416 |
|
|
|
2,047 |
Accounts receivable |
|
|
|
|
|
414,823 |
|
|
|
279,324 |
Income taxes receivable |
|
|
|
|
|
8,289 |
|
|
|
15,981 |
Inventories |
|
|
|
|
|
187,675 |
|
|
|
146,786 |
Prepaid expenses |
|
|
|
|
|
35,318 |
|
|
|
24,454 |
Derivative financial instruments |
|
|
|
|
|
4,232 |
|
|
|
270 |
|
|
|
|
|
|
1,057,253 |
|
|
|
536,138 |
Non-current Assets |
|
|
|
|
|
|
|
|
|
|
Loan receivable |
|
|
|
|
|
12,273 |
|
|
|
12,622 |
Property, plant and equipment |
|
|
|
|
|
301,320 |
|
|
|
299,118 |
Intangible assets |
|
|
|
|
|
78,659 |
|
|
|
86,362 |
Investment in associate |
|
|
|
|
|
32,246 |
|
|
|
30,095 |
Deferred income taxes |
|
|
|
|
|
27,495 |
|
|
|
30,058 |
Other assets |
|
|
|
|
|
10,220 |
|
|
|
12,022 |
Goodwill |
|
|
|
|
|
215,373 |
|
|
|
220,334 |
|
|
|
|
|
|
677,586 |
|
|
|
690,611 |
|
|
|
|
|
$ |
1,734,839 |
|
|
$ |
1,226,749 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
Bank indebtedness |
|
|
|
|
$ |
54 |
|
|
$ |
12,281 |
Loan payable |
|
|
|
|
|
6,603 |
|
|
|
5,001 |
Accounts payable and accrued liabilities |
|
|
|
|
|
189,305 |
|
|
|
156,064 |
Provisions |
|
|
|
|
|
26,721 |
|
|
|
12,317 |
Income taxes payable |
|
|
|
|
|
30,938 |
|
|
|
35,200 |
Derivative financial instruments |
|
|
|
|
|
668 |
|
|
|
419 |
Deferred revenue |
|
|
|
|
|
321,329 |
|
|
|
27,446 |
Obligations under finance lease |
|
|
|
|
|
69 |
|
|
|
268 |
|
|
|
|
|
|
575,687 |
|
|
|
248,996 |
Non-current Liabilities |
|
|
|
|
|
|
|
|
|
|
Provisions |
|
|
|
|
|
41,571 |
|
|
|
50,859 |
Deferred revenue |
|
|
|
|
|
150,480 |
|
|
|
- |
Derivative financial instruments |
|
|
|
|
|
1,472 |
|
|
|
2,499 |
Deferred income taxes |
|
|
|
|
|
52,066 |
|
|
|
56,984 |
|
|
|
|
|
|
245,589 |
|
|
|
110,342 |
|
|
|
|
|
$ |
821,276 |
|
|
$ |
359,338 |
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
Share capital |
|
|
|
|
|
220,528 |
|
|
|
218,381 |
Contributed surplus |
|
|
|
|
|
17,317 |
|
|
|
16,391 |
Retained earnings |
|
|
|
|
|
726,452 |
|
|
|
664,475 |
Accumulated other comprehensive loss |
|
|
|
|
|
(50,734) |
|
|
|
(31,836) |
|
|
|
|
|
|
913,563 |
|
|
|
867,411 |
|
|
|
|
|
$ |
1,734,839 |
|
|
$ |
1,226,749 |
ShawCor Ltd.
Consolidated Statements of Income
(Unaudited)
|
|
|
|
|
|
|
(in thousands of
Canadian dollars) |
|
Three Months
Ended
September 30, |
|
Nine Months
Ended
September 30, |
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
Sale of products |
$ |
94,567 |
$ |
84,108 |
$ |
289,400 |
$ |
228,237 |
Rendering of services |
|
300,708 |
|
187,370 |
|
745,065 |
|
587,248 |
|
|
395,275 |
|
271,478 |
|
1,034,465 |
|
815,485 |
Cost of Goods Sold |
|
231,266 |
|
179,974 |
|
638,319 |
|
524,281 |
|
|
|
|
|
|
|
|
|
Gross Profit |
$ |
164,009 |
$ |
91,504 |
$ |
396,146 |
$ |
291,204 |
|
|
|
|
|
|
|
|
|
Selling, general and administrative
expenses |
|
77,067 |
|
69,829 |
|
223,603 |
|
191,498 |
Research and development expenses |
|
3,350 |
|
2,617 |
|
10,115 |
|
9,225 |
Foreign exchange (gains)
losses |
|
(528) |
|
6,510 |
|
716 |
|
795 |
Amortization of property, plant and
equipment |
|
11,252 |
|
10,766 |
|
31,579 |
|
31,553 |
Amortization of intangible
assets |
|
1,737 |
|
1,842 |
|
5,352 |
|
5,438 |
Impairment of property, plant, and
equipment |
|
3,854 |
|
- |
|
3,854 |
|
- |
Income (loss) from
Operations |
|
67,277 |
|
(60) |
|
120,927 |
|
52,695 |
|
|
|
|
|
|
|
|
|
(Gain) loss on investment in
associate |
|
(8) |
|
3,114 |
|
(2,726) |
|
8,132 |
Finance (income) costs,
net |
|
(159) |
|
1,140 |
|
(350) |
|
3,353 |
Income (loss) before Income
Taxes |
$ |
67,444 |
$ |
(4,314) |
$ |
124,003 |
$ |
41,210 |
|
|
|
|
|
|
|
|
|
Income taxes (recovery) |
|
14,006 |
|
(1,170) |
|
25,887 |
|
8,166 |
Net Income (loss) for the
Period |
$ |
53,438 |
$ |
(3,144) |
$ |
98,116 |
$ |
33,044 |
|
|
|
|
|
|
|
|
|
Earnings (loss) per Share |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.76 |
$ |
(0.04) |
$ |
1.39 |
$ |
0.47 |
|
Diluted |
$ |
0.75 |
$ |
(0.04) |
$ |
1.38 |
$ |
0.46 |
|
|
|
|
|
|
|
|
|
Weighted Average Number of Shares
Outstanding |
|
|
|
|
|
|
|
|
|
Basic |
|
70,209 |
|
70,894 |
|
70,477 |
|
70,759 |
|
Diluted |
|
70,876 |
|
71,520 |
|
71,224 |
|
71,678 |
|
|
|
|
|
|
|
|
|
ShawCor Ltd.
Consolidated Statements of Comprehensive Income
(unaudited)
|
|
|
|
|
|
|
(in thousands of Canadian
dollars) |
|
Three Months
Ended
September 30, |
|
Nine Months
Ended
September 30, |
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) for the
Period |
$ |
53,438 |
$ |
(3,144) |
$ |
98,116 |
$ |
33,044 |
|
|
|
|
|
|
|
|
|
Other Comprehensive (Loss)
Income |
|
|
|
|
|
|
|
|
|
Unrealized (loss) gain on translation
of foreign operations |
|
(12,288) |
|
10,655 |
|
(18,293) |
|
11,615 |
|
Other comprehensive income (loss)
attributable to investment in associate |
|
8 |
|
- |
|
(605) |
|
- |
|
Gain on hedge of unrealized foreign
currency translation |
|
- |
|
- |
|
- |
|
603 |
|
Gain on hedges of unrealized foreign
currency translation transferred to net income
during the period |
|
- |
|
- |
|
- |
|
(1,833) |
|
|
|
|
|
|
|
|
|
Income tax on other comprehensive
(loss) income |
|
|
|
|
|
|
|
|
|
|
Gain on hedges of unrealized foreign currency
translation |
|
- |
|
- |
|
- |
|
(103) |
|
|
Gain on hedges of unrealized foreign currency
translation transferred to net income
during the period |
|
- |
|
- |
|
- |
|
311 |
Other Comprehensive (Loss) Income
for the Period, net of Income Tax |
$ |
(12,280) |
$ |
10,655 |
$ |
(18,898) |
$ |
10,593 |
|
|
|
|
|
|
|
|
|
Comprehensive Income for the
Period |
$ |
41,158 |
$ |
7,511 |
$ |
79,218 |
$ |
43,637 |
|
ShawCor Ltd.
Consolidated Statements of Shareholders' Equity
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
(in thousands of Canadian
dollars) |
|
|
|
|
|
Accumulated |
|
|
|
|
Share
Capital |
|
Contributed
Surplus |
|
Retained
Earnings |
|
Other
Comprehensive
Loss |
|
Total
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2011 |
$ |
218,381 |
$ |
16,391 |
$ |
664,475 |
$ |
(31,836) |
$ |
867,411 |
|
|
|
|
|
|
|
|
|
|
|
Net income for the period |
|
- |
|
- |
|
98,116 |
|
- |
|
98,116 |
Issued on exercise of stock options |
|
3,110 |
|
- |
|
- |
|
- |
|
3,110 |
Compensation cost on exercised options |
|
1,138 |
|
(1,138) |
|
- |
|
- |
|
- |
Compensation cost on exercised RSUs |
|
75 |
|
(75) |
|
- |
|
- |
|
- |
Stock-based compensation |
|
- |
|
2,139 |
|
- |
|
- |
|
2,139 |
Other comprehensive income (loss) |
|
- |
|
- |
|
- |
|
(18,898) |
|
(18,898) |
Dividends paid |
|
- |
|
- |
|
(19,427) |
|
- |
|
(19,427) |
Purchase - normal course issuer bid |
|
(2,176) |
|
- |
|
- |
|
- |
|
(2,176) |
Excess of purchase price over stated value of
shares |
|
- |
|
- |
|
(16,712) |
|
- |
|
(16,712) |
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012 |
$ |
220,528 |
$ |
17,317 |
$ |
726,452 |
$ |
(50,734) |
$ |
913,563 |
|
|
|
|
|
|
|
|
|
|
|
December 31, 2010 |
$ |
206,775 |
$ |
18,144 |
$ |
644,191 |
$ |
(36,867) |
$ |
832,243 |
|
|
|
|
|
|
|
|
|
|
|
Net income for the period |
|
- |
|
- |
|
33,044 |
|
- |
|
33,044 |
Issued on exercise of stock options |
|
9,323 |
|
- |
|
- |
|
- |
|
9,323 |
Compensation cost on exercised options |
|
3,908 |
|
(3,908) |
|
- |
|
- |
|
- |
Compensation cost on exercised RSUs |
|
7 |
|
(7) |
|
- |
|
- |
|
- |
Stock-based compensation |
|
- |
|
1,760 |
|
- |
|
- |
|
1,760 |
Other comprehensive loss |
|
- |
|
- |
|
- |
|
10,593 |
|
10,593 |
Dividends paid |
|
- |
|
- |
|
(16,372) |
|
- |
|
(16,372) |
Purchase - normal course issuer bid |
|
(2,221) |
|
- |
|
- |
|
- |
|
(2,221) |
Excess of purchase price over stated value of
shares |
|
- |
|
- |
|
(13,046) |
|
- |
|
(13,046) |
|
|
|
|
|
|
|
|
|
|
|
September 30, 2011 |
$ |
217,792 |
$ |
15,989 |
$ |
647,817 |
$ |
(26,274) |
$ |
855,324 |
|
ShawCor Ltd.
Consolidated Statements of Cash Flows (unaudited)
(Unaudited)
|
|
|
|
|
|
|
(in thousands of
Canadian dollars) |
|
Three Months
Ended
September 30, |
|
Nine Months
Ended
September 30, |
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
Operating Activities |
|
|
|
|
|
|
|
|
Net income (loss) for the
period |
$ |
53,438 |
$ |
(3,144) |
$ |
98,116 |
$ |
33,044 |
Add (deduct) items not affecting
cash |
|
|
|
|
|
|
|
|
|
Amortization of property, plant and equipment |
|
11,252 |
|
10,766 |
|
31,579 |
|
31,553 |
|
Amortization of intangible assets |
|
1,737 |
|
1,842 |
|
5,352 |
|
5,438 |
|
Amortization of long-term prepaid expenses |
|
189 |
|
289 |
|
700 |
|
754 |
|
Decommissioning obligations expense |
|
354 |
|
117 |
|
1,066 |
|
351 |
|
Other provision (recovery) expenses |
|
264 |
|
(931) |
|
(2,568) |
|
219 |
|
Stock-based compensation |
|
4,410 |
|
(691) |
|
10,616 |
|
2,975 |
|
Deferred income taxes |
|
(891) |
|
(3,625) |
|
(2,355) |
|
1,809 |
|
(Gain) loss on disposal of property, plant and
equipment |
|
(94) |
|
15 |
|
(388) |
|
198 |
|
Investment (gain) loss on long-term
investment |
|
(8) |
|
3,114 |
|
(2,726) |
|
8,132 |
|
Impairment of property, plant and equipment |
|
3,854 |
|
- |
|
3,854 |
|
- |
|
Other |
|
800 |
|
2,147 |
|
(266) |
|
2,879 |
Settlement of decommissioning
liabilities |
|
(790) |
|
(284) |
|
(1,331) |
|
(284) |
Settlement of other provisions |
|
(72) |
|
1,285 |
|
(482) |
|
(1,839) |
(Decrease) increase in deferred
revenue non-current |
|
(55,396) |
|
- |
|
150,480 |
|
- |
Net change in employee future
benefits |
|
(150) |
|
- |
|
654 |
|
- |
Change in non-cash working capital and
foreign exchange |
|
(35,993) |
|
(11,712) |
|
139,026 |
|
(61,749) |
Cash (Used in) Provided by
Operating Activities |
$ |
(17,096) |
$ |
(812) |
$ |
431,327 |
$ |
23,480 |
|
|
|
|
|
|
|
|
|
Investing Activities |
|
|
|
|
|
|
|
|
Decrease (increase) in loan
receivable |
|
2,622 |
|
(8,289) |
|
(58,958) |
|
(8,230) |
Net purchase of short-term
investments |
|
(56,849) |
|
- |
|
(201,342) |
|
- |
Purchases of property, plant and
equipment |
|
(18,895) |
|
(13,776) |
|
(46,311) |
|
(37,450) |
Proceeds on disposal of property,
plant and equipment |
|
671 |
|
5 |
|
1,312 |
|
446 |
(Increase) decrease in intangible
assets |
|
(7) |
|
(20) |
|
(52) |
|
(20) |
Investment in associate |
|
- |
|
(1,432) |
|
- |
|
(10,517) |
(Increase) decrease in other
assets |
|
(343) |
|
- |
|
(343) |
|
- |
Business acquisition |
|
(2,205) |
|
- |
|
(2,205) |
|
(12,839) |
Cash Used in Investing
Activities |
$ |
(75,006) |
$ |
(23,512) |
$ |
(307,899) |
$ |
(68,610) |
|
|
|
|
|
|
|
|
|
Financing Activities |
|
|
|
|
|
|
|
|
Proceeds from (repayments of) bank
indebtedness |
|
(3,035) |
|
(1,774) |
|
(12,227) |
|
- |
Proceeds from (repayments of)
loan/lease obligations |
|
1,116 |
|
(66) |
|
1,403 |
|
(235) |
Repayments of long-term debt |
|
- |
|
- |
|
- |
|
(24,402) |
Issuance of shares |
|
132 |
|
7,530 |
|
3,110 |
|
9,323 |
Repurchase of shares |
|
|
|
(12,312) |
|
(18,888) |
|
(15,267) |
Dividend paid to shareholders |
|
(6,904) |
|
(5,595) |
|
(19,427) |
|
(16,372) |
Cash Used in Financing
Activities |
$ |
(8,691) |
$ |
(12,217) |
$ |
(46,029) |
$ |
(46,953) |
|
|
|
|
|
|
|
|
|
Effect of Foreign Exchange on Cash
and Cash Equivalents |
$ |
(674) |
$ |
5,862 |
$ |
(517) |
$ |
3,319 |
|
|
|
|
|
|
|
|
|
Net (Decrease) Increase in Cash and
Cash Equivalents for the Period |
|
(101,467) |
|
(30,679) |
|
76,882 |
|
(88,764) |
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents -
Beginning of Period |
$ |
235,080 |
$ |
97,913 |
$ |
56,731 |
$ |
155,998 |
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents - End of
Period |
$ |
133,613 |
$ |
67,234 |
$ |
133,613 |
$ |
67,234 |
SOURCE ShawCor Ltd.