Company Announcements

2023

CONSOLIDATED RESULTS

Revenue

$565.9

$542.6

4.3 %

$2,097.6

$2,154.7

(2.6) %

Equipment sales

$208.4

$158.5

31.5 %

$618.6

$607.1

1.9 %

Product support

$132.8

$132.8

(0.1) %

$535.0

$543.3

(1.5) %

Industrial parts

$133.6

$136.0

(1.7) %

$572.0

$605.1

(5.5) %

Engineered repair services (ERS)

$79.1

$103.6

(23.7) %

$326.5

$354.3

(7.9) %

Equipment rental

$12.1

$11.7

3.2 %

$45.5

$45.0

1.3 %

Net earnings

$1.0

$11.1

(90.7) %

$42.8

$81.0

(47.2) %

Basic earnings per share⁽²⁾

$0.05

$0.52

(90.8) %

$1.97

$3.77

(47.7) %

Adjusted net earnings⁽¹⁾⁽³⁾

$7.5

$17.8

(57.8) %

$52.9

$83.5

(36.6) %

Adjusted basic earnings per share^(1)(2)(3)

$0.35

$0.83

(58.2) %

$2.44

$3.88

(37.2) %

Adjusted EBIT⁽¹⁾

$19.3

$31.7

(39.0) %

$105.8

$138.9

(23.8) %

Adjusted EBITDA⁽¹⁾

$35.1

$47.2

(25.6) %

$168.0

$197.4

(14.9) %

Adjusted EBIT margin⁽¹⁾

3.4 %

5.8 %

(41.5) %

5.0 %

6.4 %

(21.7) %

Adjusted EBITDA margin⁽¹⁾

6.2 %

8.7 %

(28.6) %

8.0 %

9.2 %

Notes:

(1)

"Backlog", "Working capital", "Gross profit margin", "Selling and administrative expenses as a percentage of revenue", "Working capital efficiency", "Leverage ratio", "Senior secured leverage ratio", "Adjusted net earnings", "Adjusted basic and diluted earnings per share", "Adjusted EBIT", "Adjusted EBIT margin", "Adjusted EBITDA" and "Adjusted EBITDA margin" 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 fourth quarter of 2024 were 21,774,451 (2023 – 21,570,005) and 22,210,260 (2023 – 22,319,062), 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, 2024 were 21,719,568 (2023 - 21,509,250) and 22,188,628 (2023 - 22,271,628), respectively.

(3)

Net earnings excluding the following:

a.

after-tax facility closure, restructuring, and other related costs of $4.3 million (2023 – $1.4 million), or basic and diluted loss per share of $0.20 and $0.19, respectively (2023 – basic and diluted loss per share of $0.07 and $0.06, respectively) for the fourth quarter of 2024 and for the year ended December 31, 2024.

b.

after-tax losses on the change in fair value of contingent consideration of $2.3 million (2023 – $0.2 million), or basic and diluted loss per share of $0.10 (2023 – loss per share of $0.01) for the fourth quarter of 2024 and for the year ended December 31, 2024.

c.

after-tax non-cash gains on mark to market of derivative instruments of less than $0.1 million (2023 – losses of $5.0 million), or basic and diluted earnings per share of less than $0.01 (2023 – loss per share of $0.23) for the fourth quarter of 2024.

d.

after-tax non-cash losses on mark to market of derivative instruments of $3.6 million (2023 – losses of $0.9 million), or basic and diluted loss per share of $0.16 (2023 – loss per share of $0.04) for the year ended December 31, 2024.

e.

after-tax gains recorded on the sale of properties of nil (2023 – $0.1 million), or basic and diluted earnings per share of nil (2023 – earnings per share of less than $0.01) for the year ended December 31, 2024.

(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", "Adjusted basic earnings per share" and "Adjusted 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 any facility closure, restructuring, and other related costs, gains/losses recorded on sale of properties, non-cash gains/losses on mark to market of derivative instruments, and change in fair value of contingent consideration.

Adjusted basic earnings (loss) per share and adjusted diluted earnings (loss) per share

Basic and diluted earnings (loss) per share before any facility closure, restructuring, and other related costs, gains/losses recorded on sale of properties, non-cash gains/losses on mark to market of derivative instruments, and change in fair value of contingent consideration.

Adjusted EBIT

EBIT before any facility closure, restructuring, and other related costs, gains/losses recorded on sale of properties, non-cash gains/losses on mark to market of derivative instruments, and change in fair value of contingent consideration.

Adjusted EBITDA

EBITDA before any facility closure, restructuring, and other related costs, gains/losses recorded on sale of properties, non-cash gains/losses on mark to market of derivative instruments, and change in fair value of contingent consideration.

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. Pro-forma adjusted EBITDA is used in calculating the Leverage ratio and Senior secured leverage ratio.

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 and the current portion of debentures, as presented in the consolidated statements of financial position.

Non-GAAP ratios are identified and defined below:

Adjusted EBIT margin

Defined as adjusted EBIT (defined above) divided by revenue, as presented in the consolidated statements of earnings.

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

Defined as 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. 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.

Three months ended

Year ended

December 31

December 31

2024

2023

2024

2023

Net earnings

$             1.0

$           11.1

$           42.8

$           81.0

Facility closure, restructuring, and other related costs, after tax

4.3

1.4

4.3

1.4

Gain recorded on the sale of properties, after tax

—

—

—

(0.1)

Non-cash losses on mark to market of derivative instruments, after tax

—

5.0

3.6

0.9

Change in fair value of contingent consideration, after tax

2.3

0.2

2.3

0.2

$             7.5

$           17.8

$           52.9

$           83.5

Adjusted basic earnings per share ⁽¹⁾

$           0.35

$           0.83

$           2.44

$           3.88

Adjusted diluted earnings per share ⁽¹⁾

$           0.34

$           0.80

$           2.38

$           3.75

(1)

At December 31, 2024, the number of weighted average basic and diluted shares outstanding were 21,774,451 and 22,210,260, respectively for the three months ended, and 21,719,568 and 22,188,628, respectively for the year ended.
At December 31, 2023, the number of weighted average basic and diluted shares outstanding were 21,570,005 and 22,319,062, respectively for the three months ended, and 21,509,250 and 22,271,628, respectively for the year ended.

Three months ended

Year ended

December 31
2024

December 31
2023

December 31
2024

December 31
2023

EBIT

$                  11.1

$                  28.1

$                  96.5

$                136.7

Depreciation and amortization

15.8

15.5

62.2

58.6

EBITDA

$                  27.0

$                  43.6

$                158.7

$                195.3

EBIT

$                  11.1

$                  28.1

$                  96.5

$                136.7

Facility closure, restructuring, and other related costs⁽¹⁾

5.8

1.9

5.8

1.9

Gain recorded on the sale of properties

—

—

—

(0.1)

Non-cash losses on mark to market of derivative instruments, excluding interest rate swaps⁽²⁾

0.1

1.3

1.3

—

Change in fair value of contingent consideration⁽³⁾

2.3

0.3

2.3

0.3

Adjusted EBIT

$                  19.3

$                  31.7

$                105.8

$                138.9

Depreciation and amortization

15.8

15.5

62.2

58.6

Adjusted EBITDA

$                  35.1

$                  47.2

$                168.0

$                197.4

Payment of lease liabilities⁽⁴⁾

(39.2)

(35.5)

Polyphase acquisition pro-forma EBITDA⁽⁵⁾

—

3.2

Beta acquisition pro-forma EBITDA⁽⁵⁾

—

1.4

Pro-forma adjusted EBITDA

$                128.7

$                166.7

(1)

For 2024, facility closure, restructuring, and other related costs consists of costs relating to workforce reductions in response to market conditions, incurred during the fourth quarter of 2024. 
For 2023, facility closure, restructuring, and other related costs consists of costs accrued for a branch closure during the fourth quarter of 2023, including workforce reduction and remaining facility costs.

(2)

Non-cash losses (gains) on mark to market of derivative instruments that are not effectively designated as hedging instruments under IFRS, excluding interest rate swaps as their fair value fluctuations impact finance costs.

(3)

The change in fair value of contingent consideration relates to changes in the estimated fair value of future performance-based earnout payments relating to business acquisitions.

(4)

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.

(5)

Pro-forma EBITDA for 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, for the purpose of calculating the leverage ratio. "Polyphase" refers to Polyphase Engineered Controls (1977) Ltd., acquired effective July 4, 2023. "Beta" refers collectively to Beta Fluid Power Ltd. and Beta Industrial Ltd., which were acquired effective September 1, 2023.

December 31
2024

December 31
2023

(Cash) bank indebtedness

$                  (7.4)

$                    1.4

Debentures

57.0

56.3

Long-term debt

283.0

267.8

Funded net debt

$                332.7

$                325.5

Letters of credit

3.7

4.8

Debt   

$                336.3

$                330.3

Pro-forma adjusted EBITDA⁽¹⁾

$                128.7

$                166.7

Leverage ratio⁽²⁾

2.61

1.98

Senior secured leverage ratio⁽³⁾          

2.17

1.64

(1)

For the year ended December 31, 2024 and December 31, 2023.

(2)

Calculation uses debt divided by the trailing four-quarter Pro-forma adjusted EBITDA. This leverage ratio is calculated for purposes of monitoring against the Corporation's 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. See the Liquidity and Capital Resources section.

December 31
2024

December 31
2023

Shareholders' equity

$               512.3

$               496.2

Funded net debt

332.7

325.5

Total capital

$               844.9

$               821.7

Funded net debt to total capital          

39.4 %

39.6 %

December 31
2024

December 31
2023

Total current assets

$             1,090.7

$             1,043.6

Total current liabilities

558.3

483.4

Working capital

$                532.4

$                560.2

Trade and other receivables

(303.5)

(309.1)

Inventory

(673.1)

(630.9)

Debentures - current

57.0

—

Accounts payable and accrued liabilities

417.8

407.1

Other working capital amounts

$                  30.6

$                  27.3