(TSX: SCL)
-
For the full year 2013, revenue, EBITDA, net income (attributable to
shareholders of the Company) and diluted earnings per share all reached
record levels of $1.8 billion, $391 million, $220 million, and $3.51
per share respectively.
-
Fourth quarter revenue of $409.8 million decreased by $116.1 million, or
22%, from the record $525.8 million reported in the third quarter of
2013 and decreased by 7% from the $439.5 million reported in the fourth
quarter a year ago.
-
EBITDA in the fourth quarter of 2013 was $57.1 million, reduced by
$71.1 million, or 55.5%, from the record level of the third quarter of
2013 and also lower by $44.8 million, or 44.0%, from the fourth quarter
a year ago. Fourth quarter 2013 EBITDA was negatively affected by
one-time charges of $10.7 million for restructuring costs and amended
executive retirement arrangements that are reported in SG&A expenses.
-
Net income (attributable to shareholders of the Company) in the fourth
quarter was $22.4 million (or $0.37 per share diluted) compared with
net income of $80.3 million (or $1.13 per share diluted) in the fourth
quarter of the prior year.
TORONTO, Feb. 27, 2014 /CNW/ - Mr. Bill Buckley, Chief Executive Officer
of ShawCor Ltd. remarked "We are of course very pleased to announce the
record full year 2013 financial results. The Company's performance in
2013 was the result of excellent execution in all of our business
operations and in particular in our Asia Pacific region where we
successfully executed the largest projects in the Company's history".
Mr. Buckley added "Fourth quarter results did soften from the
exceptional levels seen in the third quarter following completion of
the $400 million Inpex Ichthys gas export pipeline project in Asia
Pacific and as a result of one-time charges. These charges include
restructuring costs and a loss on the sale of the Brazil joint venture,
partially offset by a gain on the sale of land with a resulting impact
on net income (attributable to the shareholders of the Company) of
approximately $11 million. For 2014, we are expecting reduced revenue
and earnings versus 2013; however, the Company's financial performance
is expected to result in strong cash flow generation. Furthermore,
given the Company's current high level of outstanding bids, the Company
is well positioned to produce backlog growth, if a significant portion
of these bids are converted to production orders, and to consequently
generate strong revenue and earnings growth in 2015 and beyond."
Selected Financial Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of Canadian dollars, except per share
amounts and percentages)
|
|
|
Three Months ended
December 31,
|
|
|
Twelve Months ended
December 31,
|
|
|
|
|
2013
|
|
|
2012(c)
|
|
|
2013
|
|
|
2012(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
409,759
|
|
$
|
439,499
|
|
$
|
1,847,549
|
|
$
|
1,469,187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
162,645
|
|
|
181,483
|
|
|
788,603
|
|
|
574,183
|
|
|
Gross profit %
|
|
|
39.7%
|
|
|
41.3%
|
|
|
42.7%
|
|
|
39.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA(a)
|
|
|
57,139
|
|
|
101,891
|
|
|
391,223
|
|
|
265,254
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
47,236
|
|
|
92,962
|
|
|
319,774
|
|
|
211,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the period(b)
|
|
$
|
22,397
|
|
$
|
80,275
|
|
$
|
219,862
|
|
$
|
178,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.37
|
|
$
|
1.14
|
|
$
|
3.55
|
|
$
|
2.53
|
|
|
|
Fully diluted
|
|
$
|
0.37
|
|
$
|
1.13
|
|
$
|
3.51
|
|
$
|
2.50
|
|
(a)
|
EBITDA is a non-GAAP measure calculated by adding back to net income the
sum of net finance costs, income taxes, depreciation/amortization of
property, plant and equipment and intangible assets, gains/losses from
assets sold or held for sale, and impairment of assets. 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.
|
|
(b)
|
Attributable to shareholders of the Company, excluding non-controlling
interests.
|
|
(c)
|
Restated due to the adoption of certain new IFRS standards that became
effective as at January 1, 2013, but were implemented retrospectively
to January 1, 2012.
|
1.0 KEY DEVELOPMENTS
Sale of Brazilian Joint Venture Interest
On December 4 , 2013, the Company announced an agreement for the sale,
subject to regulatory approval, of its Socotherm division's joint
venture interest in Socotherm Brasil to its joint venture partner,
Tenaris. Socotherm Brasil operates a pipe coating facility which is
managed by Tenaris and which is located at the Confab welded pipe mill
in Pindamonhangaba, Brazil.
From the sale, ShawCor expects to realize net proceeds of approximately
US$28.5 million, with a further potential earn out based on future
performance. In the fourth quarter, the Company recorded a net loss of
$8.3 million from the Brazilian Joint Venture, comprised of a $2.8
million loss on investment in joint venture, a $0.9 million loss on
assets held for sale, $2.7 million in income taxes on the sale, and a
$1.9 million loss included in non-controlling interest. This
non-controlling interest expense represents the minority interest share
of the gain reported at the Socotherm subsidiary level, notwithstanding
the fact that there is a loss on the sale at a ShawCor consolidated
level.
The sale of Socotherm's joint venture interest in Socotherm Brasil is
consistent with ShawCor's strategy to focus its pipe coating
investments on operations it manages and controls. Following the sale,
ShawCor will continue to serve Tenaris' global pipe coating needs and
the Brazilian pipe coating market from its global pipe coating plant
network.
Development Agreement with Vintri Technologies Inc.
On December 20, 2013, ShawCor entered into a development agreement with
Calgary, Alberta based Vintri Technologies Inc. ("Vintri"), whereby
Vintri will develop for ShawCor's Bredero Shaw division, a cloud based
plant management and shop floor data collection system providing
accurate asset identification and traceability. In consideration for
the development agreement, ShawCor has been provided a minority equity
interest in Vintri for nil consideration.
Equity investment in ZEDI Inc.
On February 20, 2014, ShawCor completed an equity investment in Zedi
Inc. ("Zedi"), a Calgary, Alberta based company engaged in end-to-end
solutions for production operations management in the oil and gas
industry. Zedi has successfully developed and deployed remote field
monitoring and related data management solutions for the optimization
of oil and gas well production and has recently completed a management
led buyout through an Alberta court and shareholder approved plan of
arrangement. ShawCor's equity investment in Zedi will consist of a 25%
common share interest plus convertible preferred shares for a total
investment of approximately $24 million, which will be accounted for
using equity accounting. ShawCor and Zedi have also entered into a
joint development agreement to work together to develop monitoring and
connectivity solutions for pipeline and OCTG applications.
1.1 OUTLOOK
Following the record results produced by ShawCor during the full year
2013, the Company expects revenue and earnings to decrease in 2014 in
comparison with the full year of 2013. This expected reduction in
activity is the result of the fact that in 2013, revenue from the
Company's Asia Pacific region has been enhanced by the execution of the
$400 million Inpex Ichthys gas export pipeline project, the largest
single project in the Company's history and a project size that will
not be replicated in 2014. Further detail on the outlook for the
Pipeline and Pipe Services segment by region and the Petrochemical and
Industrial segment is set out below:
Pipeline and Pipe Services Segment - North America
In 2014, ShawCor's North American Pipeline segment businesses are
expected to generate solid revenue growth over 2013 levels. Pipe
coating volumes will benefit from a full year of production at the
Socotherm Gulf of Mexico plant where the order backlog for deepwater
insulation coating projects exceeds $60 million. North American land
pipe coating activity is expected to continue at strong levels,
consistent with the levels produced in 2013. In other pipeline segment
businesses in North America, the prospects for growth in 2014 are quite
compelling. Continued shale oil and gas developments are creating
growing market demands for the Flexpipe composite pipe and Guardian
OCTG pipe inspection and refurbishment businesses while the Company's
introduction of new real-time radiography technology to the USA land
pipeline market is enabling market share gains in pipeline girth weld
inspection.
Pipeline and Pipe Services Segment - Latin America
The Company believes that revenue from Latin America pipe coating
operations has the potential for modest growth in 2014 as a result of
increased offshore and large diameter gas transmission pipeline
opportunities in Mexico, the launch of insulation coating production at
the Socotherm Argentina operation, and an expected increase in revenue
in Brazil, where production will commence in the first quarter 2014 for
the deepwater insulation coating for flowlines and risers for
Petrobras' Sapinhoa field in the Santos basin. These sources of revenue
growth will be partially offset by the fact that 2013 Latin America
revenue had included approximately $55 million from the Technip project
that was executed through the deployment of two portable concrete
weight coating plants in Trinidad.
Pipeline and Pipe Services Segment - EMAR
The Company's Europe, Middle East, Africa, Russia ("EMAR") region
expects to begin to generate significant revenue growth in 2014. In
addition to a continuation of strong project revenues from the pipe
coating facilities in Orkanger, Norway and Ras Al Khaimah, UAE, revenue
gains are expected in 2014 as the Leith, Scotland facility executes the
$30 million Edvard Grieg project and Socotherm ramps up production at
the Pozzallo, Sicily pipe coating facility to execute a large deepwater
insulation project for a new West African oil field development. The
Company is also currently bidding on several very large projects in the
EMAR region that could produce revenues in excess of $300 million that
could potentially start production by the fourth quarter of 2014 and
thus contribute to revenue growth in the 2015 to 2016 period.
Pipeline and Pipe Services Segment - Asia Pacific
In 2013, the Company generated record revenues in the Asia Pacific
region as a result of the execution of the Inpex Ichthys gas export
pipeline, Chevron Wheatstone export pipeline and flowlines, and Apache
Julimar flowlines projects. These projects produced over $510 million
in revenue in 2013 and contributed to a level of activity that will
decline by at least 50% in 2014. Beyond 2014, the Company remains
confident that the Asia Pacific region will continue to provide
compelling opportunities, particularly with the emergence of deepwater
oil and gas developments that will require the Company's operational
capability and unique product technologies.
Petrochemical and Industrial Segment
ShawCor's Petrochemical and Industrial segment businesses are
significantly exposed to demand in the North American and European
automotive, industrial and nuclear refurbishment markets. During 2013,
demand in the global industrial markets served by the Petrochemical and
Industrial segment businesses has been stable but the Company has
achieved gains in market share with the result that revenue increased
by approximately 10% year over year. Similar revenue growth in 2014
should be possible provided market conditions remain healthy. Operating
income growth should exceed revenue growth due to the one-time charges
of $3.2 million incurred in 2013 for staff reductions and other costs
related to the completion of the new facility in Germany for the
segment's heat shrink tubular business. This new facility should also
contribute to the segment's earnings growth potential as a result of
the improved operational efficiencies associated with the consolidation
of production activities in one facility and the expected improvements
in production throughput.
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 December 31, 2013
decreased to $617 million from $646 million at September 30, 2013 and
versus $850 million at the end of 2012. The decline in backlog from the
start of 2013 has resulted primarily from the execution during the year
of the $400 million Inpex Ichthys gas export pipeline project. Although
the order backlog may continue to decline over the next few quarters,
the Company's bidding activity remains very high with outstanding bids
currently exceeding $900 million dollars. The bidding activity is also
very well diversified across all of the Company's regions. If a
significant portion of these bids are translated into production orders
during 2014, the backlog will increase over the course of the year,
which would provide a strong indication for growth in revenue and
earnings in 2015 and beyond.
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
|
|
Twelve Months ended
|
|
|
|
December 31,
2013
|
|
September 30,
2013
|
|
December 31,
2012(a)
|
|
December 31,
2013
|
|
December 31,
2012(a)
|
|
Pipeline and Pipe Services
|
|
$
|
370,477
|
|
$
|
483,174
|
|
$
|
406,572
|
|
$
|
1,687,768
|
|
$
|
1,324,215
|
|
Petrochemical and Industrial
|
|
|
40,409
|
|
|
43,117
|
|
|
33,413
|
|
|
162,449
|
|
|
147,068
|
|
Elimination
|
|
|
(1,127)
|
|
|
(443)
|
|
|
(486)
|
|
|
(2,668)
|
|
|
(2,096)
|
|
|
|
$
|
409,759
|
|
$
|
525,848
|
|
$
|
439,499
|
|
$
|
1,847,549
|
|
$
|
1,469,187
|
|
(a)
|
Revenue for the three-month and twelve-month periods ending December 31,
2012 has been restated due to the adoption of certain new IFRS
standards that became effective as at January 1, 2013, but were
implemented retrospectively to January 1, 2012.
|
Fourth Quarter 2013 versus Third Quarter 2013
Consolidated revenue decreased 22%, or $116.1 million, from $525.8
million during the third quarter of 2013 to $409.8 million during the
fourth quarter of 2013, due to a decrease of $112.7 million in the
Pipeline and Pipe Services segment and a decrease of $2.7 million in
the Petrochemical and Industrial segment.
In the Pipeline and Pipe Services segment, revenue decreased 23%, or
$112.7 million, from $483.2 million in the third quarter of 2013 to
$370.4 million in the fourth quarter of 2013, due to a decrease of 44
%, or $91.0 million, in Asia Pacific and a decrease of 47%, or $20.0
million, in 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.
In the Petrochemical and Industrial segment, revenue was lower by $2.7
million, or 6%, in the fourth quarter of 2013, compared to the third
quarter of 2013, mainly due to a decrease in revenue of $2.7 million,
or 10%, in the North America region. See section 3.2 - Petrochemical and Industrial segment for additional disclosure with respect to the change in revenue in the
Petrochemical and Industrial segment.
Fourth Quarter 2013 versus Fourth Quarter 2012
Consolidated revenue decreased by $29.7 million, or 7%, from $439.5
million during the fourth quarter of 2012, to $409.8 million during
fourth quarter of 2013, due to a decrease of $36.1 million in the
Pipeline and Pipe Services segment, partially offset by an increase of
$7.0 million in the Petrochemical and Industrial segment.
In the Pipeline and Pipe Services segment, revenue in the fourth quarter
of 2013 was $36.1 million, or 9%, lower than in the fourth quarter of
2012, due to decreased activity in Latin America, North America and
Asia Pacific, partially offset by higher 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.
In the Petrochemical and Industrial segment, revenue increased by $7.0
million, or 21%, during the fourth quarter of 2013 compared to the
fourth quarter of 2012, due to higher activity levels in all three
regions. See section 3.2 - Petrochemical and Industrial segment for additional disclosure with respect to the change in revenue in the
Petrochemical and Industrial segment.
Twelve Months ended December 31, 2013 versus Twelve Months ended
December 31, 2012
Consolidated revenue increased by 26%, or $378.4 million, from $1,469.2
million for the twelve month period ended December 31, 2012 to
$1,847.6 million for the twelve month period ended December 31, 2013,
due to increases of $363.5 million in the Pipeline and Pipe Services
segment and $15.4 million in the Petrochemical and Industrial segment.
Revenue for the Pipeline and Pipe Services segment in 2013 was $1,687.8
million, $363.6 million, or 27%, higher than in 2012, primarily due to
higher revenue in Asia Pacific and North America, partially offset by
lower activity in EMAR 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 $15.4
million, or 10%, in 2013 compared to 2012, primarily due to higher
activity levels in all regions. 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
|
|
Twelve Months ended
|
|
|
|
December 31,
2013
|
|
September 30,
2013
|
|
December 31,
2012(a)
|
|
December 31,
2013
|
|
|
December 31,
2012(a)
|
|
Operating Income
|
|
$
|
47,236
|
|
$
|
104,877
|
|
$
|
92,962
|
|
$
|
|
319,774
|
|
$
|
211,053
|
|
Operating Margin(b)
|
|
|
11.6%
|
|
|
19.9%
|
|
|
21.2%
|
|
|
|
17.3%
|
|
|
14.4%
|
|
(a)
|
Operating Income for the three-month and twelve-month periods
endingDecember 31, 2012 has been restated due to the adoption of
certain new IFRS standards that became effective as at January 1, 2013,
but were implemented retrospectively to January 1, 2012.
|
|
(b)
|
Operating margin is defined as Operating Income divided by revenue.
|
|
|
|
Fourth Quarter 2013 versus Third Quarter 2013
Operating Income decreased by $57.6 million, from $104.9 million during
the third quarter of 2013 to $47.2 million during the fourth quarter of
2013. Operating Income was impacted by a decrease in gross profit of
$66.4 million and an increase in SG&A expenses of $6.8 million. This
was partially offset by decreases in research and development expenses
of $0.9 million, amortization of property, plant, equipment and
intangible assets of $1.4 million, an increase in net foreign exchange
gain of $8.0 million and a gain on sale of land of $5.2 million.
The decrease in gross profit resulted from a 3.9 percentage point
decrease in the gross margin from the third quarter of 2013 and the
lower revenue, as explained above.The decrease in the gross margin
percentage was primarily due to unfavourable product and project mix
and lower facility utilization and absorption of overheads, as a result
of the reduction in revenue in the Pipeline and Pipe Services segment's
Asia Pacific region.
SG&A expenses increased by $6.8 million, from $96.3 million in the third
quarter of 2013 to $103.0 million in the fourth quarter of 2013,
primarily due to one-time restructuring costs and amended executive
retirement arrangements of $10.7 million, partially offset by lower
management incentive compensation expenses of $3.6 million. The
one-time restructuring costs and amended executive retirement
arrangements were primarily related to reorganizing the organizational
structure to more effectively manage the Company's business and were
comprised of charges of $2.0 million for the Pipeline and Pipe Services
segment, $3.2 million for the Petrochemical and Industrial segment and
$5.5 million for Finance and Corporate.
Fourth Quarter 2013 versus Fourth Quarter 2012
Operating Income decreased by $45.7 million, from $93.0 million in the
fourth quarter of 2012 to $47.2 million during the fourth quarter of
2013. Operating Income was impacted by a decrease in gross profit of
$18.8 million, increases in SG&A expenses of $20.0 million, research
and development expenses of $1.3 million, amortization of property,
plant, equipment and intangible assets of $3.9 million, loss on assets
held for sale of $1.1 million and a lower gain on sale of land of $6.9
million. This was partially offset by an increase in net foreign
exchange gain of $5.5 million and a charge for impairment of property,
plant and equipment of $0.8 million recorded in the fourth quarter of
2012.
The decrease in gross profit resulted from lower revenue of $29.7
million and a 1.6 percentage point decrease in gross margin
attributable to unfavourable product and project mix and lower facility
utilization and absorption of overheads, particularly in the Pipeline
and Pipe Services segment's Asia Pacific and Latin America regions.
SG&A expenses increased by $20.0 million compared with the fourth
quarter of 2012, primarily as a result of higher SG&A costs of $5.8
million following the acquisition and full consolidation of Socotherm
and one-time restructuring costs and amended executive retirement
arrangements of $10.7 million, as explained above. In addition,
building rental and equipment costs increased by $2.7 million, legal
and professional consulting fees were higher by $3.2 million and
transportation related expenses increased $1.2 million, partially
offset by one-time strategic review expenses of $4.0 million incurred
in the fourth quarter of 2012.
Twelve Months ended December 31, 2013 versus Twelve Months ended
December 31, 2012
Operating Income increased by $108.7 million from the twelve month
period ended December 31, 2012 to $319.8 million for the full year
2013. The increase in Operating Income resulted from a year over year
increase in gross profit of $214.4 million, an increase in net foreign
exchange gain of $4.8 million and an impairment charge of $4.7 million
incurred in 2012. This was partially offset by increases in SG&A
expenses of $76.6 million, research and development expenses of $3.4
million, amortization of property, plant, equipment and intangible
assets of $24.5 million, a lower gain on sale of land of $6.9 million
and a loss on assets held for sale of $3.7 million.
The increase in gross profit resulted from higher revenue of $378.4
million and a 3.6 percentage point improvement in gross margin
attributable to favourable project mix and better facility utilization
and absorption of overheads, particularly in the Pipeline and Pipe
Services segment's Asia Pacific region.
SG&A expenses increased by $76.6 million in 2013 compared to 2012,
primarily as a result of higher SG&A costs of $25.3 million following
the acquisition and full consolidation of Socotherm, one-time
restructuring costs and amended executive retirement arrangements of
$10.7 million recorded in the fourth quarter of 2013, as explained
above, and $13.6 million incurred to complete the Company's Plan of
Arrangement on March 20, 2013 and related expenses associated with
amended executive retirement arrangements, recorded in the first
quarter of 2013. In addition, personnel related costs and management
incentive compensation expenses were higher by $12.6 million, building
rental, insurance and equipment costs were higher by $5.4 million,
legal and professional consulting fees were higher by $6.9 million and
provisions for bad debts, warranty and other items increased by $6.0
million, partially offset by one-time strategic review expenses of $4.0
million incurred in the fourth quarter of 2012.
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
|
|
Twelve Months ended
|
|
|
|
December 31,
2013
|
|
|
September 30,
2013
|
|
|
December 31,
2012(a)
|
|
|
December 31,
2013
|
|
|
December 31,
2012(a)
|
|
Interest income
|
|
$
|
(452)
|
|
$
|
-
|
|
$
|
(736)
|
|
$
|
(1,156)
|
|
$
|
(2,767)
|
|
Interest expense, other
|
|
|
2,559
|
|
|
1,252
|
|
|
116
|
|
|
5,949
|
|
|
1,407
|
|
Interest expense on long-term debt
|
|
|
3,280
|
|
|
3,275
|
|
|
-
|
|
|
10,119
|
|
|
-
|
|
Finance costs (income), net
|
|
$
|
5,387
|
|
$
|
4,527
|
|
$
|
(620)
|
|
$
|
14,912
|
|
$
|
(1,360)
|
|
(a)
|
Finance costs (income) for the three-month and twelve month periods
ending December 31, 2012 has been restated due to the adoption of
certain new IFRS standards that became effective as at January 1, 2013,
but were implemented retrospectively to January 1, 2012.
|
Fourth Quarter 2013 versus Third Quarter 2013
In the fourth quarter of 2013, net finance cost was $5.4 million,
compared to a net finance cost of $4.5 million during the third quarter
of 2013, as a result of higher other interest expenses on bank loans
and overdrafts, partially offset by higher interest income on
short-term deposits.
Fourth Quarter 2013 versus Fourth Quarter 2012
In the fourth quarter of 2013, net finance cost was $5.4 million,
compared to a net finance income of $0.6 million during the fourth
quarter of 2012. The increase in net finance costs was a result of
interest on the Senior Notes issued on March 20, 2013, higher other
interest expenses on bank loans and overdrafts and lower interest
income on short-term deposits.
Twelve Months ended December 31, 2013 versus Twelve Months ended
December 31, 2012
In the twelve months ended December 31, 2013, net finance cost was
$14.9 million, compared to a net finance income of $1.4 million during
the comparable period of 2012, as a result of interest on long term
senior notes issued on March 20, 2013, higher other interest expenses
on bank loans and overdrafts and lower interest income on short-term
deposits.
2.4 Income Taxes
The following table sets forth the income tax expenses for the following
periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of Canadian dollars)
|
|
Three Months ended
|
Twelve Months ended
|
|
|
|
December 31,
2013
|
|
September 30,
2013
|
|
December 31,
2012(a)
|
|
December 31,
2013
|
|
December 31,
2012(a)
|
|
Income tax expenses
|
|
$
|
10,278
|
|
$
|
29,386
|
|
$
|
18,392
|
|
$
|
78,402
|
|
$
|
43,783
|
(a) Income tax expenses for the three-month and twelve-month periods
ending December 31, 2012 has been restated due to the adoption of
certain new IFRS standards that became effective as at January 1, 2013,
but were implemented retrospectively to January 1, 2012.
Fourth Quarter 2013 versus Third Quarter 2013
The Company recorded an income tax expense of $10.3 million (28% of
income before income taxes) in the fourth quarter of 2013, compared to
an income tax expense of $29.4 million (29% of income before income
taxes) in the third quarter of 2013. The effective tax rate in the
fourth quarter of 2013 was higher than the Company's expected effective
income tax rate of 27%, primarily due to higher losses on investment in
joint ventures, which reduced income before income taxes. The Company's
tax rate in the third quarter was slightly higher than expectations
primarily due to the incurrence of tax losses in jurisdictions where
the Company was unable to record a tax benefit in the quarter.
Fourth Quarter 2013 versus Fourth Quarter 2012
The Company recorded an income tax expense of $10.3 million (28% of
income before income taxes) in the fourth quarter of 2013, compared to
an income tax expense of $18.4 million (19% of income before income
taxes) in the fourth quarter of 2012. The effective tax rate in the
fourth quarter of 2013 was higher than the Company's expected effective
income tax rate of 27%, primarily due to higher losses on investment in
joint ventures, which reduced income before income taxes. The Company's
tax rate in the fourth quarter of 2012 was lower than the expected rate
of 27% primarily due to the fact that a significant portion of the
Company's income was earned in the Trinidad Free Zone, Asia Pacific and
the Middle East and other jurisdictions where the expected tax rate is
25% or less.
Twelve Months ended December 31, 2013 versus Twelve Months ended
December 31, 2012
The Company recorded an income tax expense of $78.4 million (26% of
income before income taxes) during the twelve-month period ended
December 31, 2013, compared to an income tax expense of $43.8 million
(20% of income before income taxes) during the twelve-month period
ended December 31, 2012. The effective income tax rate for the twelve
months ending December 31, 2013 is lower than the expected income tax
rate of 27% due to income being earned in jurisdictions were the tax
rate is 25% or less, with this benefit partially offset by the
incurrence of tax losses in jurisdictions where the Company was unable
to record a tax benefit during the year. In 2012, the low tax rate was
due to a higher proportion of the Company's taxable income having been
earned in the Trinidad Free Zone, Asia Pacific, the Middle East and
other jurisdictions where the tax rate is 25% or less.
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
December 31,
|
|
Twelve Months ended
December 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
U.S. dollar
|
|
|
1.051
|
|
|
0.991
|
|
|
1.032
|
|
|
1.003
|
|
Euro
|
|
|
1.436
|
|
|
1.290
|
|
|
1.373
|
|
|
1.292
|
|
British Pounds
|
|
|
1.709
|
|
|
1.599
|
|
|
1.620
|
|
|
1.588
|
The following table sets forth the impact on revenue, income from
operations and net income, compared with the prior quarter and the
prior year period, as a result of foreign exchange fluctuations on the
translation of foreign currency operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of Canadian dollars)
|
|
|
Q4-2013
Versus
Q3-2013
|
|
|
Q4-2013
versus
Q4-2012
|
|
|
Q4-2013
YTD
versus
Q4-2012
YTD
|
|
Revenue
|
|
$
|
5,435
|
|
|
17,220
|
|
|
41,839
|
|
|
Income from operations
|
|
|
629
|
|
|
3,218
|
|
|
13,229
|
|
|
Net income
|
|
$
|
998
|
|
|
4,482
|
|
|
11,963
|
In addition to the translation impact noted above, the Company recorded
a foreign exchange gain of $6.3 million in the fourth quarter of 2013,
compared to a gain of $0.8 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.
2.6 Net Income (attributable to shareholders of the Company)
Fourth Quarter 2013 versus Third Quarter 2013
Net income decreased by $50.6 million, from $73.0 million during the
third quarter of 2013 to $22.4 million during the fourth quarter of
2013, mainly due to the lower Operating Income in the fourth quarter of
2013, as explained in section 2.2 above and a higher loss on investment
in joint ventures of $6.8 million. This was partially offset by lower
income tax expense of $19.1 million.
Fourth Quarter 2013 versus Fourth Quarter 2012
Net income decreased by $57.9 million, from $80.3 million during the
fourth quarter of 2012 to $22.4 million during the fourth quarter of
2013, mainly due to lower Operating Income in the fourth quarter of
2013, as explained in section 2.2 above, income from investment in
associate recorded in the fourth quarter of 2012 of $6.0 million, a
higher net loss on investment in joint ventures of $4.2 million and
higher net finance costs of $$6.0 million. This was partially offset by
a decrease in income tax expenses of $8.1 million.
Twelve Months ended December 31, 2013 versus Twelve Months ended
December 31, 2012
Net income increased by $41.6 million, from $178.3 million during the
twelve-month period ended December 31, 2012 to $219.9 million during
the twelve-month period ended December 31, 2013, mainly due to higher
Operating Income of $108.7 million in 2013, as explained in section 2.2
above. This was partially offset by increases in net finance costs of
$16.3 million, income tax expense of $34.6 million and income on
investment in associate of $8.7 million recorded in 2012.
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, except Operating Margin)
|
|
Three Months ended
|
|
Twelve Months ended
|
|
|
|
December 31,
2013
|
|
September 30,
2013
|
|
December 31,
2012(a)
|
|
December 31,
2013
|
|
December 31,
2012(a)
|
|
North America
|
|
$
|
182,549
|
|
$
|
181,494
|
|
$
|
141,105
|
|
$
|
671,317
|
|
$
|
604,106
|
|
Latin America
|
|
|
22,132
|
|
|
42,105
|
|
|
69,335
|
|
|
161,627
|
|
|
164,649
|
|
EMAR
|
|
|
51,418
|
|
|
54,180
|
|
|
44,667
|
|
|
191,814
|
|
|
221,471
|
|
Asia Pacific
|
|
|
114,378
|
|
|
205,395
|
|
|
151,465
|
|
|
663,010
|
|
|
333,989
|
|
Total Revenue
|
|
$
|
370,477
|
|
$
|
483,174
|
|
$
|
406,572
|
|
$
|
1,687,768
|
|
$
|
1,324,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
$
|
58,151
|
|
$
|
111,800
|
|
|
101,368
|
|
$
|
365,122
|
|
$
|
236,689
|
|
|
Operating Margin
|
|
|
15.7%
|
|
|
23.1%
|
|
|
24.9%
|
|
|
21.6%
|
|
|
17.9%
|
|
(a)
|
Restated due to the adoption of certain new IFRS standards that became
effective as at January 1, 2013, but were implemented retrospectively
to January 1, 2012.
|
Fourth Quarter 2013 versus Third Quarter 2013
Fourth quarter revenue decreased by $112.7 million to $370.5 million,
from $483.2 million in the third quarter of 2013. This was driven by
decreased activity levels in Asia Pacific, Latin America and EMAR,
partially offset by North America:
-
In North America, revenue increased by $1.0 million, or 1%, as a result
of increased activity from Socotherm's Gulf of Mexico operation, higher
pipe weld inspection service revenue in the USA and increased tubular
management service revenue in Canada, partially offset by lower
activity levels in large diameter pipe coating in both Canada and the
USA.
-
In Latin America, revenue decreased by $20.0 million, or 47%, primarily
as a result of decreased activity from the Technip project in Trinidad
and decreased volumes in Socotherm Argentina.
-
EMAR revenue decreased by $2.8 million, or 5%, primarily due to
decreased activity at the Socotherm pipe coating facility in Adria,
Italy, partially offset by higher activity at Leith, Scotland and in
Orkanger, Norway.
-
In Asia Pacific, revenue decreased $91.0 million, or 44%, mainly due to
decreased volumes on the Inpex Ichthys and Apache Julimar projects in
Kabil, Indonesia and the Chevron Wheatstone flowlines project in
Kuantan, Malaysia.
In the fourth quarter of 2013, Operating Income was $58.2 million
compared to $111.8 million in the third quarter of 2013, a decrease of
$53.6 million, or 48%. The decrease in Operating Income was due to a
reduction in gross profit of $64.0 million due to the decrease in
revenue of $112.7 million as explained above, and a 3.7 percentage
point decrease in the gross margin due to unfavourable product and
project mix and lower facilities' utilization and the absorption of
overheads, particularly at the Company's two pipe coating facilities in
Asia Pacific. In addition to the decrease in gross profit, SG&A
expenses were also higher as explained in section 2.2 above.
Fourth Quarter 2013 versus Fourth Quarter 2012
Revenue was $370.5 million in the fourth quarter of 2013, a decrease of
$36.1 million, or 9%, from $406.6 million in the comparable period of
2012. Revenues in Asia Pacific and Latin America were lower, partially
offset by increased activity in North America and EMAR:
-
In North America, revenue increased by $41.4 million, or 29%, due to the
acquisition of Socotherm Gulf of Mexico, increased tubular management
services in Canada, higher flexible composite pipe volumes in both
Canada and the USA and increased pipe weld inspection service revenue
in the USA.
-
Latin America revenue decreased by $47.2 million, or 68%, due to lower
activity levels in Mexico and on the Technip project in Trinidad.
-
In EMAR, revenue increased by $6.8 million, or 15%, primarily due to
higher activity levels at the Company's pipe coating facilities in
Orkanger, Norway and Socotherm, Italy, partially offset by reduced
volumes from Ras Al Khaimah ("RAK"), UAE and Leith, Scotland.
-
Asia Pacific revenue decreased by $37.1 million, or 25%, due to the
lower volumes associated with the Chevron Wheatstone project in Kabil,
Indonesia and Kuantan, Malaysia.
In the fourth quarter of 2013, Operating Income was $58.2 million
compared to $101.4 million in the fourth quarter of 2012, a decrease of
$43.2 million, or 43%, due to a reduction in gross profit of $19.7
million as a result of the decrease in revenue of $36.1 million, as
explained above, and a 1.2 percentage point decrease in gross margin
due to unfavourable project mix, lower facilities' utilization and the
absorption of overheads, particularly at the Company's two pipe coating
facilities in Asia Pacific. In addition to the decrease in gross
profit, SG&A expenses and amortization of property, plant, equipment
and intangibles were also higher combined with a lower gain on sale of
land, as explained in section 2.2 above.
Twelve Months ended December 31, 2013 versus Twelve Months ended
December 31, 2012
For the twelve month period ended December 31, 2013, revenue in the
Pipeline and Pipe Services segment was $1,687.8 million, an increase of
$363.6 million, or 28%, from $1,324.2 million in the comparable period
in the prior year. Activity levels in Asia Pacific and North America
were higher in 2013 compared to 2012, partially offset by a decrease in
EMAR and Latin America revenue:
-
In North America, revenue increased by $67.2 million, or 11%, primarily
due to increased flexible composite pipe revenue in the USA, the
acquisition of Socotherm Gulf of Mexico, increased pipe weld inspection
service revenue in the USA and higher large diameter project revenues
in Canada, partially offset by lower pipe coating activity in the USA.
-
In Latin America, revenue was lower by $3.0 million, or 2%, mainly due
to lower activity levels in Mexico and Brazil, partially offset by the
full year inclusion of Socotherm Argentina.
-
In EMAR, revenue decreased by $29.7 million, or 13%, primarily due to
decreased pipe coating activity levels in RAK and Leith, Scotland,
partially offset by increased volumes at the Orkanger, Norway facility
and the full year inclusion of Socotherm, Italy.
-
Revenue in Asia Pacific increased by $329.0 million, or 99%, mainly due
to execution of the Inpex Ichthys gas export pipeline and the Chevron
Wheatstone projects in both Kuantan, Malaysia and Kabil, Indonesia.
Operating Income for the twelve month period ended December 31, 2013 was
$365.1 million compared to $236.7 million for the twelve month period
ended December 31, 2012, an increase of $128.4 million, or 54%. The
increase in Operating Income was due to an increase in gross profit of
$203.9 million due to the increase in revenue of $363.6 million, as
explained above, and a 3.6 percentage point increase in gross margin
due to favourable project mix, better facilities utilization and the
absorption of overheads, particularly at the Company's two pipe coating
facilities in Asia Pacific. The increase in gross profit was partially
offset by higher SG&A expenses and amortization of property, plant,
equipment and intangibles as explained in section 2.2 above.
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
|
|
Twelve Months ended
|
|
|
|
December 31,
2013
|
|
September 30,
2013
|
|
December 31,
2012(a)
|
|
December 31,
2013
|
|
December 31,
2012(a)
|
|
North America
|
|
$
|
25,230
|
|
$
|
27,927
|
|
$
|
20,818
|
|
$
|
101,117
|
|
$
|
92,551
|
|
EMAR
|
|
|
13,622
|
|
|
13,742
|
|
|
11,434
|
|
|
55,457
|
|
|
50,496
|
|
Asia Pacific
|
|
|
1,557
|
|
|
1,448
|
|
|
1,161
|
|
|
5,875
|
|
|
4,021
|
|
Total Revenue
|
|
$
|
40,409
|
|
$
|
43,117
|
|
$
|
33,413
|
|
$
|
162,449
|
|
$
|
147,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
$
|
2,613
|
|
$
|
7,890
|
|
$
|
4,510
|
|
$
|
20,576
|
|
$
|
19,886
|
|
|
Operating Margin
|
|
|
6.5%
|
|
|
18.3%
|
|
|
13.5%
|
|
|
12.7%
|
|
|
13.5%
|
|
(a)
|
Restated due to the adoption of certain new IFRS standards that became
effective as at January 1, 2013, but were implemented retrospectively
to January 1, 2012.
|
Fourth Quarter 2013 versus Third Quarter 2013
Revenue decreased in the fourth quarter of 2013 by $2.7 million, or 6%,
to $40.4 million, compared to the third quarter of 2013 due to record
nuclear cable product shipments to North American electrical utilities
recorded in the third quarter of 2013.
Operating Income of $2.6 million in the fourth quarter of 2013 was $5.3
million, or 67%, lower than in the third quarter of 2013. The decrease
in Operating Income was primarily due to lower gross profit of $2.2
million as a result of lower revenue of $2.7 million, as explained
above, and a 3.1 percentage point decrease in gross margin. In
addition, SG&A expenses were higher primarily due to one-time
restructuring costs of $3.2 million at the DSG Canusa facilities in
Europe, as explained in section 2.2 above.
Fourth Quarter 2013 versus Fourth Quarter 2012
In the fourth quarter of 2013, revenue totaled $40.4 million compared to
$33.4 million in the fourth quarter of 2012, an increase of $7.0
million, or 21%. The increase was driven by higher wire and cable
volumes in North America and higher heat shrink tubing product volumes
in the EMAR market.
Operating Income in the fourth quarter of 2013 was $2.6 million compared
to $4.5 million in the fourth quarter of 2012, a decrease of $1.9
million, or 42%. Despite higher gross profit of $2.2 million as a
result of an increase in revenue of $7.0 million, as explained above,
and a 0.4 percentage point increase in gross margin, primarily due to
product mix, operating income declined as a result of higher SG&A
expenses primarily due to one-time restructuring costs of $3.2 million
at the DSG Canusa facilities in Europe, as explained in section 2.2
above.
Twelve Months ended December 31, 2013 versus Twelve Months ended
December 31, 2012
Revenue increased in the twelve month period ended December 31, 2013 by
$15.4 million, or 11%, to $162.4 million, compared to the comparable
period in 2012, due to increased shipments of wire and cable products
to the North American electrical utilities, nuclear and oil sands
markets combined with increased heat shrink tubing product shipments in
all three regions.
Operating Income for the twelve month period ended December 31, 2013 was
$20.6 million compared to $19.9 million for the twelve month period
ended December 31, 2012, an increase of $0.7 million, or 3%. The
increase was primarily due to higher revenue and gross profit,
partially offset by higher SG&A costs resulting from the one-time
restructuring costs of $3.2 million at the DSG Canusa facilities in
Europe.
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
|
|
Twelve Months ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2013
|
|
September 30,
2012
|
|
December 31,
2012(a)
|
|
December 31,
2013
|
|
December 31,
2012(a)
|
|
Financial and Corporate Expenses
|
|
$
|
(19,844)
|
|
$
|
(13,100)
|
|
$
|
(13,742)
|
|
$
|
(70,860)
|
|
$
|
(45,631)
|
(a) Restated due to the adoption of certain new IFRS standards that
became effective as at January 1, 2013, but were implemented
retrospectively to January 1, 2012.
Fourth Quarter 2013 versus Third Quarter 2013
Financial and corporate costs increased by $6.7 million from
$13.1million during the third quarter of 2013, to $19.8 million during
the fourth quarter of 2013, primarily due to one-time restructuring
costs and amended executive retirement arrangements of $5.5 million, as
explained in section 2.2 above, and increased information technology
expenses.
Fourth Quarter 2013 versus Fourth Quarter 2012
Financial and corporate costs increased by $6.1 million from the fourth
quarter of 2012 to $19.8 million in the fourth quarter of 2013, due to
one-time restructuring costs and amended executive retirement
arrangements of $5.5 million, as explained in section 2.2 above,
increased information technology, professional consulting and and other
expenses of $4.4 million. This was partially offset by one-time
strategic review expenses of $4.0 million incurred in the fourth
quarter of 2012.
Twelve Months ended December 31, 2013 versus Twelve Months ended
December 31, 2012
Financial and corporate costs increased by $25.2 million from the twelve
month period ended December 31, 2012 to $70.9 million for the twelve
month period ended December 31, 2013. The increase was due to one-time
costs of restructuring and amended executive retirement arrangements
recorded in the fourth quarter of 2013 of $5.5 million, $13.6 million
incurred to complete the Company's Plan of Arrangement on March 20,
2013 and related expenses associated with amended executive retirement
arrangements and due to increases of $4.7 million in personnel and
management incentive compensation costs and $5.9 million in legal,
professional consulting and research and development expenses.
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" and "forward looking statements" (collectively "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 completion of the sale of the Company's joint venture
interest in Socotherm Brasil and the proceeds therefrom, the timing of
major project activity, the sufficiency of resources, capacity and
capital to meet market demand, to meet contractual obligations and to
execute the Company's development and growth strategy, the impact of
the existing order backlog and other factors on the Company's revenue
and Operating Income in 2014 and in the longer term, 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 and other claims 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, the
maintenance of operations in major oil and gas producing regions and
the ability of the Company to satisfy all covenants under its credit
facilities and the senior notes . 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.
To the extent any forward looking information in this document
constitutes future oriented financial information or financial
outlooks, within the meaning of securities laws, such information is
being provided to demonstrate the potential of the Company and readers
are cautioned that this information may not be appropriate for any
other purpose. Future oriented financial information and financial
outlooks, as with forward looking information generally, are based on
the assumptions and subject to the risks noted above.
ShawCor will be hosting a Shareholder and Analyst Conference Call and
Webcast on Friday February 28th, 2013 at 10:00AM EST, which will discuss the Company's fourth quarter
financial results. The Conference call participant dial-in number(s)
are: Operator assisted toll-free dial-in number: (888) 231-8191;local
dial-in number: (647) 427-7450.
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)
|
|
|
December 31,
2013
|
|
|
December 31,
2012
|
|
|
January 1,
2012
|
|
|
|
|
|
|
|
Restated (Note 5)
|
|
|
Restated (Note 5)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
79,395
|
|
$
|
284,981
|
|
$
|
56,537
|
|
Short-term investments
|
|
|
6,618
|
|
|
77,950
|
|
|
10,545
|
|
Loan receivable
|
|
|
1,780
|
|
|
1,565
|
|
|
2,047
|
|
Accounts receivable
|
|
|
363,984
|
|
|
376,788
|
|
|
279,134
|
|
Income taxes receivable
|
|
|
9,919
|
|
|
11,837
|
|
|
15,981
|
|
Inventories
|
|
|
180,876
|
|
|
188,347
|
|
|
146,416
|
|
Prepaid expenses
|
|
|
19,176
|
|
|
41,370
|
|
|
24,453
|
|
Derivative financial instruments
|
|
|
624
|
|
|
3,988
|
|
|
270
|
|
|
|
|
662,372
|
|
|
986,826
|
|
|
535,383
|
|
Assets held for sale
|
|
|
56,186
|
|
|
27,141
|
|
|
-
|
|
|
|
|
718,558
|
|
|
1,013,967
|
|
|
535,383
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current Assets
|
|
|
|
|
|
|
|
|
|
|
Loans receivable
|
|
|
7,462
|
|
|
20,903
|
|
|
12,622
|
|
Property, plant and equipment
|
|
|
413,287
|
|
|
371,584
|
|
|
298,721
|
|
Intangible assets
|
|
|
130,216
|
|
|
101,455
|
|
|
86,362
|
|
Investments in joint ventures
|
|
|
17,276
|
|
|
77,342
|
|
|
30
|
|
Investments in associate
|
|
|
-
|
|
|
-
|
|
|
30,095
|
|
Deferred income taxes
|
|
|
48,480
|
|
|
36,147
|
|
|
34,747
|
|
Other assets
|
|
|
17,830
|
|
|
11,179
|
|
|
10,115
|
|
Goodwill
|
|
|
298,819
|
|
|
256,296
|
|
|
220,334
|
|
|
|
|
933,370
|
|
|
874,906
|
|
|
693,026
|
|
|
|
$
|
1,651,928
|
|
$
|
1,888,873
|
|
$
|
1,228,409
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
Bank indebtedness
|
|
$
|
5,290
|
|
$
|
5,751
|
|
$
|
12,281
|
|
Accounts payable and accrued liabilities
|
|
|
230,974
|
|
|
206,051
|
|
|
154,932
|
|
Provisions
|
|
|
49,762
|
|
|
48,807
|
|
|
16,335
|
|
Income taxes payable
|
|
|
61,911
|
|
|
35,736
|
|
|
36,193
|
|
Derivative financial instruments
|
|
|
1,632
|
|
|
1,275
|
|
|
419
|
|
Deferred revenue
|
|
|
84,396
|
|
|
377,091
|
|
|
27,446
|
|
Obligations under finance lease
|
|
|
487
|
|
|
1,927
|
|
|
268
|
|
|
|
|
434,452
|
|
|
676,638
|
|
|
247,874
|
|
Liabilities directly associated with the assets classified as held for
sale
|
|
|
16,617
|
|
|
11,917
|
|
|
-
|
|
|
|
|
451,069
|
|
|
688,555
|
|
|
247,874
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current Liabilities
|
|
|
|
|
|
|
|
|
|
|
Loans payable
|
|
|
126
|
|
|
2,664
|
|
|
-
|
|
Long-term debt
|
|
|
374,381
|
|
|
-
|
|
|
-
|
|
Obligations under finance lease
|
|
|
13,827
|
|
|
12,728
|
|
|
-
|
|
Provisions
|
|
|
59,409
|
|
|
40,581
|
|
|
40,523
|
|
Derivative financial instruments
|
|
|
-
|
|
|
-
|
|
|
2,499
|
|
Deferred revenue
|
|
|
-
|
|
|
64,392
|
|
|
-
|
|
Employee future benefits
|
|
|
25,678
|
|
|
29,807
|
|
|
26,315
|
|
Deferred income taxes
|
|
|
68,857
|
|
|
61,479
|
|
|
56,984
|
|
|
|
|
542,278
|
|
|
211,651
|
|
|
126,321
|
|
|
|
|
993,347
|
|
|
900,206
|
|
|
374,195
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
303,327
|
|
|
221,687
|
|
|
218,381
|
|
Contributed surplus
|
|
|
13,093
|
|
|
17,525
|
|
|
16,391
|
|
Retained earnings
|
|
|
373,574
|
|
|
799,741
|
|
|
664,475
|
|
Non-controlling interests
|
|
|
2,419
|
|
|
(331)
|
|
|
-
|
|
Accumulated other comprehensive loss
|
|
|
(33,832)
|
|
|
(49,955)
|
|
|
(45,033)
|
|
|
|
|
658,581
|
|
|
988,667
|
|
|
854,214
|
|
|
|
$
|
1,651,928
|
|
$
|
1,888,873
|
|
$
|
1,228,409
|
|
|
|
|
|
|
|
|
|
|
|
ShawCor Ltd.
Consolidated Statements of Income
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of Canadian dollars)
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
(Restated)
|
|
|
|
|
|
(Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of products
|
|
$
|
141,819
|
|
$
|
87,792
|
|
$
|
451,833
|
|
$
|
377,192
|
|
Rendering of services
|
|
|
267,940
|
|
|
351,707
|
|
|
1,395,716
|
|
|
1,091,995
|
|
|
|
|
409,759
|
|
|
439,499
|
|
|
1,847,549
|
|
|
1,469,187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Goods Sold and Services Rendered
|
|
$
|
247,114
|
|
$
|
258,016
|
|
$
|
1,058,946
|
|
$
|
895,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
$
|
162,645
|
|
$
|
181,483
|
|
$
|
788,603
|
|
$
|
574,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
103,015
|
|
|
83,008
|
|
|
382,755
|
|
|
306,108
|
|
Research and development expenses
|
|
|
3,390
|
|
|
2,127
|
|
|
15,687
|
|
|
12,242
|
|
Foreign exchange gains
|
|
|
(6,316)
|
|
|
(826)
|
|
|
(4,936)
|
|
|
(109)
|
|
Amortization of property, plant and equipment
|
|
|
16,627
|
|
|
13,514
|
|
|
66,484
|
|
|
44,985
|
|
Amortization of intangible assets
|
|
|
2,727
|
|
|
1,967
|
|
|
10,312
|
|
|
7,319
|
|
Loss on assets held for sale
|
|
|
1,122
|
|
|
-
|
|
|
3,683
|
|
|
|
|
Gain on sale of land and other items
|
|
|
(5,156)
|
|
|
(12,101)
|
|
|
(5,156)
|
|
|
(12,101)
|
|
Impairment of property, plant and equipment
|
|
|
-
|
|
|
832
|
|
|
-
|
|
|
4,686
|
|
Income from Operations
|
|
$
|
47,236
|
|
$
|
92,962
|
|
$
|
319,774
|
|
$
|
211,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income on investments in joint ventures
|
|
|
(5,417)
|
|
|
(1,251)
|
|
|
(3,874)
|
|
|
618
|
|
Finance (costs) income, net
|
|
|
(5,387)
|
|
|
620
|
|
|
(14,912)
|
|
|
1,360
|
|
Income on investments in associate
|
|
|
-
|
|
|
5,968
|
|
|
-
|
|
|
8,694
|
|
Accounting gain on acquisition
|
|
|
-
|
|
|
413
|
|
|
-
|
|
|
413
|
|
Income before Income Taxes
|
|
$
|
36,432
|
|
|
98,712
|
|
$
|
300,988
|
|
|
222,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
10,278
|
|
|
18,392
|
|
$
|
78,402
|
|
|
43,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income for the Period
|
|
$
|
26,154
|
|
$
|
80,320
|
|
$
|
222,586
|
|
$
|
178,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders of the Company
|
|
$
|
22,397
|
|
$
|
80,275
|
|
$
|
219,862
|
|
$
|
178,310
|
|
|
Non-controlling interests
|
|
|
3,757
|
|
|
45
|
|
|
2,724
|
|
|
45
|
|
Net Income for the Period
|
|
$
|
26,154
|
|
$
|
80,320
|
|
$
|
222,586
|
|
$
|
178,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.37
|
|
$
|
1.14
|
|
$
|
3.55
|
|
$
|
2.53
|
|
|
Diluted
|
|
$
|
0.37
|
|
$
|
1.13
|
|
$
|
3.51
|
|
$
|
2.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Shares Outstanding (000's)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
59,973
|
|
|
70,209
|
|
|
61,972
|
|
|
70,413
|
|
|
Diluted
|
|
|
60,347
|
|
|
70,876
|
|
|
62,646
|
|
|
71,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ShawCor Ltd.
Consolidated Statements of Comprehensive Income
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of Canadian dollars)
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
(Restated)
|
|
|
|
|
|
(Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income for the Period
|
|
$
|
26,154
|
|
$
|
80,320
|
|
$
|
222,586
|
|
$
|
178,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Income (Loss) to be reclassified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to Net Income in subsequent periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translation of foreign operations
|
|
|
6,443
|
|
|
17,870
|
|
|
10,821
|
|
|
(357)
|
|
|
Loss on cash flow hedge
|
|
|
-
|
|
|
-
|
|
|
(6,880)
|
|
|
-
|
|
|
Other comprehensive income (loss) attributable to investments in
associate
|
|
|
-
|
|
|
136
|
|
|
-
|
|
|
(469)
|
|
Net Other Comprehensive Income (Loss) to be reclassified to net income
in subsequent periods
|
|
|
6,443
|
|
|
18,006
|
|
|
3,941
|
|
|
(826)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Income (Loss) not to be
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
reclassified to net income in subsequent periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actuarial gain (loss) on defined employee future benefit plans
|
|
|
16,311
|
|
|
(1,311)
|
|
|
16,311
|
|
|
(5,246)
|
|
|
Income tax (expense) recovery
|
|
|
(4,103)
|
|
|
339
|
|
|
(4,103)
|
|
|
1,353
|
|
Net Other Comprehensive income (Loss) not to be reclassified to net
income in subsequent periods
|
|
|
12,208
|
|
|
(972)
|
|
|
12,208
|
|
|
(3,893)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Income (Loss),
Net of Income Tax
|
|
|
18,651
|
|
|
17,034
|
|
|
16,149
|
|
|
(4,719)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Comprehensive Income For the Period,
|
|
$
|
44,805
|
|
$
|
97,354
|
|
$
|
238,735
|
|
$
|
173,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders of the Company
|
|
$
|
41,388
|
|
$
|
97,106
|
|
$
|
235,985
|
|
$
|
173,388
|
|
|
Non-controlling interests
|
|
|
3,417
|
|
|
248
|
|
|
2,750
|
|
|
248
|
|
Total Comprehensive Income for the Period
|
|
$
|
44,805
|
|
$
|
97,354
|
|
$
|
238,735
|
|
$
|
173,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ShawCor Ltd.
Consolidated Statements of Changes in Equity
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of Canadian dollars)
(Restated)
|
|
Share
Capital
|
|
Contributed
Surplus
|
|
Retained
Earnings
|
|
Non-
Controlling
Interests
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - December 31, 2011
|
$
|
218,381
|
|
$
|
16,391
|
|
$
|
664,475
|
|
|
-
|
|
$
|
(45,033)
|
|
$
|
854,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
-
|
|
|
-
|
|
|
178,310
|
|
|
45
|
|
|
-
|
|
|
178,355
|
|
Issued on exercise of stock options
|
|
3,988
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
3,988
|
|
Compensation cost on exercised options
|
|
1,415
|
|
|
(1,415)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Compensation cost on exercised RSUs
|
|
79
|
|
|
(79)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Stock-based compensation expense
|
|
-
|
|
|
2,628
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,628
|
|
Purchase - Normal Course Issuer Bid
|
|
(2,176)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(2,176)
|
|
Excess of purchase price over stated value of shares
|
|
-
|
|
|
-
|
|
|
(16,712)
|
|
|
-
|
|
|
-
|
|
|
(16,712)
|
|
Acquisition of non-controlling interests
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(579)
|
|
|
-
|
|
|
(579)
|
|
Other comprehensive income (loss)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
203
|
|
|
(4,922)
|
|
|
(4,719)
|
|
Dividends paid to shareholders
|
|
-
|
|
|
-
|
|
|
(26,332)
|
|
|
-
|
|
|
-
|
|
|
(26,332)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - December 31, 2012
|
$
|
221,687
|
|
$
|
17,525
|
|
$
|
799,741
|
|
$
|
(331)
|
|
$
|
(49,955)
|
|
$
|
988,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
-
|
|
|
-
|
|
|
219,862
|
|
|
2,724
|
|
|
-
|
|
|
222,586
|
|
Issued on exercise of stock options
|
|
19,599
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
19,599
|
|
Compensation cost on exercised options
|
|
7,579
|
|
|
(7,579)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Compensation cost on exercised RSUs
|
|
24
|
|
|
(24)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Stock-based compensation expense
|
|
-
|
|
|
3,171
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
3,171
|
|
Cancellation of Class B shares
|
|
54,438
|
|
|
-
|
|
|
(553,215)
|
|
|
-
|
|
|
-
|
|
|
(498,777)
|
|
Shares cancellation costs (net income tax benefit of $1.5 million)
|
|
-
|
|
|
-
|
|
|
(4,312)
|
|
|
-
|
|
|
-
|
|
|
(4,312)
|
|
Other comprehensive income
|
|
-
|
|
|
-
|
|
|
|
|
|
26
|
|
|
16,123
|
|
|
16,149
|
|
Dividends paid to shareholders
|
|
-
|
|
|
-
|
|
|
(88,502)
|
|
|
-
|
|
|
-
|
|
|
(88,502)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - December 31, 2013
|
$
|
303,327
|
|
$
|
13,093
|
|
$
|
373,574
|
|
$
|
2,419
|
|
$
|
(33,832)
|
|
$
|
658,581
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ShawCor Ltd.
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of Canadian dollars)
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
(Restated)
|
|
|
|
|
|
(Restated)
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the period
|
|
$
|
26,154
|
|
$
|
80,320
|
|
$
|
222,586
|
|
$
|
178,355
|
|
Add (deduct) items not affecting cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of property, plant and equipment
|
|
|
16,627
|
|
|
13,514
|
|
|
66,484
|
|
|
44,985
|
|
|
Amortization of intangible assets
|
|
|
2,727
|
|
|
1,967
|
|
|
10,312
|
|
|
7,319
|
|
|
Amortization of long-term prepaid expenses
|
|
|
108
|
|
|
200
|
|
|
807
|
|
|
900
|
|
|
Decommissioning obligations expense (recovery)
|
|
|
107
|
|
|
(1,538)
|
|
|
395
|
|
|
(472)
|
|
|
Other provision expenses
|
|
|
4,292
|
|
|
7,344
|
|
|
22,136
|
|
|
2,227
|
|
|
Stock-based and incentive-based compensation
|
|
|
6,081
|
|
|
4,681
|
|
|
23,594
|
|
|
15,297
|
|
|
Deferred income taxes
|
|
|
(6,257)
|
|
|
1,941
|
|
|
(14,959)
|
|
|
(414)
|
|
|
(Gain) loss on disposal of property, plant and equipment
|
|
|
-
|
|
|
(22)
|
|
|
538
|
|
|
(416)
|
|
|
Gain on sale of land and other items
|
|
|
(5,156)
|
|
|
(12,101)
|
|
|
(5,156)
|
|
|
(12,101)
|
|
|
Unrealized (gain) loss on derivative financial instruments
|
|
|
(918)
|
|
|
679
|
|
|
3,070
|
|
|
651
|
|
|
Income on investments in associate
|
|
|
-
|
|
|
(5,968)
|
|
|
-
|
|
|
(8,694)
|
|
|
Loss (income) on investments in joint ventures
|
|
|
5,417
|
|
|
1,251
|
|
|
3,874
|
|
|
(618)
|
|
|
Loss on assets held for sale
|
|
|
1,122
|
|
|
-
|
|
|
3,683
|
|
|
-
|
|
|
Accounting gain on acquisition
|
|
|
-
|
|
|
(9,445)
|
|
|
-
|
|
|
(9,445)
|
|
|
Impairment of property, plant and equipment
|
|
|
-
|
|
|
832
|
|
|
-
|
|
|
4,686
|
|
|
Other
|
|
|
5
|
|
|
(3,085)
|
|
|
825
|
|
|
(3,351)
|
|
Settlement of decommissioning liabilities
|
|
|
(150)
|
|
|
(249)
|
|
|
(817)
|
|
|
(1,580)
|
|
Settlement of other provisions
|
|
|
(3,493)
|
|
|
(6,810)
|
|
|
(19,449)
|
|
|
(7,292)
|
|
(Decrease) increase in deferred revenue non-current
|
|
|
-
|
|
|
(86,088)
|
|
|
(64,392)
|
|
|
64,392
|
|
Net change in employee future benefits
|
|
|
(16,542)
|
|
|
514
|
|
|
(20,994)
|
|
|
1,168
|
|
Change in non-cash working capital and foreign exchange
|
|
|
(5,173)
|
|
|
116,175
|
|
|
(200,273)
|
|
|
254,915
|
|
Cash Provided by Operating Activities
|
|
$
|
24,951
|
|
$
|
104,112
|
|
$
|
32,264
|
|
$
|
530,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in loan receivable
|
|
|
(4,658)
|
|
|
(2,784)
|
|
|
(2,630)
|
|
|
(62,085)
|
|
Decrease (increase) in short term investments
|
|
|
1,730
|
|
|
133,937
|
|
|
71,332
|
|
|
(67,405)
|
|
Purchases of property, plant and equipment
|
|
|
(19,258)
|
|
|
(27,194)
|
|
|
(76,729)
|
|
|
(73,505)
|
|
Proceeds on disposal of property, plant and equipment
|
|
|
8,094
|
|
|
12,875
|
|
|
8,539
|
|
|
14,187
|
|
Purchases of intangible assets
|
|
|
-
|
|
|
(10)
|
|
|
(522)
|
|
|
(62)
|
|
Investment in joint venture
|
|
|
-
|
|
|
-
|
|
|
(7,398)
|
|
|
-
|
|
Investment in associate
|
|
|
-
|
|
|
(2,824)
|
|
|
-
|
|
|
(2,824)
|
|
Business acquisition
|
|
|
-
|
|
|
(54,886)
|
|
|
(30,163)
|
|
|
(57,091)
|
|
Increase in other assets
|
|
|
(183)
|
|
|
(956)
|
|
|
(495)
|
|
|
(956)
|
|
Cash (Used in) Provided by Investing Activities
|
|
$
|
(14,275)
|
|
$
|
58,158
|
|
$
|
(38,066)
|
|
$
|
(249,741)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase in bank indebtedness
|
|
|
(36,386)
|
|
|
5,630
|
|
|
(461)
|
|
|
(6,597)
|
|
Decrease in loans payable
|
|
|
(17)
|
|
|
(11,184)
|
|
|
(772)
|
|
|
(4,581)
|
|
Payment of finance lease obligations
|
|
|
-
|
|
|
(266)
|
|
|
(900)
|
|
|
(465)
|
|
Proceeds from long-term debt
|
|
|
-
|
|
|
-
|
|
|
356,280
|
|
|
-
|
|
Proceeds from interest rate swap
|
|
|
-
|
|
|
-
|
|
|
2,111
|
|
|
-
|
|
Issuance of shares
|
|
|
729
|
|
|
878
|
|
|
19,599
|
|
|
3,988
|
|
Repurchase of shares
|
|
|
-
|
|
|
-
|
|
|
(503,089)
|
|
|
(18,888)
|
|
Dividend paid to shareholders
|
|
|
(7,497)
|
|
|
(6,905)
|
|
|
(88,502)
|
|
|
(26,332)
|
|
Cash Used in Financing Activities
|
|
$
|
(43,171)
|
|
$
|
(11,847)
|
|
$
|
(215,734)
|
|
$
|
(52,875)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Foreign Exchange on Cash and Cash Equivalents
|
|
$
|
8,775
|
|
$
|
1,065
|
|
$
|
15,950
|
|
$
|
548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Decrease) Increase in Cash and Cash Equivalents
|
|
|
(23,720)
|
|
|
151,488
|
|
|
(205,586)
|
|
|
228,444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents - Beginning of Period
|
|
$
|
103,115
|
|
$
|
133,493
|
|
$
|
284,981
|
|
$
|
56,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents - End of Period
|
|
$
|
79,395
|
|
$
|
284,981
|
|
$
|
79,395
|
|
$
|
284,981
|
SOURCE ShawCor Ltd.