Mattr Corp. (“Mattr” or the “Company”) (TSX: MATR) reported today
its operational and financial results for the three and twelve
months ended December 31, 2023. This press release should be read
in conjunction with the Company’s Management Discussion and
Analysis (“MD&A”) and audited consolidated financial statements
for the years ended December 31, 2023 and 20221, which are
available on the Company’s website and at www.sedarplus.com.
“During the fourth quarter of 2023, Mattr
continued to execute on its strategy to deliver long-term growth,
margin expansion and volatility reduction, completing the sale of a
substantial part of our legacy pipe coating business, which
concludes our strategic review process and firmly positions the
Company as a harsh-environment infrastructure products provider,
delivering high-value solutions to customers as they expand and
renew critical infrastructure around the world,” said Mike Reeves,
President & CEO of Mattr.
“In 2023, Mattr’s Continuing Operations
delivered year-over-year Adjusted EBITDA growth of approximately
16%, with Adjusted EBITDA margin expanding by 140 basis points in
the same period. This was accomplished while also completing a
fundamental business transformation and despite unfavorable
interest rates, slowing North American oilfield activity, US
infrastructure permitting challenges and automotive sector labor
disruption.”
Highlights include1:
- Full year Continuing Operations
revenue was $925.3 million and operating income from Continuing
Operations was $81.5 million. Adjusted EBITDA from Continuing
Operations was $165.1 million, a 16% increase compared to $141.8
million for full year 2022. The results from 2023 included $2.6
million of one-time costs associated with the Company’s North
American manufacturing footprint Modernization, Expansion and
Optimization (“MEO”) program, which encompasses the Company’s
growth and efficiency improvement initiatives;
- The Company completed the sale of a
substantial part of its Pipeline Performance Group (“PPG”)
business, reported as Discontinued Operations, to Tenaris S.A.
(“Tenaris”) on November 30, 2023, for a contractual purchase price
of $225 million ($166 million USD), subject to a customary working
capital adjustment, concluding the Company’s strategic review
process. The Company currently anticipates receiving
aggregate net cash proceeds of approximately $278.5 million,
consisting of the cash provided to the Company by operating
activities from Discontinued Operations between signing and closing
of this transaction, plus the contractual purchase price, net
of its aggregate transaction fees and expenses and the currently
estimated working capital adjustment. The Company expects the
parties to finalize the net working capital adjustment during the
second quarter of 2024;
- As at December 31, 2023, the
Company had total net cash of $334.1 million and a Net
Debt-to-Adjusted EBITDA2 ratio (using a trailing twelve-month
consolidated Adjusted EBITDA2) of approximately (0.26) times;
- For the full year ended December
31, 2023, Consolidated Net Income was $87.2 million, Consolidated
Adjusted EBITDA was $388.0 million, fully diluted Consolidated EPS
was $1.25 and fully diluted Adjusted Consolidated EPS was
$3.43;
- Fourth quarter revenue generated by
Continuing Operations was $210.8 million and fourth quarter
operating income from Continuing Operations was $2.3 million.
Fourth quarter Adjusted EBITDA from Continuing Operations was $32.8
million, a 21% decrease compared to fourth quarter of 2022. Fourth
quarter 2023 results included $1.7 million of one-time costs
associated with the Company’s MEO program and a non-cash impairment
charge of $18.5 million associated with a production facility
closure as discussed in further detail below;
- Composite Technologies segment
fourth quarter revenue decreased by 19% to $112.5 million compared
to $139.6 million in the prior year’s quarter. Fourth quarter
Adjusted EBITDA for the Composite Technologies segment was $18.8
million, which included $1.5 million of one-time costs associated
with the Company’s MEO program, decreased by 31% from prior year’s
fourth quarter;
- Subsequent to the end of the fourth
quarter of 2023, and consistent with its MEO program, the Composite
Technologies segment discontinued the production of fiberglass
reinforced plastic (“FRP”) tanks within its Anaheim, California
facility and took steps to exit the site, which is expected to be
complete by year end. Once completed, this action is expected to
lower annualized segment fixed costs in its Composite Technologies
segment by approximately $2.5 million, elevate overall production
footprint efficiency and substantially lower its exposure to
potential environmental, employment and other regulatory risks
associated with business operations within the State of California.
This action is not expected to alter previously shared revenue
growth potential and related returns expectations tied to the
segment’s MEO program. Consequently, the Company has reported a
related non-cash impairment charge of $18.5 million during the
fourth quarter of 2023 and expects to report a related
non-recurring charge during the first quarter of 2024;
- Connection Technologies segment
fourth quarter revenue increased by 4% to $79.0 million compared to
$76.0 million in the prior year’s quarter. Fourth quarter Adjusted
EBITDA for the Connection Technologies segment was $14.7 million,
which included $0.2 million of one-time costs associated with the
Company’s MEO program, was relatively flat compared to the fourth
quarter of prior year;
- For the fourth quarter,
Discontinued Operations generated revenue of $265.1 million,
operating income of $105.4 million and Adjusted EBITDA of $104.9
million;
- On a total consolidated basis
(consisting of both Continuing Operations and Discontinued
Operations), for the fourth quarter Mattr reported Net Loss of
$23.0 million, Adjusted EBITDA (“Consolidated Adjusted EBITDA”) of
$137.7 million, fully diluted Earnings (Losses) Per Share
(“Consolidated EPS”) of $(0.34) and fully diluted Adjusted
Consolidated EPS of $1.51 during the fourth quarter;
- The Company generated $101.4
million in cash in the fourth quarter from operating activities
from Continuing Operations and Discontinued Operations on a
consolidated basis (“Consolidated Total Operating Activities”),
compared to $163.0 million of cash generated from Consolidated
Total Operating Activities during the fourth quarter of 2022, while
investing approximately $19 million under the 2023 portion of its
previously announced capital investment program to support
longer-term growth in its Composite and Connection Technologies
segments;
- A net repayment of $30.0 million
was made on the Credit Facility (as defined herein) bringing the
outstanding balance to zero;
- The Company remained active under
its normal course issuer bid (“NCIB”) repurchasing 2.9 million of
its common shares during the fourth quarter for an aggregate
repurchase price of $41.9 million and completing the maximum number
of repurchases of common shares permitted under its current NCIB,
which is eligible for renewal starting in June 2024; and
- Subsequent to the end of the fourth
quarter of 2023, the Company was renamed to Mattr Corp. and changed
its US OTC ticker symbol from SAWLF to MTTRF.
1 The Company’s consolidated financial
statements for the year ended December 31, 2023, report Continuing
Operations as the Company’s Composite Technologies and Connection
Technologies reporting segments and Discontinued Operations as the
Company’s PPS reporting segment. Total consolidated figures include
figures from both Continuing Operations and Discontinued
Operations. 2 Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted
EPS are non-GAAP measures. Non-GAAP measures do not have
standardized meanings prescribed by GAAP and are not necessarily
comparable to similar measures provided by other companies. See
Section 5.0 – Reconciliation of Non-GAAP Measures for further
details and a reconciliation of these non-GAAP measures.
Mr. Reeves continued, “Each of our continuing
operating segments achieved new record annual revenue and annual
Adjusted EBITDA results for 2023. Connection Technologies delivered
its largest ever premium wire and cable order and significantly
expanded its US infrastructure market participation, while
Composite Technologies increased fuel storage tank revenue by over
7%, reached a new annual water products revenue record and saw
larger diameter Flexpipe® product revenue rise by nearly 70% versus
the prior year. In parallel, the Company repurchased over 4.4
million shares during 2023 and deployed nearly $76.3 million of
organic growth capital, with four substantial, high return, North
American production facility additions remaining on-time, on-budget
and scheduled for first production between mid-2024 and early 2025.
In these last twelve months the employees of Mattr have achieved a
long list of extraordinary outcomes and have done so while setting
a new safety performance record. I could not be prouder of this
organization and the many talented, creative and committed people
who work here.”
“During the fourth quarter of 2023, our ongoing
actions to lower fixed costs and enhance production efficiency
enabled Continuing Operations to maintain Adjusted EBITDA margins1
in excess of 15%, as Connection Technologies delivered
year-over-year revenue growth, partially offsetting the previously
anticipated impacts of lower North American onshore oilfield
activity and temporarily reduced fuel tank production and shipment
activity, both of which weighed on our Composite Technologies
segment.”
“Notwithstanding its sale at the end of
November, our Discontinued Operations delivered substantial revenue
growth, both year-over-year and on a sequential basis, driven by
continued strong operational execution on the Southeast Gateway
Pipeline (“SGP”) project and around the world, a testament to the
capabilities and professionalism of the entire pipe coating
organization.”
Mr. Reeves concluded, “Entering 2024, normal
seasonality combined with flat early-year North American oilfield
activity is anticipated to cause Adjusted EBITDA in the first
quarter of the year to be modestly below the fourth quarter of
2023, before an expected significant upwards shift in the second
quarter of 2024.”
“Our businesses serve large and growing end
markets, we have a robust balance sheet, significant opportunities
for investment in high return organic growth and the capacity to
seek and complete meaningful, accretive acquisitions. Consequently,
management believes Mattr is well positioned to deliver substantial
value creation for shareholders over the coming years. While we
will be impacted by one-time costs tied to our North American
production footprint MEO activities during 2024, we believe that
full year 2024 revenue and underlying profitability will be higher
than 2023, and that our Company is poised to meet our stated
growth, profitability and free-cash-flow conversion objectives in
the years that follow.”
| Selected
Financial Highlights |
| |
|
|
(in thousands of Canadian dollars, except per
share amounts and percentages) |
Three Months Ended |
Year Ended |
|
|
December 31 |
December 31 |
| |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
| |
|
$ |
% |
$ |
% |
$ |
% |
$ |
% |
|
|
Revenue |
210,767 |
|
|
225,751 |
|
|
925,271 |
|
861,786 |
|
|
|
|
Gross profit |
65,873 |
|
31% |
69,551 |
|
31% |
296,439 |
32% |
258,230 |
|
30% |
|
|
Income from Continuing
Operations(a) |
2,319 |
|
1% |
12,383 |
|
5% |
81,542 |
9% |
110,971 |
|
13% |
|
|
Net Income from Continuing Operations |
2,336 |
|
|
13,489 |
|
|
55,859 |
|
93,347 |
|
|
|
|
Net (Loss) Income from Discontinued
Operations |
(25,342 |
) |
|
(80,299 |
) |
|
31,360 |
|
(124,323 |
) |
|
|
|
Net (Loss) Income for the period |
(23,006 |
) |
|
(66,810 |
) |
|
87,219 |
|
(30,976 |
) |
|
|
|
(Loss) Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
(0.34 |
) |
|
(0.94 |
) |
|
1.26 |
|
(0.43 |
) |
|
|
|
Diluted |
(0.34 |
) |
|
(0.94 |
) |
|
1.25 |
|
(0.43 |
) |
|
|
|
Adjusted EBITDA from
ContinuingOperations (b) (c) |
32,787 |
|
16% |
41,413 |
|
18% |
165,078 |
18% |
141,823 |
|
16% |
| |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA from Discontinued Operations(b)
(c) |
104,933 |
|
40% |
15,044 |
|
13% |
222,884 |
27% |
9,910 |
|
3% |
|
|
Total Adjusted EBITDA from Operations (b) (c) |
137,720 |
|
29% |
56,457 |
|
16% |
387,962 |
22% |
151,733 |
|
12% |
| |
Total Adjusted EPS
from Operations: (b) |
|
|
|
|
|
|
|
|
| |
Basic |
1.52 |
|
|
0.44 |
|
|
3.46 |
|
1.01 |
|
|
|
|
Diluted |
1.51 |
|
|
0.43 |
|
|
3.43 |
|
1.01 |
|
|
| |
|
|
(a) |
Operating income for the three months ended December 31, 2023,
includes $18.5 million impairment charges, $1.7 million gain on
sale of land and other and $2.5 million restructuring costs and
other, net; while operating income for the three months ended
December 31, 2022, includes no gain on sale of land and other, $2.2
million in impairment charges and $4.1 million in restructuring
costs and other, net. Operating income for the year ended December
31, 2023, includes impairment charges of $27.2 million, $1.7
million gain on sale of land and other and $2.5 million
restructuring costs and other, net; while operating income for the
year ended December 31, 2022, includes $43.0 million in gain on
sale of land and other, $9.5 million in impairment charges and $9.7
million in restructuring costs and other, net. |
|
(b) |
Adjusted EBITDA and Adjusted EPS are non-GAAP measures. Non-GAAP
measures do not have standardized meanings prescribed by GAAP and
are not necessarily comparable to similar measures provided by
other companies. See Section 5.0 – Reconciliation of Non-GAAP
Measures for further details and a reconciliation of these non-GAAP
measures. |
|
(c) |
Adjusted EBITDA is adjusted for all periods presented as the
Company updated this non-GAAP measure in the first quarter of 2023
to include adjustments for share-based incentive compensation cost
and foreign exchange (gain) loss. See Section 5.0 – Reconciliation
of Non-GAAP Measures for further details on the changes in the
composition in Adjusted EBITDA. The amounts presented above reflect
restated figures for all prior periods to align with the current
presentation. |
1.0 FOURTH QUARTER
HIGHLIGHTS
The fourth quarter of 2023 saw the Company’s
Composite Technologies segment revenue and Adjusted EBITDA decrease
compared to the same quarter of 2022, as the segment navigated
sequentially lower average North American oilfield activity, normal
seasonal slowing of underground storage tank installation activity
and the first of two quarters of lowered underground fuel tank
production in response to transient customer permitting challenges
encountered earlier in 2023. The segment also sold its
Oilfield Asset Management (“OAM”) business during Q4 2022 and
therefore the Q4 2023 results did not reflect any contributions
from the OAM business line.
In parallel, the Company’s Connection
Technologies segment delivered fourth quarter revenue and Adjusted
EBITDA similar to the same quarter of 2022, with sales growth in
North American infrastructure markets offsetting continued slowness
in the Canadian distribution sector and US automotive labor
disruption effects.
The Company delivered operating income from
Continuing Operations of $2.3 million and Adjusted EBITDA1 from
Continuing Operations of $32.8 million in the fourth quarter of
2023, a decrease of $10.1 million and $8.6 million, respectively,
compared to the fourth quarter of 2022. Operating income from
Continuing Operations in the fourth quarter included impairment
charges of $18.5 million booked in connection with the closure of
the Xerxes®’ Anaheim manufacturing facility and restructuring costs
of $2.5 million, whereas the comparable period for the prior year
included $2.1 million of impairment charges and $4.1 million of
restructuring costs. Additionally, share-based incentive
compensation of $2.1 million was recorded against operating income
from Continuing Operations during the fourth quarter of 2023, while
operating income from Continuing Operations in the prior year’s
fourth quarter included a $12.9 million share-based incentive
compensation expense.
The Company continued to execute on its
portfolio optimization strategy during the fourth quarter. On
November 30, 2023, the Company completed the sale of its PPG pipe
coating business to Tenaris. The Company has received gross
proceeds of $241.2 million (USD $177.6 million) which include the
agreed-upon purchase price of $225.4 million (USD$166 million) and
initial working capital adjustments. The final net cash
proceeds received by the Company in satisfaction of the contractual
purchase price for the sale of the PPG business remains subject to
completion of a customary final true up of the estimated working
capital calculation as provided in the definitive purchase and sale
agreement in respect of the transaction. The Company expects the
parties to finalize the net working capital adjustment during the
second quarter of 2024 and the Company currently anticipates its
net cash outflow to settle the working capital adjustment will be
approximately $32.0 million. The completion of this
transaction concludes the Company’s previously announced strategic
review and portfolio transformation process.
As at December 31, 2023, the Company had cash
and cash equivalents totaling $334.1 million, an increase from the
$98.0 million as at September 30, 2023 (December 31, 2022 – $264.0
million). The increase in cash compared to the third quarter of
2023 was largely attributable to $241.2 million of gross sale
proceeds received from the sale of PPG and $101.4 million of cash
provided by consolidated operating activities (including
Discontinued Operations). This was offset by (i) repayment of $30.0
million of the Company’s syndicated credit facility (the “Credit
Facility”), (ii) an aggregate of $41 million of share acquisitions
under the Company’s NCIB in the fourth quarter of 2023, (iii) $18.8
million of growth and maintenance capital expenditures for its
Continuing Operations and (iv) $6.6 million spent on repayment of
lease liabilities during the fourth quarter of 2023. Since the
beginning of 2021 and up to December 31, 2023, the Company has
repaid $291.5 million against the Credit Facility. The Company will
continue to focus on maximizing the conversion of operating income
into cash, optimizing its capital structure, investing in organic
and inorganic growth opportunities, and enhancing shareholder
value.
1 EBITDA, Adjusted EBITDA, Adjusted EPS, and net
debt-to-Adjusted EBITDA are non-GAAP measures. Non-GAAP measures do
not have standardized meanings under GAAP and are not necessarily
comparable to similar measures provided by other companies. See
“Section 5.0 – Reconciliation of Non-GAAP Measures” for further
details and a reconciliation of these non-GAAP measures. Adjusted
EBITDA is adjusted for all periods presented as the Company updated
this non-GAAP measure to include adjustments for share-based
incentive compensation cost and foreign exchange (gain) loss. See
“Section 5.0 – Reconciliation of Non-GAAP Measures” for further
details on the changes in composition of Adjusted EBITDA. The
amounts presented above reflect restated figures for all prior
periods to align with the current presentation. The Company expects
the current calculation methodology of Adjusted EBITDA to be
consistently applied in future periods.
|
Selected Segment Financial Highlights |
|
|
|
|
(in thousands of Canadian dollars, except percentages) |
Three Months Ended |
Year Ended |
|
|
December 31 |
December 31 |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
$ |
|
% |
$ |
|
% |
$ |
|
% |
$ |
|
% |
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
Composite Technologies |
112,489 |
|
|
139,599 |
|
|
535,549 |
|
|
529,151 |
|
|
|
|
Connection Technologies |
78,982 |
|
|
76,053 |
|
|
344,980 |
|
|
315,245 |
|
|
|
|
Financial, Corporate, and Others |
19,296 |
|
|
10,099 |
|
|
44,742 |
|
|
17,390 |
|
|
|
|
Revenue from Continuing Operations |
210,767 |
|
|
225,751 |
|
|
925,271 |
|
|
861,786 |
|
|
|
|
Revenue from Discontinued Operations |
265,125 |
|
|
119,707 |
|
|
829,641 |
|
|
393,503 |
|
|
|
|
Operating (loss) income |
|
|
|
|
|
|
|
|
|
|
Composite Technologies |
(4,369 |
) |
(3.9 |
%) |
15,205 |
|
10.9 |
% |
67,416 |
|
12.6 |
% |
53,346 |
|
10.1 |
% |
|
|
Connection Technologies |
11,795 |
|
14.9 |
% |
11,594 |
|
15.2 |
% |
60,356 |
|
17.5 |
% |
55,237 |
|
17.5 |
% |
|
|
Financial and Corporate |
(5,103 |
) |
|
(14,424 |
) |
|
(46,230 |
) |
|
2,388 |
|
|
|
|
Operating income from Continuing Operations |
2,319 |
|
|
12,383 |
|
|
81,542 |
|
|
110,971 |
|
|
|
|
Operating Income (loss) from Discontinued
Operations |
105,356 |
|
39.7 |
% |
(1,352 |
) |
(1.1 |
%) |
196,271 |
|
23.7 |
% |
(42,019 |
) |
(10.7 |
%) |
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
Composite Technologies |
18,837 |
|
16.7 |
% |
27,343 |
|
19.6 |
% |
112,821 |
|
21.1 |
% |
97,687 |
|
18.5 |
% |
|
|
Connection Technologies |
14,699 |
|
18.6 |
% |
14,512 |
|
19.1 |
% |
69,504 |
|
20.1 |
% |
62,745 |
|
19.9 |
% |
|
|
Financial and Corporate |
(749 |
) |
|
(442 |
) |
|
(17,247 |
) |
|
(18,609 |
) |
|
|
|
Adjusted EBITDA from Continuing Operations
(a) |
32,787 |
|
15.6 |
% |
41,413 |
|
18.3 |
% |
165,078 |
|
17.8 |
% |
141,823 |
|
16.5 |
% |
|
|
Adjusted EBITDA from Discontinued Operations
(a) |
104,933 |
|
39.6 |
% |
15,044 |
|
12.6 |
% |
222,884 |
|
26.9 |
% |
9,910 |
|
2.5 |
% |
| |
|
|
(a) |
Adjusted EBITDA is a non-GAAP measure. Non-GAAP measures do not
have a standardized meaning prescribed by GAAP and are not
necessarily comparable to similar measures provided by other
companies. See Section 5.0 – Reconciliation of Non-GAAP Measures
for further details and a reconciliation of these non-GAAP
measures. Adjusted EBITDA is adjusted for all periods presented as
the Company updated this non-GAAP measure in the first quarter of
2023 to include adjustments for share-based incentive compensation
cost and foreign exchange (gain) loss. See Section 5.0 –
Reconciliation of Non-GAAP Measures for further details on the
changes in composition for Adjusted EBITDA. The amounts presented
above reflect restated figures for all prior periods to align with
the current presentation. |
Composite Technologies segment revenue in the
fourth quarter of 2023 was $112.5 million, a decrease of $27.1
million, or 19.4%, compared to the fourth quarter of 2022.
Operating loss in the fourth quarter of 2023 was $4.4 million
compared to operating income of $15.2 million in the fourth quarter
of 2022. The segment's 2023 fourth quarter results included air
permit and equipment non-cash impairment charges of $18.5 million
booked in connection with the closure of the Xerxes®’ Anaheim
manufacturing facility. Excluding impacts from the OAM business
(which was sold in November 2022 and generated no revenue or
operating income in the fourth quarter of 2023 compared to revenue
of $6.2 million and operating income of $0.2 million in the
comparative period), the impact of the previously discussed
impairment charge and the impact of $1.5 million in MEO costs
associated with the establishment of the segment’s two new North
American production sites during the period (no MEO costs were
incurred during the prior year period), the segment's revenue
decreased by $21 million and the operating income increased by $0.6
million.
Excluding the impacts discussed above, the
decrease in revenue was mostly attributable to lower demand for the
Company’s Flexpipe® product line due to lower drilling and
completion activity levels by North American oil and gas operators,
and lower production and shipment of FRP tanks due to normal
seasonal slowing in project execution compounded by the lingering
impact of customer permitting delays experienced earlier in
2023. Despite these revenue reducing factors, the
segment continued to optimize its cost base and delivered growth
over the comparable period in sales of its large diameter Flexpipe®
products and established a new quarterly revenue record for its
Xerxes® stormwater product line. Adjusted EBITDA1 in the fourth
quarter of 2023 was $18.8 million, a decrease of $8.5 million
compared to $27.3 million in the fourth quarter of 2022.
The Connection Technologies segment delivered
revenue of $79 million in the fourth quarter of 2023 which was an
increase of $2.9 million compared to the fourth quarter of 2022.
This was primarily driven by an increase in wire and cable product
shipments into infrastructure applications in North America. Its
operating income in the fourth quarter of 2023 was $11.8 million, a
modest increase from $11.6 million reported in the prior year
period. The segment incurred MEO costs of approximately $0.2
million associated with the relocation of its North American
footprint during the quarter. The segment delivered Adjusted
EBITDA1 of $14.7 million during the fourth quarter of 2023, a 1.2%
increase versus the prior year quarter.
Discontinued Operations, which consists of the
businesses formerly reported under the PPS segment (excluding the
entities not within the perimeter of the transaction with Tenaris),
generated revenue of $265.1 million in the fourth quarter of 2023,
representing an increase of 121.5% versus the same quarter of 2022.
Operating income in the fourth quarter of 2023 was $105.4 million
which represented an increase of $106.7 million versus the fourth
quarter of 2022 operating loss of $1.4 million. This significant
increase was a result of strong performance in pipe coating
facilities across all regions, bolstered by 2 full months of
coating activity within the SGP project. Discontinued Operations
generated $104.9 million of Adjusted EBITDA1 in the fourth quarter
of 2023, a substantial increase from the $15 million reported in
the prior year’s fourth quarter. Execution efficiency and
favourable revenue mix resulted in Adjusted EBITDA margins1 of
39.6% during the quarter, compared to a 12.6% Adjusted EBITDA
margin1 in the prior year’s fourth quarter.
The Company has recognized a $105.0 million loss
on the sale of PPG to Tenaris in Discontinued Operations in the
consolidated statements of income (loss). The loss includes a
non-cash Cumulative Translation Adjustment of $13.0 million that
reflects the impact of foreign exchange rate fluctuations on the
sold business.
The PPG business, which has historically
comprised the vast majority of the Company’s bid and budgetary
estimates and total order backlog, was sold in November 2023 and as
a result the Company will no longer report these supplementary
financial measures as the Company does not believe that going
forward such measures will provide investors with useful
information to understand or evaluate the Company’s Continuing
Operations or its respective performance and prospects.
2.0
OUTLOOK
The Company expects to experience a modest
sequential increase in consolidated revenue within its Continuing
Operations during the first quarter of 2024, driven by broadly
higher activity levels in its Connection Technologies segment and
higher sales of composite pipe products into international markets
within the Composite Technologies segment, partially offset by
lower production and shipment of FRP tanks and lower pipe coating
activity within its Brazilian operations.
The Composite Technologies segment’s first
quarter revenue outlook is primarily driven by expectations that
North American onshore drilling and completion activity levels, and
therefore North American demand for Flexpipe® products, will be
similar to those observed during the fourth quarter of 2023, while
shipments of Flexpipe® products to support international projects
will move sequentially up. This is coupled with the normal seasonal
low point for FRP tank installation activity as unfavorable weather
and ground conditions are experienced across much of North America.
The first quarter of 2024 is also anticipated to see the segment
continue to limit FRP tank production activity to control
customer-owned inventory levels which elevated over the course of
2023 in the face of permitting delay issues faced by some North
American customers. This is the last quarter in which the Company
anticipates this action will be necessary, as most customers have
adapted their permit application strategies and are indicating
greater confidence that permits will be available for projects in
2024 and beyond.
First quarter revenue outlook within the
Connection Technologies segment is primarily driven by expected
sequential strengthening of demand within North American industrial
and infrastructure markets.
Despite an expectation of modest favorable
movement in revenue generation in the first quarter of 2024, the
Company anticipates some margin compression as a result of its MEO
activities and the specific mix of product sales.
During the second quarter of 2023, the Company
detailed several planned 2023 and 2024 capital investments into
high-return growth and efficiency improvement opportunities in both
segments. These investments and other MEO activities, which are
currently progressing on time and on budget, include:
- The addition of two new
manufacturing facilities and elimination of one aging manufacturing
facility within its Composite Technologies network, namely:
- a new Xerxes® FRP tank production
site in Blythewood, South Carolina that is expected to commence
production in mid-2024; and
- a new Flexpipe® composite pipe
production site in Rockwall, Texas that is expected to commence
production in mid-2024; and
- the shut-down and exit of a Xerxes®
FRP tank production site in Anaheim, California that is expected to
be largely complete by the end of 2024.
- The replacement of its Rexdale,
Canada facility and expansion of its Connection Technologies’ North
American manufacturing footprint via:
- a new heat-shrink tubing production
site in Fairfield, Ohio that is expected to commence production in
late 2024; and
- a new wire and cable production
site in Vaughan, Ontario that is expected to commence production in
late 2024.
The Company expects to continue to make sizeable
organic investments throughout 2024 to modernize, expand capacity
in targeted geographies and improve efficiency within the North
American production network of its Composite Technologies and
Connection Technologies segments. Given the anticipated timing of
these MEO actions, the Company continues to expect to recognize
meaningful MEO costs throughout 2024, with these costs weighted
towards optimization and growth activities within the Composite
Technologies segment during the first half of 2024 and weighted
towards the modernization and growth activities within the
Connection Technologies segment during the second half of 2024. In
aggregate, once completed, these planned investments are expected
to result in the Company creating at least $150 million per year of
incremental revenue generating capacity with comparable margins to
those realized in its Composite Technologies and Connection
Technologies segments. These levels of output are expected to be
realized over the 3–5 year period following completion, as the
facilities reach efficient utilization levels in accordance with
their currently expected timelines. The Company does not expect the
recently announced shut-down of the Xerxes production site in
Anaheim, California, to alter the output expectations.
In management’s view, the underlying mid and
long-term market trends for all of Mattr’s core businesses remain
favourable. Despite elevated interest rates, demand for products in
support of critical infrastructure renewal and expansion is
expected to remain robust; its fuel tank customers have made
adjustments to accommodate elongated permitting timelines which are
anticipated to result in a return to more normal FRP tank shipment
patterns during the second quarter of 2024; and anticipated stable
oil and gas commodity prices combined with a new annual capital
spending cycle for North American oil and gas producers is expected
to provide opportunities for market share gains by the Company’s
Flexpipe® business, particularly within its recently commercialized
larger diameter product portfolio, moving through the year. More
broadly, management expects that demand for its differentiated
products designed to withstand harsh environments will continue to
rise in the coming years as a result of the global need to renew
and expand critical infrastructure, including energy generation and
distribution, electrification, transportation network enhancement
and storm water management. The Company continues to closely
monitor raw material and labour costs and accordingly, will
continue to ensure its pricing appropriately reflects the value of
its products and its cost inputs.
The Company continues to take an “all of the
above” approach to capital allocation, skewed towards investment in
organic and inorganic acquisition and investment opportunities
viewed as having the highest risk-adjusted return on investment
potential. With substantial capacity to deploy capital and the
expectation to deploy available capital over the next several
quarters, the Company continues to elevate focus on inorganic
opportunities, including opportunities of meaningful scale,
particularly related to differentiated wire & cable sectors and
water products, where long-term tailwinds are expected. The Company
remains focused on ensuring any capital investments provide
superior returns (both near and long-term) to shareholders in light
of all available options, including the return of capital to
shareholders. We expect to apply to renew our NCIB and continue to
repurchase the Company’s common shares on an opportunistic basis.
Opportunities also exist to further enhance the Company’s organic
growth trajectory.
1 EBITDA, Adjusted EBITDA, adjusted EBITDA
margins and net debt-to-Adjusted EBITDA are non-GAAP measures.
Non-GAAP measures do not have standardized meanings under GAAP and
are not necessarily comparable to similar measures provided by
other companies. See “Section 5.0 – Reconciliation of Non-GAAP
Measures” for further details and a reconciliation of these
non-GAAP measures. Adjusted EBITDA is adjusted for all periods
presented as the Company updated this non-GAAP measure in the first
quarter of 2023 to include adjustments for share-based incentive
compensation cost and foreign exchange (gain) loss. See “Section
5.0 – Reconciliation of Non-GAAP Measures” for further details on
the changes in composition of Adjusted EBITDA. The amounts
presented above reflect restated figures for all prior periods to
align with the current presentation. The Company expects the
current calculation methodology of Adjusted EBITDA to be
consistently applied in future periods.
Composite Technologies
Segment
While the Company anticipates continued
year-over-year expansion of its stormwater products business,
Composite Technologies segment performance in the first half of
2024 will largely be driven by three factors: production and
shipment of FRP tanks into North American fuel station
applications; baseline volumes of Flexpipe® product consumption
driven by North American oilfield activity levels; and continued
market share gains by the Company’s larger diameter Flexpipe®
products in North America and internationally.
Production and shipment of Xerxes® FRP tanks
will be at their seasonal low point during the first quarter, as
weather and ground conditions across much of North America remain
largely unfavorable to fuel station construction activities, before
normal seasonal construction activity rises in the second quarter
of 2024. The first quarter of 2024 is also anticipated to see the
segment continue to limit FRP tank production activity to control
customer owned FRP tank inventory levels, which elevated over the
course of 2023 in the face of permitting delay issues faced by some
North American customers. This is the last quarter in which the
Company anticipates this action will be necessary, as most
customers have adapted their permit application strategies and are
indicating greater confidence that permits will be available for
projects in 2024 and beyond. Consequently, the Company anticipates
a substantial increase in FRP tank production and shipments in the
second quarter of 2024, and currently expects full year 2024
Xerxes® revenues to expand compared to 2023.
The Company anticipates North American onshore
oil and gas drilling and completion activity will remain relatively
flat throughout the first half of 2024, as generally stable
commodity prices and the favorable impact of new calendar year
customer capital budgets are offset by broad, large-scale, customer
consolidation events which typically result in temporarily lower
activity levels within the impacted organizations. Normal
seasonality effects are expected to occur, with robust first
quarter Canadian oilfield activity anticipated to move lower in the
second quarter of 2024, due to weather and ground conditions, while
US completion activity is anticipated to move higher in the second
quarter, as weather and ground conditions become more favorable.
The Company currently anticipates a substantial increase in North
American Flexpipe® revenue moving from the first quarter to the
second quarter of 2024, as continued adoption of its recently
commercialized larger diameter products enhance normal seasonal
cycles.
Overlaying North American oilfield trends, the
Company has been successful in securing multiple Flexpipe® orders,
including larger diameter product orders, for delivery into
international projects during the first half of 2024, and expects
these deliveries to enhance first quarter and, more substantially,
second quarter performance. The Company currently anticipates full
year 2024 Flexpipe® revenues to expand compared to 2023.
The segment continues to execute the
establishment of two new US production sites, with its Rockwall,
Texas Flexpipe® and Blythewood, South Carolina Xerxes® facilities
progressing on-time and on-budget. First production is expected
from both sites during the third quarter of 2024. In addition, the
segment has taken steps to lower its fixed cost and operating risk
base by ceasing production of FRP tanks from its aging Anaheim,
California facility, and will fully exit the site by year end. In
combination, the actions taken to modernize, expand and optimize
the segment’s North American production footprint are expected to
lower average production costs, increase total production capacity
and position the segment to deliver meaningful growth and margin
expansion in subsequent years. The Company continues to expect MEO
costs will lower segment EBITDA margins during the first half of
2024. The Company expects that there will be sufficient incremental
revenues from these new facilities to absorb incremental fixed
costs during the ramp up periods, and both new facilities have
sufficient physical space to enable further production line
additions in future years. The segment continues to closely monitor
raw material and labour costs and, as a result, will continue to
ensure its pricing appropriately reflects the value of its products
and its cost inputs.
Connection Technologies
Segment
The Company is expecting demand for its
Connection Technologies segment products to rise in the first
quarter of 2024 to levels similar to those observed in the prior
year’s quarter, despite the non-recurrence of a large aerospace
wire and cable order which favorably impacted Q1-2023 results,
before moving further upwards in the second quarter of 2024.
Profitability in the first and second quarters is expected to be
modestly impacted by one-time costs associated with the Company’s
MEO activities, although the majority of MEO costs for the segment
are expected to be recognized during the second half of 2024.
The Company continues to monitor recessionary
concerns and broad supply chain impacts. Its outlook does not
incorporate any expectation of meaningful growth in total global
vehicle output within the automotive end markets, which represented
approximately 29% of the segment’s revenue in the fourth quarter of
2023. The Company does not anticipate any material impact from the
continuing stabilization of EV demand and production. Despite the
macroeconomic backdrop, demand for the Company’s automotive
products is expected to continue to outpace overall automotive
production as a result of electronic content growth in premium,
hybrid and full electric vehicle markets, particularly in the Asia
Pacific and Europe, Middle East and Africa regions. The Company is
expecting to benefit from continued infrastructure spending in 2024
and beyond as new and upgraded utility and communication networks
are constructed, nuclear refurbishments continue in Canada, and
federal stimulus package impacts persist. The segment continues to
execute the establishment of two new production sites, with its
Vaughan, Ontario and Fairfield, Ohio facilities progressing on-time
and on-budget. First production from both sites is expected during
the second half of 2024. The Company expects that there will be
sufficient incremental revenues from these new facilities to absorb
incremental fixed costs during the ramp up periods, and both new
facilities have sufficient physical space to enable further
production line additions in future years. The segment continues to
closely monitor raw material and labour costs, particularly copper,
and, as a result, will continue to ensure its pricing appropriately
reflects the value of its products and its cost inputs.
Strategic Review Update
On November 30, 2023, the Company completed the
sale of its PPG operating unit, a substantial part of its legacy
pipe coating business, which concluded its strategic review process
that was initially announced on September 12, 2022 (the “Strategic
Review”) to review strategic alternatives for its PPG, SPS, and OAM
operating units.
Pursuant to the Strategic Review, the Company
considered and explored a range of options for each of these
operating units, including the sale of such units. To date, the
Strategic Review process (including the sale of a non-material
business unit preceding the formal launch of the Strategic Review)
has resulted in the successful completion of the following:
- the sale of its Lake Superior
Consulting business (which formed part of what was previously the
PPS segment) in September 2022;
- the sale of its OAM business (which
formed part of the Composite Technologies segment) in November
2022;
- the sale of its Socotherm
subsidiary (which formed part of what was previously the PPS
segment) in December 2022;
- the sale of its specialty pipe
coating facility in Ellon, Scotland (which formed part of what was
previously the PPS segment) in the second quarter of 2023;
- the sale of its SPS business (which
formed part of what was previously the PPS segment) at the end of
May 2023;
- the sale of its facility in
Pozzallo, Italy (which formed part of what was previously the PPS
segment) in fourth quarter of 2023;
- the sale of one of its real estate
assets in western Canada; and
- the sale of the substantial
majority of its PPG operating unit (which formed the majority of
what was previously the PPS segment), at the end of November
2023.
In connection with the Strategic Review, the
Company announced its official re-brand to “Mattr” in June 2023,
and then completed its legal name change from “Shawcor Ltd” to
“Mattr Corp” in January 2024, reflecting its transformation from an
energy services organization to a material technologies company
providing differentiated, high-performance products to critical
infrastructure markets around the world.
During the fourth quarter and prior to the
completion of its sale to Tenaris in November of 2023, the PPG
business generated significant revenue, Adjusted EBITDA and cash
from operating activities for the Company. The Company
benefitted from this significant generation of cash, but
consequently this has resulted in the incurrence of related income
tax and other liabilities for the PPG business which will require
settlement with Tenaris as part of a customary working capital
adjustment process. As such, the final net cash proceeds received
by the Company in satisfaction of the contractual purchase price
for the sale of the PPG business remains subject to completion of a
customary final true up of the estimated working capital
calculation as provided in the definitive purchase and sale
agreement in respect of the transaction. The Company expects the
parties to finalize the net working capital adjustment during the
second quarter of 2024 and the Company currently anticipates its
net cash outflow to settle the working capital adjustment will be
approximately $32.0 million.
The Company continues to explore options to
divest of its Brazilian pipe coating operations (“Thermotite”),
formerly part of the PPG operating unit, which was excluded from
the perimeter of the transaction completed in November of 2023.
While the Company does not anticipate Thermotite’s financial
results to be material to the organization, the business is fully
booked throughout 2024 and is expected to deliver increased full
year 2024 financial performance when compared to 2023. The Company
remains committed to divest of this entity and considers its
Strategic Review to be substantially complete.
3.0 CONFERENCE CALL AND ADDITIONAL
INFORMATION
Mattr will be hosting a Shareholder and Analyst
Conference Call and Webcast on Thursday, March 14th, 2024 at 9:00
AM ET, which will discuss the Company’s Fourth Quarter 2023
Financial Results. To participate via telephone, please register at
https://register.vevent.com/register/BI7d6d639108f6417e87ebf3c247fc115e
and a telephone number and pin will be provided.
Alternatively, please go to the following
website address to participate via webcast:
https://edge.media-server.com/mmc/p/66rbwdc2 . The webcast
recording will be available within 24 hours of the live
presentation and will be accessible for 90 days.
About Mattr
Mattr is a growth-oriented, global materials
technology company broadly serving critical infrastructure markets,
including transportation, communication, water management, energy
and electrification. The Company operates through a network of
fixed manufacturing facilities. Its two business segments,
Composite Technologies and Connection Technologies, enable
responsible renewal and enhancement of critical infrastructure
while lowering risk and environmental impact.
For further information, please contact:
Meghan
MacEachernDirector, External Communications & ESGTel:
437-341-1848Email: meghan.maceachern@mattr.comWebsite:
www.mattr.com
Source: Mattr Corp.Mattr.ER4.0
FORWARD-LOOKING INFORMATION
This news release 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, judgements 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 news release includes
forward-looking information in the Outlook Section and elsewhere in
respect of, among other things, the ability of the Company to
deliver higher returns to all shareholders; the market dynamics
during 2024; the favourability of underlying business trends of the
Company; the Company’s ability to execute on its portfolio
optimization strategy; the Company’s ability to execute projects
under contract; the Company’s ability to execute on its business
plan and strategies, including the pursuit, execution and
integration of potential organic and inorganic growth
opportunities, as applicable; the timing of the finalization of the
net working capital adjustment for the sale of the PPG business;
the anticipated net cash outflow amount to settle the working
capital adjustment for the sale of the PPG business; the level of
financial performance throughout 2024; expected increased revenue
within Continuing Operations in the first quarter of 2024; the
gradual increase in demand for oilfield products in the first half
of 2024; the demand for, and activity in, the Company’s products in
the Composite Technologies and the Connection Technologies segments
of the Company’s business; the Company’s investments throughout
2024 to expand capacity within the Composite Technologies and
Connection Technologies segments; North American onshore drilling
and completion activity; the continued permitting delay impacts on
fuel storage tank shipments; the anticipated results and timing of
the Company's capital expenditures investments and the expected
impact on the Company's revenue generating capacity, operational
efficiencies, margin profile enhancement, and financial results;
increased shipments of Flexpipe® products; FRP tank production
activity; the end to delays faced by North American customers due
to permit application strategies; availability for permits for
projects in 2024 and beyond; the impact of MEO activities on the
Company’s financial performance; the impact of MEO costs on
financial measures in the first half of 2024; timing for completion
of new facilities, and timing of achievement of anticipated
production levels; the seasonal impacts to, and demand in, the
Company’s Composite Technologies and Connection Technologies
segments; the impact of increased normal seasonality and stable
North American oilfield activity in the first quarter of 2024; the
anticipated normalized product shipment patterns during the second
quarter of 2024; the anticipated demand for the Company’s Flexpipe®
product line; the growth in premium, hybrid and full electric
vehicle markets and the impact thereof on the Company’s financial
performance; the impact of continued infrastructure spending,
including in the areas of water management, communication networks
and nuclear refurbishment on the Company’s financial performance;
the Company’s management of raw material and labour costs; the
impact of global economic activity on the demand for the Company's
products; the level, and impact of the demand for oil and gas; the
impact of global oil and gas commodity prices and the annual
capital spending cycle for North American oil and gas producers;
the global need to renew and expand critical infrastructure; the
impact of changing energy demand, supply and prices; the ability of
the Company to fund its operating and capital requirements; the
ability of the Company to comply with its debt covenants; and the
ability to finance increases in working capital.
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. Readers are cautioned 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: the risks and uncertainties described in the Company’s
Management Discussion and Analysis under “Risks and Uncertainties”
and in the Company’s Annual Information Form under “Risk
Factors”.
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
the Company’s ability to manage supply chain disruptions and other
business impacts caused by, among other things, current or future
geopolitical events, conflicts, or disruptions, such as the
conflict in Ukraine and related sanctions on Russia; the impact of
the Russia and Ukraine conflict on the Company’s demand for
products and the strength of its and its customers supply chains;
the current escalating Israel-Palestine conflict; increased
activity levels in the Connection Technologies segment; higher
sales of composite pipe products into international markets; a
similar level of North American onshore drilling and completion
activity levels to those observed during the fourth quarter of
2023; demand for Flexpipe® products will be similar to those
observed during the fourth quarter of 2023; increased shipment of
Flexpipe® products to support international projects; strengthening
demand within the North American industrial and infrastructure
markets seasonal impacts on the Company’s FRP tanks business due to
North American weather and ground conditions; the changing demand
for the Company’s FRP tanks and water and stormwater storage and
treatment systems; seasonal impacts to the Company’s composite pipe
business due to spring break-up conditions; the trend of
international sales for composite pipe products ;expected demand
for the Company’s products in the Composite Technologies segment,
including the ability to grow such demand over the timeline
expected to complete such facilities and achieve desired
operational levels; the Company being able to complete the
construction and commissioning of these facilities on their
expected timeline and budget, as applicable, and its ability to
achieve and maintain necessary production and efficiency levels
once operational; expectations regarding the Company’s ability to
attract new customers and develop and maintain relationships with
existing customers; the continued availability of funding required
to meet the Company’s anticipated operating and capital expenditure
requirements over such time; continued competitive intensity in the
segments in which the Company operates consistent with levels
experienced in 2023; no significant legal or regulatory
developments, other shifts in economic conditions, or macro changes
in the competitive environment affecting our business activities;
key interest rates remaining relatively stable throughout 2024 to
2026; expectations regarding the Company’s ability to continue to
manage its supply chain and any future disruptions; the increased
demand for the Company’s products within the Connection
Technologies markets; heightened demand for electric and hybrid
vehicles and for electronic content within those vehicles; the
growth in demand for water and storm water storage and treatment
systems; heightened infrastructure spending in Canada, including in
respect of commercial and municipal water projects, nuclear plant
refurbishment and upgraded communication and transportation
networks, communication networks and nuclear refurbishments;
sustained health of oil and gas producers; the continued global
need to renew and expand critical infrastructure including energy
generation and distribution, electrification, transportation
network enhancement and storm management; enhanced overall market
activity; the continued recovery of the global economy; the
Company’s ability to execute projects under contract; the Company’s
continuing ability to provide new and enhanced product offerings to
its customers; that the Company will continue to be able to
optimize its portfolio and identify and successfully execute on
opportunities for acquisitions or investments; the higher level of
investment in working capital by the Company; the easing of supply
chain shortages and the continued supply of and stable pricing or
the ability to pass on higher prices to its customers for
commodities used by the Company; the availability of personnel
resources sufficient for the Company to operate its businesses; the
maintenance of operations by the Company in major oil and gas
producing regions; the adequacy of the Company’s existing accruals
in respect of environmental compliance and in respect of litigation
and tax matters and other claims generally; the impact of adoption
of artificial intelligence and other machine learning on
competition in the industries which the Company operates; the
Company’s ability to meet its financial objectives; the ability of
the Company to satisfy all covenants under its Credit Facility (as
defined herein) and other debt obligations and having sufficient
liquidity to fund its obligations and planned initiatives; the
ability to develop, access or implement some or all of the
technology necessary to efficiently and effectively achieve the
Company’s ESG goals and ambitions, including its greenhouse gas
targets; the availability, commercial viability and scalability of
the Company’s greenhouse gas emission reduction strategies and
related technology and products; and the anticipated costs and
impacts on the Company’s operations and financial results of
adopting these technologies or strategies. 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.
5.0 RECONCILIATION OF NON-GAAP
MEASURES
The Company reports on certain non-GAAP measures
that are used to evaluate its performance and segments, as well as
to determine compliance with debt covenants and to manage its
capital structure. These non-GAAP measures do not have standardized
meanings under IFRS and are not necessarily comparable to similar
measures provided by other companies. The Company discloses these
measures because it believes that they provide further information
and assist readers in understanding the results of the Company’s
operations and financial position. These measures should not be
considered in isolation or used in substitution for other measures
of performance prepared in accordance with GAAP. The following is a
reconciliation of the non-GAAP measures reported by the
Company.
EBITDA and Adjusted EBITDA
In an effort to reduce the volatility of the
Adjusted EBITDA metric imposed by factors outside of the Company’s
control and to provide enhanced comparability of the Company’s
results from its principal business activities with those of the
Company’s peer group, the Company has modified the composition of
Adjusted EBITDA. Beginning in the first quarter of 2023, Adjusted
EBITDA includes adjustments for share-based incentive compensation
costs and foreign exchange (gains) losses. Share-based incentive
compensation costs have recently experienced a high degree of
volatility derived from movements in the market value of the
Company’s shares and the related impact on such plans. Given the
Company’s global presence and its exposure to several foreign
currency rates, the Company experiences fluctuation from foreign
exchange gains or losses outside of its control. The Company
believes this modified composition will present a more accurate
representation of the Company’s results from principal business
activities. The amounts presented below reflect restated figures
for prior periods as needed to align with the updated
definition.
EBITDA is a non-GAAP measure defined as earnings
before interest, income taxes, depreciation and amortization.
Adjusted EBITDA is also a non-GAAP measure defined as EBITDA
adjusted for items which do not impact day to day operations.
Adjusted EBITDA is calculated by adding back to EBITDA the sum of
impairments, costs associated with refinancing of long-term debt
and credit facilities, gain on sale of land and other, gain on sale
of investment in associates, gain on sale of operating unit,
acquisition costs, restructuring costs, share-based incentive
compensation cost, foreign exchange (gain) loss and other, net and
hyperinflationary adjustments. The Company believes that EBITDA and
Adjusted EBITDA are useful supplemental measures that provide a
meaningful indication of the Company’s results from principal
business activities prior to the consideration of how these
activities are financed or the tax impacts in various jurisdictions
and for comparing its operating performance with the performance of
other companies that have different financing, capital or tax
structures. The Company presents Adjusted EBITDA as a measure of
EBITDA that excludes the impact of transactions that are outside
the Company’s normal course of business or day to day operations.
Adjusted EBITDA is used by many analysts as one of several
important analytical tools to evaluate financial performance and is
a key metric in business valuations. It is also considered
important by lenders to the Company and is included in the
financial covenants of the Credit Facility.
|
(in thousands of Canadian dollars) |
|
|
Year Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
Net Income from Continuing Operations |
|
$ |
55,859 |
|
$ |
93,347 |
|
|
|
|
|
|
|
|
| Add: |
|
|
|
|
|
| Income tax expense
(recovery) |
|
|
5,401 |
|
|
(4,155 |
) |
| Finance costs, net |
|
|
20,282 |
|
|
20,452 |
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
|
36,861 |
|
|
37,628 |
|
|
EBITDA from Continuing Operations |
|
$ |
118,403 |
|
$ |
147,272 |
|
| |
|
|
|
|
|
| Share-based incentive
compensation cost |
|
|
18,307 |
|
|
26,011 |
|
| Foreign exchange loss
(gain) |
|
|
2,243 |
|
|
(7,871 |
) |
| Gain on sale of land and
other |
|
|
(1,655 |
) |
|
(43,017 |
) |
| Loss on sale of
Subsidiaries |
|
|
- |
|
|
1,327 |
|
| Curtailment of defined benefit
plan |
|
|
(1,889 |
) |
|
- |
|
| 2019 ZCL Composites Inc.
purchase trust |
|
|
- |
|
|
(1,059 |
) |
| Impairment |
|
|
27,195 |
|
|
9,457 |
|
|
Restructuring costs and other, net |
|
|
2,474 |
|
|
9,703 |
|
|
Adjusted EBITDA from Continuing Operations |
|
$ |
165,078 |
|
$ |
141,823 |
|
|
|
Three Month Ended |
|
|
|
March 31, |
|
|
June 30, |
|
|
September 30, |
|
|
December 31, |
|
|
(in thousands of Canadian dollars) |
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income from Continuing Operations |
$ |
20,708 |
|
$ |
14,670 |
|
$ |
18,145 |
|
$ |
2,335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
| Income
tax expense (recovery) |
|
4,585 |
|
|
3,327 |
|
|
2,486 |
|
|
(4,997 |
) |
| Finance
costs, net |
|
4,984 |
|
|
4,974 |
|
|
5,344 |
|
|
4,980 |
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
9,021 |
|
|
9,170 |
|
|
9,785 |
|
|
8,885 |
|
|
EBITDA from Continuing Operations |
$ |
39,298 |
|
$ |
32,141 |
|
$ |
35,760 |
|
$ |
11,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based incentive compensation (recovery) cost |
|
(42 |
) |
|
18,668 |
|
|
(2,414 |
) |
|
2,096 |
|
| Foreign
exchange loss (gain) |
|
1,210 |
|
|
(45 |
) |
|
952 |
|
|
126 |
|
| Gain on sale of land and
other |
|
- |
|
|
- |
|
|
- |
|
|
(1,655 |
) |
|
Curtailment of defined benefit plan |
|
- |
|
|
- |
|
|
(1,889 |
) |
|
- |
|
|
Impairment |
|
- |
|
|
- |
|
|
8,652 |
|
|
18,544 |
|
|
Restructuring costs and other, net |
|
- |
|
|
- |
|
|
- |
|
|
2,474 |
|
|
Adjusted EBITDA from Continuing Operations |
$ |
40,466 |
|
$ |
50,764 |
|
$ |
41,060 |
|
$ |
32,787 |
|
|
|
|
| |
|
|
|
Three Month Ended |
|
|
|
March 31, |
|
|
June 30, |
|
|
September 30, |
|
|
December 31, |
|
|
(in thousands of Canadian dollars) |
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income from Continuing Operations |
$ |
10,017 |
|
$ |
40,629 |
|
$ |
29,211 |
|
$ |
13,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
| Income
tax expense (recovery) |
|
249 |
|
|
7,006 |
|
|
(4,446 |
) |
|
(6,963 |
) |
| Finance
costs, net |
|
3,948 |
|
|
5,934 |
|
|
6,040 |
|
|
4,530 |
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
9,464 |
|
|
9,998 |
|
|
9,102 |
|
|
9,064 |
|
|
EBITDA from Continuing Operations |
$ |
23,678 |
|
$ |
63,567 |
|
$ |
39,907 |
|
$ |
20,120 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based incentive compensation cost |
|
2,346 |
|
|
2,584 |
|
|
8,182 |
|
|
12,899 |
|
| Foreign
exchange (gain) loss |
|
(2,625 |
) |
|
(351 |
) |
|
(5,664 |
) |
|
769 |
|
| Gain on
sale of land and other |
|
- |
|
|
(43,017 |
) |
|
- |
|
|
- |
|
| Loss on sale of
Subsidiaries |
|
- |
|
|
- |
|
|
- |
|
|
1,327 |
|
| 2019 ZCL
Composites Inc. purchase trust |
|
- |
|
|
- |
|
|
(1,059 |
) |
|
- |
|
|
Impairment |
|
- |
|
|
7,292 |
|
|
- |
|
|
2,165 |
|
|
Restructuring costs and other, net |
|
1,075 |
|
|
2,420 |
|
|
2,075 |
|
|
4,133 |
|
|
Adjusted EBITDA from Continuing Operations |
$ |
24,474 |
|
$ |
32,495 |
|
$ |
43,442 |
|
$ |
41,413 |
|
Composite Technologies Segment
|
(in thousands of Canadian dollars) |
|
|
Year Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
67,416 |
|
$ |
53,347 |
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
|
27,043 |
|
|
29,758 |
|
|
EBITDA |
|
$ |
94,459 |
|
$ |
83,104 |
|
|
|
|
|
|
|
|
|
Share-based incentive compensation cost |
|
|
1,812 |
|
|
4,468 |
|
| Gain on sale of land and
other |
|
|
(1,995 |
) |
|
(3,820 |
) |
|
Impairment |
|
|
18,544 |
|
|
9,458 |
|
|
Restructuring costs and other, net |
|
|
- |
|
|
4,477 |
|
|
Adjusted EBITDA |
|
$ |
112,821 |
|
$ |
97,687 |
|
|
|
|
Three Month Ended |
|
|
|
March 31, |
|
|
June 30, |
|
September 30, |
|
|
December 31, |
|
|
(in thousands of Canadian dollars) |
|
2023 |
|
|
2023 |
|
2023 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) |
$ |
20,722 |
|
$ |
25,580 |
$ |
25,483 |
|
$ |
(4,369 |
) |
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
6,627 |
|
|
6,762 |
|
7,398 |
|
|
6,257 |
|
|
EBITDA |
$ |
27,349 |
|
$ |
32,342 |
$ |
32,881 |
|
$ |
1,888 |
|
|
|
|
|
|
|
|
|
|
|
|
Share-based incentive compensation (recovery) cost |
|
(601 |
) |
|
2,449 |
|
(435 |
) |
|
399 |
|
| Gain on sale of land and
other |
|
- |
|
|
- |
|
- |
|
|
(1,995 |
) |
| Impairment |
|
- |
|
|
- |
|
- |
|
|
18,544 |
|
|
Restructuring costs and other, net |
|
- |
|
|
- |
|
- |
|
|
- |
|
|
Adjusted EBITDA |
$ |
26,748 |
|
$ |
34,791 |
$ |
32,446 |
|
$ |
18,837 |
|
|
|
|
Three Month Ended |
|
|
|
March 31, |
|
June 30, |
|
|
September 30, |
|
December 31, |
|
(in thousands of Canadian dollars) |
|
2022 |
|
2022 |
|
|
2022 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
$ |
6,874 |
$ |
9,521 |
|
$ |
21,747 |
$ |
15,205 |
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
7,409 |
|
7,910 |
|
|
7,189 |
|
7,250 |
|
EBITDA |
$ |
14,283 |
$ |
17,431 |
|
$ |
28,936 |
$ |
22,455 |
|
|
|
|
|
|
|
|
|
|
|
Share-based incentive compensation cost |
|
278 |
|
293 |
|
|
1,173 |
|
2,724 |
| Gain on
sale of land and other |
|
- |
|
(3,820 |
) |
|
- |
|
- |
|
Impairment |
|
- |
|
7,293 |
|
|
- |
|
2,164 |
|
Restructuring costs and other, net |
|
423 |
|
1,967 |
|
|
2,088 |
|
- |
|
Adjusted EBITDA |
$ |
14,984 |
$ |
23,164 |
|
$ |
32,197 |
$ |
27,343 |
Connection Technologies Segment
|
(in thousands of Canadian dollars) |
|
Year Ended December 31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
60,356 |
$ |
55,237 |
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
|
5,752 |
|
4,363 |
|
EBITDA |
|
$ |
66,107 |
$ |
59,600 |
|
|
|
|
|
|
|
|
Share-based incentive compensation cost |
|
|
2,649 |
|
3,064 |
|
Restructuring costs and other, net |
|
|
747 |
|
81 |
|
Adjusted EBITDA |
|
$ |
69,504 |
$ |
62,745 |
|
|
|
Three Month Ended |
|
|
|
March 31, |
|
June 30, |
|
September 30, |
|
|
December 31, |
|
(in thousands of Canadian dollars) |
|
2023 |
|
2023 |
|
2023 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
$ |
17,650 |
$ |
17,005 |
$ |
13,910 |
|
$ |
11,791 |
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
1,333 |
|
1,349 |
|
1,356 |
|
|
1,713 |
|
EBITDA |
$ |
18,983 |
$ |
18,354 |
$ |
15,266 |
|
$ |
13,505 |
|
|
|
|
|
|
|
|
|
|
|
Share-based incentive compensation (recovery) cost |
|
26 |
|
2,224 |
|
(48 |
) |
|
448 |
|
Restructuring costs and other, net |
|
- |
|
- |
|
- |
|
|
747 |
|
Adjusted EBITDA |
$ |
19,009 |
$ |
20,578 |
$ |
15,218 |
|
$ |
14,699 |
|
|
|
Three Month Ended |
|
|
|
March 31, |
|
June 30, |
|
September 30, |
|
December 31, |
|
(in thousands of Canadian dollars) |
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
$ |
14,887 |
$ |
14,832 |
$ |
13,915 |
$ |
11,603 |
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
1,085 |
|
1,059 |
|
1,076 |
|
1,143 |
|
EBITDA |
$ |
15,972 |
$ |
15,891 |
$ |
14,991 |
$ |
12,746 |
|
|
|
|
|
|
|
|
|
|
|
Share-based incentive compensation cost |
|
209 |
|
270 |
|
820 |
|
1,766 |
|
Restructuring costs and other, net |
|
27 |
|
54 |
|
- |
|
- |
|
Adjusted EBITDA |
$ |
16,208 |
$ |
16,214 |
$ |
15,811 |
$ |
14,512 |
Discontinued Operations
|
(in thousands of Canadian dollars) |
|
Year Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
Net Income (loss) from Discontinued
Operations |
|
$ |
31,360 |
|
$ |
(124,323 |
) |
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
Income tax expense (recovery) |
|
|
52,660 |
|
|
(15,123 |
) |
|
Finance costs, net |
|
|
1,247 |
|
|
1,263 |
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
|
27,524 |
|
|
33,788 |
|
|
EBITDA from Discontinued Operations |
|
$ |
112,791 |
|
$ |
(104,395 |
) |
|
|
|
|
|
|
|
|
Share-based incentive compensation (recovery) cost |
|
|
236 |
|
|
5,480 |
|
|
Foreign exchange (gain) |
|
|
(2,612 |
) |
|
(1,842 |
) |
|
Loss on sale of Subsidiaries |
|
|
111,004 |
|
|
83,424 |
|
|
Hyperinflation adjustment for Argentina |
|
|
- |
|
|
12,774 |
|
|
Impairment |
|
|
- |
|
|
12,975 |
|
|
Restructuring costs and other, net |
|
|
1,465 |
|
|
1,495 |
|
|
Adjusted EBITDA from Discontinued Operations |
|
$ |
222,884 |
|
$ |
9,910 |
|
|
|
|
Three Month Ended |
|
|
|
March 31, |
|
|
June 30, |
|
|
September 30, |
|
|
December 31, |
|
|
(in thousands of Canadian dollars) |
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) from Discontinued
Operations |
$ |
4,521 |
|
$ |
(1,648 |
) |
$ |
53,829 |
|
$ |
(25,342 |
) |
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
Income tax expense |
|
672 |
|
|
2,831 |
|
|
23,769 |
|
|
25,388 |
|
|
Finance costs, net |
|
160 |
|
|
554 |
|
|
400 |
|
|
133 |
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
10,209 |
|
|
10,860 |
|
|
6,480 |
|
|
(25 |
) |
|
EBITDA from Discontinued Operations |
$ |
15,562 |
|
$ |
12,596 |
|
$ |
84,478 |
|
$ |
157 |
|
|
Share-based incentive compensation (recovery) cost |
|
(561 |
) |
|
3,296 |
|
|
(498 |
) |
|
(2,002 |
) |
| Foreign
exchange (gain) loss |
|
(939 |
) |
|
(3,120 |
) |
|
1,310 |
|
|
138 |
|
| Loss on sale of
Subsidiaries |
|
- |
|
|
3,738 |
|
|
2,089 |
|
|
105,177 |
|
|
Restructuring costs and other, net |
|
- |
|
|
- |
|
|
- |
|
|
1,465 |
|
|
Adjusted EBITDA from Discontinued Operations |
$ |
14,062 |
|
$ |
16,510 |
|
$ |
87,379 |
|
$ |
104,933 |
|
|
|
|
Three Month Ended |
|
|
|
March 31, |
|
|
June 30, |
|
|
September 30, |
|
|
December 31, |
|
|
(in thousands of Canadian dollars) |
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) from Discontinued Operations |
$ |
(17,133 |
) |
$ |
(20,682 |
) |
$ |
(6,208 |
) |
$ |
(80,299 |
) |
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
| Income
tax expense (recovery) |
|
1,988 |
|
|
(807 |
) |
|
(13,919 |
) |
|
(2,386 |
) |
| Finance
costs, net |
|
397 |
|
|
128 |
|
|
455 |
|
|
284 |
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
8,008 |
|
|
7,485 |
|
|
7,340 |
|
|
10,955 |
|
|
EBITDA from Discontinued Operations |
$ |
(6,740 |
) |
$ |
(13,876 |
) |
$ |
(12,332 |
) |
$ |
(71,447 |
) |
|
|
|
|
|
|
|
|
|
|
|
Share-based incentive compensation cost |
|
339 |
|
|
138 |
|
|
1,284 |
|
|
3,719 |
|
| Foreign
exchange (gain) loss |
|
(411 |
) |
|
(1,155 |
) |
|
(921 |
) |
|
645 |
|
| Loss on sale of
Subsidiaries |
|
- |
|
|
- |
|
|
5,932 |
|
|
77,492 |
|
|
Hyperinflation adjustment for Argentina |
|
1,890 |
|
|
1,533 |
|
|
5,510 |
|
|
3,842 |
|
|
Impairment |
|
- |
|
|
12,974 |
|
|
- |
|
|
- |
|
|
Restructuring costs and other, net |
|
131 |
|
|
576 |
|
|
(6 |
) |
|
794 |
|
|
Adjusted EBITDA from Discontinued Operations |
$ |
(4,790 |
) |
$ |
190 |
|
$ |
(532 |
) |
$ |
15,044 |
|
Total Consolidated Mattr (Continuing and Discontinued
Operations)
|
|
|
Year Ended December 31, |
|
(in thousands of Canadian dollars) |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
Total Consolidated Mattr Net Income
(loss) |
|
$ |
87,219 |
|
$ |
(30,976 |
) |
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
Income tax expense (recovery) |
|
|
58,061 |
|
|
(19,278 |
) |
|
Finance costs, net |
|
|
21,529 |
|
|
21,715 |
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
|
64,385 |
|
|
71,416 |
|
|
Total Consolidated Mattr EBITDA |
|
$ |
231,195 |
|
$ |
42,876 |
|
|
|
|
|
|
|
|
|
Share-based incentive compensation cost |
|
|
18,541 |
|
|
31,488 |
|
|
Foreign exchange (gain) |
|
|
(369 |
) |
|
(9,712 |
) |
|
Gain on sale of land and other |
|
|
(1,655 |
) |
|
(43,017 |
) |
|
Loss on sale of Subsidiaries |
|
|
111,004 |
|
|
84,751 |
|
|
Curtailment of defined benefit plan |
|
|
(1,889 |
) |
|
- |
|
|
2019 ZCL Composites Inc. purchase trust |
|
|
- |
|
|
(1,059 |
) |
|
Hyperinflation adjustment for Argentina |
|
|
- |
|
|
12,774 |
|
|
Impairment |
|
|
27,197 |
|
|
22,433 |
|
|
Restructuring costs and other, net |
|
|
3,938 |
|
|
11,199 |
|
|
Total Consolidated Mattr Adjusted EBITDA |
|
$ |
387,962 |
|
$ |
151,733 |
|
|
|
|
Three Month Ended |
|
|
|
March 31, |
|
|
June 30, |
|
|
September 30, |
|
|
December 31, |
|
|
(in thousands of Canadian dollars) |
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Consolidated Mattr Net Income (Loss) |
$ |
25,229 |
|
$ |
13,023 |
|
$ |
71,974 |
|
$ |
(23,006 |
) |
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
Income tax expense |
|
5,257 |
|
|
6,158 |
|
|
26,255 |
|
|
20,391 |
|
|
Finance costs, net |
|
5,144 |
|
|
5,528 |
|
|
5,744 |
|
|
5,113 |
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
19,230 |
|
|
20,030 |
|
|
16,265 |
|
|
8,859 |
|
|
Total Consolidated Mattr EBITDA |
$ |
54,860 |
|
$ |
44,737 |
|
$ |
120,238 |
|
$ |
11,357 |
|
|
|
|
|
|
|
|
|
|
|
|
Share-based incentive compensation (recovery) cost |
|
(603 |
) |
|
21,963 |
|
|
(2,912 |
) |
|
94 |
|
|
Foreign exchange loss (gain) |
|
271 |
|
|
(3,165 |
) |
|
2,262 |
|
|
263 |
|
|
Gain on sale of land and other |
|
- |
|
|
- |
|
|
- |
|
|
(1,655 |
) |
|
Loss on sale of Subsidiaries |
|
- |
|
|
3,738 |
|
|
2,089 |
|
|
105,178 |
|
|
Curtailment of defined benefit plan |
|
- |
|
|
- |
|
|
(1,889 |
) |
|
- |
|
|
Impairment |
|
- |
|
|
- |
|
|
8,652 |
|
|
18,544 |
|
|
Restructuring costs and other, net |
|
- |
|
|
- |
|
|
- |
|
|
3,938 |
|
|
Total Consolidated Mattr Adjusted EBITDA |
$ |
54,528 |
|
$ |
67,274 |
|
$ |
128,440 |
|
$ |
137,720 |
|
|
|
|
Three Month Ended |
|
|
|
March 31, |
|
|
June 30, |
|
|
September 30, |
|
|
December 31, |
|
|
(in thousands of Canadian dollars) |
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Consolidated Mattr Net (Loss) Income |
$ |
(7,117 |
) |
$ |
19,947 |
|
$ |
23,003 |
|
$ |
(66,810 |
) |
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
Income tax expense (recovery) |
|
2,237 |
|
|
6,199 |
|
|
(18,365 |
) |
|
(9,349 |
) |
|
Finance costs, net |
|
4,345 |
|
|
6,062 |
|
|
6,495 |
|
|
4,813 |
|
|
Amortization of property, plant, equipment, intangible and ROU
assets |
|
17,472 |
|
|
17,483 |
|
|
16,442 |
|
|
20,019 |
|
|
Total Consolidated Mattr EBITDA |
$ |
16,937 |
|
$ |
49,691 |
|
$ |
27,575 |
|
$ |
(51,327 |
) |
|
|
|
|
|
|
|
|
|
|
|
Share-based incentive compensation cost |
|
2,685 |
|
|
2,722 |
|
|
9,466 |
|
|
16,616 |
|
| Foreign
exchange (gain) loss |
|
(3,036 |
) |
|
(1,506 |
) |
|
(6,585 |
) |
|
1,414 |
|
| Gain on
sale of land and other |
|
- |
|
|
(43,017 |
) |
|
- |
|
|
- |
|
| Loss on sale of
Subsidiaries |
|
- |
|
|
- |
|
|
5,932 |
|
|
78,819 |
|
|
Hyperinflation adjustment for Argentina |
|
1,889 |
|
|
1,531 |
|
|
5,510 |
|
|
3,843 |
|
| 2019 ZCL
Composites Inc. purchase trust |
|
- |
|
|
- |
|
|
(1,059 |
) |
|
- |
|
|
Impairment |
|
- |
|
|
20,269 |
|
|
- |
|
|
2,164 |
|
|
Restructuring costs and other, net |
|
1,206 |
|
|
2,996 |
|
|
2,070 |
|
|
4,927 |
|
|
Total Consolidated Mattr Adjusted EBITDA |
$ |
19,681 |
|
$ |
32,686 |
|
$ |
42,908 |
|
$ |
56,457 |
|
Adjusted EBITDA Margin
Adjusted EBITDA margin is defined as Adjusted
EBITDA divided by revenue and is a non-GAAP measure. The Company
believes that Adjusted EBITDA margin is a useful supplemental
measure that provides meaningful assessment of the business results
of the Company and its Operating Segments from principal business
activities excluding the impact of transactions that are outside of
the Company’s normal course of business.
See reconciliation above for the changes in
composition of Adjusted EBITDA, as a result of which the applicable
tables reflect restated figures for the prior year quarter to align
with current presentation.
Operating Margin
Operating margin is defined as operating (loss)
income divided by revenue and is a non-GAAP measure. The Company
believes that operating margin is a useful supplemental measure
that provides meaningful assessment of the business performance of
the Company and its Operating Segments. The Company uses this
measure as a key indicator of financial performance, operating
efficiency and cost control based on volume of business
generated.
Adjusted Net Income (attributable to
shareholders)
Adjusted Net Income (attributable to
shareholders) is a non-GAAP measure defined as Net Income
(attributable to shareholders) adjusted for items which do not
impact day to day operations. Adjusted Net Income (attributable to
shareholders) is calculated by adding back to Net Income
(attributable to shareholders) the after tax impact of the sum of
impairments, costs associated with repayment of long-term debt and
credit facilities, gain on sale of land and other, gain on sale of
investment in associates, gain on sale of operating unit,
acquisition costs, restructuring costs, share-based incentive
compensation cost, foreign exchange (gain) loss and other, net and
hyperinflationary adjustments. The Company believes that Adjusted
Net Income (attributable to shareholders) is a useful supplemental
measure that provides a meaningful indication of the Company’s
results from principal business activities for comparing its
operating performance with the performance of other companies that
have different financing, capital or tax structures.
Adjusted Earnings Per Share (“Adjusted
EPS”)
Adjusted EPS (basic) is a non-GAAP measure
defined as Adjusted Net Income (attributable to shareholders)
divided by the number of common shares outstanding. Adjusted EPS
(diluted) is a non-GAAP measure defined as Adjusted Net Income
(attributable to shareholders) divided by the number of common
shares outstanding, further adjusted for potential dilutive impacts
of outstanding securities which are convertible to common shares.
The Company presents Adjusted EPS as a measure of Earning Per Share
(“EPS”) that excludes the impact of transactions that are outside
the Company’s normal course of business or day to day operations.
Adjusted EPS indicates the amount of Adjusted Net Income the
Company makes for each share of its stock and is used by many
analysts as one of several important analytical tools to evaluate
financial performance and is a key metric in business
valuations.
Total Consolidated Mattr Adjusted EPS (Continuing and
Discontinued Operations)
|
(in thousands of Canadian dollars except for per share
amounts) |
Year Ended |
|
December 31, |
December 31,2022 |
|
2023 |
|
|
|
|
Earnings Per Share |
|
|
Earnings Per Share |
|
|
|
|
Basic |
Diluted |
|
|
Basic |
Diluted |
|
Total Consolidated Mattr Net Income (Loss)
(a) |
$ |
87,187 |
|
1.26 |
1.25 |
$ |
(29,989 |
) |
(0.43 |
) |
(0.43 |
) |
|
|
|
|
|
|
|
|
|
|
|
Adjustments (before tax): |
|
|
|
|
|
|
|
|
|
Share-based incentive compensation cost |
|
18,542 |
|
|
|
|
31,489 |
|
|
|
| Foreign
exchange (gain) loss |
|
(369 |
) |
|
|
|
(9,712 |
) |
|
|
| Gain on
sale of land and other |
|
(1,655 |
) |
|
|
|
(43,017 |
) |
|
|
|
Loss on sale of Subsidiaries |
|
111,004 |
|
|
|
|
84,751 |
|
|
|
|
Hyperinflation adjustment for Argentina |
|
- |
|
|
|
|
12,776 |
|
|
|
|
Curtailment of defined benefit plan |
|
(1,889 |
) |
|
|
|
- |
|
|
|
|
Impairment |
|
27,197 |
|
|
|
|
22,433 |
|
|
|
|
Restructuring costs and other, net |
|
3,938 |
|
|
|
|
11,199 |
|
|
|
|
Tax effect of above adjustments |
|
(4,300 |
) |
|
|
|
(8,787 |
) |
|
|
|
Adjusted Net Income (non-GAAP)
(a) |
|
239,655 |
|
3.46 |
3.43 |
|
71,143 |
|
1.01 |
|
1.01 |
|
| (a) attributable
to Shareholders of the Company |
|
(in thousands of Canadian dollars except for per share
amounts) |
Three Months Ended |
|
December 31, |
December 31, |
|
2023 |
2022 |
|
|
|
|
Earnings Per Share |
|
|
Earnings Per Share |
|
|
|
|
Basic |
Diluted |
|
|
Basic |
Diluted |
|
Total Consolidated Mattr Net (Loss) (a) |
$ |
(23,022 |
) |
(0.34 |
) |
(0.34 |
) |
$ |
(66,413 |
) |
(0.94 |
) |
(0.94 |
) |
|
|
|
|
|
|
|
|
|
|
|
Adjustments (before tax): |
|
|
|
|
|
|
|
|
|
Share-based incentive compensation cost |
|
94 |
|
|
|
|
16,618 |
|
|
|
| Foreign
exchange (gain) loss |
|
263 |
|
|
|
|
1,414 |
|
|
|
| Gain on
sale of land and other |
|
(1,655 |
) |
|
|
|
- |
|
|
|
| Loss on
sale of Subsidiaries |
|
105,178 |
|
|
|
|
78,819 |
|
|
|
|
Hyperinflation adjustment for Argentina |
|
- |
|
|
|
|
3,843 |
|
|
|
|
Curtailment of defined benefit plan |
|
- |
|
|
|
|
- |
|
|
|
|
Impairment |
|
18,544 |
|
|
|
|
2,164 |
|
|
|
|
Restructuring costs and other, net |
|
3,939 |
|
|
|
|
4,927 |
|
|
|
|
Tax effect of above adjustments |
|
(464 |
) |
|
|
|
(10,625 |
) |
|
|
|
Adjusted Net Income (non-GAAP)
(a) |
|
102,877 |
|
1.52 |
|
1.51 |
|
|
30,746 |
|
0.44 |
|
0.43 |
|
| (a) attributable
to Shareholders of the Company |
Total Net debt-to-Adjusted EBITDA
Total Net debt-to-Adjusted EBITDA is a non-GAAP
measure defined as the sum of long-term debt, current lease
liabilities and long-term lease liabilities, less cash and cash
equivalents, divided by the Consolidated (Continuing and
Discontinued Operations) Adjusted EBITDA, as defined above, for the
trailing twelve-month period. The Company believes Total Net
debt-to-Adjusted EBITDA is a useful supplementary measure to assess
the borrowing capacity of the Company. Total Net debt-to-Adjusted
EBITDA is used by many analysts as one of several important
analytical tools to evaluate how long a company would need to
operate at its current level to pay of all its debt. It is also
considered important by credit rating agencies to determine the
probability of a company defaulting on its debt.
See discussion above for the changes into the
composition of Adjusted EBITDA. The table below reflects restated
figures for the prior year quarters to align with current
presentation.
|
(in thousands of Canadian dollars except Net debt-to-EBITDA
ratio) |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
Long-term debt |
|
$ |
144,201 |
|
$ |
210,832 |
|
|
Lease liabilities |
|
|
88,263 |
|
|
59,439 |
|
|
Cash and Cash equivalents |
|
|
(334,061 |
) |
|
(263,990 |
) |
|
Total Net Debt |
|
$ |
(101,597 |
) |
$ |
6,281 |
|
|
|
|
|
|
|
|
|
Q1 2022 Adjusted EBITDA |
|
$ |
- |
|
$ |
19,682 |
|
|
Q2 2022 Adjusted EBITDA |
|
|
- |
|
|
32,688 |
|
|
Q3 2022 Adjusted EBITDA |
|
|
- |
|
|
42,908 |
|
|
Q4 2022 Adjusted EBITDA |
|
|
- |
|
|
56,458 |
|
|
Q1 2023 Adjusted EBITDA |
|
|
54,528 |
|
|
- |
|
|
Q2 2023 Adjusted EBITDA |
|
|
67,274 |
|
|
- |
|
|
Q3 2023 Adjusted EBITDA |
|
|
128,440 |
|
|
- |
|
|
Q4 2023 Adjusted EBITDA |
|
|
137,721 |
|
|
- |
|
|
Trailing twelve-month Adjusted EBITDA |
|
$ |
387,963 |
|
$ |
151,736 |
|
|
Total Net debt-to-Adjusted EBITDA |
|
|
(0.26 |
) |
|
0.04 |
|
Total Interest Coverage Ratio
Total Interest Coverage Ratio is a non-GAAP
measure defined as Consolidated Adjusted EBITDA (Continuing and
Discontinued Operations), as defined above, for the trailing
twelve-month period, divided by finance costs, net, for the
trailing twelve-month period. The Company believes Total Interest
Coverage Ratio is a useful supplementary measure to assess the
Company’s ability to honor its debt payments. Total Interest
Coverage Ratio is used by many analysts as one of several important
analytical tools to judge a company’s ability to pay interest on
its outstanding debt. It is also considered important by credit
rating agencies to determine a company’s riskiness relative to its
current debt or for future borrowing.
|
(in thousands of Canadian dollars except Interest Coverage
ratio) |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
Q1 2022 Adjusted EBITDA |
|
$ |
- |
$ |
19,682 |
|
Q2 2022 Adjusted EBITDA |
|
|
- |
|
32,688 |
|
Q3 2022 Adjusted EBITDA |
|
|
- |
|
42,908 |
|
Q4 2022 Adjusted EBITDA |
|
|
- |
|
56,458 |
|
Q1 2023 Adjusted EBITDA |
|
|
54,528 |
|
- |
|
Q2 2023 Adjusted EBITDA |
|
|
67,274 |
|
- |
|
Q3 2023 Adjusted EBITDA |
|
|
128,440 |
|
- |
|
Q4 2023 Adjusted EBITDA |
|
|
137,721 |
|
- |
|
Trailing twelve-month Adjusted EBITDA |
|
$ |
387,963 |
$ |
151,736 |
|
|
|
|
|
|
|
|
Q1 2022 Finance costs, net |
|
$ |
- |
$ |
4,345 |
|
Q2 2022 Finance costs, net |
|
|
- |
|
6,062 |
|
Q3 2022 Finance costs, net |
|
|
- |
|
6,495 |
|
Q4 2022 Finance costs, net |
|
|
- |
|
4,813 |
|
Q1 2023 Finance costs, net |
|
|
5,144 |
|
- |
|
Q2 2023 Finance costs, net |
|
|
5,528 |
|
- |
|
Q3 2023 Finance costs, net |
|
|
5,744 |
|
- |
|
Q4 2023 Finance costs, net |
|
|
5,113 |
|
- |
|
Trailing twelve-month finance cost, net |
|
$ |
21,529 |
$ |
21,715 |
|
Total Interest Coverage Ratio |
|
|
18.02 |
|
6.99 |
Order Backlog and Bid and Budgetary
Estimates
The PPG business, which has historically
comprised the vast majority of the Company’s bid and budgetary
estimates and total order backlog, was sold in November 2023 and as
a result the Company will no longer report these supplementary
financial measures as the Company does not believe that going
forward such measures will provide investors with useful
information to understand or evaluate the Company’s Continuing
Operations or their respective performance and prospects.
6.0 Additional Information
Additional information relating to the Company, including its
AIF, is available on SEDAR+ at www. sedarplus.com and on the
“Investors Centre” page of the Company’s website at:
https://investors.Mattr.com/Investor-Center/default.aspx.
MATTR (TSX:MATR)
과거 데이터 주식 차트
부터 10월(10) 2024 으로 11월(11) 2024
MATTR (TSX:MATR)
과거 데이터 주식 차트
부터 11월(11) 2023 으로 11월(11) 2024
