SNC-Lavalin Reports Strong Year-End Results: Fourth
Quarter and Year-end Report December 31, 1999
MARCH 3, 2000
MONTREAL, QUEBEC--
Highlights
* Operating cash flow rose 34 per cent to $90.5 million or $1.94
per share, excluding the positive contribution from Highway 407 of
$3.9 million or $0.08 per share
* Net income rose 8.6 per cent to $49.5 million or $1.06 per share
from $45.6 million or $0.98 per share, excluding the SNC-Lavalin
share of Highway 407 loss which was $13.2 million or $0.28 per
share.
* Backlog increased by $0.8 billion in 1999 to approximately $2.8
billion, of which $0.4 billion is from the Highway 407 concession.
SNC-Lavalin Group today reported its year-end results to December
31, 1999. Operating cash flow, excluding the company's
participation in the Highway 407 concession, increased 34 per cent
to $90.5 million or $1.94 per share, from $67.5 million or $1.45
per share in 1998. In addition, Highway 407 contributed $3.9
million of positive cash flow since its acquisition on May 5,
1999.
Net income, excluding Highway 407, increased for the eighth
consecutive year, to $49.5 million or $1.06 per share, compared to
$45.6 million or $0.98 per share last year. SNC-Lavalin's
proportionate share of the Highway 407 loss was $13.2 million or
$0.28 per share. Highway 407 performed better than forecast due
to a number of factors, including higher revenues on the existing
portion, lower interest charges as a result of successful bond
issues well ahead of schedule, and a non-recurring gain in the
third quarter from the termination of rate hedging instruments
that were no longer required.
Revenues for the year were $1.3 billion compared with $1.5 billion
in 1998. Backlog at the end of the year was $2.8 billion, $0.8
billion higher than at the end of the previous year. This level
of backlog and prospects are expected to increase revenues in
2000.
"The engineering and construction industry has faced a challenging
few years," said Jacques Lamarre, SNC-Lavalin President and Chief
Executive Officer. "We are justifiably proud that during this
period, SNC-Lavalin achieved strong profits, maintained a solid
balance sheet, and has entered 2000 with a healthy backlog."
"As we look ahead to 2000 and 2001, we see good indications of
economic recovery in parts of Asia. Commodity prices for
resources have improved, and continued economic growth is forecast
in Canada. We are well-positioned to seize the many opportunities
that will result," Mr. Lamarre added.
The Board of Directors declared today at its meeting a dividend in
the amount of $0.06 per share on the outstanding common shares
payable on March 31, 2000 to shareholders of record on March 17,
2000. The company has paid a dividend for 42 consecutive
quarters. Total dividends paid in 1999 were $0.24, compared with
$0.20 per share in the previous year.
SNC-Lavalin Group is one of the leading engineering and
construction firms in the world, and a key player in the ownership
and management of infrastructure. The group and its companies
have offices across Canada and in 30 other countries, and are
currently working in some 100 countries. The company is listed on
the Toronto Stock Exchange (symbol: SNC).
/T/
Highlights
Fourth Quarter Years ended
December 31
(in thousands, except
per-share amounts) 1999 1998 1999 1998
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Summary of results
Revenues
Services $136,661 $142,560 $531,042 $537,887
Packages 117,249 133,543 438,830 687,823
Diversified 85,607 87,030 300,961 281,829
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$339,517 $363,133 $1,270,833 $1,507,539
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Earnings before
interest, taxes,
depreciation
and amortization
Excluding
Highway 407 $23,372 $25,658 $107,235 $109,855
From Highway 407 6,460 - 18,674 -
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$29,832 $25,658 $125,909 $109,855
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Net income
Excluding
Highway 407 $11,450 $10,703 $49,526 $45,591
From Highway 407 (9,077) - (13,222) -
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$2,373 $10,703 $36,304 $45,591
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Basic earnings
per share
Excluding
Highway 407 $0.24 $0.24 $1.06 $0.98
From Highway 407 (0.19) - (0.28) -
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$0.05 $0.24 $0.78 $0.98
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Basic cash flow
per share
Excluding
Highway 407 $0.33 $0.20 $1.94 $1.45
From Highway 407 0.04 - 0.08 -
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$0.37 $0.20 $2.02 $1.45
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Return on weighted
average shareholders'
equity
Excluding
Highway 407 14.2 % 14.3 %
From Highway 407 (3.8 %) -
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10.4 % 14.3 %
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Weighted average number of
outstanding shares 46,628 46,560
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Actual number of outstanding
shares at year-end 46,884 44,871
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Backlog at December 31
Canada * Services $157,100 $154,000
* Packages 184,700 17,600
* Diversified 1,330,100 752,600
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1,671,900 924,200
Outside
Canada * Services 157,700 175,200
* Packages 730,200 638,000
* Diversified 199,500 204,200
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1,087,400 1,017,400
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$2,759,300 $1,941,600
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Note: The Company's 26.92 % proportionate share of 407 International
Inc. results, after consolidation eliminations, is referred to
as "Highway 407".
Consolidated statements of income
Fourth quarter Years ended
December 31
(in thousands of dollars,
except per-share
amounts) 1999 1998 1999 1998
---------------------------------------------------------------------
Revenues $339,517 $363,133 $1,270,833 $1,507,539
Gross margin $76,162 $72,898 $300,933 $281,336
Administrative,
marketing and
other expenses 56,375 54,826 213,887 207,165
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Income before
interest and taxes 19,787 18,072 87,046 74,171
Interest and capital
taxes 12,996 1,606 25,172 4,031
Income before
income taxes 6,791 16,466 61,874 70,140
Income taxes 4,418 5,763 25,570 24,549
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Net income $2,373 $10,703 $36,304 $45,591
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---------------------------------------------------------------------
Basic earnings
per share $0.05 $0.24 $0.78 $0.98
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---------------------------------------------------------------------
Note - Additional
information
Net income
Excluding
Highway 407 $11,450 $10,703 $49,526 $45,591
From Highway 407 (9,077) - (13,222) -
---------------------------------------------------------------------
$2,373 $10,703 $36,304 $45,591
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---------------------------------------------------------------------
Basic earnings
per share
Excluding
Highway 407 $0.24 $0.24 $1.06 $0.98
From Highway 407 (0.19) - (0.28) -
---------------------------------------------------------------------
$0.05 $0.24 $0.78 $0.98
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Consolidated balance sheets
December 31
(in thousands of dollars) 1999 1998
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Assets
Current
Cash and cash equivalents $97,676 $198,747
Short-term investments 12,668 18,835
Accounts receivable 347,544 291,061
Contracts in progress and inventories 160,816 258,765
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618,704 767,408
Capital assets (note) 1,014,008 138,938
Other assets 210,729 79,189
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$1,843,441 $985,535
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Liabilities and shareholders' equity
Current
Accounts payable and accrued charges $368,517 $339,895
Down payments on contracts 95,103 123,636
Deferred revenues 139,898 150,667
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603,518 614,198
Long-term debt (note) 840,911 40,068
Other liabilities 41,099 13,446
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1,485,528 667,712
Shareholders' equity 357,913 317,823
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$1,843,441 $985,535
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Note
The Company's consolidated balance sheet as of December 31, 1999,
includes the Company's proportionate share of total assets and total
liabilities of Highway 407 amounting to $996.3 million and $822.6
million, respectively. Included in these totals are capital assets
and long-term debt (non-recourse to the general credit of the
Company) of $879.5 million and $802.3 million, respectively.
Consolidated statements of cash flows
Years ended December 31
(in thousands of dollars,
except per-share amounts) 1999 1998
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Operating activities
Net Income $36,304 $45,591
Items not involving a movement of cash
Depreciation and amortization 38,863 35,684
Future income taxes 4,965 (8,288)
Other 5,541 (5,514)
Deferred gains on interest rate hedging 8,695 -
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94,368 67,473
Net change in non-cash working capital items 70,507 43,720
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164,875 111,193
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Investing activities
Acquisition of capital assets (36,189) (22,875)
Proceeds from disposal of capital assets - 28,600
Acquisition of Highway 407 (860,890) -
Acquisition of investment (25,060) -
Subordinated loan to Highway 407 (25,790) -
Other (21,814) (4,000)
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(969,743) 1,725
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Financing activities
Repayment of long-term debt (528,816) (2,276)
Increase in long-term debt 1,306,943 -
Reserve funds (75,802) -
Net proceeds from issuance of shares 51,935 3,389
Redemption of shares (31,159) (40,345)
Dividends (11,265) (9,298)
Other (8,039) 684
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703,797 (47,846)
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Net increase (decrease) in cash and
cash equivalents (101,071) 65,072
Cash and cash equivalents at beginning of year 198,747 133,675
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Cash and cash equivalents at end of year $97,676 $198,747
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Cash flow per share (1) $2.02 $1.45
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Note - Additional information
Basic cash flow per share
Excluding Highway 407 $1.94 $1.45
From Highway 407 0.08 -
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$2.02 $1.45
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Cash paid for interest $25,624 $4,269
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Cash paid for income taxes $22,137 $27,370
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(1) The cash flow per share has been determinated by dividing the
cash provided from operating activities before the net change in
non-cash working capital items by the weighted average number of
outstanding shares.
Segment disclosures
Fourth quarter
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(in thousands of dollars) 1999 1998
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Operating Operating
Income Income
Revenues (loss) Revenues (loss)
---------------------------------------------------------------------
Excluding Highway 407
Chemicals and
petroleum $54,010 $(2,482) $62,610 $7,059
Infrastructure 92,876 10,922 92,457 2,530
Mining and
metallurgy 49,056 3,333 65,332 1,435
Power 39,101 930 36,241 117
Defence 48,350 3,982 59,640 5,284
All Other 47,132 (581) 46,853 734
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$330,525 16,104 $363,133 17,159
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Reversal of total
imputed interest cost
included in segment
operating income 499 2,277
Goodwill amortization (1,448) (1,364)
Interest revenue (expense)
and capital taxes 1,307 (1,606)
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Income before income taxes 16,462 16,466
Income taxes (5,012) (5,763)
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Net income excluding
Highway 407 11,450 10,703
Highway 407 - net loss (9,077) -
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Net income $2,373 $10,703
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Years ended December 31
---------------------------------------------------------------------
(in thousands of dollars) 1999 1998
---------------------------------------------------------------------
Operating Operating
Income Income
Revenues (loss) Revenues (loss)
---------------------------------------------------------------------
Excluding Highway 407
Chemicals and
petroleum $248,350 $16,738 $441,148 $48,304
Infrastructure 298,477 37,201 352,488 (5,602)
Mining and
metallurgy 210,521 4,476 240,417 9,601
Power 139,905 4,576 125,703 1,873
Defence 171,518 12,859 175,394 11,068
All Other 175,353 1,541 172,389 6,461
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$1,244,124 77,391 $1,507,539 71,705
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Reversal of total
imputed interest cost
included in segment
operating income 4,244 9,979
Goodwill amortization (7,786) (7,513)
Interest revenue (expense)
and capital taxes 1,191 (4,031)
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Income before income taxes 75,040 70,140
Income taxes (25,514) (24,549)
---------------------------------------------------------------------
Net income excluding
Highway 407 49,526 45,591
Highway 407 - net loss (13,222) -
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Net income $36,304 $45,591
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Details of the Company's proportionate share of
Highway 407 results are as follows:
Fourth quarter Year ended
1999 December 31, 1999
Revenues (diversified),
before consolidation
eliminations (fourth
quarter: $2,317;
year: $3,478) $11,309 $30,187
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Gross margin, after
deducting depreciation
and amortization
(fourth quarter: $1,828;
year: $5,477) 5,433 15,264
Administrative, marketing
and other expenses (473) (1,519)
Interest expense and
capital taxes (11,383) (23,117)
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Loss before income taxes (6,423) (9,372)
Income taxes (505) (1,346)
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Net loss, before
consolidation eliminations (6,928) (10,718)
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Consolidation eliminations (2,149) (2,504)
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Net loss, net of consolidation
eliminations $(9,077) $(13,222)
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/T/ |
