And as mentioned(HoHumm) record earnings and sales,should exceed $1B in sales for 98.Scott
Subject: WAJAX ANNOUNCES RECORD SALES AND EARNINGS
>To: "Portfolio Email User"
>
>Attention Business/Financial Editors:
>
>WAJAX ANNOUNCES RECORD SALES AND EARNINGS
>
>
> ME, TSE Symbol: WJX
>
> VANCOUVER, Feb. 20 /CNW/ - Wajax Limited announced that new records for
>sales, earnings and earnings per share had been set with its fourth quarter
>results. Revenue for the fourth quarter was $264 million, up 44% from $183
>million in the fourth quarter of 1996. Net earnings were $6.7 million, up 40%
>from $4.8 million last year. Earnings per share amounted to $0.43, an increase
>of 26% compared with $0.34 per share in the fourth quarter of 1996. The
>earnings per share for the fourth quarter of 1997 reflect the dilution impact
>of the higher number of shares outstanding due to the $25.5 million equity
>issue in April, 1997, which was undertaken to position the Company to finance
>future acquisitions.
> The higher earnings for the quarter reflect further improvement in the
>results for the mobile equipment business In Alberta and Ontario, as well as
>for diesel engines and the Quebec-based bearings division. Earnings for the
>B.C. mobile equipment region declined due to weaker markets for forestry and
>mining. Pacific North, as anticipated at the time of implementing this
>acquisition in March, 1997, is not yet accretive to the Company's earnings.
>However, it is expected to make an increasingly positive earnings contribution
>as we continue to position the business to capitalize on the potential of its
>strong regional markets and its quality product-lines.
> For the full year ended December 31, 1997, revenue was a record $947
>million, up 40% from the previous record level of $675 million achieved in
>1996. Net earnings for the year were a record $21 million, up 24% from $17
>million in 1996. Earnings per share were $1.39, an increase of 14% from $1.22
>per share in 1996. The full year results include the impact of an unusual
>reorganization charge of $1.2 million after-tax, or $0.08 per share.
> The Company generated $33 million of cash flow from operations ($2.15 per
>share) in 1997, before changes in non-cash working capital, compared with $28
>million ($1.98 per share) in 1996. The previously announced U.S. $50 million
>unsecured senior note issue was completed in December, 1997, and together with
>the common share issue earlier in the year, positions the Company to fund its
>anticipated acquisition requirements for the foreseeable future with
>lower-cost floating rate bank debt. The Company has been investigating
>suitable acquisition opportunities for profitable re-investment of the
>proceeds from the financings undertaken during the year, and is currently
>actively engaged in various acquisition discussions.
> Wajax is a diversified growth company which is leading a consolidation
>process in its industry. The Company's three core distribution businesses are
>engaged in the sale and after-sales parts and service support of mobile
>equipment, diesel engines and industrial components, through a network of
>approximately 100 branches across Canada and the Western United States. Its
>customer base spans natural resources, construction, transportation,
>manufacturing, industrial processing and utilities.
>
>
> <<
> Wajax Limited
> -------------------------------------------------------------------------
> CONSOLIDATED STATEMENTS OF EARNINGS
> -------------------------------------------------------------------------
> (unaudited)
>
> -------------------------------------------
> Three months ended Years ended
> (in thousands of dollars, December 31 December 31
> except per share data) 1997 1996 1997 1996
> -------------------------------------------------------------------------
>
> Revenue $ 263,673 $ 182,939 $ 947,354 $ 675,065
> Cost of Sales 207,096 140,585 743,046 522,602
> -------------------------------------------------------------------------
>
> Gross Profit 56,577 42,354 204,308 152,463
> -------------------------------------------------------------------------
>
> Selling and administrative
> expenses 40,963 31,040 152,658 111,349
> -------------------------------------------------------------------------
>
> Earnings before interest and
> income taxes 15,614 11,314 51,650 41,114
> Interest expense 3,616 2,499 13,434 9,675
> -------------------------------------------------------------------------
>
> Earnings before income taxes 11,998 8,815 38,216 31,439
> Income taxes 5,310 4,055 17,189 14,462
> -------------------------------------------------------------------------
>
> Net earnings $ 6,688 $ 4,760 $ 21,027 $ 16,977
> -------------------------------------------------------------------------
>
> Earnings per common share $ 0.43 $ 0.34 $ 1.39 $ 1.22
> -------------------------------------------------------------------------
>
> Weighted average number of
> common shares outstanding 15,159,678 13,972,083
> ---------------------
>
>
>
> Wajax Limited
> -------------------------------------------------------------------------
> CONSOLIDATED BALANCE SHEETS
> -------------------------------------------------------------------------
> (unaudited)
> December 31 December 31
> (in thousands of dollars) 1997 1996
> -------------------------------------------------------------------------
> ASSETS
>
> CURRENT
> Cash $ - $ 1,715
> Accounts receivable $ 135,046 $ 113,704
> Inventories 256,722 179,211
> Prepaid expenses 5,259 3,551
> Deferred income taxes 7,446 5,690
> -------------------------------------------------------------------------
> 404,473 303,871
> -------------------------------------------------------------------------
>
> NON-CURRENT
> Rental equipment 23,521 19,292
> Capital assets 34,145 31,588
> Goodwill and other assets 65,133 50,241
> -------------------------------------------------------------------------
> 122,799 101,121
> -------------------------------------------------------------------------
>
> $ 527,272 $ 404,992
> -------------------------------------------------------------------------
> -------------------------------------------------------------------------
>
>
> LIABILITIES AND SHAREHOLDERS' EQUITY
>
> CURRENT
> Bank indebtedness $ 5,078 $ -
> Accounts payable and accrued liabilities 157,467 107,181
> Income taxes payable 2,039 4,057
> Current portion of long-term debt 3,133 4,189
> -------------------------------------------------------------------------
> 167,717 115,427
> -------------------------------------------------------------------------
>
> LONG-TERM DEBT 167,819 144,472
> -------------------------------------------------------------------------
>
> SHAREHOLDERS' EQUITY
> Share capital 101,590 75,454
> Retained earnings 90,146 69,639
> -------------------------------------------------------------------------
> 191,736 145,093
> -------------------------------------------------------------------------
>
> $ 527,272 $ 404,992
> -------------------------------------------------------------------------
> -------------------------------------------------------------------------
>
>
>
> Wajax Limited
> -------------------------------------------------------------------------
> CONSOLIDATED STATEMENTS OF CHANGES IN CASH POSITION
> -------------------------------------------------------------------------
> (unaudited)
>
> Years ended
> December 31
> (in thousands of dollars, except per share data) 1997 1996
> -------------------------------------------------------------------------
>
> OPERATING ACTIVITIES
> Net Earnings $ 21,027 $ 16,977
> Items not affecting cash flow
> Amortization
> - Rental equipment 4,734 3,408
> - Capital assets 5,548 4,427
> - Goodwill and deferred expenses 3,001 2,127
> Deferred income taxes (1,771) 706
> -------------------------------------------------------------------------
> Cash flow before changes in non-cash
> working capital 32,539 27,645
> -------------------------------------------------------------------------
>
> Changes in non-cash working capital
> Accounts receivable (11,458) (8,757)
> Inventories (30,840) 2,200
> Prepaid expenses (923) (977)
> Accounts payable and accrued liabilities 33,783 (6,004)
> Income taxes payable (2,290) (5,176)
> -------------------------------------------------------------------------
> (11,728) (18,714)
> -------------------------------------------------------------------------
>
> Cash provided by operating activities 20,811 8,931
> -------------------------------------------------------------------------
>
> INVESTING ACTIVITIES
> Net rental equipment additions (8,964) (5,598)
> Capital asset additions (8,766) (6,183)
> Proceeds on disposal of capital assets 3,999 1,761
> Acquisition of businesses
> Working capital (38,228) (33,223)
> Rental equipment - (2,991)
> Capital assets (3,203) (3,849)
> Goodwill (14,693) (34,738)
> -------------------------------------------------------------------------
> (69,855) (84,821)
> -------------------------------------------------------------------------
>
> Cash flow before financing activities (49,044) (75,890)
> -------------------------------------------------------------------------
>
> FINANCING ACTIVITIES
> Notes payable on acquisition (1,959) 3,639
> (Decrease) Increase in long-term bank loan (45,631) 56,403
> Issue of U.S. senior notes 68,986 -
> Issue of debentures - 20,000
> Repayment of debentures (2,229) (727)
> Deferred financing costs (2,390) (502)
> Issue of share capital 25,616 3,824
> Other (142) -
> -------------------------------------------------------------------------
> 42,251 82,637
> -------------------------------------------------------------------------
>
> (Increase) Decrease in current bank indebtedness (6,793) 6,747
>
> Cash (Current bank indebtedness) -
> beginning of year 1,715 (5,032)
> -------------------------------------------------------------------------
>
> (Current bank indebtedness) Cash - end of year $ (5,078) $ 1,715
> -------------------------------------------------------------------------
>
> Cash flow per common share from operations
> before changes in non-cash working capital $ 2.15 $ 1.98
> -------------------------------------------------------------------------
> -------------------------------------------------------------------------
> >>
> -0- 02/20/98
>
>For further information: Laurence G. Sellyn, Senior Vice-President, Finance
and Corporate Development; Scott T. McCaw, Treasurer, (604) 513-2224
>
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