Wajax Announced a 12% Increase in 2012 Second Quarter Earnings

Wajax Corporation, Toronto, Ontario, announced a 12 percent increase in 2012 second quarter earnings. Second Quarter Highlights Consolidated second quarter revenue of $386.6 million increased $52.5 million, or 16 percent compared to last year, with gains in western Canada accounting for the majority of the increase. Equipment sales rose 29 percent on higher revenue in all key product sectors with particular strength noted in construction and mining. Power Systems revenue was up only slightly as the positive comparative effect of the May 2, 2011 acquisition of Ontario based Harper Power Products was mostly offset by declines in the western Canada oil and gas sector. Industrial Components revenue increased 5 percent on stronger demand for all major product categories. Net earnings for the quarter were $18.5 million, or $1.11 per share, up 12 percent compared to $16.5 million, or $0.99 per share recorded in 2011 on stronger results in the Equipment segment. Equipment segment earnings increased 31 percent on the higher volumes. Power Systems segment earnings declined $1.9 million mainly on lower energy sector related sales in western Canada and lower parts and service margins in Ontario. Industrial Components segment earnings declined slightly as higher revenue was more than offset by a small reduction in margins and higher selling and administrative costs. Consolidated backlog of $244.0 million at June 30, 2012 decreased 5 percent, from $257.2 million at March 31, 2012, mainly as a result of a higher volume of customer deliveries in the Equipment segment. On May 24, 2012, Wajax increased the limit of the revolving term portion of its bank credit facility by $50 million on substantially the same terms and conditions as the existing facility. As a result, total borrowing capacity under the facility, due Aug. 12, 2016, increased from $175 million to $225 million. The increase provides Wajax with additional borrowing capacity to fund future growth, including increases in working capital and acquisitions. At June 30, 2012 Wajax had utilized $104.8 million of the facility. The Corporation declared monthly dividends of $0.27 per share ($3.24 annualized) for the months of August, September and October. Commenting on the second quarter results and the outlook for the remainder of 2012, Mark Foote, president and CEO, stated: “Overall we continue to be very pleased with our 2012 results, particularly in the Equipment segment where we had record sales of Hitachi construction excavators in western Canada in the quarter and mining equipment sales exceeded amounts recorded last year. Results from the Power Systems segment fell short of our expectation on softness in the western Canada energy sector and lower margins in Ontario. With market forecasters continuing to lower their expectations for growth in the global and Canadian economies as a result of the European debt crisis and a slowing Chinese economy, we are slightly more cautious regarding our outlook for the remainder of 2012. While most of our end markets continue to hold up well and quoting activity particularly in mining remains buoyant, we have seen a weakening of oil and gas drilling and well servicing activities in western Canada. This, combined with phasing out of the LeTourneau aftermarket business in the second quarter leads us to expect that results for the full year of 2012 will be modestly higher than the previous year.” Wajax is a leading Canadian distributor and service support provider of mobile equipment, power systems and industrial components. Reflecting a diversified exposure to the Canadian economy, its three distinct core businesses operate through a network of 117 branches across Canada. Its customer base spans natural resources, construction, transportation, manufacturing, industrial processing and utilities. Source: aednet