Toromont reports 2015 results
Feb. 23, 2016 - Toromont Industries has reported financial results for the three and twelve-month periods ended December 31, 2015.
“We were pleased with our 2015 results, which demonstrated consistent and resilient performance. Earnings increased 9%, in-line with total revenue growth as an increasing contribution from product support, offset margin pressures in today’s challenging markets. We are also pleased with performance in the fourth quarter against a very tough comparator last year,” said Scott J. Medhurst, President and Chief Executive Officer of Toromont Industries Ltd. “The Equipment Group delivered good results on growth in product support and CIMCO had a strong year with increased penetration into the U.S. market.”
Considering the Company’s solid financial position, cash flows and balances, and positive long- term outlook, the Board of Directors today increased the quarterly dividend to 18 cents per share, representing a 6% increase. The next dividend is payable April 1, 2016 to shareholders of record at the close of business on March 10, 2016. The Company has paid dividends every year since going public in 1968 and this represents the 27th consecutive year of increases.
- Net earnings for 2015 were $145.7 million ($1.88 EPS) up 9% from last year, reflecting higher revenues in both operating groups. The increase was principally due to higher revenues from product support, together with lower expenses relative to revenues, offset by lower gross margins stemming from competitive pressures and challenging end markets.
- Net earnings for the fourth quarter were $44.4 million ($0.57 EPS), down 3% from the record reported in the same quarter last year. Pricing pressures continued to grow through the year in part exacerbated by the weakened Canadian dollar. This coupled with reduced utilization of the larger rental fleet resulted in reduced overall margins.
- Equipment Group revenues increased 8% in the year to $1.6 billion. Product support growth was strong and equipment sales and rentals also increased with good activity levels in construction markets. The addition of the two agriculture dealerships to Toromont late in 2014 also contributed to revenue growth in a market which saw significant weakness in 2015. The weakened Canadian dollar also contributed to revenue growth as reflecting the higher cost of US sourced equipment and parts. Operating income(1)as a percentage of revenues was 12.1%, on lower relative expense levels partially offset by lower margins.
- Equipment Group revenues of $406.0 million were relatively unchanged in the fourth quarter versus the same period of 2014 with strong product support growth offsetting lower total equipment sales and rentals. Operating income of $56.3 million was 2% lower compared to last year on lower margins.
- Equipment Group bookings in 2015 of $779.0 million were up 3% from last year’s record. Fourth quarter bookings of $165.0 million were 18% lower than last year on softened market conditions. Backlogs were $92.0 million at the end of 2015 compared to $102.0 million at this time last year. The reduced ordering activity combined with shortened delivery windows at Caterpillar and available equipment in inventory, have contributed to reduced backlogs. Most of this backlog is expected to be delivered in 2016.
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