WesternOne Inc. Reports 2017 Q1 Results

May 11, 2017

VANCOUVER, BC (May 11, 2017) WesternOne Inc. (“WesternOne”) (Toronto Stock Exchange: WEQ and WEQ.DB) today announced the release of its financial results for the three months ended March 31, 2017.

The results, consisting of WesternOne’s unaudited interim financial statements for the three months ended March 31, 2017 and Management’s Discussion and Analysis (“MD&A”) dated May 11, 2017, are available on SEDAR (www.sedar.com).

2017 Q1 financial summary:

  • WesternOne recorded Q1 consolidated revenue from continuing operations of $26.0 million, an increase of 16.5% from $22.3 million in the prior year period. The increase was due primarily to a comparatively colder winter season in Alberta, leading to a general rise in heat-related rental volume and fuel sales. Heat-related services to major project customers also contributed to the revenue growth, resulting in an increase of 66.1% in service revenues compared to the prior year period. 
  • Q1 gross profit and adjusted EBITDA (as defined below) were $10.7 million and $6.1 million respectively, compared to the respective amounts of $10.3 million and $6.2 million in the prior year period. Despite the revenue growth, changes in gross profit and adjusted EBITDA were minimal, reflecting challenges with rate-driven competition and supply-related factors that continued to weigh on operating margins. 
  • Q1 net cash from operating activities of continuing operations was $5.4 million, compared to $6.3 million in the prior year period. The decline was mainly due to increased accounts receivable relating to the higher business activities. Net change in cash position from continuing operations was $14.9 million, compared to negative $5.4 million in the prior year period. The increase was mainly due to the sale of WesternOne’s modular space rental business and modular manufacturing operations in the United States announced on March 6, 2017. WesternOne received estimated gross sale proceeds of $45.1 million from these transactions and made a lump-sum principal repayment of $25.7 million under its senior credit facility. Other changes in the Q1 cash position included items relating to cash flow from operating activities, net capital expenditures, interest costs and scheduled payments towards indebtedness. 
  • Net loss from continuing operations attributable to shareholders was $4.8 million ($0.28 per share), compared to net income of $0.8 million ($0.71 per share) in prior year period. Included in the net loss or income were non-cash finance expense relating to changes in the fair value of convertible debentures at quarter-end. Excluding the related non-cash effects on an after-tax basis, net income for Q1 would have been $0.2 million ($0.01 per share), compared to net loss of $0.9 million ($0.76 per share) in the prior year period.
  • On May 2, 2017, WesternOne completed the exit from the modular manufacturing and rental businesses with the announcement of the closing of the sale of its Canadian modular manufacturing assets and liabilities for $2.5 million. The proceeds of this transaction are subject to post-closing working capital adjustments and WesternOne may receive up to an additional $2.5 million contingent on earnings from the business sold for the 12-month period following the close of the transaction.


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(1)    “Adjusted EBITDA” is not a recognized measure under IFRS and does not have a standardized meaning prescribed by IFRS. “Adjusted EBITDA” refers to net income or loss from continuing operations before interest, taxes, depreciation and amortization, and other specified items that would impact comparability including, where applicable, non-operational income and expenses, securities-based compensation and other gains or losses. The use of the term “non-operational income and expenses” is defined by WesternOne as those that do not impact operating decisions taken by WesternOne’s management as well as items of an unusual nature that do not reflect WesternOne’s ongoing operations. For a full description of adjusted EBITDA, refer to “Non-IFRS Measures” in the MD&A dated May 11, 2017. 
(2)    Represents amount attributable to shareholders.
(3)    Income/(Loss) per share for prior periods have been adjusted on a retroactive basis to reflect the consolidation of WesternOne’s issued and outstanding common shares on the basis of one post-consolidation common share for every 35 pre-consolidation common shares (the 
“Consolidation”). The Consolidation was completed on October 31, 2016.

“We are pleased with the year-over-year growth in Q1 revenues as a result of our strategic focus on growing and servicing major project customers within the construction heat markets, along with favorable impact from cold temperatures which bolstered rental and related service activity levels. The market remains challenging, however, with rate compression brought on by competition and an oversupply of fleet equipment,” said Mr. Peter Blake, CEO of WesternOne. “To maintain market share and competitiveness we will continue to focus on effectively redeploying rental fleet to targeted markets and managing capital returns and liquidity.” 

Conference Call 

Peter Blake, CEO, and the management team will host a conference call at 11:00am (Eastern time) or 8:00am (Pacific time), on Friday, May 12, 2017 to review the financial results and corporate developments for the three months ended March 31, 2017. 

To participate in this conference call, please dial one of the following numbers approximately 10 minutes prior to the commencement of the call, and ask to join the WesternOne conference call.    

Dial in numbers:     Toll Free     1-888-390-0546
  International or Local Toronto     1-416-764-8688

Conference Call Replay 

If you cannot participate on May 12, 2017, a replay of the conference call will be available by dialing one of the following replay numbers. You will be able to dial in and listen to the conference two hours after the meeting end time, and the replay will be available until May 19, 2017. Please enter the Replay ID number 319116 followed by the # key.    

Replay Dial-In:     Toll Free     1-888-390-0541
  International or Local Toronto     1-416-764-8677

Forward-looking Information 

Certain statements in this news release may constitute “forward-looking” information that involves known and unknown risks, uncertainties and other factors, and it may cause actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information. Forward-looking information is identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “would”, and similar terms and phrases, including references to assumptions. Such information includes, without limitation, statements with respect to: the determination of post-closing working capital adjustments and future amounts payable to WesternOne pursuant to the earn-out provision in relation to the sale of WesternOne’s Canadian modular manufacturing assets and liabilities; and WesternOne’s intention to continue to focus on effectively redeploying rental fleet to targeted markets and managing capital returns and liquidity. Actual events or results may differ materially. 

Forward-looking information contained in this news release is based on certain key expectations and assumptions made by WesternOne, including, without limitation: the stability of the economy in Western Canada; the impact of the current economic climate in Western Canada on WesternOne’s operations will remain consistent with WesternOne’s current expectations; the increased competitive environment in which WesternOne and its business units operate; rental fleet utilizations will remain challenging as excess supply of rental equipment in the market place is expected to continue and adversely affect rental volumes and rates; a protracted period of lower crude oil prices; the supply and demand for WesternOne’s products and services and the related impact on the pricing on such products and services will remain consistent with WesternOne’s current expectations; and management’s assessment of future plans and operations. Although the forward-looking information contained in this news release is based upon what WesternOne’s management believes to be reasonable assumptions, WesternOne cannot assure investors that actual results will be consistent with such information. Forward-looking information reflects current expectations of management regarding future events and operating performance as of the date of this news release. Such information involves significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information, and a description of these factors can be found under “Risk Factors” in WesternOne’s Annual Information Form dated March 30, 2017 and MD&A dated May 11, 2017, which are both available on SEDAR (www.sedar.com).

The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information reflects management’s current beliefs and is based on information currently available to WesternOne. The forward-looking information is made as of the date of this news release and WesternOne assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.

About WesternOne 

WesternOne Inc. seeks to acquire and grow businesses in the construction and infrastructure services sectors in Western Canada. Its primary business platform, WesternOne Infrastructure Services, is a leading provider of construction heat services and aerial equipment rentals to businesses in the construction, infrastructure, film and television industries in Western Canada. 

Additional Information

Additional information relating to WesternOne and other public filings, is available on SEDAR at www.sedar.com or on WesternOne’s website at www.weq.ca.

For investor relations information, please contact:

Andrew Greig, Manager of Investor Relations
WesternOne Inc.
Suite 910, 925 West Georgia Street
Vancouver, BC V6C 3L2
Phone:  (604) 678-4042
E-mail:  agreig@weq.ca

Trading Symbols
Toronto Stock Exchange: WEQ and WEQ.DB

THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE.

http://www.weq.ca/sites/default/files/docs/news/q1_fy_17_news_release_final.pdf