TORONTO, Feb. 8, 2024 /CNW/ – TerraVest Industries Inc., (TSX:TVK) (“TerraVest” or the “Company”) announces its results for the first quarter ended December 31, 2023 and the declaration of its quarterly dividend.
FIRST QUARTER REVIEW AND OUTLOOK
Business Performance
Management believes that there are certain non‐IFRS financial measures that can be used to assist shareholders in analyzing the performance of TerraVest. The table below highlights certain financial results and reconciles net income to adjusted earnings before interests, income taxes, depreciation and amortization (“EBITDA”) for the first quarter ended December 31, 2023 and the comparative period in fiscal 2023.
First quarters ended
Dec. 31, 2023
Dec. 31, 2022
$
$
Sales
228,090
177,198
Net Income
19,303
13,086
Add (subtract):
Income tax expense
8,142
4,513
Financing costs
6,417
3,716
Depreciation and amortization
11,125
9,291
Change in fair value of derivative financial instruments
(280)
(1,312)
Change in fair value of investment in equity instruments
573
205
Change in fair value of investment in a limited partnership
403
–
(Gain) loss on foreign exchange
3,014
753
(Gain) loss on disposal of other property, plant and equipment
332
454
(Gain) loss on disposal of property, plant and equipment for rental
(375)
(567)
(Gain) loss on lease modification
–
19
Acquisition‑related cost
402
80
Adjusted EBITDA
49,056
30,238
Sales for the first quarter ended December 31, 2023 were $228,090 versus $177,198 for the prior comparable quarter. This represents an increase of 29%. However, TerraVest acquired all the operating assets of the subsidiaries of Highland Tank Holdings, LLC (“HT”) in November 2023 and all of the issued and outstanding shares of LV Energy Services Ltd. and its sister company (together referred as “LV”) effective October 1, 2023, all of which did not contribute to the prior comparable period. Excluding HT and LV, sales for the first quarter ended December 31, 2023 were $189,543 versus $177,198 for the prior comparable quarter representing an increase of 7% for TerraVest’s base portfolio (excluding HT and LV). The increases in sales for the first quarter ended December 31, 2023 are the result of higher demand for oil and gas processing equipment and services in Western Canada, as well as for LPG storage and distribution equipment.
Net income for the first quarter ended December 31, 2023 was $19,303 versus $13,086 for the prior comparable quarter. This represents an increase of 48% which is a result of the positive contributions from HT, LV and from increased sales in TerraVest’s base portfolio of businesses. The increase in net income was partially offset by acquisition-related costs, increased financing costs due to higher debt level to finance business acquisitions and increased interest rates versus the prior period as well as higher income tax expense. Other variances are also highlighted in the table above.
Adjusted EBITDA for the first quarter ended December 31, 2023 was $49,056 versus $30,238 for the prior comparable quarter. This represents an increase of 62%, which is the result of the reasons explained above.
The table below reconciles cash flow from operating activities to Cash Available for Distribution for the first quarter ended December 31, 2023 and the comparative period in fiscal 2023.
First quarters ended
Dec. 31, 2023
Dec. 31, 2022
$
$
Cash Flow from Operating Activities