ShawCor Ltd. Announces Third Quarter 2011 Results.
* Third quarter revenue of $271 million declined by 4% from the $283 million reported in the third quarter of 2010 but was marginally higher than the $265 million reported in the second quarter of 2011.
* EBITDA in the third quarter was $12.5 million, 78% lower than the $55.7 million reported in the third quarter of 2010 and 65% lower than the $35.3 million reported in the second quarter of 2011.
* The significant decline in year over year EBITDA was due to lower gross margin in the Pipeline segment, foreign exchange losses of $6.5 million and a $9.6 million increase in the allowance for doubtful accounts. This increase results from a contract dispute that is currently under negotiation with a client and for which the Company will continue to aggressively pursue all avenues to recover the amounts owed.
* Net loss in the third quarter was $3.1 million (or a loss of $0.04 per share diluted) compared with net income of $32.1million (or $0.45 per share diluted) in the third quarter of the prior year.
“ShawCor’s third quarter financial results reflect reduced project activity and lower margins in the Pipeline segment compared with the prior year. This, when combined with a foreign exchange loss of $6.5 million and a one time charge of $9.6 million to increase the allowance for doubtful accounts, led to the net loss result” said Bill Buckley, President and CEO of ShawCor Ltd.
Mr. Buckley added “The Company is increasing production at its major pipe coating facilities which are expected to result in higher revenue and facility utilization in the fourth quarter of this year. In addition, we have recently announced major contract awards which combined with the $1.5 billion in outstanding firm project bids provides the potential for strong growth in revenue and income in 2012.”
Source: ShawCor Ltd, November 10, 2011