Canadian distributor Strongco reported a 7-percent first quarter revenue increase to CDN $104.4 million (about U.S. $95.1 million). Product support revenue jumped 8 percent to $32.7 million, while gross margin increased 1 percent to 18.9 million. Operating loss was $1.1 million, however, compared to an operating loss of $100,000 in the first quarter of 2013.
“Despite the worst winter in decades – which persisted across all of the regions in which we operate – we were pleased to achieve an overall improvement in sales across all areas of the business, extending our record of solid revenue growth through market share gains,” said Bob Dryburgh, president and CEO of Strongco. “As anticipated and in line with expectations, costs related to our branch investments and the upgraded sales organization contributed to higher expense levels. We are confident that the new branches and enhanced organization will contribute to improved earnings as the year progresses.”
Dryburgh added that branches are reporting a much improved level of sales inquiries, “consistent with the feedback we received from customers during [ConExpo] in Las Vegas in early March.”
Dryburgh also said that although new facilities and additional people have added to Strongco’s cost structure, “we expect these investments to result in continued revenue growth and improved market share performance in 2014, which in turn should lead to – despite the expected flat overall market – growth in bottom-line profitability.”
Strongco management expects relatively flat heavy equipment markets across Canada in 2014.
Strongco, based in Mississauga, Ontario, Canada, is No. 62 on the RER 100.