Leading Canadian equipment distributor Strongco posted a 16-percent revenue increase in the second quarter with CDN $132.2 million ($132.4 million U.S.) in total revenue, compared with $114.1 million for the second quarter of 2011. EBITDA jumped 21 percent to CDN $12.7 million, compared with $10.5 million in the year-ago quarter.
Rental revenue progressed by a more modest 4.9 percent, from $6.1 million in Q211 to $6.4 million. For the first six months of 2012, rental revenue remained essentially flat year over year, from $11.6 million last year to $11.5 million in Q212. Total revenue increased 12 percent year over year for the first six months, from $201.6 million a year ago, to $229 million this year.
“In the quarter, the company achieved increases in all major revenue streams year over year and simultaneously improved gross margins on equipment sales in competitive markets,” said Robert Dryburgh, president and CEO. "Revenues in all regions were up from the prior period. Revenues were significantly higher in Alberta, in particular, where we are making substantial investment to enhance our market position.”
Rental was strong in eastern Canada, which historically has not been a strong rental market, Strongco officials said, but did well because of rental-purchase-options for articulated trucks and loaders in Quebec for hydro-electric and infrastructure projects in the province. Rental activity was also strong at the company’s North American division, Chadwick-BaRoss in the New England region because a weak economy there favored rental. Strongco’s crane rental business increased, especially because of RPO contracts in Ontario.
In looking at the outlook for the rest of the year, Dryburgh said the company is optimistic, especially in Alberta, where the company expanded its branch capacity.
“The Canadian economy in general and the markets for construction equipment and cranes across Canada are expected to continue the improvement the company has seen in the first half throughout 2012,” Dryburgh added. “Strongco’s sales backlog grew during the first quarter and remained at robust levels through the second quarter as Strongco moved into its prime selling season, a positive indication of the increasing demand for heavy equipment.
“Management remains cautiously optimistic that the improving Canadian economy will continue through the balance of the year, and lead to increased revenues. In addition, while market conditions in the northeastern United States remain weak, Chadwick-Baross realized modest growth in the first half of 2012 and contributed positively to Strongco’s overall results.”
Based in Mississauga, Ontario, Canada, Strongco Corp. is No. 61 on the RER 100.
