Canadian distributor Wajax posted CDN $324.4 million in revenue in the fourth quarter of 2015, dropping 16 percent compared to the fourth quarter of 2014. For the full year, Wajax recorded $1.273 billion, down from $1.451 billion in 2014, a 12.3-percent slide, with the slowdown in Western Canada’s energy sector the primary cause of the decline.
Wajax announced a company reorganization, transitioning from its current three independent product divisions – Power Systems, Industrial Components, and Equipment -- to a leaner and more integrated organization. The new organization will be based on three main functional groups: business development, service operations, and vendor development. These groups will be supported by centralized functions including supply hain, information systems, human resources, environmental health and safety and finance.
Wajax also announced the agreement to acquire the assets of Montreal-based Wilson Machine Co. for about $5 million. The company expects the acquisition to close within 60 days subject to customary closing conditions. Wilson manufactures and repairs precision rotating machinery and gearboxes with annual sales of about $6 million.
“Results from the Power Systems and Industrial Components segments were softer than expected, as reductions in selling and administrative costs could not offset lower than expected volumes and gross margins, primarily in western Canada,” said president and CEO Mark Foote. “However, in light of the economic pressures faced in western Canada, we were pleased with results from the Equipment segment.”
For the fourth quarter “rental and other” revenue, predominantly rental, was $12.6 million, and for the full year it was $50.3 million.
Foote said the company expects market conditions to remain challenging in 2016. “We expect that earnings will be under significant pressure due to ongoing market conditions in western Canada, resource customer capital and operating expenditure reductions and a weak Canadian dollar,” Foot said. The company expects improving conditions in the second half of 2016 and is confident in the growth activities outlined in its “4 Points of Growth” strategy.
Wajax is based in Mississauga, Ontario.
