Canadian distributor Strongco Corp. posted CDN $485.7 million (about U.S. $439 million) in 2013 revenue, a 5-percent year-over-year increase compared to 2012’s $464.2 million total. EBITDA, however, dropped 6.8 percent from $48.3 million in 2012 to $45 million in 2013. Revenues for the fourth quarter were essentially flat, increasing from $115.9 million in 2012 to $116.4 million.
Rental volume declined in 2013 full year as well as in the fourth quarter. Rental revenue in 2013 was $31.3 million, down 3 percent from 2012. Rental revenue declined 15 percent in the fourth quarter from $10.4 million in Q412 to $8.8 million in 2014.
“Given the challenging market conditions in 2013, we were pleased to achieve overall sales increases for equipment and product support, continuing Strongco’s record of revenue growth and improved market position in all the regions in which we operate,” said Bob Dryburgh, president and CEO of Strongco. “While increased sales and market share in a down market indicates that we are doing the right things, we were not able to completely offset cost increases associated with the new and upgraded branches, and improved sales organization. Our stated goal for 2013 was to reduce equipment inventories and the associated floor-plan debt. By year end, we were successful in reducing year-over-year inventories by $32.4 million.”
During the past two years, Strongco has made significant investments in new branches to expand and improve the company’s presence in key markets. In 2012, new branches were opened in Acheson, Alberta, on the outskirts of Edmonton; in Baie Comeau, Quebec, to replace an old branch, and Orillia, Ontario, to further penetrate the aggregates market in the region. In 2013, new branches were built in Saint-Augustin-de-Desmaures, Quebec, to replace an old branch near Quebec City, and Fort McMurray, Alberta, to grow in the northern Alberta market. The benefits of these investments were just beginning to be realized in 2013, as evidenced by market share gains and increased product support revenues.
According to Strongco, most economists are forecasting modest growth for Canada in 2014, with active construction markets. Growth is likely to be strongest in Alberta, led by the burgeoning oil sector, and weakest in Quebec where activity is stifled by the ongoing investigation into corruption in the construction industry.
Strongco Corp. is based in Mississauga, Ontario, Canada. The company is No. 62 on the RER 100.
