Toronto-based Toromont Industries Ltd., the parent company of Battlefield Equipment Rentals, last week reported record financial results for the first quarter of 2007. Net earnings were CA $14.3 million (about U.S. $12.8 million) or $0.22 per share (U.S. $0.19), up 22 percent from CA $11.7 million (U.S. $10.5 million) or $0.18 per share (U.S. $0.16) reported in the first quarter of 2006.
“We continue to realize significant revenue growth and margin enhancement in our U.S. Compression operations, with offsetting revenue declines in Canada,” said Robert Ogilvie, chairman and CEO of Toromont Industries. “The Equipment Group reported an excellent quarter on very strong machine sales. Momentum in the business, particularly within the mining and construction segments, continued with good bookings in the quarter. Compression Group backlogs remain at record levels as a result of excellent bookings in the United States.”
Consolidated revenues increased 6 percent to $390.2 million (U.S. $349.3 million) in the quarter versus the same period of the prior year. Equipment Group revenues were 22-percent higher on a 62-percent increase in new machine sales. Used equipment sales and rental revenues were also higher. Compression Group revenues were 11-percent lower in the quarter versus the same period of 2006, on a 50-percent decline in sales of natural gas compression packages produced in Canada. This was partially offset by higher natural gas compression revenues on packages produced in the U.S., up 150 percent, and a 14-percent increase in product support business.
Last month, Toromont acquired the assets of Sunrise Rentals, a privately owned rental operation in Timmins, Ontario, for $3.1 million cash (U.S. $2.8 million). Rental revenues were up 6 percent in the quarter largely due to increased same-store revenues generated from a larger rental fleet. The 2006 opening of a new Battlefield - The CAT Rental Store branch in Barrie, Ontario, together with the recent acquisition, also contributed to this growth.
“We are currently expecting that 2007 will be another year of solid performance for the company,” Ogilvie said. “Infrastructure spending, mine development and other sectors should continue to be strong for the Equipment Group. While market conditions in the Canadian natural gas market are not particularly favorable, activity within the United States, particularly for larger horsepower units, continues to be robust.”
The company also announced the regular quarterly dividend of $0.12 cents per share (U.S. $0.10) on outstanding common shares, payable July 3, to shareholders of record at the close of business on June 15.
Toromont Industries operates through two business segments: The Equipment Group and the Compression Group. The Equipment Group includes Battlefield Equipment Rentals, No. 23 on the RER 100. The Compression Group is a North American leader specializing in the design, engineering, fabrication and installation of compression systems for natural gas, coal-bed methane, fuel gas and carbon dioxide in addition to process systems and industrial and recreational refrigeration systems.
