Canadian distributor Strongco’s total revenues increased 6 percent to $140.2 million in the second quarter, compared to $132.2 million in the same period a year ago. Rental revenues increased 19 percent, from $6.4 million in last year’s second quarter, to $7.6 million this year.
EBITDA for the second quarter was $13.7 million, compared to $12.5 million for the year-ago quarter, a 9.6-percent increase.
“In the second quarter, Strongco posted a solid increase in revenue and achieved gains in market share in all of its regions in Canada,” said Robert Dryburgh, president and CEO. “This was in spite of prolonged winter weather across the country, tragic floods in Fort McMurray and southern Alberta in June, weak markets in New England, and in Quebec a significant slowdown in demand, exacerbated by a construction strike in the province at quarter end. Our strong performance is not only a testament to the decision to upgrade our branch presence in Alberta and Quebec, it also reflects on the efforts of Strongco’s people working in our enhanced sales organization.
“Inventory levels crested in May, as expected, and we fully expect to meet our planned $50 million year-over-year reduction in equipment, with the resultant impact on floor plan debt by year end.”
Dryburgh added that overall demand for equipment remains moderately ahead of last year with the exception of Eastern Canada. “Looking ahead, market activity in Alberta is positive and current backlogs for the region remain strong,” he said. “Continuing wet weather is impeding jobsite activity, but, as conditions dry out, higher machine usage will generate increased product support revenues. In Ontario, markets should slowly improve and we expect to see increased customer demand for equipment. Strongco’s strong sales backlog and level of RPO contacts in 2013 are positive indicators of continuing demand and we are cautiously optimistic for the balance of the year.
“Economic forecasts continue to project modest growth for Canada overall in 2013 and market activity remains encouraging except in Quebec. In the northeastern United States, following a depressed first half of the year, there are early signs of a housing recovery, normally a precursor to economic recovery. While demand will likely vary from region to region, overall construction markets are expected to remain active, which should result in continued demand for heavy equipment.”
Based in Mississauga, Ontario, Canada, Strongco is No. 62 on the RER 100.
