Toromont Industries Ltd. has reported its financial results for the first quarter ended March 31, 2018. The company reported a net earnings increase over the first quarter of 2017, with the Equipment Group showing strong activity to start the year.
Net earnings increased $3.8 million or 14% in the quarter versus a year ago to $30.8 million or $0.38 EPS. The Equipment Group had a significant revenue increase thanks to Toromont's acquisitions of 2017, with the acquired businesses contributing a healthy $241.4 million in the quarter.
"We are pleased with results for our first full quarter following the significant acquisition we completed late last year. While maintaining a strong commitment to serve our customers, we remain focused on the integration of our newly acquired businesses and are pleased with the progress achieved," said Scott J. Medhurst, President and Chief Executive Officer of Toromont Industries Ltd. "Our Equipment Group teams achieved growth in revenues, which together with the strong bookings, backlogs and service work-in-process levels, point to the increased activity levels seen this year. CIMCO continued to execute very well in Canada."
Earnings in the legacy Toromont businesses ("Legacy Toromont") increased 19% in the first quarter versus a year ago on growth in both the Equipment Group and CIMCO. The businesses acquired in October of 2017 ("Toromont QM") contributed $5.0 million with contributions from the mining and power systems segments. Integration-related costs included severance and other one-time-only costs and combined with interest expense on the acquisition financing, reduced net earnings by $6.3 million versus a year ago.
Equipment Group revenues increased $253.2 million or 70% to $613.0 million versus last year. Legacy Toromont revenues increased 3% on growth in product support and rental revenues, partially offset by lower total equipment sales. Toromont QM contributed $241.4 million in the quarter, which increased 18% from revenues generated in the first quarter of 2017 at the predecessor organization on growth in new equipment and product support.
The company's CIMCO segment saw revenues increase 22% to $63.9 million from a year ago mainly due to strong package sales growth in Canada. Product support revenues decreased by 3%. Operating income increased 21% to $3.4 million and was 5.4% as a percentage of revenues.
"We are encouraged by the long-term outlook for infrastructure investment from the federal and provincial governments. Momentum remains good in the mining sector," continued Mr. Medhurst. "The sustained momentum at CIMCO reflects its strong market presence and solid reputation as a leader in the markets it serves. Though much work lies ahead, we are making inroads in expanding our U.S. presence. Across our organization, long-term product support growth trends, together with diversity of markets in the new and significantly expanded territory, a strong management group and solid financial underpinning, provide substantial opportunities for continued success."
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