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Toromont Announces Results for the Second Quarter of 2013 and Regular Quarterly Dividend

July 29, 2013 at 11:15 AM EDT

TORONTO, ONTARIO--(Marketwired - July 29, 2013) - Toromont Industries Ltd. (TSX:TIH) today reported financial results for the second quarter ended June 30, 2013. Net earnings increased 7% in the quarter compared to the same period last year while revenues were 1% lower.


                     Three months ended June 30    Six months ended June 30

                     ---------------------------  --------------------------

millions, except per                          %                            %

 share amounts          2013      2012   change      2013      2012   change

------------------------------------------------  --------------------------

                     $         $                  $         $

Revenues               374.7     379.6      (1%)    687.9     661.1       4%

                     $         $                  $         $

Operating income        38.7      36.7       6%      64.1      60.8       5%

                     $         $                  $         $

Net earnings            27.3      25.4       7%      45.1      42.4       7%

                     $         $                  $         $

Earnings per share -

 basic                  0.36      0.33       9%      0.59      0.55       7%


"We are pleased with results for the quarter and first half of the year. Although our Equipment Group faced tough year-over-year comparators in mining, we delivered increased profitability reflecting our strong market position, diversity of industries served and growing contribution from product support. CIMCO achieved record revenues for a second quarter and first six months. Across all of our operations, execution remains strong and we are focused on cost control initiatives," said Scott J. Medhurst, President and Chief Executive Officer of Toromont Industries Ltd. "We continued to see stronger competitive conditions in equipment markets due to global excess inventories together with softness in certain market segments."


--  Equipment Group revenues for the second quarter of 2013 were $317

    million, down 5% from 2012. Equipment revenues were 14% lower than 2012

    which included significant deliveries to mining customers not repeated

    in 2013. Excluding mining, sales to other market segments increased 14%,

    principally on strength with road building and infrastructure customers.

    Product support and rentals grew 5% and 15% respectively, both setting

    new records for a second quarter. Operating income increased 2% compared

    to last year on higher gross profit margins, partially offset by lower


--  Equipment Group revenues for the first six months of 2013 were $584

    million, up 1% from 2012. Equipment sales were 6% lower than 2012 due to

    lower relative mining revenues. Excluding mining, equipment sales were

    up 16%, significantly due to road building, infrastructure and power

    systems. Product support and rentals grew 6% and 17% respectively.

    Operating income increased 4% compared to last year on lower expense

    levels. Operating income as a percentage of revenues for the six months

    ended June 30, 2013 was 9.9% compared with 9.7% for the similar period

    last year.

--  Equipment Group backlogs were $173 million at June 30, 2013 compared to

    $128 million at December 31, 2012 and $260 million at this time last

    year. Backlogs have declined from this time last year due to significant

    mining deliveries during 2012 and improved equipment availability.

    Bookings were $193 million in the second quarter of 2013 compared to

    $195 million for the same period last year.

--  CIMCO revenues set a new record for this time of year, at $58 million

    for the quarter and $104 million for the first six months of 2013.

    Revenues increased 27% in the quarter and 28% year-to-date compared to

    last year on revenues related to a significant industrial project. CIMCO

    realized a $1 million gain due to insurance proceeds. Excluding this,

    operating income increased 16% in the quarter and 5% through June 30,

    2013 compared to last year on higher revenues. Operating income

    excluding the gain as a percentage of revenues for the six months ended

    June 30, 2013 was 4.8% compared with 5.9% for the similar period last

    year on lower gross margins.

--  CIMCO bookings in the second quarter of 2013 were $34 million, down 19%

    versus the second quarter of 2012. Canadian bookings were lower while US

    bookings were strong. Through the first half of 2013, bookings were 1%

    higher than last year excluding a $50 million order in the prior year.

    Backlogs were $104 million at June 30, 2013.

--  Net earnings were $27.3 million in the quarter ($0.36 per share basic),

    up 7% from $25.4 million ($0.33 per share basic) reported last year,

    reflecting higher gross profit margins and lower net interest expense.

    For the first six months of 2013, net earnings were $45.1 million ($0.59

    per share basic), up 7% from $42.4 million ($0.55 per share basic)

    reported last year, reflecting higher revenues and lower expense levels

    partially offset by lower gross profit margins.

--  Equipment Group inventory levels have been a focus area. These

    inventories were reduced $8 million from a year ago but were $42 million

    higher than December 31, 2012. The normal seasonal trend would have

    levels increasing during the first half of the year, however incremental

    ordering (tier III) and lower sales volumes also contributed this year.

--  Total debt net of cash to total capitalization was 25%, well within

    stated capital targets.

--  The Board of Directors approved the regular quarterly dividend of 13

    cents per share on outstanding common shares, payable October 1, 2013 to

    shareholders of record on September 12, 2013. The regular quarterly

    dividend was previously increased 8% to 13 cents per share effective

    with the dividend paid April 1, 2013.

"The strength of product support and diversity of end-markets are encouraging for our performance; however, we are seeing continuing softness in certain market segments," continued Mr. Medhurst. "At CIMCO, recreational bookings recovered to more normal levels and the order backlog position bodes well for performance this year."

Quarterly Results Materials

The complete second quarter report for 2013, including MD&A and unaudited interim condensed financial statements, is available on our website at www.toromont.com.

Quarterly Conference Call and Webcast

Interested parties are invited to join the quarterly conference call with investment analysts, in listen-only mode, on Monday, July 29, 2013 at 5:00 p.m. (ET). The call may be accessed by telephone at 1-866-226-1792 (toll free) or 416-340-2216 (Toronto area). A replay of the conference call will be available until Monday, August 12, 2013 by calling 1-800-408-3053 or 905-694-9451 and quoting passcode 7809226.

Both the live webcast and the replay of the quarterly conference call can be accessed at www.toromont.com.


Information in this press release that is not a historical fact is "forward-looking information". Words such as "plans", "intends", "outlook", "expects", "anticipates", "estimates", "believes", "likely", "should", "could", "will", "may" and similar expressions are intended to identify statements containing forward-looking information. Forward-looking information in this press release is based on current objectives, strategies, expectations and assumptions which management considers appropriate and reasonable at the time including, but not limited to, general economic and industry growth rates, commodity prices, currency exchange and interest rates, competitive intensity and shareholder and regulatory approvals.

By its nature, forward-looking information is subject to risks and uncertainties which may be beyond the ability of Toromont to control or predict. The actual results, performance or achievements of Toromont could differ materially from those expressed or implied by forward-looking information. Factors that could cause actual results, performance, achievements or events to differ from current expectations include, among others, risks and uncertainties related to: business cycles, including general economic conditions in the countries in which Toromont operates; commodity price changes, including changes in the price of precious and base metals; changes in foreign exchange rates, including the Cdn$/US$ exchange rate; the termination of distribution or original equipment manufacturer agreements; equipment product acceptance and availability of supply; increased competition; credit of third parties; additional costs associated with warranties and maintenance contracts; changes in interest rates; the availability of financing; and, environmental regulation.

Any of the above mentioned risks and uncertainties could cause or contribute to actual results that are materially different from those expressed or implied in the forward-looking information and statements included in this press release. For a further description of certain risks and uncertainties and other factors that could cause or contribute to actual results that are materially different, see the risks and uncertainties set out in the "Risks and Risk Management" and "Outlook" sections of Toromont's most recent annual or interim Management Discussion and Analysis, as filed with Canadian securities regulators at www.sedar.com and may also be found at www.toromont.com. Other factors, risks and uncertainties not presently known to Toromont or that Toromont currently believes are not material could also cause actual results or events to differ materially from those expressed or implied by statements containing forward-looking information.

Readers are cautioned not to place undue reliance on statements containing forward-looking information that are included in this press release, which are made as of the date of this press release, and not to use such information for anything other than their intended purpose. Toromont disclaims any obligation or intention to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities legislation.

About Toromont

Toromont Industries Ltd. operates through two business segments: The Equipment Group and CIMCO. The Equipment Group includes one of the larger Caterpillar dealerships by revenue and geographic territory in addition to industry leading rental operations. CIMCO is a market leader in the design, engineering, fabrication and installation of industrial and recreational refrigeration systems. Both segments offer comprehensive product support capabilities. This press release and more information about Toromont Industries can be found at www.toromont.com.




                             Three months ended            Six months ended

                                        June 30                     June 30

($ thousands, except

 share amounts)              2013          2012          2013          2012


                                       Restated                    Restated

Revenues              $   374,738$   379,607$   687,870$   661,066

Cost of goods sold        283,321       289,938       520,534       496,152


Gross profit               91,417        89,669       167,336       164,914

Selling and


 expenses                  52,710        52,987       103,278       104,164


Operating income           38,707        36,682        64,058        60,750

Interest expense            2,175         2,249         4,277         4,370

Interest and

 investment income         (1,068)         (442)       (2,260)       (1,637)


Income before income

 taxes                     37,600        34,875        62,041        58,017

Income taxes               10,316         9,492        16,909        15,664


Net Earnings          $    27,284$    25,383$    45,132$    42,353



Earnings per share

  Basic               $      0.36$      0.33$      0.59$      0.55

  Diluted             $      0.35$      0.33$      0.59$      0.55

Weighted average

 number of shares


  Basic                76,588,810    76,760,731    76,542,490    76,773,193

  Diluted              77,159,097    77,336,473    77,117,747    77,399,535


Toromont Industries Ltd.Paul R. Jewer

Executive Vice President and Chief Financial Officer

(416) 667-5638


Source: Toromont Industries Ltd.

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