Toromont reports solid first quarter growth
By Andrew Macklin
April 27, 2016 – Toromont Industries Ltd. has seen solid growth in revenue in the first quarter of 2016, with double-digit improvements in the Equipment Group over the same period last year.
“We were pleased to achieve growth in the quarter on higher revenues and good expense control in both the Equipment Group and CIMCO,” said Scott J. Medhurst, president and chief executive officer of Toromont Industries Ltd. “In the Equipment Group, strong used equipment sales, product support growth, and increased RPO conversions led to higher revenues. At CIMCO, package sales and product support achieved growth in both Canada and the US.”
Equipment Group revenues increased 10 per cent to $327.6 million in the quarter. Operating income increased 11 per cent to $31.9 million compared to last year on higher revenues and relatively lower expenses partially offset by lower gross margins.
CIMCO revenues were up 15 per cent to $50.1 million in the quarter on increased package sales and strong product support growth. Operating income increased $1.4 million to $1.6 million and was 3.2 per cent as a percentage of revenues.
Net earnings increased 20 per cent in the quarter to $24.2 million largely due to the higher revenues and a relatively lower expense ratio, partially offset by lower gross profit margins.
“In the quarter, the Equipment Group delivered strong results despite weakness in many of the markets that we serve. Excess inventory levels industry-wide and soft commodity prices continue, which impact the operating environment. Product support growth continues to benefit from the larger installed base in the field and serves to partially offset the downward pressures from other areas of the business. We are encouraged that the Federal government has committed to increasing infrastructure spending in our territories, however, timing of any such projects is unclear at this time,” continued Mr. Medhurst. “At CIMCO, activity levels in Canada and the US are encouraging with backlogs at record levels for any first quarter. Product support growth at CIMCO demonstrates continued momentum in both the US and Canada and remains a strategic focus.”