In This Article:
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Revenue: $568.3 million, a decrease of 3.1% from Q2 2023.
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Gross Profit Margin: Increased to 20.9% from 19.9% in Q2 2023.
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Selling and Administrative Expenses: Increased to 14.4% of revenue from 12.8% in Q2 2023.
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Adjusted EBITDA: $54.7 million, a decrease of 4.3% from Q2 2023.
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Adjusted Net Earnings per Share: $1.06, a decrease of 16.3% from Q2 2023.
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Backlog: $544.9 million, a decrease of 7.2% from Q1 2024.
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Cash Flow from Operating Activities: $35.8 million, compared to a use of $6 million in Q2 2023.
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Leverage Ratio: Decreased to 2.17 times from 2.2 times in Q1 2024.
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Dividend: $0.35 per share for Q3 2024.
Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Wajax Corp (WJXFF) reported an increase in gross profit margin to 20.9% in Q2 2024, up from 19.9% in the same period of 2023.
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The company successfully rolled out a new ERP system to 99 branch locations, representing approximately 90% of 2023 annual revenue.
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Eastern Canada saw an 8.3% increase in sales, driven by higher equipment sales in construction and forestry and increased power systems sales.
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Wajax Corp (WJXFF) has a strong M&A pipeline, indicating ongoing strategic growth opportunities.
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The company has secured orders for eight large mining shovels, with deliveries scheduled through 2025, indicating a strong backlog in the mining sector.
Negative Points
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Revenue decreased by 3.1% in Q2 2024 compared to the same quarter in 2023, primarily due to lower sales in Western and Central Canada.
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Adjusted EBITDA decreased by 4.3% from the second quarter of 2023, impacted by lower sales volumes and higher personnel expenses.
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Selling and administrative expenses increased to 14.4% of revenue in Q2 2024, up from 12.8% in Q2 2023, due to higher personnel costs.
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The company's backlog decreased by 7.2% compared to Q1 2024, primarily due to lower orders in construction, forestry, and ERS.
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Industrial parts and ERS sales were soft in Q2, with declines in Central and Eastern Canada, reflecting broader market challenges.
Q & A Highlights
Q: Industrial parts and ERS demand were soft in Q2. Are there specific regions or end markets driving this, or is it more broad-based? A: We are seeing softness in industrials and forestry, specifically pulp and paper. A small part of the decrease was due to the ERP rollout, which takes about a quarter to fully integrate.
Q: Has the demand trend continued into early Q3, and are there indicators suggesting a turning point? A: We are not expecting significant changes in demand trends moving into Q3.