Upcoming AWS Coverage on Vulcan Materials
LONDON, UK / ACCESSWIRE / April 12, 2017 / Active Wall St. announces its post-earnings coverage on Forterra, Inc. (NASDAQ: FRTA). The Company announced its fourth quarter and fiscal 2016 financial results on March 29, 2017. The manufacturer and marketer of water and drainage pipes and products narrowed its adjusted net loss driven by higher sales and improved gross margin. Register with us now for your free membership at:
One of Forterra's competitors within the General Building Materials space, Vulcan Materials Co. (NYSE: VMC), is estimated to report earnings on May 02, 2017. AWS will be initiating a research report on Vulcan Materials following the release of its next earnings results.
Today, AWS is promoting its earnings coverage on FRTA; touching on VMC. Get our free coverage by signing up to:
For the three months ended December 31, 2016, Forterra's net sales surged 80.4% to $354.1 million compared to $196.3 million in the prior year's same quarter. The increase is attributable to the impact of acquisitions which increased net sales by $172.1 million.
For Q4 2016, Forterra's adjusted EBITDA increased by $36.4 million to $42.6 million compared to $6.2 million in the prior year's same quarter. The increase in adjusted EBITDA was attributable to higher net sales, an expansion in gross margin, and improved leverage on selling, general, and administrative expenses, which improved by 120 basis points to 17.8% as a percent of net sales, compared to the prior year's comparable quarter. Gross margin improved by 450 basis points to 17.0% as a result of the Company's cost saving initiatives and the ongoing realization of synergies from acquisitions. Adjusted EBITDA margin improved to 12.0% in the reported quarter, compared to 3.2% in Q4 2015.
Forterra reported Q4 2016 consolidated net loss of $48.7 million compared to a net loss of $33.1 million in Q4 2015. The increase in net loss of $15.6 million is due to charges incurred in the reported quarter related to refinancing. The Company's adjusted net loss narrowed by $18.8 million to $6.6 million in the reported quarter compared to an adjusted net loss of $25.4 million in the year ago comparable period, attributable to higher net sales and higher gross profit.
During Q4 2016, Forterra's Drainage Pipe & Products segment net sales increased by 19.8% to $176.8 million compared to $147.6 million in Q4 2015, due to $31.4 million of net sales from acquisitions. Drainage Pipe & Products gross profit increased to $31.1 million from $21.4 million in the prior year's same quarter, increasing gross profit margin by approximately 310 basis points. Drainage Pipe & Products EBITDA and adjusted EBITDA were $11.7 million and $29.6 million, respectively, in Q4 2016 compared to $16.2 million and $18.2 million, respectively, in Q4 2015.
The Company's Water Pipe & Products segment net sales tripled to $177.3 million in Q4 2016 compared to $48.1 million in the prior year's same quarter. Water Pipe & Products gross profit increased to $30.0 million from $4.8 million, increasing gross profit margin by 700 basis points. Water Pipe & Products EBITDA and adjusted EBITDA increased to $18.4 million and $24.9 million, respectively, compared to negative $0.6 million and positive $2.2 million, in the prior year's same quarter, respectively.
Full Year 2016 Results
Forterra's net sales for FY16 increased to $1.36 billion. The impact of acquisitions contributed $698.0 million to net sales. Drainage Pipe & Products net sales increased to $728.9 million due to $222.1 million of net sales from acquisitions. Water Pipe & Products net sales increased to $632.6 million due to net sales from acquisitions of $475.9 million.
Forterra's reported net loss for the year decreased to $7.6 million. The decline in net loss was primarily attributed to higher income from operations. Adjusted net income increased to $47.1 million, again mainly attributable to higher net sales.
Forterra's adjusted EBITDA for the year increased to $218.0 million. The increase in adjusted EBITDA was attributable to higher net sales, expanded gross margins, and improved leverage on selling, general, and administrative expenses. Gross margin improved to 20.6% as a result of cost saving initiatives and the ongoing realization of synergies from acquisitions.
On February 03, 2017, the Company acquired the business of Royal Enterprises America, which manufactures concrete drainage pipe, precast concrete products, storm water treatment products and erosion control products serving the greater Minneapolis market. The aggregate purchase price was $35.5 million, subject to customary working capital adjustments.
Balance Sheet and Liquidity
At December 31, 2016, Forterra had cash of $40.0 million and borrowings under its credit agreements of $1,146.4 million. Availability under the Company`s asset based revolving credit facility as of December 31, 2016, was $189.4 million.
At the close of trading session Tuesday, April 11, 2017, Forterra's stock price climbed 2.34% to end the day at $18.38. A total volume of 115.26 thousand shares were exchanged during the session. The stock currently has a market cap of $1.19 billion.
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