Upcoming AWS Coverage on MDU Resources Post-Earnings Results
LONDON, UK / ACCESSWIRE / June 2, 2017 / Active Wall St. announces its post-earnings coverage on Forterra, Inc. (NASDAQ: FRTA). The Company posted its first quarter fiscal 2017 financial results on May 15, 2017. The manufacturer of water and drain pipe, and of precast concrete structures missed top- and bottom-line expectations. Register with us now for your free membership at: http://www.activewallst.com/register/.
One of Forterra's competitors within the General Building Materials space, MDU Resources Group, Inc. (NYSE: MDU), reported on May 03, 2017, its financial results for Q1 2017. AWS will be initiating a research report on MDU Resources in the coming days.
For the three months ended March 31, 2017, Forterra's net sales increased to $338.3 million compared to $187.0 million in Q1 2016. This sales growth is attributable to the impact of acquisitions that increased net sales by $163.0 million. The Company's revenue numbers lagged behind analysts' consensus of $338.6 million.
For Q1 2017, Forterra reported consolidated net loss of $22.5 million, or $(0.35) loss per share, compared to a net loss of $3.9 million in Q1 2016, due to the impact of lower gross profit as a percentage of sales and higher SG&A costs as a percentage of sales. The Company posted adjusted net loss of $19.7 million versus adjusted net income of $1.0 million in the prior year's comparable quarter. The Company reported wider than expected loss as per Wall Street's expectations.
During Q1 2017, Forterra's Drainage Pipe & Products ("Drainage") segment's net sales improved to $160.4 million compared to $144.3 million in the prior year's same quarter, due to $20.1 million of net sales from acquisitions. The decline in net sales excluding acquisitions was due to a more typical winter in Q1 2017 and the impact of heavy rain and flooding in California compared to unseasonably warm weather in the northern regions in Q1 2016. Drainage gross profit was $17.4 million compared to $30.5 million in the prior year's same quarter.
For Q1 2017, Drainage Pipe & Products EBITDA and adjusted EBITDA were $11.4 million and $12.8 million, respectively, compared to $27.9 million and $29.1 million, respectively, in the prior year's same quarter.
Forterra's Water Pipe & Products ("Water") net sales more than tripled to $177.8 million in Q1 2017 compared to $40.5 million in Q1 2016, due to net sales from its acquisition of US Pipe of $142.9 million. Net sales excluding acquisitions was impacted by lower average sales prices as well as customer and weather related project delays in the concrete and steel pressure pipe portion of the Water business. The segment's gross profit increased to $22.2 million from $6.0 million.
During Q1 2017, Water Pipe & Products EBITDA and adjusted EBITDA increased to $17.1 million and $17.8 million, respectively, compared to $4.2 million for both metrics in the prior year's corresponding quarter.
Balance Sheet and Liquidity
At March 31, 2017, Forterra had cash of $27.5 million and borrowings under its credit agreements of $1.26 billion. Availability under the Company`s asset based revolving credit facility as of March 31, 2017, was $68.1 million.
On May 01, 2017, Forterra entered into an amendment to its $1.05 billion Senior Lien Term Loan Credit Agreement that resulted in a repricing of the facility from LIBOR + 350 basis points to LIBOR + 300 basis points and the incurrence of an incremental $200 million term loan with terms matching the existing credit agreement. The majority of the net proceeds from the term loan upsize of approximately $197 million were used to pay down the Company's revolving credit facility.
Forterra expects that net income for Q2 2017 will range from $3.0 million to $10.0 million and adjusted EBITDA will range from $50.0 million to $60.0 million. The range reflects market factors that impacted business in Q1 2017 that are expected to continue to weigh on the upcoming quarter. The Company expects costs associated with its growth and margin enhancing initiatives, ongoing integration activities, and Sarbanes-Oxley Act compliance to result in lower year-over-year results in H1 2017.
At the close of trading session on Thursday, June 01, 2017, Forterra's stock price climbed 4.45% to end the day at $7.51. A total volume of 1.17 million shares were exchanged during the session, which was above the 3-month average volume of 570.81 thousand shares. The stock currently has a market cap of $494.91 million.
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SOURCE: Active Wall Street