Equipment dealer Strongco Corporation’s first quarter 2017 revenues fell to $83.2 million according to its most recent financial report, representing an 8.8 percent decrease compared to the same period the year before.
Earnings before interest, tax, depreciation and amortization (EBITDA) dropped to $4.3 million, a decrease of 18.9 percent compared to 2016’s $5.3 million.
Despite these decreases, Robert Beutel, executive chairman of the Ontario-based company, says Strongco is beginning to see “small, but encouraging signs of improvement in the marketplace” compared to the challenges and transitions the company experienced last year.
In 2016, Strongco underwent a series of moves to “restructure, simplify and streamline” its business, including the divestiture of its U.S. subsidiary Chadwick-BaRoss.
“While cautiously optimistic about the months to come, we are particularly pleased with the progress we’ve made to date in streamlining our organization in terms of focus on core brands and core markets, sales processes, cost controls and inventory management,” Beutel says. “As a result of these initiatives, we now have a significantly reduced cost structure and an improved balance sheet, which will set a solid foundation for stability, enhanced market share and greater profitability going forward.”
If non-recurring crane sales in Quebec are excluded in comparison to the first quart of 2016, Strongco says its revenues actually grew 5 percent, with growth in Albert and Ontario specifically.
The company reports a gross profit of $15.6 million, representing 18.7 percent of revenues, a drop of 8.8 percent compared to the same quarter last year. The company’s pretax loss of $1.1 million is unchanged from the first quarter of 2016.
On the positive side, Strongco says its equipment inventory of continuing operations was $121.2 million in the first quarter this year, compared to $159.3 million in 2016. Equipment notes payable of continuing operations dropped to $103.6 million, compared to $135.5 million in the first quarter of 2016.
