Ontario-based equipment dealer Strongco Corporation has reported a 6.2-percent drop in revenues for 2016, along with a dramatic decrease in earnings before interest, tax, depreciation and amortization (EBITDA) of 64.2 percent, as it works to “streamline and stabilize” its business.
Revenues for 2016 reached $361.3 million, compared to $385 million the previous year. EBITDA dropped to $5.8 million last year, compared to $16.2 million in 2015.
But the company feels it is correcting its management course, following a series of moves including the divestiture of its U.S. subsidiary Chadwick-BaRoss.
“As weak markets persist, we now have a much younger and more focused inventory, a more sustainable cost structure and a stronger balance sheet,” says Executive Chairman Robert Beutel. “Management believes the actions taken set the stage for greater profitability going forward, regardless of market conditions. We remain confident that financial stability, along with exceptional customer service and a greater focus on core world-class suppliers, will enhance our position, positively impact cash flow and deliver greater value over the long term.”
For the fourth quarter of 2016, Strongco’s revenues dropped to $81.2 million from $101.4 million the year before. The company attributes this decline comparison to the sale of several large cranes occurring in the fourth quarter of 2015 that did not repeat in 2016. The company’s gross profit for 2016 reached $57 million, a drop of 12.6 percent compared to 2015.
The company sees several bright spots on its balance sheet, as Beutel points out. The company’s equipment inventory of continuing operations was $129.2 million for 2016, compared to $181.3 million the previous year. Strongco’s equipment notes payable of continuing operations also declined, dropping to $101.2 million at the end of last year, compared to $156.7 million the year before.
Strongco has 27 branches across Canada with an estimated 515 employees, and carries equipment from Volvo Construction Equipment, Case Construction, Manitowoc Crane—including National and Grove—Terex Cedarapids, Terex Trucks, Fassi, Sennebogen, Konecranes and SDLG.