CEMATRIX (CVX) Q3 2024 earnings summary

Executive summary

• 2024 is projected to be the second-best year ever, despite significant project delays; delayed projects are expected to start in early 2025, setting up a strong rebound year.

• Third-quarter revenue declined due to project delays, with sales from four major projects postponed, shifting revenue into future quarters.

• Despite lower sales, focus on pricing and cost efficiency improved gross margins and resulted in positive cash flow from operations and adjusted EBITDA.

• The business continues to grow, especially in small to medium-sized projects, and maintains a strong market position in both Canada and the U.S.

• Business backlog exceeds $74 million, supporting growth prospects into 2025.

Financial highlights

• Q3 revenue was CAD 10.1 million, down 50% from CAD 20.4 million in Q3 2023; year-to-date revenue was CAD 25 million, a 26% decrease from 2023.

• Gross margin improved to 27% in Q3 (up from 23% in 2023) and 26% year-to-date (up from 19%).

• Operating income for Q3 was CAD 700,000, down from CAD 2.5 million in 2023; a small year-to-date loss of CAD 100,000 versus income of CAD 0.4 million last year.

• Adjusted EBITDA was positive: CAD 1.4 million in Q3 (down 56% year-over-year), CAD 1.8 million year-to-date (down 14%).

• Cash on hand at September 30 was CAD 9.9 million, up significantly from CAD 1.9 million a year ago.

Outlook and guidance

• Most delayed projects are scheduled to begin in early 2025, supporting a strong outlook for next year.

• 2025 is forecast to be a rebound year, with a strong backlog and sales pipeline of CAD 74.7 million and CAD 400–450 million, respectively.

• Expansion into less seasonally impacted regions aims to reduce revenue volatility.

• No negative impact expected from U.S. tariffs or political changes; infrastructure spending may increase under new administration.

• Management remains optimistic about growth, supported by a robust backlog.