Toromont Industries (TIH) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue increased 16% year-over-year to $1.36 billion, with net income up 2% and strong performance from both Equipment Group and CIMCO; supply conditions normalized and end markets remained active.

• Operations commenced at the Bradford remanufacturing center, enhancing capacity and efficiency.

• Backlog held steady at $1.3 billion, with Q2 bookings down 13% but year-to-date bookings up 13%; financial position remains robust with strong liquidity.

• Equipment Group saw strong prime product deliveries and healthy product support, despite softer rental markets.

• CIMCO delivered solid results, with revenue up 19% and robust order backlog progression in both Canada and the U.S.

Financial highlights

• Q2 revenue reached $1,360M, up 16% year-over-year; year-to-date revenue up 7%.

• Net earnings from continuing operations increased 2% in Q2 to $135.4 million or $1.65 per share; year-to-date net earnings down 4% to $219.3 million or $2.67 per share.

• Operating income decreased 1% in Q2 and 7% year-to-date, as higher revenue was offset by lower gross margins and higher expenses.

• Gross profit for Q2 was $328.9 million, up from $317.3 million year-over-year, but margins declined due to sales mix and market dynamics.

• Expenses increased 9% in Q2, mainly due to higher compensation and SG&A to support growth.

Outlook and guidance

• Healthy order backlog and strong financial position support a positive outlook for the remainder of 2024.

• Focus remains on safe execution, customer support, and disciplined business building, with technician hiring a key priority.

• Management is committed to disciplined capital deployment, operational execution, and long-term investment strategies.