Wajax (WJX) Q4 2023 earnings summary

Executive summary

• Q4 2023 revenue was $542.6 million, up 0.2% YoY; FY 2023 revenue was $2,154.7 million, up 9.8%.

• Adjusted EBITDA reached $47.2 million, up 12% YoY, while adjusted basic EPS was $0.83 per share.

• Strong ERS growth and higher margins across revenue types supported results; lower western Canada equipment sales partly offset gains elsewhere.

Financial highlights

• Q4 gross profit margin was 21.2%, up 310 bps YoY, reflecting higher margins across revenue types and a greater mix of ERS and product support sales.

• Adjusted EBITDA was $47.2 million, up 12% YoY; adjusted basic EPS was $0.83 per share, with no percentage change shown YoY.

• Adjusted EBITDA excludes $1.9 million in facility closure, restructuring and related costs, $6.8 million in non-cash derivative mark-to-market losses, and $0.3 million in contingent consideration fair-value changes.

• Adjusted basic EPS excludes after-tax costs of $1.4 million, derivative mark-to-market losses of $5.0 million, and contingent consideration fair-value changes of $0.2 million.

Outlook and guidance

• 2024 priorities include strengthening a people-first culture, growing parts and service, improving margins and costs, advancing Hitachi’s direct relationship, pursuing Industrial Parts and ERS acquisitions, and continuing ERP and technology improvements.

• Long-term heavy equipment growth and further demand in less cyclical Industrial Parts and ERS businesses remain expected; strong backlog and market fundamentals support near-term confidence.

• Higher interest rates, wage and price inflation, and a tight labour market are expected to persist in 2024; market dynamics and customer sentiment remain under monitoring.