Rermag 5708 Strongco Banner 1
Rermag 5708 Strongco Banner 1
Rermag 5708 Strongco Banner 1
Rermag 5708 Strongco Banner 1
Rermag 5708 Strongco Banner 1

Canada’s Strongco Posts 3 Percent First Quarter Revenue Decline

May 14, 2016
Canadian distributor Strongco posted first quarter revenue of $109.7 million compared to $112.6 million in the first quarter of 2015, a 3 percent decline.

Canadian distributor Strongco posted first quarter revenue of $109.7 million compared to $112.6 million in the first quarter of 2015, a 3 percent decline. The decrease was primarily in Alberta, where revenues plunged 38 percent because of weak market conditions as a result of the drop in oil prices. Overall equipment sales increased 3 percent year over year because of strong crane sales in Eastern Canada, which more than offset the drop in sales in Alberta. However, rental revenues and product support sales both declines in the quarter.

Despite lower revenues, gross profits were virtually unchanged from a year ago at $21.1 million.

Strongco management anticipates increased construction activity this year, which will lead to increased demand for equipment, parts and service. However, market conditions are expected to remain challenging throughout the balance of 2016 in Canada, particularly in Quebec. In New England the company expects that ongoing recovery in traditional markets for residential construction and forestry should continue to benefit heavy equipment markets.

“Strongco continues to take the necessary steps to guide the business to profitability; however, constrained by a difficult economic environment and an overall air of caution, we still face significant headwinds in many regions,” said Robert Beutel, executive chairman of Strongco. “As we navigate these challenging conditions, we were pleased to see meaningful reductions in equipment inventories and the associated financing costs, which have positively impacted the balance sheet and will help pave the way to stability and strength over the long term.”

Strongco, based in Mississauga, Ontario, Canada, is No. 82 on the new RER 100.