Canada39s Strongco represents a variety of brands including Dressta
Canada's Strongco represents a variety of brands including Dressta.

Distributor Strongco Holds Solid Despite Canadian Challenges

Strongco Corp., one of Canada’s leading equipment distributors and rental players, posted a 3-percent revenue increase in 2014 to CDN $498.3 million (about U.S. $395 million). Equipment rental revenue for the year was CDN $30.4 million, a 3-percent year-over-year decline.

Strongco posted EBITDA of $43 million, down slightly from $45 million in 2013.

“Last year’s harsh winter led to a very late spring in key markets, initially causing our customers to postpone, and ultimately cancel orders as their ability to get on site was delayed further into the year,” said Robert Dryburgh, president and CEO of Strongco. “These slower market conditions intensified the already weakened situation in Eastern Canada. In this difficult environment, Strongco completed a number of strategic initiatives including the launch of new branches in Alberta and Quebec, the addition of four new complementary brands, a branch-by-branch focus on operational effectiveness that is yielding sustainable cost reductions, improvements to sales execution and inventory and debt management, as well as extensive work on Strongco’s SAP dealer management system, which is poised to go live this May.

“Collectively, these investments and enhancements in key markets, technology, our people and our financial stability will fuel continued growth and improve profitability.”

The fourth quarter of 2014 was solid for Strongco, with total revenue increasing 11 percent year over year to $128.8 million. Equipment rentals in the fourth quarter were $8.7 million, consistent with Q413.

Dryburgh added that the company expects 2015 to be another challenging year in some key regions of Canada, based on the current low price of oil and devaluation of the Canadian dollar, as well as the continued weakness in Quebec. The company has responded with cost reductions including lowered headcount.

“Over the last two years, Strongco has substantially upgraded its branch network and improved its sales organization,” Dryburgh added. “These actions were taken to improve Strongco’s market presence and management believes that the results of these actions will be positive going forward.”

Based in Mississauga, Ontario, Canada, Strongco is No. 66 on the RER 100.

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