Canadian distributor Wajax posted fourth quarter 2023 rental revenue of $11.7 million compared to $10.2 million in the fourth quarter of 2022, a 14.7-percent increase. Total revenue for Q423 was $542.6 million, up 0.2 percent compared to $541.3 million in the fourth quarter of 2022. Product support revenue was also solid in the fourth quarter at 132.8 million compared to $118.3 million, a 12.2-percent increase. However, sales of new equipment dropped from $202.2 million in the fourth quarter of 2022 to $158.5 million, a 21.6-percent decline.
For the full year, total revenue was $2,154.7 million compared to $1,962.8 in 2022, a 9.8-percent increase. Equipment rental did well in 2023 at $45 million compared to $39.1 million in 2022, a 15-percent hike. Product support business was also strong all year, $543.3 million compared to $483.9 million in 2022, a 12.3-percent incline. Only equipment sales declined from $628.6 million in 2022 to $607.1 in 2023, a 3.4-percent dip.
Adjusted EBITDA in the fourth quarter was $47.2 million, an 11.5-percent year-over-year increase. The full year’s EBITDA was a record $197.4 million, a 19-percent year-over year hike.
“In 2023, Wajax celebrated its 165th anniversary and delivered a third straight year of record revenue, up 9.8 percent over 2022,” said Iggy Domagalski, president and CEO. “When combined with our continuing focus on improved operating leverage, this resulted in a 19.1 percent year-over-year increase in adjusted basic earnings per share. Our team delivered significant value to shareholders including a 32-percent increase in the quarterly dividend. We are pleased with these results, and proud of our team’s exceptional efforts throughout the year.
“Looking ahead into 2024, fundamentals remain solid across many of our key markets, which continues to be reflected in our strong backlog – and these fundamentals should be supportive as we look to build on the near-record number of Hitachi excavators we shipped in 2023, as well as the exceptionally strong performance of our industrial parts and engineered repair services businesses. Our strong financial results and solid balance sheet, coupled with the recently completed $100.0 million increase in credit limit under our senior secured credit facility, give us the flexibility to continue to invest in future organic growth and acquisitions. The 6% dividend increase announced today reflects the board’s and management’s collective belief in our strategic vision.”
Strong fundamentals
Moving into 2024, Wajax continues to see solid fundamentals in many of the markets it serves - particularly mining, energy and construction - supported by relatively elevated key commodity prices and sustained customer budgeting for capital projects. Wajax began 2024 with strong backlog of $554.0 million, up 18.2 percent from the end of 2022, which supports management’s confidence in the near-term future. In addition to expected growth in its heavy equipment business over the long-term, Wajax continues to anticipate further demand in its less cyclical industrial parts and engineered repair services businesses, which saw top-line growth of 12.9 percent and 28.6 percent, respectively, in 2023. Challenges associated with higher interest rates, wage and price inflation, and a tight labor market, are expected to persist, and management continues to monitor market dynamics and customer sentiment for signs of possible weakness.
Management will be focused on six strategic priorities for 2024: continuing to build a “people first” company; growing Wajax’s existing business with a focus on parts, service and margin improvement; unlocking the potential of Wajax’s enhanced direct relationship with Hitachi; acquiring industrial parts and ERS businesses; improving cost structure and processes; and continuing Wajax’s enterprise resource planning system rollout and additional technology improvements.
Wajax Corp., based in Mississauga, Ontario, Canada, is No. 66 on the RER 100.
