WGI

Revenue up 20.1%, gross margin up 23.8%, EBITDA up 2.4%

TORONTO, Nov. 27, 2013 /CNW/ - Wheels Group Inc. ("Wheels" or the "Company") (TSXV: WGI, OTCQX: WGIJF) today announced its results for the quarter ended September 30, 2013.

Revenue for the quarter ended September 30, 2013 was $88.4 million, representing an increase of $14.8 million or 20.1% over $73.6 million reported in the quarter ended October 31, 2012. Revenue from MSM Group ("MSM") acquired on October 1, 2012 was $9.3 million of the increase, while revenue from the remainder of the operations increased $5.5 million or 7.9%. Revenue for the nine months ended September 30, 2013 was $261.5 million, representing an increase of $57.4 million or 28.2% over $204.0 million reported in the nine months ended October 31, 2012. Revenue from MSM was $32.3 million of the increase, while revenue from the remainder of the operations increased $25.1 million or 12.5%.

Gross margin for the quarter ended September 30, 2013 was $12.1 million, an increase of $2.3 million or 23.8% over the quarter ended October 31, 2012. MSM contributed $1.8 million, while gross margin from the remainder of the operations increased $0.6 million or 6.2%. Gross margin for the nine months ended September 30, 2013 was $34.6 million, an increase of $7.9 million or 29.8% over the nine months ended October 31, 2012. MSM contributed $6.4 million, while gross margin from the remainder of the operations grew by $1.5 million or 5.9%.

Adjusted EBITDA for the quarter ended September 30, 2013 increased 2.4% to $2.2 million. Adjusted EBITDA for the nine months ended September 30, 2013 increased 22.3% to $6.3 million from $5.2 million for the nine months ended October 31, 2012. Adjusted EBITDA as a percentage of revenue for the nine months ended September 30, 2013 was 2.4%, comparable with 2.5% for the nine months ended October 31, 2012.

Net income for the quarter ended September 30, 2013 was $Nil or $0.00 per share compared to a net loss of $0.3 million in the prior year quarter. Net loss for the nine months ended September 30, 2013 was $0.7 million or $0.01 per share, compared to a net loss of $0.8 million for the nine months ended October 31, 2012.

In the Canadian segment, revenue for the third quarter increased $9.0 million or 25.8% to $44.1 million. Revenue for the nine months increased $33.6 million or 36.6% to $125.3 million. In the US segment, revenue for the three months increased $6.4 million or 16.4% to $45.2 million. Revenue for the nine months increased 22.8% or $25.8 million to $138.7 million.

"Wheels delivered solid growth in the first nine months of the year with contributions from both existing operations and acquisitions," said Doug Tozer, Chief Executive Officer of Wheels. "We continue to invest in the business, while focusing on appropriate measures to improve the efficiency of our operations. Our non-asset model remains central to our approach as we maintain flexibility in delivering the best solutions possible for our customers regardless of mode or service. As revenue grows, we expect EBITDA and EBITDA margins to expand."

Adjusted EBITDA

The term adjusted EBITDA is used to describe earnings before any deduction for income taxes, net finance cost, depreciation, amortization, one-time non-recurring expenses and share-based compensation. EBITDA and adjusted EBITDA are metrics used by many investors and analysts to compare organizations on the basis of ability to generate cash from operations. Management considers adjusted EBITDA (as defined) to be an indirect measure of operating cash flows, which is a significant indicator of the success of any business. EBITDA and adjusted EBITDA are not intended to be representative of cash flow from operations or results of operations determined in accordance with IFRS.

EBITDA and adjusted EBITDA are not recognized measures under IFRS. Wheels' method of calculating EBITDA and adjusted EBITDA may differ from methods used by other companies, and accordingly may not be comparable to similar measures presented by other companies.

The financial statements and related management's discussion and analysis will be available on the Company's website at www.wheelsgroup.com and on SEDAR at www.sedar.com.

Caution Regarding Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking statements within the meaning of certain securities laws, including the Securities Act (Ontario). Forward-looking statements can be generally identified by the use of words such as "anticipate", "continue", "estimate", "expect", "expected", "intend", "may", "will", "project", "plan", "should", "believe" and similar expressions. Specifically, forward-looking statements in this news release include statements respecting certain future expectations about: prices and demand for commodities, products and services, capital expenditures, the ability of the Company to access tax losses and tax attributes, sources and use and sufficiency of cash flows, the Company's ability to renew its term debt at maturity, the effect of changes in the exchange and interest rates and the prices of key services. Forward-looking statements in this news release describe the expectations of the Company as of the date hereof. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation the RISKS AND UNCERTAINTIES section of the Company's most recent Management Discussion and Analysis.

Although the Company believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon. With respect to the forward-looking statements contained in this news release, the Company has made assumptions regarding: there being no significant disruptions affecting the Company's operations, whether due to labour disruptions, damage to equipment or otherwise; the ability of Wheels to obtain transportation services and supplies in a timely manner to carry out its activities and at prices consistent with current levels or in line with the Company's expectations; the ability of the Company to successfully access tax losses and tax attributes; the ability of the Company to obtain financing on acceptable terms; currency exchange and interest rates being consistent with current levels or in line with Wheels' expectations; and global economic performance.

Wheels disclaims any intention or obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.

Further information can be found in the disclosure documents filed by Wheels Group Inc. with the securities regulatory authorities, available under the profile of the Company at www.SEDAR.com.

About Wheels

Founded in 1988, Wheels is a leading North American 3PL, supply chain logistics provider. As a non-asset provider, the Company develops advanced supply chain solutions delivered through its qualified partner network of over 6,000 truck, rail, air and ocean carriers. Wheels serves consumer goods, food and beverage, manufacturing and retail clients through 26 offices throughout the US and Canada. Wheels has been named one of Canada's 50 Best Managed Companies since 1997, with Platinum status since 2003. Wheels has been named one of North America's Top 100 Third-Party Logistics ("3PL") Companies, one of the Top 100 Food 3PL's and one of the Top Five Intermodal Marketing Companies.

Neither the TSX Venture Exchange, nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

SOURCE Wheels Group Inc.