On Tuesday, before the market opened, Vicwest Inc. (TSE:VIC) delivered fourth quarter of 2014 Adjusted EBITDA of $12.3 million in-line with our forecast of $12.9 million and ahead of consensus estimates of $10.1 million. Management noticed that the sale of Vicwest to Kingspan and Ag Growth for $12.70 per share is proceeding well. Shareholders have approved the sale and the only rest approvals required before closing are from the Competition Bureau of Canada. Approval from Competition Canada is anticipated to be received in April.
The company’s total backlog ending fourth quarter of 2014 was $77.7 million, 1.1% lower consecutively and 1.7% higher than the same period previous year. The Westeel division delivered backlog of $35.6 million, 20.2% higher consecutively and 21.3% below fourth quarter of 2013. The Vicwest Building Product (BP) division delivered a backlog of $42.1 million, 13.9% lower consecutively and 35.2% higher than the same period previous year.
Fourth quarter of 2014 Adjusted EBITDA margin was 8.9% or 730 basis points higher than fourth quarter of 2013. Recall that fourth quarter of 2013 results reflected weaker operating margins stemming from temporary Westeel order delays, higher steel costs, and weak Canadian non-residential construction activity. We anticipate fourth quarter of 2014 margins indicate a normalized operating profile, hike in sales volumes in operating divisions, price adjustments, and upgraded operating efficiencies.
Decline in grain prices, slower-than-anticipated recovery in residential and commercial construction are major risks to be considered while trading. We rate Vicwest shares “Tender” while risk ratings remain “High”.