CALGARY, April 5, 2013 /CNW/ - Winalta
Inc. ("Winalta" or the "Company") announces results for the
three months and year ended December 31,
2012. Revenue of $19.8 million
and EBITDA of $9.2 million, showed
decreases of $1.8 million and
$1.6 million, respectively, to
revenue of $21.6 million and EBITDA
of $10.8 million for the comparative
12 month period 2011. EBITDA margins remained strong at 47%, while
the 8% decrease in revenue was due to decreases in utilization and
third party revenue as a result of decreased drilling activity in
the industry as a whole.
Cash flow from operating activities of $9.8 million in 2012 compares favourably to
$9.6 million in 2011. The Company
added $5.3 million in new rental
assets in the year (22 Wellsites and 14 Dedicated Geo-labs units)
representing a 15% increase in fleet size over 2011.
Adjusting for tax loss recognition, 2012 net income of
$3.2 million or $0.08 per share showed a $0.7 million decrease from $3.9 million or $0.10 per share in 2011.
Year End Highlights
- 2012 cash flow from operating activities increased $0.2 million to $9.8
million
- Net earnings of $3.6 million or
$0.09 per share fully diluted
- EBITDA margin of 47% compared to EBITDA margin of 50% in
2011
Selected Financial Information
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Years ended December 31 (all
numbers in thousands unless per share) |
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2012 |
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2011 |
Revenue |
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19,833 |
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21,611 |
Earnings before income taxes |
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3,147 |
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3,935 |
Net earnings (loss) from continuing
operations |
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3,620 |
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7,237 |
Earnings (loss) per share - continuing
operations |
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0.09 |
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0.18 |
Net loss from discontinued operations |
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- |
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- |
Loss per share - discontinued operations |
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- |
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- |
EBITDA (1) |
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9,229 |
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10,835 |
EBITDA per share |
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0.23 |
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0.27 |
Total assets |
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41,582 |
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40,910 |
Total liabilities |
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17,191 |
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18,635 |
Dividends paid |
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1,603 |
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- |
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Revenue
Winalta's revenue decreased by $1.8
million, a decrease of 8% for 2012 (the "Period") compared
to 2011 (the "Comparative Period"). This 8% decrease in revenue
year over year is attributable to decreases in utilization and
third party revenue.
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Revenue Drivers 2012 versus
2011 |
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% Increase |
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2012 |
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2011 |
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Fleet size (# of units) |
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13% |
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324 |
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288 |
Utilization (annual) |
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(32%) |
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48% |
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71% |
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Fleet Expansion
Over the past 12 months, the Company has added 22 Wellsite units
and 14 Dedicated Geo-Labs. The Company continues to expand its
fleet, maintaining a low average age of equipment which enables it
to keep its status as a premium provider of surface rental
equipment.
General and Administrative
For the Period, administrative costs were $4.0 million, down from $4.2 million, for the Comparative Period.
The Company has continued to focus on cost controls and reductions
occurred in salaries and benefits of $292
thousand; stock based compensation of $118 thousand; professional fees of $101 thousand; and, office rent expense of
$111 thousand. These reductions
were offset by an increase of $50
thousand in marketing; additional meals and entertainment
expenses of $31 thousand;
$22 thousand in administrative
expenses; $140 thousand relating to
the Sylvan Lake subsidiary company
and a one time item cost of $176
thousand relating to the land project in Stony Plain, Alberta.
Depreciation and Amortization
The increase in depreciation and amortization expense of
$227 thousand in the Period reflects
the acquisition of $5.7 million of
equipment in the trailing 12 months.
Finance Costs
The decrease in finance costs of $1.0
million in the Period was the result of the Company
replacing a bridge financing and renegotiating its financing
facility with its primary lender to more favourable terms.
The current rate for the operating loan facility is prime plus
1.25% per annum and the revolving term loan facility is prime plus
1.75% per annum.
FOURTH QUARTER RESULTS
REVENUE
Revenues were down by $1.7 million
for the three months ending December 31,
2012 from the comparative quarter ended December 31, 2011. The decrease in revenues
can be attributed to a 36% decrease in utilization of Company owned
assets along with a comparable decrease in third party related
revenues and a reduction in third party camps that the Company
marketed during the winter drilling season of 2011. The
decrease in third party related revenue is expected to continue as
the company Winalta was sub-renting equipment from has established
it own sales team to market their equipment directly.
Administrative Costs
Expenses increased by $129 thousand
for the three months ending December 31,
2012 over the same period in 2011. The Company
saw increases in the following areas: $196
thousand in corporate expenses as there was a recovery that
occurred in 2011 realized from the Company's restructuring plan;
the recovery of professional fees from restructuring of
$167 thousand; $16 thousand for the cancelation of a service
contract and $18 thousand for the
allowance of bad debt. These increases were offset by a
decrease of $267 thousand in profit
sharing.
Outlook
The fourth quarter of 2012 resulted in some challenges for the
Company due to adverse weather conditions and volatile market
conditions relating to gas and oil price fluctuations which
impacted drilling activities. Demand for our services
improved over the third quarter 2012 utilization rate however,
anticipated activity in the fourth quarter did not materialize to
the same degree as expected as customers continued to control
spending. Management continues to monitor these factors as
this would impact quarterly results as changing conditions directly
impact drilling activities and Company asset utilizations.
The Company continues to be cautiously optimistic in regards to the
2013/2014 winter drilling season as the Company has seen an
increase in equipment utilization towards the end of 2012 which has
continued into the start of 2013. This, combined with the
continued Western Canadian economic activity in both oil and gas
exploration, should continue to provide opportunities for the
Company. The Company believes the economy will continue at
the same pace for the foreseeable future, as further supported by
Petroleum Services Association of Canada forecast for 2013, which should
translate to improved utilization rates for Winalta's
equipment. In conjunction with the expected demand, the
Company is continuing to expand its fleet of oilfield Wellsite
units and Dedicated Geo-Labs units in order to meet anticipated
demand and to maintain a modern fleet of units. The additions
to the fleet will allow the Company to continue to support its
customer base in meeting their needs as well as expanding to new
customers. The Company continues to explore other
complementary product lines, such as the Integrated Wellsite
Systems to support SAGD drilling programs, which the Company
believes will generate additional revenues without the seasonal
impacts associated with the traditional gas and oil exploration
activities.
Winalta Oilfield Rentals, specializes in innovative and
high-quality modular buildings for the Western Canadian Oil and Gas
Industry. Winalta's rental fleet is comprised of single-unit
Wellsites, Integrated Wellsite Systems (IWS), Dedicated Geo Labs,
and Drill Camps. The Company also provides complementary services
which include installation, dismantling, and repair and maintenance
of the modular structures in its fleet.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward-looking information
Certain information set forth in this press release, including
management's assessment of the potential for increased cash flows,
continued growth of the Company's rental fleet, demand for the
Company's rental units and the Company's expectation regarding the
status of the economy and its impact on the Company, may constitute
forward-looking statements. By their nature, forward-looking
statements involve material assumptions and are subject to numerous
risks and uncertainties, including with respect to market and
economic conditions and their impact on the Company's business,
some of which, are beyond the Company's control. Readers are
cautioned not to place undue reliance on the forward-looking
statements as the assumptions used in the preparation of such
information, although considered reasonable at the time of
preparation, may prove to be imprecise and actual results,
performance or outcomes could materially differ from those
expressed or implied in such forward-looking statements and
accordingly, no assurance can be given that any of the events
anticipated by forward looking statements will transpire or occur,
or if any of them do so, what benefit Winalta will derive
therefrom. The Company does not assume the obligation to revise or
update this forward-looking information after the date of this
release or to revise such information to reflect the occurrence of
future unanticipated events, except as may be required under
applicable securities laws.
SOURCE Winalta Inc.