CALGARY, CANADA -- (Marketwired) -- 11/28/13 -- CORDY OILFIELD SERVICES INC. (the "Corporation" or "Cordy") (TSX VENTURE: CKK) released today its third quarter results for the period ending September 30, 2013.
Throughout 2013 and the current quarter, Cordy continues to experience revenue growth from its two largest segments, Heavy Construction and Environmental Services.
THREE MONTHS ENDING SEPTEMBER 30, 2013
The Corporation's revenues from operations for the three months ended September 30, 2013 decreased $2.0 million to $32.5 million, down from $34.5 million in the same period in 2012. The Corporation experienced revenue growth in Heavy Construction, Environmental Services, and Manufacturing and Supply segments from increased demand from the 2013 Alberta flood, continued strength in the Cold Lake Oil Sands Region ("Oil Sands Region"), and new customers in the Manufacturing and Supply segment. The decrease in revenue is as a result of management streamlining its Pipeline and Facilities segment from two locations to one and a drop in pipeline construction in 2013 versus 2012.
Earnings before interest, taxes, depreciation, amortization and impairment, and share-based payments ("EBITDAS") from continuing operations for the three months ended September 30, 2013 was $3.1 million compared to $4.2 million for the three months ended September 30, 2012, a decrease of $1.1 million. The decrease was primarily attributable to the decrease in the Pipeline and Facilities segment, however, Environmental Services EBITDAS decreased $0.3 million as a result of the increased cost of renting equipment as opposed to carrying owned equipment. Our rental arrangements allow for flexibility of service but impacted expenses directly in the period. There was also one-time severance costs of $0.6 million that contributed to the decrease. Heavy Construction partially offset the decrease in EBITDAS due to continued strength in the Oil Sands Region.
The net earnings from continuing operations of $1.3 million or $0.01 per share for the three months ended September 30, 2013 remains unchanged from the three months ended September 30, 2012.
NINE MONTHS ENDING SEPTEMBER 30, 2013
The Corporation's revenues from operations for the nine months ended September 30, 2013 were $90.2 million, a $1.4 million increase from the comparative 2012 period. The Corporation experienced growth primarily in the Oil Sands Region in the first quarter of 2013 as well as an increase in the second quarter due to the 2013 Alberta flood which increased demand for our equipment and services as part of the flood clean-up. Cordy's Manufacturing and Supply segment experienced an increase in revenue in the third quarter due to new customers for PDC drill bits used in horizontal drilling. Overall, increases in the Heavy Construction and Environmental Services segments have continued to result in an increase in revenue year to date.
Cordy had EBITDAS of $7.1 million for the nine months ended September 30, 2013 compared to $8.0 million for the nine months ended September 30, 2012, a decrease of $0.9 million. The decrease was attributable to one-time severance costs of $0.6 million in the third quarter and $0.3 million of professional and legal fees incurred in the second quarter of 2013. For the nine month period ended September 30 2013, Cordy experienced a decline in EBITDAS primarily due to our Pipeline and Facilities segment as the segment has switched its focus to pipeline spills as opposed to pipeline construction. For the nine month period ended September 30 2013, the Environmental Services and Heavy Construction segments increased their EBITDAS due to increased activity in the Oil Sands Region and the Alberta flood clean-up which offset the decline in the Pipeline and Facilities segment.
For the nine months ended September 30, 2013, Cordy had net earnings from continuing operations of $1.3 million, a decrease of $0.2 million from the nine months ended September 30, 2012 earnings of $1.5 million.
For the quarters ended
September 30,
($ millions except share price Change Q3 YTD Q3 YTD Change
and per share amounts) Q3 2013 Q3 2012 ($) 2013 2012 ($)
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FINANCIAL RESULTS
Revenue 32.5 34.5 (2.0) 90.2 88.8 1.4
EBITDAS1 3.1 4.2 (1.1) 7.1 8.0 (0.9)
Net earnings (loss) and total
comprehensive income (loss)
from all operations 1.3 1.3 - 1.3 1.5 (0.2)
Cash flow s generated from
(used in) operating
activities from all
operations (2.2) 0.2 (2.4) 2.0 5.7 (3.7)
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SHARE INFORMATION
Earnings per share from
continuing operations ($) 0.01 (0.01) 0.01 0.02 (0.01)
Earnings per share from all
operations ($) 0.01 (0.01) 0.01 0.02 (0.01)
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1 Earnings before interest, taxes, depreciation, amortization, impairment
and share-based payments (see reader advisory).
For the quarters ended
September 30,
($ millions except share
price and per share Change Q3 YTD Q3 YTD Change
amounts) Q3 2013 Q3 2012 ($) 2013 2012 ($)
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SEGMENT RESULTS
Revenue
Heavy Construction 16.2 14.7 1.5 39.6 38.7 0.9
Environmental Services 8.2 7.6 0.6 28.4 19.9 8.5
Manufacturing and Supply 3.9 3.4 0.5 9.3 10.8 (1.5)
Pipeline and Facilities 4.2 8.8 (4.6) 12.9 19.4 (6.5)
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Total 32.5 34.5 (2.0) 90.2 88.8 1.4
EBITDAS(1)
Heavy Construction 3.1 1.7 1.4 5.9 2.5 3.4
Environmental Services 1.0 1.3 (0.3) 5.3 3.4 1.9
Manufacturing and Supply 0.2 0.1 0.1 (0.5) 1.0 (1.5)
Pipeline and Facilities 0.1 1.9 (1.8) (0.3) 3.3 (3.6)
Corporate (1.3) (0.8) (0.5) (3.3) (2.2) (1.1)
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Total 3.1 4.2 (1.1) 7.1 8.0 (0.9)
(1) Earnings before interest, taxes, depreciation, amortization, impairment and share-based payments (see reader advisory).
OUTLOOK
Cordy has diverse business units within four segments. Historically these business segments have had stronger first and fourth quarters. The Corporation is dependent, to a degree, on the overall health of western Canada's oil, natural gas, and mining sectors. For the balance of 2013 and into the first quarter of 2014, the prospects for the Oil Sands Region are expected to be the primary driver for our Heavy Construction and Environmental Services segments. Our Pipeline and Facilities segment is expected to slow down over the balance of 2013 and into the first quarter of 2014. In our Manufacturing and Supply segment, the objective is to increase sales of PDC drill bits used in horizontal drilling. There is no assurance that the increased demand for PDC drill bits experienced in the third quarter of 2013 will be sustainable over the balance of 2013 and into the first quarter of 2014. Management continues to seek opportunities to expand or realign Cordy's operations in sectors where its business segments operate and to refinance the business to support the Corporation.
SUBSEQUENT EVENT
Cordy has obtained a $6 million secured loan on November 27, 2013. The Loan will be due and payable on the six month anniversary of the closing date (the "Maturity Date") and will bear interest at the rate of 14% per annum, calculated daily. At Cordy's option, the term of the Loan may be extended for an additional six months upon the payment of a renewal fee of $300,000. There are certain affirmative and negative covenants which the Corporation is in compliance with as at November 27, 2013.
As partial consideration for the advance of the loan, the lender is to be issued a standby fee of 1,500,000 common shares of the Corporation (the "Standby Fee Shares").
The proceeds from the secured loan have been used to repay and eliminate amounts owed to Cordy's prior senior secured lender.
Complete copies of Cordy's reviewed unaudited interim condensed consolidated financial statements for the quarter ended September 30, 2013 and the associated Management's Discussion and Analysis are available on our website www.cordy.ca or on SEDAR at www.sedar.com.
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.
READER ADVISORY
Effective January 1, 2011, Cordy began reporting its financial results in accordance with International Financial Reporting Standards (IFRS). Prior-year's comparative amounts were changed to reflect results as if Cordy had always prepared its financial results using IFRS.
This News Release contains certain statements that constitute forward-looking statements. These statements relate to future events or the Corporation's future performance. All statements, other than statements of historical fact, that address activities, events or developments that the Corporation or a third party expects or anticipates will or may occur in the future, are forward-looking statements. These include the Corporation's future growth, results of operations, performance and business prospects and opportunities; prevailing economic conditions; commodity prices; sourcing, pricing and availability of raw materials, components and parts, equipment, suppliers, facilities and skilled personnel; dependence on major customers; uncertainties in weather and temperature affecting the duration of the service periods and the activities that can be completed; regional competition; and other factors, many of which are beyond the Corporation's control. These other factors include future prices of oil and natural gas and oil and natural gas industry activity, including the effect of changes in commodity prices on oil and natural gas exploration and development activity, the ability to complete strategic acquisitions and realize the anticipated benefits of any acquisitions that are completed, the Corporation's outlook regarding the competitive environment it operates in, and the assumptions underlying any of the foregoing. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", " should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the Corporation's control, including those discussed under "Risks and Uncertainties" and elsewhere in this News Release, that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this News Release should not be unduly relied upon. These statements speak only as of the date of this News Release. The Corporation does not intend, and does not assume any obligation, to update these forward- looking statements, whether as a result of new information, future events or otherwise, except as required under applicable securities laws. The forward-looking statements contained in this News Release are expressly qualified by this cautionary statement.
Cordy uses the measures Earnings Before Interest, Taxes, Depreciation, Amortization and Impairment and Share Based Compensation (EBITDAS) in this news release. This measure does not have any standardized meaning prescribed by International Financial Reporting Standards (IFRS). It is, therefore, considered to be non-IFRS term and may not be comparable to similar measures presented by other entities. Management of Cordy uses these non-IFRS measures to improve its ability to compare financial results among reporting periods and to enhance its understanding of operating performance, liquidity and ability to generate funds to finance operations. This non-IFRS measure is also provided to readers as additional information on Cordy's operating performance, liquidity and ability to generate funds to finance operations. EBITDAS is an approximate measure of the Cordy's pre-tax operating cash flow and is generally used to better measure performance and evaluate trends of individual assets. EBITDAS comprises earnings before deducting interest and other financial charges, income taxes, depreciation and amortization, net income attributable to non-controlling interests and preferred share dividends.
Contacts:
For general information:
Cordy Oilfield Services Inc.
David Mullen, Chairman & Chief Executive Officer
403-266-2067
403-266-2087 (FAX)
david.mullen@cordy.ca
For investor relations information:
Cordy Oilfield Services Inc.
David Boomer, CA, Chief Financial Officer
403-266-2067
403-266-2087 (FAX)
dave.boomer@cordy.ca
www.cordy.ca
