CALGARY, ALBERTA -- (Marketwired) -- 08/08/14 -- CORDY OILFIELD SERVICES INC. (the "Corporation" or "Cordy") (TSX VENTURE: CKK) released today its second quarter results for the period ending June 30, 2014.
For the period ended June 30, 2014
Cordy's consolidated revenues decreased by $5.7 million, or 29 percent, to $13.8 million as compared to consolidated revenues of $19.5 million in the period ended June 30, 2013. The period over period decrease in consolidated revenue was largely attributable to declining revenues experienced in the Heavy Construction segment and Environmental Services segment as compared to the same period in 2013. The Manufacturing and Supply segment experienced slightly lower revenue in the second quarter of 2014 as compared to the same period in 2013.
Effective January 1, 2014, Cordy amalgamated its Pipeline and Facilities segment into its Heavy Construction segment. As a result, Cordy now operates in three segments, being Heavy Construction, Environmental Services and Manufacturing and Supply. The 2013 comparative segmented information for the Heavy Construction segment has been restated to include the results previously presented as Pipeline and Facilities. Results for Cordy by segment are as follows:
-- Heavy Construction segment revenues decreased 27 percent and net
earnings decreased 30 percent in the second quarter of 2014 versus 2013.
Operations in the oil sands region, pipeline construction and the mining
sector were slower due to reduced customer demand and customer delays.
In 2013 the Alberta flood clean-up contributed to revenue in the second
quarter to a limited extent.
-- Environmental Services segment revenues decreased 39 percent and net
earnings declined 183 percent in the second quarter of 2014 versus 2013
due to reduced activity in southern Alberta and loss of customers. In
2013 the Alberta flood contributed to revenue.
-- Manufacturing and Supply segment revenues decreased 5 percent and net
loss decreased 17 percent in the second quarter of 2014 versus 2013.
For the three month period ended June 30, 2014, the Corporation had an EBITDAS loss of $3.1 million as compared to a loss of $1.9 million in the period ended June 30, 2013, which amounts to a decrease of $1.2 million or 63 percent. By segment, the Corporation's EBITDAS were as follows:
-- The Heavy Construction segment EBITDAS declined by $0.3 million to a
loss of $1.2 million, primarily as a result of decreased customer demand
and delayed projects in the mining sector and oil sands region and
increased fixed costs.
-- The Environmental Services segment EBITDAS declined by $1.2 million to a
loss of $0.4 million in 2014 versus 2013, due to reduced activity in
southern Alberta and loss of customers.
-- The Manufacturing and Supply segment EBITDAS was consistent year over
year at $0.6 million.
The Corporation reported a net loss of $3.4 million for the three months ended June 30, 2014, an increased loss of $0.7 million from net loss of $2.7 million for the three months ended June 30, 2013.
The periods ending June 30, Three months Six months
$ $
($ millions) 2014 2013 change 2014 2013 change
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Revenue
Heavy Construction 7.8 10.7 (2.9) 24.8 32.2 (7.4)
Environmental Services 4.2 6.9 (2.7) 13.3 20.2 (6.9)
Manufacturing and Supply 1.8 1.9 (0.1) 5.6 5.4 0.2
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13.8 19.5 (5.7) 43.7 57.8 (14.1)
EBITDAS
Heavy Construction (1.2) (0.9) (0.3) (0.6) 2.5 (3.1)
Environmental Services (0.4) 0.8 (1.2) 0.7 4.3 (3.6)
Manufacturing and Supply (0.6) (0.6) - (0.1) (0.7) 0.6
Corporate (0.9) (1.2) 0.3 (2.3) (2.1) (0.2)
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(3.1) (1.9) (1.2) (2.3) 4.0 (6.3)
Net loss (3.4) (2.7) (0.7) (4.1) - (4.1)
Cash flow generated from operating
activities 3.5 5.3 (1.8) 0.1 4.2 (4.1)
Earnings per share (0.04) (0.03) (0.01) (0.05) 0.00 (0.05)
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OUTLOOK
At the outset of the current fiscal year, it was anticipated that the financial and operating performance would be weaker than the prior year due to customer project delays. This has proven to be true, additionally; weather-related issues in the second quarter of 2014 have resulted in a further lack of demand for services in all segments of the business. Margins have come under pressure. This is primarily due to increases in our equipment lease costs which have been further impacted by decreased activity levels.
The prospects for the oil sands region are still anticipated to be the primary driver of potential growth for our Heavy Construction and Environmental Services segments. The growth will occur once customers begin to fully ramp-up their projects. With respect to Cordy's Manufacturing and Supply segment, we continue to anticipate focussing sales of our PDC drill bits in both North American and select international locations.
Complete copies of Cordy's unaudited interim condensed consolidated financial statements for the quarter ended June 30, 2014 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
403-237-6278 (FAX)
For investor relations information:
Cordy Oilfield Services Inc.
David Boomer, CA, CPA , Chief Financial Officer
403-266-2067
403-237-6278 (FAX)
dave.boomer@cordy.ca
www.cordy.ca
