DAL Dalmac Energy Inc

TSX Venture: "DAL"

EDMONTON, March 26, 2014 /CNW/ - John Babic, President and CEO of Dalmac Energy Inc. ("Dalmac") (TSX Venture "DAL") is pleased to announce third quarter financial results for the three month and nine month periods ended January 31, 2014.

Revenue for Q3'14 was $10.3M which was about $1.3M less than revenue reported in Q3'13. In the current quarter Dalmac addressed the streamlining of shift schedules and other procedure standardizations which helped reduce non billable and overtime costs that had adversely affected previous profit margins. Gross margin increased 3% to 27 percent and EBITDA was also up about 27% to $1.8M. Net income before taxes was similarly up about 27% to $747K and after tax net income came in about $7K short of last year to close out at $578,000. Overall, results in Q3'14 were more in line with the Company's historical averages and continued the improvement in margins and profitability seen in the last few quarters.

Western Alberta's energy sector witnessed a return to robust drilling and completions in late fall and continued until mid-December when it tapered off for the Christmas holidays. The drilling and completions season did not bounce back to pre mid-December levels until the third week of January. This was an unexpected delay which would have otherwise pushed Dalmac's revenues well ahead of last year's quarter and is borne out by the early reporting for February which is looking very strong.

Expenses for the current quarter have decreased 5.5% to $2.0M and this trend is expected to continue in the future. In January, Dalmac began implementing an electronic dispatching and invoicing system which is expected to significantly reduce operating costs and expenses. The full benefit of this computerization initiative will be felt over the course of the calendar year but savings are expected to be significant. It is management's expectations that this will help boost gross profit margins back into the 30's and drive down both operating costs and expenses. This program is expected to be fully implemented by the fall of 2014.

Outlook
Dalmac's focus for the remainder of 2014 will be on productivity improvements such as streamlined administration, equipment optimization, and the elimination of excess capacity. From an industry perspective, the current prevailing global economic conditions along with the never ending saga of the pipeline capacities have muddied the waters for Canadian oil and gas exports. However, whatever vagueness there may be about the growth of the Canadian economy in 2014 is mitigated somewhat by a weaker Canadian dollar which serves as a positive indicator for increasing energy exports. Dalmac is confident that our experienced management team will deliver on its strategic actions to attract and retain skilled professional drivers and mechanics along with optimizing on the utilization of our service equipment. This combined with the company's focus on productivity enhancements will help lower operating costs and position Dalmac for profitable growth in 2014.

Conference call

A conference call to discuss the results will be held Wednesday, March 26, 2014, at 1:30 pm EST/11:30 am MST.

To participate in the conference call, please dial 416-644-3415 local in Toronto or toll-free 1-877-974-0445 and request the Dalmac Energy conference.

Statements throughout this report that are not historical facts may be considered 'forward looking statements'.  Such statements are based on current expectations that involve risks and uncertainties, which could cause actual results to differ from those anticipated.  Important factors that can cause anticipated outcomes to differ materially from actual outcomes include the impact of general economic conditions, industry conditions, competition from other industry participants, volatility of petroleum prices, the ability to attract and retain qualified personnel, changes in laws or regulation, currency fluctuations, continued ability to access capital from available facilities and environmental risks.  References to "Dalmac', the "Corporation", "Company", "us", "we", and "our" mean Dalamc Energy Inc. and its subsidiary Dalmac Oilfield Services Inc.  The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.  We seek safe harbor.

SOURCE Dalmac Energy Inc.