Trio Merger Corp. (NASDAQ:TRIO; OTCBB:TMRGW)(“Trio”)
today announced preliminary, unaudited financial results for the
three months ended March 31, 2013 (“Q1 2013”) for its intended
merger target, privately-held SAExploration Holdings, Inc.
(“SAE” or the “Company”).
Trio noted that these results are preliminary, and remain
subject to customary review and closing processes that could cause
final results to differ materially from those presented in this
release.
PRELIMINARY Q1 2013
RESULTS
Eric Rosenfeld, Chairman and CEO of Trio, commented, “We believe
SAE’s performance continues to validate our investment thesis and
represents everything we searched for in a merger opportunity. As
evidenced by these preliminary results, we believe SAE possesses an
attractive growth profile and a compelling valuation relative to
its industry peers. It is also noteworthy that SAE continues to
make the investments necessary to evolve its business model and
fortify its industry presence. We believe SAE’s business is
supported by numerous sustainable competitive advantages, including
a seasoned management team, geographic diversity, expertise in
logistically-complex regions, long-standing relationships with its
customers, and a strong QHSE track record. Importantly, 100% of
SAE’s revenue is earned on a contracted basis, which eliminates the
risks associated with maintaining unfunded or partially funded
speculative libraries.”
Q1 2013 Highlights
Revenues for Q1 2013 totaled $84.8 million, a 37.2% increase
from $61.8 million in the comparable prior year period. Higher
revenue growth was primarily due to continued success in the
Canadian market and increased project activity in Colombia and
Papua New Guinea.
Gross profit was $18.7 million, or 22.1% of revenues, compared
to gross profit of $14.9 million, or 24.1% of revenue, in Q1 2012.
The decline in gross margin was due to higher depreciation compared
to prior quarter.
General and administrative (“G&A”) expenses were $7.4
million, or 8.8% of revenues, compared to $5.4 million, or 8.8% of
revenues in Q1 2012. The increase in G&A was due to the need to
hire additional personnel able to support SAE’s expanding worldwide
operations.
Operating income was $10.9 million, an increase of 16.0% from
$9.4 million in Q1 2012. This was due primarily to the increased
revenue growth in Q1 2013.
Net income decreased from $7.8 million to $4.9 million or 37.2%
because of significantly higher depreciation and interest
expense.
Cash and cash equivalents totaled $21.4 million, an increase of
$5.7 million, or 36.3%, from December 31, 2012.
Modified EBITDA (as defined) was $14.1 million, a 14.3% increase
from Modified EBITDA of $12.3 million in Q1 2012.
RECORD DATE FOR SPECIAL MEETING OF
STOCKHOLDERS
Trio also announced that it has established May 31, 2013 as the
record date for the Special Meeting of Stockholders (“Special
Meeting”) to approve, among other things, the proposed merger
between Trio and SAE. Stockholders of record at the close of
business on that date will be entitled to receive notice of the
Special Meeting and to vote the shares of common stock of Trio
owned by them at the Special Meeting. The Special Meeting is
expected to be held in June 2013. This press release is not a proxy
statement or a solicitation of proxies from the holders of common
stock of Trio.
Stockholders who hold their shares in “street name,” which means
the shares are held of record by a broker, bank or nominee, should
contact their broker, bank or nominee to ensure that votes related
to the shares beneficially owned by such stockholders are properly
counted. In this regard, holders must provide the broker, bank or
nominee with instructions on how to vote the shares or, if such a
stockholder wishes to attend the meeting and vote in person, obtain
a proxy from the broker, bank or nominee.
Additionally, in advance of the record date, Trio advises
holders of its securities to move these securities into accounts
which do not permit the lending of securities, so called cash
accounts or segregated accounts, and out of accounts that permit
the lending of securities, such as margin accounts. These steps are
designed to ensure that votes related to common stock beneficially
owned by stockholders are properly counted. Beneficial owners of
common stock that have been lent out (either with or without the
beneficial owners’ knowledge) are not permitted to vote those
shares.
Information on Seeking Conversion Rights
As indicated in the preliminary proxy statement/information
statement, pursuant to Trio’s amended and restated certificate of
incorporation, a record holder of shares of Trio’s common stock
issued in its initial public offering may, if the stockholder
affirmatively votes on the business combination, demand that Trio
convert such shares into cash. Demand may be made by checking the
box on the proxy card provided for that purpose and returning the
proxy card in accordance with the instructions provided. A holder
exercising his conversion rights must tender his stock certificate
to Trio’s transfer agent prior to the time that a vote is taken
with respect to the proposed merger. A record holder of Trio common
stock may tender his shares by either delivering the stock
certificate to Trio’s transfer agent or by delivering the shares
electronically using Depository Trust Company’s DWAC (Deposit
Withdrawal at Custodian) System. Questions concerning the procedure
to have shares converted should be directed to Trio’s transfer
agent, Continental Stock Transfer & Trust Company, 17 Battery
Place, New York, New York 10004, Attn: Mark Zimkind
(mzimkind@continentalstock.com).
About SAExploration Holdings,
Inc.
SAE is a holding company of various subsidiaries which
cumulatively form a geographically diversified seismic data
acquisition company. SAE provides a full range of 2D, 3D and 4D
seismic data services to its clients, including surveying, program
design, logistical support, data acquisition, processing, camp
services, catering, environmental assessment and community
relations. The Company services its multinational client base from
offices in Canada, Alaska, Peru, Columbia, Bolivia, Papua New
Guinea, New Zealand and Brazil. SAE’s website is
www.saexploration.com.
About Trio Merger Corp.
Trio was incorporated in Delaware on February 2, 2011 as a
blank check company whose objective is to effect a merger,
capital stock exchange, asset acquisition or other similar
business combination with an operating business. Trio’s initial
public offering was declared effective June 20, 2011 and was
consummated on June 24, 2011, receiving net proceeds of $57.43
million through the sale of 6.0 million units at $10.00 per unit
and $3.55 million from the sale of private placement warrants to
the initial stockholders and the underwriters. On June 24, 2011,
the underwriters exercised their over-allotment option and on June
27, 2011, Trio received net proceeds of $8.69 million from the sale
of 900,000 units. Each unit was comprised of one share of Trio
common stock and one warrant with an exercise price of $7.50. As of
March 31, 2013, Trio held approximately $61,676,800 in a trust
account maintained by an independent trustee, which will be
released upon the consummation of the business combination.
The closing of the transaction is subject to, among other
matters, approval by the stockholders of Trio and holders of
496,032 or more of the shares of Trio’s Common Stock issued in
Trio’s initial public offering of securities not exercising their
rights to convert their shares into a pro rata share of the trust
account in accordance with Trio’s amended and restated certificate
of incorporation.
Trio and its directors and executive officers may be deemed to
be participants in the solicitation of proxies for the special
meeting of Trio stockholders to be held to approve the merger.
Stockholders are advised to read Trio’s preliminary proxy
statement/information statement and when available, Trio’s
definitive proxy statement/information statement in connection with
the solicitation of proxies for the special meeting because these
statements will contain important information. The definitive proxy
statement/information statement will be mailed to stockholders as
of May 31, 2013. Stockholders will also be able to obtain a copy of
the definitive proxy statement/information statement, when
available, without charge, by directing a request to: Trio Merger
Corp., 777 Third Avenue, 37th Floor, New York, NY 10017. The
preliminary proxy statement/information statement and definitive
proxy statement/information statement, once available, can also be
obtained, without charge, at the Securities and Exchange
Commission's internet site (http://www.sec.gov).
SAE’s financial information and data contained herein is
unaudited. Furthermore, it includes certain financial information,
such as EBITDA (earnings before interest, taxes, depreciation and
amortization), not derived in accordance with generally accepted
accounting principles (“GAAP”). EBITDA is a key metric SAE uses in
evaluating its financial performance. EBITDA is considered a
non-GAAP financial measure as defined by Regulation G
promulgated by the SEC under the Securities Act of 1933, as
amended. SAE considers EBITDA important in evaluating its financial
performance on a consistent basis across various periods. Due to
the significance of non-cash and non-recurring items, EBITDA
enables SAE’s Board of Directors and management to monitor and
evaluate the business on a consistent basis. SAE uses EBITDA as a
primary measure, among others, to analyze and evaluate financial
and strategic planning decisions regarding future operating
investments and potential acquisitions. The presentation of EBITDA
should not be construed as an inference that SAE’s future results
will be unaffected by unusual or non-recurring items or by non-cash
items, such as non-cash compensation. EBITDA should be considered
in addition to, rather than as a substitute for, pre-tax income,
net income and cash flows from operating activities.
This press release includes certain forward-looking statements,
including statements regarding future financial performance, future
growth and future acquisitions. These statements are based on SAE’s
and Trio’s managements’ current expectations or beliefs and are
subject to uncertainty and changes in circumstances. Actual results
may vary materially from those expressed or implied by the
statements herein due to changes in economic, business, competitive
and/or regulatory factors, and other risks and uncertainties
affecting the operation of SAE’s business. These risks,
uncertainties and contingencies include: fluctuations in the levels
of exploration and development activity in the oil and gas
industry; business conditions; weather and natural disasters;
changing interpretations of GAAP; outcomes of government reviews;
inquiries and investigations and related litigation; continued
compliance with government regulations; legislation or regulatory
environments; requirements or changes adversely affecting the
business in which SAE is engaged; fluctuations in customer demand;
management of rapid growth; intensity of competition from other
providers of seismic acquisition services; general economic
conditions; geopolitical events and regulatory changes; the
possibility that the merger does not close, including due to the
failure to receive required security holder approvals or the
failure of other closing conditions; and other factors set forth in
Trio’s filings with the Securities and Exchange Commission. The
information set forth herein should be read in light of such risks.
Further, investors should keep in mind that certain of SAE’s
financial results included in the preliminary proxy
statement/information statement are unaudited and do not conform to
SEC Regulation S-X and as a result such information may fluctuate
materially depending on many factors. Accordingly, SAE’s financial
results in any particular period may not be indicative of future
results. Neither Trio nor SAE is under any obligation to, and
expressly disclaims any obligation to, update or alter its
forward-looking statements, whether as a result of new information,
future events, changes in assumptions or otherwise.
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