/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
CALGARY, Nov. 9, 2017 /CNW/ - Cathedral Energy
Services Ltd. (the "Company" or "Cathedral" / TSX: CET) announces
its consolidated financial results for the three and nine months
ended September 30, 2017 and
2016. Dollars in 000's except per share amounts.
This news release contains "forward-looking statements"
within the meaning of applicable Canadian securities laws.
For a full disclosure of forward-looking statements and the
risks to which they are subject, see "Forward-Looking Statements"
later in this news release.
FINANCIAL HIGHLIGHTS
Dollars in 000's except per share
amounts
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|
|
|
|
|
Three months ended
September 30
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Nine months ended
September 30
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|
|
2017
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2016
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2017
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2016
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Revenues
|
|
$
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36,015
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$
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19,489
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$
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108,693
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$
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52,857
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Adjusted gross margin
% (1)
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18%
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21%
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18%
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21%
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Adjusted EBITDAS
(1)
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$
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3,909
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$
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2,171
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$
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13,068
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$
|
2,009
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|
Diluted per
share
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|
$
|
0.08
|
$
|
0.06
|
$
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0.28
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$
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0.06
|
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As % of
revenues
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11%
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11%
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12%
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4%
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Funds from (used in)
continuing operations (1)
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$
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1,898
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$
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628
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$
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7,553
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$
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(1,004)
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|
Diluted per
share
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|
$
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0.04
|
$
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0.02
|
$
|
0.16
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$
|
(0.03)
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Gain on disposal of
foreign subsidiary
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|
$
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-
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$
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-
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$
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-
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$
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10,865
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Earnings (loss)
before income taxes
|
|
$
|
1,990
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$
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(2,058)
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$
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6,016
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$
|
371
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|
Basic and diluted per
share
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$
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0.04
|
$
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(0.06)
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$
|
0.13
|
$
|
0.01
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Net earnings
(loss)
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|
$
|
1,810
|
$
|
(2,126)
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$
|
4,577
|
$
|
641
|
|
Basic and diluted per
share
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|
$
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0.04
|
$
|
(0.06)
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$
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0.10
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$
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0.02
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Equipment additions -
cash basis
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$
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3,518
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$
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146
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$
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7,065
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$
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484
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Weighted average
shares outstanding
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|
|
|
|
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Basic
(000s)
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48,916
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36,295
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46,836
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36,295
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|
Diluted
(000s)
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|
49,035
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36,297
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46,947
|
36,295
|
|
|
|
|
|
|
|
|
|
|
September
30
|
December
31
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|
|
|
|
2017
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2016
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Working
capital
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|
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$
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29,618
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$
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39,324
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Total
assets
|
|
|
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$
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120,960
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$
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136,017
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Loans and borrowings
excluding current portion
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|
|
|
$
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53
|
$
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26,322
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Shareholders'
equity
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|
|
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$
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105,085
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$
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90,772
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(1) Refer to
"NON-GAAP MEASUREMENTS"
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2017 Q3 KEY TAKEAWAYS
Q3 revenues increased 85% from $19,489 in 2016 Q3 to $36,015 in 2017 Q3 and year-to-date revenues
increased 106% from $52,857 in 2016
to $108,693 in 2017.
Q3 adjusted EBITDAS increased from $2,171 in 2016 Q3 to $3,909 in 2017 Q3, an increase of 80%.
Year-to-date adjusted EBITDAS increased from $2,009 in 2016 to $13,068 in 2017, an increase of 550%.
Q3 net earnings increased from a loss of $(2,126) to net earnings of $1,810. Year-to-date net earnings increased
from $641 in 2016 to $4,577.
As a result of the improved profitability, the Company was able
to make equipment additions of $3,518
in 2017 Q3 (2016 - $146) and
$7,065 year-to-date (2016 -
$484).
OUTLOOK
Key business pressures for Cathedral in 2017 have been continued
pricing pressure, escalating input costs, increased equipment
repair and maintenance costs and reduced equipment availability due
to damages to and loss of equipment. The latter two issues
have been largely due to client drilling practices where
directional drilling equipment is getting pushed harder than in the
past. Despite these pressures we are pleased that we have
been able to remain firmly cash flow positive, generating positive
earnings, maintain a strong balance sheet and continue to commit
capital and resources to improve and grow our Company.
As foreshadowed in our 2017 Q2 news release Outlook,
we anticipated that our U.S. activity levels would likely remain
flat in Q3 compared to Q2 due to equipment capacity
constraints. From the end of Q2 to the end of Q3, the U.S.
rig count remained flat at an average 946 rigs (source: Baker
Hughes). However, our U.S. sequential quarter activity days
dropped 12% from Q2 to Q3. This was in part due to the mix in
work in the quarter but also due to certain clients using
specialized equipment that we were unable to provide. This
was isolated to certain clients and was in part a result of larger
oilfield services companies offering specialized equipment to
operators at attractive prices. We started implementing
strategies to deal with this in late Q3 and along with new
equipment being deployed starting in Q4, we expect our ability to
increase market share will improve into 2018. Anticipated
capital expenditures to be realized for 2017 are $13,400 plus any replacement of equipment lost
down hole in Q4. Our capital expenditure pacing has been more
backend loaded due to our confidence increasing throughout the year
and issues with timing on receiving equipment, components and
parts.
Offsetting lower sequential quarter activity day decreases in
the U.S. was that we were able to achieve modest price
increases. Our day rates increased 11% from Q2 to Q3. This
was a result of demonstrating our performance capabilities to
clients and also from improved recoveries on damaged
equipment. Our footage based pricing model in the U.S. also
provides higher margins than day-rate work, however, the mix of
footage versus day-rate pricing varies from quarter to quarter.
In the second half of 2017 we more aggressively further expand
our Drilling Engineering Services offering in the U.S. in an effort
to assist our clients with improving drilling practices and to
improve and better demonstrate our performance advantages.
In Canada, in 2017 Q3 we
experienced significantly improved activity levels following the
seasonal Q2 spring break-up in Canada where activity levels are low.
The Canadian industry continues to be challenging from a pricing
perspective and we have consciously avoided taking low margin or no
margin work. Margins in the U.S. are significantly better
resulting in a bias to deploying equipment in the U.S. rather than
Canada. Pricing in Canada
has shown improvement since 2017 Q1. Similar to the U.S.,
part of this improvement has also been our ability to recover costs
associated with damaged equipment from clients. We are
implementing a number of strategies to improve Canadian market
share as we continue to see Canada
as a key long-term market for the Company.
Looking forward, since the end of September the U.S. rig count
has declined 3% from 940 active rigs at the end of June to 909
active rigs at the end of October. However, over this same
period there has been a significant improvement in WTI compared to
the first half of 2017 with prices firming up over $50 USD/bbl. We believe that this
improvement in WTI pricing could result in the North American rig
count improving into 2018, however, our expectation is still for
flat to moderate industry growth. For 2017 Q4, activity days
available are also typically challenged by downtime resulting from
U.S. Thanksgiving and Christmas
related slowdowns in the U.S. and Canada. In Canada, Q4 activity levels may be further
impacted by a number of our Clients taking a short break in their
drilling programs in October.
In an overall flat to moderate growth drilling activity
environment, our growth will be dependent on gaining market
share. With our equipment capacity now increasing due to our
2017 capital expenditures, our focus on providing our clients
Better Performance Every Day and continued improvements in
operations, sales and technology - we are positive about our
prospects going into 2018.
2017 CAPITAL
PROGRAM
During the nine months ended September
30, 2017 the Company invested $7,065 (2016 - $484) in equipment. The following table
details the current period's net equipment additions:
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Nine months
ended
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September 30,
2017
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Equipment
additions:
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|
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Growth capital
(1)
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$
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3,062
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Maintenance
capital(1)
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2,999
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Replacement capital
(1)
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1,004
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Total cash
additions
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7,065
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Less: proceeds on
disposal of equipment (excluding capital lease
settlements)
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(6,417)
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Net equipment
additions (1)
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$
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648
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(1) See "NON-GAAP
MEASUREMENTS"
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Cathedral's 2017 capital budget ("capex") was originally
approved at $10,000 of net equipment
additions(1) ("net additions") for the year. The
$10,000 net capex plan for 2017 was
comprised of $4,900 of replacement
and maintenance capital and $5,100 of
growth capital. While the approved capex remains at
$10,000 for net additions, due to
delivery lead times some amounts will not be realized until after
year-end. The Company currently estimates its total capital
expenditures to the end of December 31,
2017 will be $13,400 plus a
portion of additional equipment lost-in-hole replacement occurring
in 2017 Q4. Based on proceeds from disposal of equipment to
the end of 2017 Q3, this will result in approximately $7,000 in net additions to December 31, 2017. On the originally
approved capital expenditures, the Company anticipates to having a
carry-over of $3,000 in capital
expenditures into 2018 Q1 and Q2.
The replacement and maintenance capital amounts noted above, is
expenditures to replace items that have been lost-in-hole over the
past two years and for equipment upgrades and replacements to
improve the capacity of Cathedral's existing
Measurement-While-Drilling ("MWD") and motor fleet. Over the past 2
years, Cathedral deferred replacement and maintenance capital
expenditures in the face of low equipment utilization and in order
to pay down debt. Subject to operating results and industry
outlook, equipment lost-in-hole will be replaced and funded
from the proceeds received. As such, Cathedral's total capex
in any year may exceed the budgeted net additions.
Cathedral intends to finance its 2017 capital budget from cash flow
from operations, proceeds from assets lost-in-hole, working capital
(cash) and credit facility availability.
RESULTS OF OPERATIONS – THREE MONTHS ENDED SEPTEMBER 30
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Revenues
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2 017
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2016
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Canada
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$
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9,187
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$
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5,843
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United
States
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26,828
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13,646
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Total
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$
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36,015
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$
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19,489
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Revenues 2017 Q3 revenues were
$36,015, which represented an
increase of $16,526 or 85% from 2016
Q3 revenues of $19,489. Both
Canada and U.S. operations had increases due to improvements in
overall drilling activity. In late 2016, due to a limited
supply of the Company's proprietary motors, the Company made the
decision to reduce the number of rental motors available in both
Canada and the U.S. in favor of
redirecting motors on jobs where both equipment and staff are
deployed and the cash flow contribution is typically higher.
As a consequence motor rental revenue in both Canada and the U.S. were less in 2017 Q3
compared to 2016 Q3.
Canadian revenues (excluding motor rental revenues) increased to
$7,978 in 2017 Q3 from $4,502 in 2016 Q3; a 77% increase. This
increase was the result of: i) a 66% increase in activity days to
1,120 in 2017 Q3 from 673 in 2016 Q3; and ii) a 6% increase in the
average day rate to $7,123 in 2017 Q3
from $6,689 in 2016 Q3.
Partially offsetting the revenue increase was a decrease in motor
rental revenue to $1,209 in 2017 Q3
from $1,341 in 2016 Q3.
The average active land rig count in Canada was up 68% in 2017 Q3 compared to 2016
Q3 (source: Baker Hughes). This is in line with the 66%
increase in activity days the Company had on a year-over-year
basis. The increases in day rates was primarily due to
increased tool damage and repair recoveries from customers.
U.S. revenues (excluding motor rental revenues) increased to
$26,630 in 2017 Q3 from $13,012 in 2016 Q3; a 105% increase. This
increase was the result of: i) a 74% increase in activity days to
2,233 in 2017 Q3 from 1,283 in 2016 Q3; and ii) a 18% increase in
the average day rate to $11,926 in
2017 Q3 from $10,141 in 2016 Q3 (when
converted to Canadian dollars). All U.S. operating areas saw
increases in activity days. U.S. motor rental revenues for
2017 Q3 were $198 compared to
$634 in 2016
Q3.
The average active land rig count for the U.S. was up 110% in
2017 Q3 compared to 2016 Q3 (source: Baker Hughes). The
Company experienced a 74% increase in activity days which resulted
in a decrease in market share over this period. The reason
for the decreased market share was that the Company was equipment
constrained during 2017 Q3 and was not able to add work for certain
clients. In addition, in 2017 Q3 the company was not able to
meet client specific equipment requirements on certain jobs
resulting in its activity levels on those jobs being
decreased. Day rates in USD increased to $9,520 USD in 2017 Q3 from $7,768 USD in 2016 Q3; a 23% increase. U.S.
day rates were up due to the mix of work performed by the U.S.
division, including providing footage drilling services to certain
clients, which can result in higher relative day rates.
Gross margin and adjusted gross
margin Gross margin for 2017 Q3 was 10%
compared to 5% in 2016 Q3. Adjusted gross margin (see
Non-GAAP Measurements) for 2017 Q3 was $6,516 or 18% compared to $4,151 or 21% for 2016 Q3. The adjusted
gross margin percentage decrease was primarily due to increases in
equipment repairs in order to bring the equipment fleet back to
operating condition and increased labour costs. Additionally,
there were higher equipment rentals to service the increased work
levels. These cost increases were offset by a reduction in
the fixed component of cost of sales which were 11% lower on a
percentage of revenue basis in 2017 Q3 compared to 2016 Q3.
The decrease in the fixed component of cost of sales as a
percentage of revenue was mostly attributable to increase in
revenues, however there were increases in costs largely related to
salaries and other labour related costs.
Depreciation allocated to cost of sales decreased to
$2,748 in 2017 Q3 from $3,077 in 2016 Q3. Depreciation included in
cost of sales as a percentage of revenue was 8% for 2017 Q3 and 16%
in 2016 Q3.
Selling, general and administrative expenses
("SG&A") SG&A expenses were
$4,602 in 2017 Q3; an increase of
$1,061 or 30% compared with
$3,541 in 2016 Q3. As a
percentage of revenue, SG&A was 13% in 2017 Q3 compared to 18%
in 2016 Q3. SG&A increased primarily due to U.S. state
sales taxes on intercompany equipment rentals. Cathedral's
Canadian entity owns all Cathedral's downhole drilling equipment
and rents it to the U.S. entity and is subject to state sales tax
on these amounts.
Gain on disposal of equipment During
2017 Q3, the Company had a gain on disposal of equipment of
$1,907 compared to $1,170 in 2016 Q3. These gains mainly
relate to equipment lost-in-hole. Proceeds from clients on
lost-in-hole equipment are based on amounts specified in service
agreements and, in most cases, these proceeds exceed the net book
value of the equipment and result in a gain. The timing of
lost-in-hole recoveries is not in the control of the Company and
therefore can fluctuate significantly from quarter-to-quarter.
Finance costs Finance costs, which
consist of interest expenses on operating loans, loans and
borrowings and bank charges, were $129 for 2017 Q3 versus $596 for 2016 Q3. The decrease in finance
costs relate to repayments of loans in 2017 Q1 and decrease in the
interest rates.
Foreign exchange The Company had a
foreign exchange gain of $1,059 in
2017 Q3 compared to a loss of $(159)
in 2016 Q3 due to the fluctuations of the Canadian dollar relative
to the U.S. dollar. The Company's foreign operations are
denominated in a currency other than the Canadian dollar and
therefore, upon consolidation, gains and losses due to fluctuations
in the foreign currency exchange rates are recorded as other
comprehensive income on the balance sheet as a component of
equity. However, gains and losses in the Canadian entity on
U.S. denominated intercompany balances continue to be recognized in
the statement of comprehensive income (loss). Included in the
2017 Q3 foreign currency gains are unrealized gain of $1,142 (2016 Q3 – loss of $(166)) related to intercompany balances.
Provision for settlement In 2016 Q2, the
Company entered into a Settlement Agreement and Release (the
"Settlement Agreement") in respect of two wage and hour lawsuits
(the "Collective Actions") that were filed against the Company's
wholly owned U.S. subsidiary ("INC"). The Collective Actions
alleged that INC employed or contracted MWD and Directional
Drilling ("DD") operators were entitled to recover unpaid or
incorrectly calculated overtime wages under the Fair Labor
Standards Act ("FLSA").
The Settlement Agreement resolved all claims from INC employed
and contracted MWD and DD operators. Under the terms of the
Settlement Agreement, the parties established an initial settlement
fund of up to $3,400 USD. The
final determination of the settlement fund amount was based on the
number of claimants that participated in the settlement at the end
of December 2016, which under the
terms of the Settlement Agreement is confidential. The settlement
fund payments will be paid quarterly by the Company over a
three-year period with the final payment due on or before September
2019. The quarterly payments may be accelerated in the event
Cathedral meets certain financial targets over the payment period
("accelerated FLSA settlement payments") and can be deferred if a
scheduled payment would put Cathedral in violation of its credit
facility covenants subject to not more than three payments being
deferred. Any FLSA settlement fund payments made by Cathedral
exceeding $200 USD are subject to the
approval of Cathedral's banking syndicate.
In 2017 Q1, the Company entered into a confidential settlement
agreement with one of its U.S. clients related to a down-hole
drilling incident, which impacted two of their wells in December
2013. The settlement is payable based on an initial payment
in 2017 Q1 and the remainder in quarterly installments concluding
in 2021.
During 2017 Q3, payments on both settlements of $249 (2016 - $570)
were made.
Income tax For 2017 Q3, the Company had
an income tax expense of $173
compared to recovery of $710 in 2016
Q3. Excluding adjustments to prior years' tax provisions, the
effective tax rate was 19% for 2017. Excluding the
non-cash gain on disposal of foreign subsidiary but including the
loss from discontinued operations, the effective tax rate was 31%
for 2016. Income tax expense is booked based upon expected
annualized effective rates.
Net loss from discontinued operations In
2016 Q4, the Company made the decision to sell its Flowback and
Production Testing ("F&PT") assets and focus its attention and
resources fully on the directional drilling business where it
believes it has a strong competitive advantage and better future
growth prospects. The proceeds from this sale were used to
pay down debt. As such, operating results for the F&PT
business have been included in the statements of comprehensive
income and statements of cash flows as discontinued
operations. For 2017 Q3, the net loss from discontinued
operations was $(7) compared to
$(778) net loss for 2016
Q3.
RESULTS OF OPERATIONS – NINE MONTHS ENDED SEPTEMBER 30
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|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
2017
|
|
2016
|
Canada
|
|
|
|
|
|
$
|
24,567
|
$
|
14,792
|
United
States
|
|
|
|
|
|
|
84,126
|
|
38,065
|
Total
|
|
|
|
|
|
$
|
108,693
|
$
|
52,857
|
Revenues 2017 revenues were $108,693, which represented an increase of
$55,836 or 106% from 2016 revenues of
$52,857. Both Canada and U.S.
operations had increases due to an improvement in overall drilling
activity. In late 2016, due to a limited supply of the
Company's proprietary motors, the Company made the decision to
reduce the number of rental motors available in both Canada and the U.S. in favor of redirecting
motors on jobs where both equipment and staff are deployed and the
cash flow contribution is typically higher. As a consequence
motor rental revenue in both Canada and the U.S. were less in 2017 compared
to 2016.
Canadian revenues (excluding motor rental revenues) increased to
$21,428 in 2017 from $9,655 in 2016; a 122% increase. This
increase was the result of: i) a 113% increase in activity days to
3,076 in 2017 from 1,445 in 2016; and ii) a 4% increase in the
average day rate to $6,966 in 2017
from $6,682 in 2016. Partially
offsetting the revenue increase was a decrease of in motor rental
revenue to $3,139 from 2016 at
$5,137.
The average active land rig count in Canada was up 87% in 2017 compared to 2016
(source: Baker Hughes). The increase in the Company's
activity days of 113% relative to the active rigs drilling was a
result of sales and marketing efforts and the Company demonstrating
performance on client jobs. The slight increases in day rates
was due to the mix of work performed.
U.S. revenues (excluding motor rental revenues) increased to
$83,451 in 2017 from $35,420 in 2016; a 136% increase. This
increase was the result of: i) a 126% increase in activity days to
7,329 in 2017 from 3,246 in 2016; and ii) a 4% increase in the
average day rate to $11,386 in 2017
from $10,912 in 2016 (when converted
to Canadian dollars). All U.S. operating areas saw increases
in activity days. U.S. motor rental revenues for 2017 were
$675 compared to $2,645 in 2016.
The average active land rig count for the U.S. was up 84% in
2017 compared to 2016 (source: Baker Hughes). The increase of
U.S. activity days of 126% relative to the active rigs drilling was
due to efforts of sales and marketing staff and performance on
client jobs, the Company was able to increase market share compared
to 2016. Day rates in USD increased to $8,707 USD in 2017 from $8,250 USD in 2016; a 6% increase. U.S. day
rates were up due to the mix of work performed by the U.S.
division, including providing footage drilling services to certain
clients, which can result in higher relative day rates.
Gross margin and adjusted gross margin Gross
margin for 2017 was 11% compared to 4% in 2016. Adjusted
gross margin (see Non-GAAP Measurements) for 2017 was $20,075 or 18% compared to $11,241 or 21% for 2016.
Adjusted gross margin percentage decreased due to increases in
field labour rates, equipment repairs and higher equipment rentals
on a percentage of revenue basis. These increases were offset
by a reduction in the fixed component of cost of sales which were
10% lower on a percentage of revenue basis in 2017 compared to
2016. The decrease in the fixed component of cost of sales as
a percentage of revenue was mostly attributable to increase in
revenues, however there were increases in costs largely related to
salaries and other labour related costs.
Depreciation allocated to cost of sales decreased to
$8,128 in 2017 from $9,285 in 2016. Depreciation included in
cost of sales as a percentage of revenue was 7% for 2017 and 18% in
2016.
Selling, general and administrative expenses
("SG&A") SG&A expenses were
$12,535 in 2017; an increase of
$1,207 or 11% compared with
$11,328 in 2016. As a
percentage of revenue, SG&A was 12% in 2017 compared to 21% in
2016. SG&A increased primarily due to increases in sales
commissions and U.S. sales tax charges on intercompany equipment
rentals, net of a reduction in SG&A from the recovery of a bad
debt.
Gain on disposal of equipment During
2017, the Company had a gain on disposal of equipment of
$5,198 compared to $2,202 in 2016. These gains mainly relate
to equipment lost-in-hole. Proceeds from clients on
lost-in-hole equipment are based on amounts specified in service
agreements and, in most cases, these proceeds exceed the net book
value of the equipment and result in a gain. The timing of
lost-in-hole recoveries is not in the control of the Company and
therefore can fluctuate significantly from quarter-to-quarter.
Finance costs Finance costs consist of
interest expenses on operating loans, loans and borrowings and bank
charges of $527 for 2017 versus
$1,382 for 2016. The decrease
in finance costs relate to primarily to repayments of loans in 2017
Q1.
Foreign exchange The Company had a
foreign exchange gain of $1,976 in
2017 compared to $2,139 in 2016 due
to the fluctuations of the Canadian dollar relative to the U.S.
dollar. The Company's foreign operations are denominated in a
currency other than the Canadian dollar and therefore, upon
consolidation, gains and losses due to fluctuations in the foreign
currency exchange rates are recorded as other comprehensive income
on the balance sheet as a component of equity. However, gains
and losses in the Canadian entity on U.S. denominated intercompany
balances continue to be recognized in the statement of
comprehensive income (loss). Included in the 2017 foreign
currency gains are unrealized gain of $2,016 (2016 –$2,174) related to intercompany
balances.
Gain on disposal of foreign
subsidiary During 2016 Q1, the Company
completed the sale of its wholly-owned Barbados subsidiary for net proceeds of $nil
which resulted in a non-cash gain on sale of $10,865. The subsidiary held the Company's
investment in Venezuela and this
sale completed Cathedral's exit from carrying on a business in
Venezuela.
Provision for settlement During 2017,
payments on both settlements of $2,073 (2016 - $570) were made. This amount includes
accelerated FLSA settlement payments described previously.
Income tax For 2017, the Company had an
income tax expense of $1,297 compared
to recovery of $(3,463) in
2016. Excluding adjustments to prior years' tax provisions,
the effective tax rate was 22% for 2017. Excluding the
non-cash gain on disposal of foreign subsidiary but including the
loss from discontinued operations, the effective tax rate was 31%
for 2016. Income tax expense is booked based upon expected
annualized effective rates.
Net loss from discontinued operations In
2016 Q4, the Company made the decision to sell its F&PT assets
and focus its attention and resources fully on the directional
drilling business where it believes it has a strong competitive
advantage and better future growth prospects. The proceeds
from this sale were used to pay down debt. As such, operating
results for the F&PT business have been included in the
statements of comprehensive income and statements of cash flows as
discontinued operations. For 2017, the net loss from
discontinued operations was $(142)
compared to $(3,193) net loss for
2016.
LIQUIDITY AND CAPITAL RESOURCES
Overview On an annualized basis the
Company's principal source of liquidity is cash generated from
operations. In addition, the Company has the ability to
fund liquidity requirements through its credit facility and the
issuance of debt and/or equity. For the nine months
ended September 30, 2017, the Company
had funds from continuing operations (see Non-GAAP Measurements) of
$7,553 (2016 – funds used in
operations $(1,004)). The
increase in funds related to continuing operations is due to the
increase in activity levels.
During 2017 Q1 the Company completed two major transactions that
had a material impact on its outstanding debt. In January,
the Company completed the sale of its F&PT assets for net
proceeds of $17,241. On
February 15, 2017, the Company closed
a bought deal public offering and insider private placement
financing for total gross proceeds of $14,130. As a result of these transactions,
in 2017 Q1 the Company reduced its loans and borrowings by
$26,315 which included a complete
repayment of revolving term loan of $26,250. Cash balances as at September 30, 2017 were $4,049.
Working capital At September 30, 2017 the Company had working
capital of $29,618 (December 31, 2016 - $39,324) and a working capital ratio of 2.9 to 1
(December 31, 2016 – 3.3 to 1).
The decrease in working capital level was primarily due to the sale
of F&PT assets held for sale which had been classified as a
current asset at December 31 in the
amount of $17,241. Partially
offsetting this was an increase in trade receivables of
$3,705 from December 31, 2016.
Credit facility The Company has a
committed revolving credit facility (the "Facility") that expires
in December 2018. The Facility is secured by a general
security agreement over all present and future personal
property.
The current Facility has been amended seven times. These
amendments have certain restrictions, including, but not limited
to; paying dividends, utilization of the accordion feature,
enhanced lender financial reporting and a cap on any litigation
settlement payments without lender approval. As well, effective
2016 Q1, the Company includes lost-in-hole equipment proceeds in
the definition of Bank EBITDA (as defined in the credit
agreement).
The financial covenants associated with the amended Facility are
as follows:
Quarter
ending:
|
Maximum Funded Debt
to Bank
EBITDA Ratio
|
Minimum Debt Service
Ratio
|
September 30,
2017
|
3.5:1
|
3.0:1
|
December 31,
2017
|
3.25:1
|
3.0:1
|
September 30, 2018
and thereafter
|
3.0:1
|
3.0:1
|
Additionally, there is a minimum working capital ratio of
1.25:1.
The Seventh Amending Agreement, dated January 16, 2017, reduced the aggregate
commitment to $23,000 after
$17,200 was repaid upon the sale of
F&PT assets and the maturity date was extended to December 2018.
After the amendments discussed above, the Facility bears
interest at the bank's prime rate plus 0.50% to 5.00% or bankers'
acceptance rate plus 1.75% to 6.25% with interest payable
monthly. Interest rate spreads for the Facility depend on the
level of funded debt to the 12 month trailing Bank EBITDA.
The Facility provides a means to lock in a portion of the debt at
interest rates through bankers' acceptance ("BA") based on the
interest rate spread on the date the BA was entered into.
Cathedral is currently in compliance with all covenants.
Based on current available information, Cathedral expects to comply
with all covenants for the next twelve months.
At September 30, 2017, the Company
had cash balances in excess of outstanding letters of credit and
capital lease obligations. As such its funded debt to bank
EBITDA ratio ("Funded debt ratio") was negative (i.e. net cash
balance). As such, the Funded debt ratio has been met, but is
not meaningful ("NM") for presentation. For the rolling
twelve months ended September 30,
2017 Bank EBITDA was $18,799.
The Company's financial ratios at September 30, 2017 were:
Ratio
|
Actual
|
Required
|
Funded debt to Bank
EBITDA
ratio
|
NM
|
3.5:1 Maximum
|
Debt service
ratio
|
11.7:1
|
2.0:1 Minimum
|
Working capital
ratio
|
2.93:1
|
1.25:1 Minimum
|
Contractual obligations In the normal
course of business, the Company incurs contractual obligations and
those obligations are disclosed in the Company's MD&A for the
year ended December 31, 2016.
As at September 30, 2017, the Company
had a commitment to purchase approximately $611 of equipment.
Share capital At November 9, 2017, the Company has 48,916,451
common shares and 3,414,500 options outstanding with a weighted
average exercise price of $1.34.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
September 30,
2017 and December 31,
2016
Dollars in '000s
(unaudited)
|
|
|
|
|
|
|
|
|
|
September
30
|
December
31
|
|
|
|
|
2017
|
2016
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash
|
|
|
|
$
|
4,049
|
$
|
1,898
|
|
Trade
receivables
|
|
|
|
29,950
|
26,245
|
|
Current taxes
recoverable
|
|
|
|
417
|
1,336
|
|
Prepaid
expenses
|
|
|
|
1,068
|
1,611
|
|
Inventories
|
|
|
|
9,470
|
8,037
|
|
Assets held for
sale
|
|
|
|
-
|
17,241
|
Total current
assets
|
|
|
|
44,954
|
56,368
|
Equipment
|
|
|
|
65,749
|
68,158
|
Intangible
assets
|
|
|
|
2,039
|
1,978
|
Deferred tax
assets
|
|
|
|
8,218
|
9,513
|
Total non-current
assets
|
|
|
|
76,006
|
79,649
|
Total
assets
|
|
|
|
$
|
120,960
|
$
|
136,017
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Operating
loan
|
|
|
|
$
|
-
|
$
|
2,105
|
|
Trade and other
payables
|
|
|
|
14,250
|
12,837
|
|
Loans and
borrowings
|
|
|
|
249
|
459
|
|
Provision for
settlements, current
|
|
|
|
837
|
1,643
|
Total current
liabilities
|
|
|
|
15,336
|
17,044
|
Loans and
borrowings
|
|
|
|
53
|
26,322
|
Provision for
settlements, long-term
|
|
|
|
486
|
1,879
|
Total non-current
liabilities
|
|
|
|
539
|
28,201
|
Total
liabilities
|
|
|
|
15,875
|
45,245
|
Shareholders'
equity:
|
|
|
|
|
|
|
Share
capital
|
|
|
|
87,617
|
74,481
|
|
Contributed
surplus
|
|
|
|
9,799
|
9,620
|
|
Accumulated other
comprehensive income
|
|
|
|
7,792
|
11,371
|
|
Deficit
|
|
|
|
(123)
|
(4,700)
|
Total shareholders'
equity
|
|
|
|
105,085
|
90,772
|
Total liabilities and
shareholders' equity
|
|
|
|
$
|
120,960
|
$
|
136,017
|
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME (LOSS)
Three and nine months
ended September 30, 2017 and
2016
Dollars in '000s except per share amounts
(unaudited)
|
|
|
|
Three months ended
September 30
|
Nine months ended
September 30
|
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
Revenues
|
$
|
36,015
|
$
|
19,489
|
$
|
108,693
|
$
|
52,857
|
Cost of
sales:
|
|
|
|
|
|
Direct
costs
|
(29,499)
|
(15,338)
|
(88,618)
|
(41,616)
|
|
Depreciation
|
(2,748)
|
(3,077)
|
(8,128)
|
(9,285)
|
|
Share-based
compensation
|
(13)
|
(6)
|
(43)
|
(8)
|
Total cost of
sales
|
(32,260)
|
(18,421)
|
(96,789)
|
(50,909)
|
Gross
margin
|
3,755
|
1,068
|
11,904
|
1,948
|
Selling, general and
administrative expenses:
|
|
|
|
|
|
Direct
costs
|
(4,534)
|
(3,476)
|
(12,321)
|
(11,117)
|
|
Depreciation
|
(25)
|
(33)
|
(75)
|
(100)
|
|
Share-based
compensation
|
(43)
|
(32)
|
(139)
|
(111)
|
Total selling,
general and administrative expenses
|
(4,602)
|
(3,541)
|
(12,535)
|
(11,328)
|
|
(847)
|
(2,473)
|
(631)
|
(9,380)
|
Gain on disposal of
equipment
|
1,907
|
1,170
|
5,198
|
2,202
|
Earnings (loss) from
operating activities
|
1,060
|
(1,303)
|
4,567
|
(7,178)
|
Finance
costs
|
(129)
|
(596)
|
(527)
|
(1,382)
|
Foreign exchange gain
(loss)
|
1,059
|
(159)
|
1,976
|
2,139
|
Provision for
settlement
|
-
|
-
|
-
|
(3,796)
|
Write-down of
inventory
|
-
|
-
|
-
|
(277)
|
Gain on disposal of
foreign subsidiary
|
-
|
-
|
-
|
10,865
|
Earnings (loss)
before income taxes
|
1,990
|
(2,058)
|
6,016
|
371
|
Income tax recovery
(expense):
|
|
|
|
|
|
Current
|
2
|
64
|
(26)
|
324
|
|
Deferred
|
(175)
|
646
|
(1,271)
|
3,139
|
Total income tax
recovery (expense)
|
(173)
|
710
|
(1,297)
|
3,463
|
Net earnings (loss)
from continuing operations
|
1,817
|
(1,348)
|
4,719
|
3,834
|
Net loss from
discontinued operations
|
(7)
|
(778)
|
(142)
|
(3,193)
|
Net earnings
(loss)
|
1,810
|
(2,126)
|
4,577
|
641
|
Other comprehensive
income (loss):
|
|
|
|
|
|
Foreign currency
translation differences for foreign
|
|
|
|
|
|
operations
|
(1,932)
|
388
|
(3,579)
|
(2,694)
|
|
Foreign currency
translation gain on disposal of
|
|
|
|
|
|
foreign
subsidiary
|
-
|
-
|
-
|
1,348
|
Total comprehensive
income (loss)
|
$
|
(122)
|
$
|
(1,738)
|
$
|
998
|
$
|
(705)
|
|
|
|
|
|
Net earnings (loss)
from continuing operations per share
|
|
|
|
|
|
Basic and
diluted
|
$
|
0.04
|
$
|
(0.04)
|
$
|
0.10
|
$
|
0.11
|
Net loss from
discontinued operations per share
|
|
|
|
|
|
Basic
|
$
|
(0.00)
|
$
|
(0.02)
|
$
|
(0.00)
|
$
|
(0.09)
|
Net earnings (loss)
per share
|
|
|
|
|
|
Basic and
diluted
|
$
|
0.04
|
$
|
(0.06)
|
$
|
0.10
|
$
|
0.02
|
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS
Three and nine months ended September 30, 2017 and 2016
Dollars in
'000s
(unaudited)
|
|
|
|
Three months ended
September 30
|
Nine months ended
September 30
|
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
Cash flow provided
by (used in):
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
Net earnings (loss)
from continuing operations
|
1,817
|
(1,348)
|
$
|
4,719
|
$
|
3,834
|
|
Items not involving
cash:
|
|
|
|
|
|
|
Depreciation
|
2,773
|
3,110
|
8,203
|
9,385
|
|
|
Total income tax
(recovery) expense
|
173
|
(710)
|
1,297
|
(3,463)
|
|
|
Unrealized foreign
exchange (gain) loss on intercompany
|
|
|
|
|
|
|
balances
|
(1,142)
|
166
|
(2,016)
|
(2,174)
|
|
|
Finance
costs
|
129
|
596
|
527
|
1,382
|
|
|
Share-based
compensation
|
56
|
38
|
182
|
119
|
|
|
Gain on disposal of
equipment
|
(1,907)
|
(1,170)
|
(5,198)
|
(2,202)
|
|
|
Provision for
settlement
|
-
|
-
|
-
|
3,796
|
|
|
Write-down of
inventory
|
-
|
-
|
-
|
277
|
|
|
Gain on disposal of
foreign subsidiary
|
-
|
-
|
-
|
(10,865)
|
|
Cash flow -
continuing operations
|
1,899
|
682
|
7,714
|
89
|
|
Cash flow -
discontinued operations
|
(2)
|
(118)
|
(135)
|
(1,417)
|
|
Changes in non-cash
operating working capital
|
(1,640)
|
(4,744)
|
(6,695)
|
4,107
|
|
Income taxes paid
(recovered)
|
(236)
|
1,701
|
931
|
1,840
|
Cash flow - operating
activities
|
21
|
(2,479)
|
1,815
|
4,619
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
Equipment
additions
|
(3,518)
|
(146)
|
(7,065)
|
(484)
|
|
Intangible asset
additions
|
(92)
|
(18)
|
(326)
|
(113)
|
|
Proceeds on disposal
of equipment
|
2,565
|
2,039
|
6,668
|
3,750
|
|
Proceeds on disposal
of discontinued operations
|
-
|
-
|
17,252
|
-
|
|
Changes in non-cash
investing working capital
|
1,429
|
(1)
|
1,926
|
10
|
Cash flow - investing
activities
|
384
|
1,874
|
18,455
|
3,163
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
Change in operating
loan
|
-
|
175
|
(2,105)
|
(1,533)
|
|
Repayments on loans
and borrowings
|
(37)
|
(88)
|
(26,395)
|
(5,405)
|
|
Proceeds on share
issuance from bought deal public
|
|
|
|
|
|
offering and insider
private placement
|
-
|
-
|
13,131
|
-
|
|
Proceeds on share
issuance from exercise of share options
|
-
|
-
|
4
|
-
|
|
Payments on
settlement
|
(249)
|
(570)
|
(2,073)
|
(570)
|
|
Interest
paid
|
(129)
|
(600)
|
(530)
|
(1,054)
|
Cash flow - financing
activities
|
(415)
|
(1,083)
|
(17,968)
|
(8,562)
|
Effect of exchange
rate on changes in cash
|
(79)
|
14
|
(151)
|
(76)
|
Change in
cash
|
(89)
|
(1,674)
|
2,151
|
(856)
|
Cash, beginning of
period
|
4,138
|
2,244
|
1,898
|
1,426
|
Cash, end of
period
|
$
|
4,049
|
$
|
570
|
$
|
4,049
|
$
|
570
|
FORWARD LOOKING STATEMENTS
This news release contains certain forward-looking statements
and forward-looking information (collectively referred to herein as
"forward-looking statements") within the meaning of applicable
Canadian securities laws. All statements other than
statements of present or historical fact are forward-looking
statements. Forward-looking statements are often, but not
always, identified by the use of words such as "anticipate",
"achieve", "believe", "plan", "intend", "objective", "continuous",
"ongoing", "estimate", "outlook", "expect", "may", "will",
"project", "should" or similar words suggesting future
outcomes. In particular, this news release contains
forward-looking statements relating to, among other things:
anticipated capital expenditures to be realized for 2017 are
$12,400 plus any replacement of
equipment lost down hole in Q4; improvement in WTI pricing could
result in the North American rig count improving into 2018,
however, our expectation is still for flat to moderate industry
growth; 2017 Q4, activity days available are also typically
challenged by downtime resulting from U.S. Thanksgiving and Christmas related slowdowns; Q4
activity levels in Canada may also
be further impacted by a number of our Clients taking a short break
in their drilling programs in December; growth will be dependent on
gaining market share; positive about our prospects going into 2018;
projected capital expenditures, commitments and the financing
thereof; anticipates to having a carry-over of $4,000 in capital expenditures into 2018 Q1 and
Q2; and Cathedral expects to comply with all covenants during
2017.
Various material factors and assumptions are typically applied
in drawing conclusions or making the forecasts or projections set
out in forward-looking statements. Those material factors and
assumptions are based on information currently available to the
Company, including information obtained from third party industry
analysts and other third party sources. In some instances,
material assumptions and material factors are presented elsewhere
in this news release in connection with the forward-looking
statements. You are cautioned that the following list of
material factors and assumptions is not exhaustive. Specific
material factors and assumptions include, but are not limited
to:
- the performance of Cathedral's businesses, including current
business and economic trends;
- oil and natural gas commodity prices and production
levels;
- capital expenditure programs and other expenditures by
Cathedral and its customers;
- the ability of Cathedral to retain and hire qualified
personnel;
- the ability of Cathedral to obtain parts, consumables,
equipment, technology, and supplies in a timely manner to carry out
its activities;
- the ability of Cathedral to maintain good working relationships
with key suppliers;
- the ability of Cathedral to market its services successfully to
existing and new customers and reliance on major customers;
- risks associated with technology development and intellectual
property rights;
- the ability of Cathedral to maintain safety performance;
- the ability of Cathedral to obtain timely financing on
acceptable terms;
- the ability to obtain sufficient insurance coverage to mitigate
operational risks;
- currency exchange and interest rates;
- risks associated with foreign operations;
- risks associated with acquisitions and business development
efforts;
- environmental risks;
- changes under governmental regulatory regimes and tax,
environmental and other laws in Canada and U.S.; and
- competitive risks.
Forward-looking statements are not a guarantee of future
performance and involve a number of risks and uncertainties some of
which are described herein. Such forward-looking statements
necessarily involve known and unknown risks and uncertainties,
which may cause the Company's actual performance and financial
results in future periods to differ materially from any projections
of future performance or results expressed or implied by such
forward-looking statements. These risks and uncertainties
include, but are not limited to, the risks identified in this news
release and in the Company's Annual Information Form under the
heading "Risk Factors". Any forward-looking statements are
made as of the date hereof and, except as required by law, the
Company assumes no obligation to publicly update or revise such
statements to reflect new information, subsequent or otherwise.
All forward-looking statements contained in this news release
are expressly qualified by this cautionary statement. Further
information about the factors affecting forward-looking statements
is available in the Company's current Annual Information Form and
Annual Report which have been filed with Canadian provincial
securities commissions and are available on www.sedar.com.
NON-GAAP MEASUREMENTS
Cathedral uses certain performance measures throughout this
document that are not defined under GAAP. Management believes that
these measures provide supplemental financial information that is
useful in the evaluation of Cathedral's operations and are commonly
used by other oil and gas service companies. Investors should be
cautioned, however, that these measures should not be construed as
alternatives to measures determined in accordance with GAAP as an
indicator of Cathedral's performance. Cathedral's method of
calculating these measures may differ from that of other
organizations, and accordingly, may not be comparable.
The specific measures being referred to include the
following:
i) "Adjusted gross margin" -
calculated as gross margin plus non-cash items (depreciation and
share-based compensation); is considered a primary indicator of
operating performance (see tabular calculation);
ii) "Adjusted gross margin %" -
calculated as adjusted gross margin divided by revenues; is
considered a primary indicator of operating performance (see
tabular calculation);
iii) "Total Adjusted EBITDAS" - defined as
earnings before share of income/loss from associate,
write-down/recovery on investment in associate finance costs,
unrealized foreign exchange on intercompany balances, unrealized
foreign exchange due to hyper-inflation accounting, taxes,
non-recurring gains and losses on disposal of equipment (see
non-GAAP measurement), depreciation, write-down of goodwill,
write-down of equipment, write-down of inventory and share-based
compensation; is considered an indicator of the Company's ability
to generate funds flow from operations prior to consideration of
how activities are financed, how the results are taxed and measured
and non-cash expenses (see tabular calculation). This measure
includes both discontinued F&PT operations and continuing
Directional Drilling operations;
iv) "Adjusted EBITDAS from discontinued
operations" – Total Adjusted EBITDAS as calculated above from
discontinued F&PT operations only;
v) "Adjusted EBITDAS from continuing
operations" – Total Adjusted EBITDAS as calculated above for
ongoing Directional Drilling as well as corporate administrative
costs;
vi) "Funds from operations" - calculated as
cash provided by operating activities before changes in non-cash
working capital and income taxes paid less current tax expense; is
considered an indicator of the Company's ability to generate funds
flow from operations on an after tax basis but excluding changes in
non-cash working capital which is financed using the Company's
operating loan (see tabular calculation);
vii) "Growth equipment additions" or "Growth
capital" – is capital spending which is intended to result in
incremental revenues or decreased operating costs. Growth
capital is considered to be a key measure as it represents the
total expenditures on equipment expected to add incremental
revenues and funds flow to the Company;
viii) "Maintenance equipment additions" or "Maintenance
capital" – is capital spending incurred in order to refurbish or
replace previously acquired other than "replacement equipment
additions" described below. Such additions do not provide
incremental revenues. Maintenance capital is a key component in
understanding the sustainability of the Company's business as cash
resources retained within Cathedral must be sufficient to meet
maintenance capital needs to replenish the assets for future cash
generation;
ix) "Replacement equipment additions" or
"Replacement capital" – is capital spending incurred in order to
replace equipment that is lost downhole. Cathedral recovers
lost-in-hole costs including previously expensed depreciation on
the related assets from customers. Such additions do not
provide incremental revenues. The identification of
replacement equipment additions is considered important as such
additions are financed by way of proceeds on disposal of equipment
(see discussion within the MD&A on "gain on disposal of
equipment);
x) "Infrastructure equipment additions"
or "Infrastructure capital" – is capital spending incurred on land,
buildings and leasehold improvements. Infrastructure capital is a
component in understanding the sustainability of the Company's
business as cash resources retained within Cathedral must be
sufficient to meet maintenance capital needs;
xi) "Non-recurring gains and losses on
disposal of equipment" – are disposals of equipment that do not
occur on a regular or periodic basis. Unlike the lost-in-hole
recoveries, the proceeds from these gains are not used on
equivalent replacement property. These are often on non-field
equipment such as land and buildings;
xii) "Net equipment additions" – is equipment
additions expenditures less proceeds on the regular disposal of
equipment (the proceeds on sale of land and buildings have been
excluded). Cathedral uses net equipment additions to assess
net cash flows related to the financing of Cathedral's equipment
additions; and
xiii) "Net debt" – is loans and borrowing less working
capital. Management uses net debt as a metric to shows the
Company's overall debt level.
The following tables provide reconciliations from GAAP
measurements to non-GAAP measurements referred to in this news
release:
Adjusted gross
margin
|
|
|
|
|
|
Three months ended
September 30
|
Nine months ended
September 30
|
|
2017
|
2016
|
2017
|
2016
|
Gross
margin
|
$
|
3,755
|
$
|
1,068
|
$
|
11,904
|
$
|
1,948
|
Add non-cash items
included in cost of sales:
|
|
|
|
|
|
Depreciation
|
2,748
|
3,077
|
8,128
|
9,285
|
|
Share-based
compensation
|
13
|
6
|
43
|
8
|
Adjusted gross
margin
|
$
|
6,516
|
$
|
4,151
|
$
|
20,075
|
$
|
11,241
|
Adjusted gross margin
%
|
18%
|
21%
|
18%
|
21%
|
|
|
|
|
|
Total Adjusted
EBITDAS
|
|
|
|
|
|
Three months ended
September 30
|
Nine months ended
September 30
|
|
2017
|
2016
|
2017
|
2016
|
Earnings (loss)
before income taxes
|
$
|
1,990
|
$
|
(2,058)
|
$
|
6,016
|
$
|
371
|
Add:
|
|
|
|
|
|
Depreciation included
in cost of sales
|
2,748
|
3,077
|
8,128
|
9,285
|
|
Depreciation included
in selling, general and
|
|
|
|
|
|
administrative
expenses
|
25
|
33
|
75
|
100
|
|
Share-based
compensation included in cost of sales
|
13
|
6
|
43
|
8
|
|
Share-based
compensation included in selling,
|
|
|
|
|
|
general and
administrative expenses
|
43
|
32
|
139
|
111
|
|
Finance
costs
|
129
|
596
|
527
|
1,382
|
Subtotal
|
4,948
|
1,686
|
14,928
|
11,257
|
|
Unrealized foreign
exchange (gain) loss on
|
|
|
|
|
|
intercompany
balances
|
(1,142)
|
166
|
(2,016)
|
(2,174)
|
|
Write-down of
inventory
|
-
|
-
|
-
|
277
|
|
Provision for
settlement
|
-
|
-
|
-
|
3,796
|
|
Gain on disposal of
foreign subsidiary
|
-
|
-
|
-
|
(10,865)
|
|
Non-recurring
expenses
|
102
|
543
|
278
|
1,012
|
Adjusted EBITDAS from
continuing operations
|
3,908
|
2,395
|
13,190
|
3,303
|
Adjusted EBITDAS from
discontinued operations
|
1
|
(224)
|
(122)
|
(1,294)
|
Total Adjusted
EBITDAS
|
$
|
3,909
|
$
|
2,171
|
$
|
13,068
|
$
|
2,009
|
|
|
|
|
|
Funds from
operations
|
|
|
|
|
|
Three months ended
September 30
|
Nine months ended
September 30
|
|
2017
|
2016
|
2017
|
2016
|
Cash flow - operating
activities
|
$
|
21
|
$
|
(2,479)
|
$
|
1,815
|
$
|
4,619
|
Add
(deduct):
|
|
|
|
|
|
Changes in non-cash
operating working capital
|
1,640
|
4,744
|
6,695
|
(4,107)
|
|
Income taxes paid
(recovered)
|
236
|
(1,701)
|
(931)
|
(1,840)
|
|
Current tax recovery
(expense)
|
2
|
64
|
(26)
|
324
|
Funds from (used in)
operations
|
$
|
1,899
|
$
|
628
|
$
|
7,553
|
$
|
(1,004)
|
Cathedral Energy Services Ltd. (the "Company" or
"Cathedral"), based in Calgary,
Alberta is incorporated under the Business Corporations Act
(Alberta) and operates in the U.S.
under Cathedral Energy Services Inc. The Company is publicly
traded on the Toronto Stock Exchange under the symbol "CET".
Cathedral, is a trusted partner to North American energy companies
requiring high performance directional drilling services. We
work in partnership with our customers to tailor our equipment and
expertise to meet their specific geographical and technical
needs. Our experience, technologies and responsive personnel
enable our customers to achieve higher efficiencies and lower
project costs. For more information, visit
www.cathedralenergyservices.com.
SOURCE Cathedral Energy Services Ltd.