Aveda Transportation and Energy Services Inc. (“Aveda” or the
“Company”) (TSX-V:AVE), one of North America’s largest dedicated
rig moving companies, is pleased to announce solid results for the
three months and year ended December 31, 2017.
2017 Fourth Quarter Business
Highlights
- Generated revenue for the three months ended December 31, 2017
of $53.1 million. Revenue in the fourth quarter of 2017 increased
by $21.7 million or almost 70%, compared with revenue of $31.4
million for the same period in 2016;
- For the three months ended December 31, 2017, the Company
reported gross profit before depreciation and amortization1 of $7.8
million. Gross profit excluding depreciation and amortization1 in
the fourth quarter of 2017 increased by $3.1 million or 66%
compared to $4.7 million in 2016;
- Generated Adjusted EBITDA1 of $3.6 million for the three months
ended December 31, 2017. This amount of Adjusted EBITDA1 continues
the strong performance the Company has experienced throughout
fiscal 2017. Adjusted EBITDA1 in the fourth quarter of 2017
increased by $3.0 million or almost 500% compared to $0.6
million in the fourth quarter of 2016;
- Net loss for the three months ended December 31, 2017 decreased
by $3.9 million to $2.2 million, compared to a net loss of $6.1
million for the same period in 2016. Loss per share was $0.04
compared to $0.32 in the comparative period; and
- Aveda ended the year with a net asset value per share6 of
$0.60, $18.4 million in working capital with a current ratio of
1.6:1, and undrawn cash availability of $34.3 million on its senior
debt facility.
Year Ended December 31, 2017
Business Highlights
- Generated record revenue for the year ended December 31, 2017
of almost $200.0 million. This is the most revenue that Aveda has
ever reported in any year in the Company’s history. Revenue for
2017 increased by $126.3 million or 172%, compared with revenue of
$73.3 million in 2016;
- Gross profit excluding depreciation and amortization1 in 2017
increased by $26.2 million to $33.5 million compared to $7.3
million in 2016;
- Reported Adjusted EBITDA1 of $15.9 million for the year ended
December 31, 2017. Adjusted EBITDA1 in 2017 increased by almost
$23.0 million compared to a loss of $6.9 million in 2016;
- Net loss for the year ended December 31, 2017 decreased by
almost $24.0 million to $8.0 million, compared to a net loss of
$31.8 million in 2016. Loss per share was $0.15 compared to $1.67
in the comparative period;
- Aveda expanded its operational footprint by opening terminals
in Martins Ferry, OH and Midland, Texas in 2017;
- Aveda restructured its debt in the first quarter of 2017 as
further outlined in this MD&A and in the news release dated
January 13, 2017;
- The Company also raised gross proceeds of $22.9 million through
an equity offering as outlined in the news release dated, February
22, 2017; and
- As a result of both successfully restructuring its debt and
raising the equity outlined above, the Company now has a
significantly stronger balance sheet.
“We’ve had a remarkable turnaround and continued
our solid performance into the fourth quarter of 2017,” said Ronnie
Witherspoon, President and Chief Executive Officer for Aveda.
“We’re continuing to see rig count improvements in 2018. I’m
excited about our prospects going forward. I once again want to
thank our team for their tremendous contributions.”
The Company’s consolidated financial statements
and Management’s Discussion and Analysis are available on the
Company’s website at www.avedaenergy.com and the SEDAR website at
www.sedar.com.
Financial Overview
(in
thousands, except per share and ratio amounts) |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2017 |
|
Year Ended December 31, 2016 |
|
% Change 2016 - 2017 |
|
Three Months Ended December 31, 2017 |
|
Three Months Ended December 31, 2016 |
|
% Change 2016 - 2017 |
|
Revenue |
199,614 |
|
73,286 |
|
172 |
% |
53,091 |
|
31,400 |
|
69 |
% |
Gross profit
(loss)1 |
17,791 |
|
(10,807 |
) |
265 |
% |
3,790 |
|
123 |
|
-2981 |
% |
Gross margin4 |
9 |
% |
-15 |
% |
N/A |
|
7 |
% |
0 |
% |
N/A |
|
Gross profit1 excluding
depreciation and amortization |
33,459 |
|
7,273 |
|
360 |
% |
7,783 |
|
4,696 |
|
66 |
% |
Gross margin excluding
depreciation and amortization5 |
17 |
% |
10 |
% |
N/A |
|
15 |
% |
15 |
% |
N/A |
|
Adjusted EBITDA
(loss)1 |
15,937 |
|
(6,940 |
) |
330 |
% |
3,567 |
|
600 |
|
495 |
% |
Adjusted EBITDA1 as a
percentage of revenue |
8 |
% |
-9 |
% |
N/A |
|
7 |
% |
2 |
% |
N/A |
|
Net loss |
(8,019 |
) |
(31,844 |
) |
-75 |
% |
(2,217 |
) |
(6,148 |
) |
64 |
% |
Net loss as a
percentage of revenue |
-4 |
% |
-43 |
% |
N/A |
|
-4 |
% |
-20 |
% |
N/A |
|
Adjusted EBITDA (loss)1
per share |
0.31 |
|
(0.36 |
) |
186 |
% |
0.06 |
|
0.03 |
|
100 |
% |
Loss per share - basic
and diluted |
(0.15 |
) |
(1.67 |
) |
-91 |
% |
(0.04 |
) |
(0.32 |
) |
-88 |
% |
Current ratio2 |
1.6 |
|
2.0 |
|
-20 |
% |
1.6 |
|
2.0 |
|
-20 |
% |
Debt to equity
ratio3 |
2.1 |
|
4.1 |
|
-49 |
% |
2.1 |
|
4.1 |
|
-49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Outlook
Aveda earns revenue primarily by providing
specialized transportation services to companies engaged in the
exploration, development and production of petroleum resources. As
a result, demand for Aveda’s transportation services is generally
linked to the economic conditions of the energy industry and the
level of drilling activity in the US and the WCSB.
Relative to 2017, both oil and natural gas
prices have rebounded and rig counts in both Canada and the United
States have risen in the first quarter of 2018. Based both on
general market enthusiasm with respect to commodity prices and
discussions with Aveda’s customers, management expects 2018 to be
an even stronger year in terms of drilling activity. Preliminary
results for the first quarter of 2018 indicate that the Company
expects to report revenue of $59.0 million to $60.5 million,
Adjusted EBITDA1 of $4.4 million to $4.6 million and a net loss of
$0.5 million to $1.0 million. During the first quarter of 2017, the
Company generated revenue of $40.1 million, Adjusted EBITDA1 of
$2.6 million and a net loss of $3.4 million. Using the first
quarter of 2018 versus 2017 as a proxy, the Company expects
activity levels to be robust. Accordingly, the Company is planning
to invest $12.0 million in its capital program in 2018, with
approximately $4.0 to $5.0 million allocated towards maintenance
capital and the remainder towards purchasing and reengineering
hoisting and revenue producing equipment.
Based on the information above, Aveda expects to
see continued improvements in revenue, Adjusted EBITDA and net
income results in 2018.
About Aveda Transportation and Energy
Services
Aveda provides specialized transportation
services and equipment required for the exploration, development
and production of petroleum resources in the Western Canadian
Sedimentary Basin and in the United States of America principally
in and around the states of Texas, Pennsylvania, Oklahoma, Ohio and
North Dakota. Aveda balances Performance, Safety and Value for our
Customers through Leadership, Financial Discipline and Proper
Planning, while providing a culture of Family for our employees.
Aveda strives for a world where its operations improve the daily
experience of our customers, our employees, and every person we
meet on the road to success.
Aveda was incorporated in 1994 as a private
company to serve the oil and gas industry. In the spring of 2006
the Company went public on the TSX Venture Exchange. Aveda has
major operations in Leduc, AB, Edson, AB, Grande Prairie, AB,
Pleasanton, TX, Midland, TX, Pecos, TX, Marshall, TX, Williston,
ND, Williamsport, PA, Martins Ferry, OH and Oklahoma City, OK.
Aveda is publicly traded on the TSX Venture Exchange under the
symbol AVE. Aveda has 12 locations which cover North America’s most
prolific oil and gas plays. The Company has almost 1,500 pieces of
modern, well maintained equipment and employs approximately 610
team members. Aveda’s unique differentiator is our advanced
operational and safety culture. For more information on Aveda
please visit www.avedaenergy.com.
For more information, please contact:Bharat Mahajan, CPA, CAVice
President, Finance and Chief Financial Officer(403)
264-5769bharat.mahajan@avedaenergy.com
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", "could", "believe", "plan",
"intend", "objective", "continuous", "ongoing", "estimate",
"outlook", "expect", "may", "will", "project", "should" or similar
words, including negatives thereof, suggesting future outcomes. In
particular, this News Release contains forward-looking statements
relating to: demand for the Company’s services and general industry
activity level; the Company’s growth opportunities; and
expectations regarding the Company’s revenue, EBITDA, Adjusted
EBITDA and equipment utilization. Aveda believes the expectations
reflected in such forward-looking statements are reasonable as of
the date hereof but no assurance can be given that these
expectations will prove to be correct and such forward-looking
statements should not be unduly relied upon.
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 Aveda, 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. Readers 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 Aveda’s businesses, including current
business and economic trends;
- oil and natural gas commodity prices and production
levels;
- the effect of the rebranding on Aveda’s businesses;
- capital expenditure programs and other expenditures by Aveda
and its customers:
- the ability of Aveda to retain and hire qualified
personnel;
- the ability of Aveda to obtain parts, consumables, equipment,
technology, and supplies in a timely manner to carry out its
activities;
- the ability of Aveda to maintain good working relationships
with key suppliers;
- the ability of Aveda to market its services successfully to
existing and new customers;
- the ability of Aveda to obtain timely financing on acceptable
terms;
- currency exchange and interest rates;
- risks associated with foreign operations;
- changes under governmental regulatory regimes and tax,
environmental and other laws in Canada and the United States;
and
- a stable competitive environment.
The forward-looking statements regarding Aveda's
potential revenue, EBITDA and Adjusted EBITDA are included herein
to provide readers with an understanding of Aveda's anticipated
cash flow and Aveda's ability to fund its expenditures based on the
assumptions described herein. Readers are cautioned that this
information may not be appropriate for other purposes.
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 Aveda’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 Aveda’s annual information form and management discussion and
analysis for the year ended December 31, 2017 (the "MD&A"),
which are available for viewing on SEDAR at www.sedar.com. Any
forward-looking statements are made as of the date hereof and,
except as required by law, Aveda assumes no obligation to publicly
update or revise such statements to reflect new information,
subsequent or otherwise.
This News Release contains the terms “EBITDA”,
“Adjusted EBITDA”, “gross profit” “gross profit margin”, “gross
profit excluding depreciation and amortization” and “gross margin
excluding depreciation and amortization” which are defined in the
MD&A. The above terms as presented do not have any standardized
meanings prescribed by international financial reporting standards
(“IFRS”) and therefore may not be comparable with the calculation
of similar measures for other entities. Management uses EBITDA,
Adjusted EBITDA, gross profit, gross profit margin, gross profit
excluding depreciation and amortization, and gross margin excluding
depreciation and amortization to analyze the operating performance
of the business. These non-IFRS measures presented are not intended
to represent cash provided by operating activities, net earnings or
other measures of financial performance calculated in accordance
with IFRS.
This News Release contains the terms "cash
flow", "working capital" and "working capital ratio", which do not
have any standardized meanings prescribed by IFRS and therefore may
not be comparable with the calculation of similar measures for
other entities. As an indicator of the Company's performance,
cash flow should not be considered as an alternative to, or more
meaningful than, net cash from operating activities as determined
in accordance with IFRS. The Company considers cash flow to be a
key measure as it demonstrates the Company's underlying ability to
generate the cash necessary to fund operations and support
activities related to its major assets. Cash flow is
determined by adding back changes in non-cash operating working
capital to cash from operating activities. Management calculates
working capital as current assets less current liabilities and uses
this measure to analyze operating performance and leverage.
Notes:
(1) See MD&A Section 8.(2) Current ratio calculated as
current assets divided by current liabilities.(3) Debt includes
loans and borrowings and note payable as per their carrying amounts
on the balance sheet.(4) Gross margin is calculated as gross profit
divided by revenue.(5) Gross margin excluding depreciation and
amortization is calculated by dividing gross profit excluding
depreciation and amortization by revenue.(6) Net asset value per
share calculated by dividing total equity ($34.4 million) by common
shares outstanding (57.4 million).
Neither 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.
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