Macro Enterprises Inc. Announces 2014 First Quarter Results
29 May 2014 - 6:00AM
Marketwired
Macro Enterprises Inc. Announces 2014 First Quarter Results
FORT ST. JOHN, BRITISH COLUMBIA--(Marketwired - May 28, 2014) -
Macro Enterprises Inc. (TSX-VENTURE:MCR) -
|
Summary of financial results (thousands of dollars
except per share amounts) |
|
Three months ended March 31 |
|
2014 |
2013 |
|
(unaudited) |
(unaudited) |
|
|
|
Revenues |
$87,779 |
$60,122 |
|
|
|
EBITDA1 |
5,104 |
15,021 |
|
|
|
Net
earnings |
2,153 |
9,685 |
|
|
|
Net
earnings per share |
$0.07 |
$0.40 |
|
|
|
Weighted average common shares outstanding (thousands) - basic |
29,944 |
24,118 |
Note 1 - References to EBITDA are to net income from continuing
operations before interest, taxes, amortization and impairment
charge. EBITDA is not an earnings measure recognized by
International Financial Reporting Standards ("IFRS") and does not
have a standardized meaning prescribed by IFRS. Management believes
that EBITDA is an appropriate measure in evaluating the Company's
performance. Readers are cautioned that EBITDA should not be
construed as an alternative to net income (as determined under
IFRS) as an indicator of financial performance or to cash flow from
operating activities (as determined under IFRS) as a measure of
liquidity and cash flow. The Company's method of calculating EBITDA
may differ from the methods used by other issuers and, accordingly,
the Company's EBITDA may not be comparable to similar measures used
by other issuers.
Highlights
- Revenue increased significantly to $87.8 million in first
quarter 2014 from $60.1 million in first quarter 2013 due to
increased pipeline and facility construction activity
- EBITDA and net income were lower than anticipated primarily as
a result of a loss on one particular pipeline construction project
in the Fort McMurray region. For strategic reasons this project was
originally bid at lower than normal margins but the resulting loss
was unexpected.
First quarter results
Macro Enterprises Inc. posted consolidated revenue of $87.8
million, a significant increase over last year's first quarter
revenue of $60.1 million. This growth in revenue is partially
attributable to two large big inch pipeline projects near Fort
McMurray, Alberta.
Increased operating costs associated with one of the pipeline
projects in Fort McMurray have resulted in lower than anticipated
profits for the Company. For strategic reasons, Macro originally
bid this job at low margins but unanticipated problems with this
project resulted in a loss on the project of $6.9 million.
Macro has entered into discussions with the pipeline operator
requesting additional compensation. Additional compensation, if
any, will be recorded when such further compensation has been
formally agreed to.
"While we are disappointed that we lost money on this particular
job, it was an important strategic move for the Company to take on
this project to be able to show the pipeline operator that we have
the requisite experience to handle these projects," said Frank
Miles, Chief Executive Officer. "We believe our customer was
pleased with the quality of our work and that we will continue to
work on significant projects for this operator."
General and administrative expenses in the quarter were $2.5
million, up from $2.2 million in the same period last year.
Expenses were higher this year due mainly to additional staff
costs.
Total amortization expense of $2.0 million increased by $0.2
million due to a greater amount of capital assets.
Interest expense of $0.2 million in the quarter was below the
first quarter last year due to the conversion (into common shares)
of the interest-bearing shareholder loan in June 2013.
Income tax expense in the quarter of $770,000 was at an
effective tax rate of 26.3% which approximates the statutory
rate.
Net income was $2.5 million ($0.08 per share) compared to $9.7
million ($0.40 per share).
Outlook
Activity in the oil and gas industry in western Canada remains
very active, particularly in the Peace River region and the Fort
McMurray area. Macro is continuing to actively bid on numerous
pipeline and facility construction projects in targeted regions of
western Canada. However, due to the timing of our customers'
projects, the Company is expecting revenues in the second quarter
of fiscal 2014 to be below those recorded in second quarter of
fiscal 2013.
In addition, the Company is seeking out pipeline construction
contracts in connection with the Liquefied Natural Gas (LNG)
projects being planned on the west coast of British Columbia, an
industry that is anticipated to bring substantial economic activity
to British Columbia over the next 30 years. Macro has entered into
discussions with several of the LNG project owners regarding future
pipeline and facilities construction.
Macro's core business is providing pipeline and facilities
construction and maintenance services to major companies in the oil
and gas industry. The Company is based in Fort St. John, B.C. Its
shares are listed on the TSX Venture Exchange under the symbol MCR.
Information on the Company's principal operating unit, Macro
Industries Inc., can be found at www.macroindustries.ca.
Conference call
The Company will host a conference call at 8 am PDT on Thursday,
May 29, 2014 to discuss the 2014 first quarter results. The
conference call can be accessed by dialing 1-888-390-0605 and
referencing conference ID 57831328.
Forward Looking Statements
Certain statements in this news release may include
forward-looking information that involves various risks and
uncertainties. These may include, without limitation, statements
regarding expected revenues, expenses and industry trends and the
pursuit of strategic acquisitions. These risks and uncertainties
include, but are not restricted to, global economic conditions,
government regulation of energy and resource companies, seasonal
weather patterns, maintaining and increasing market share,
terrorist activity, the price and availability of alternative
fuels, the availability of pipeline capacity, and potential
instability or armed conflict in oil producing regions. These risks
and uncertainties may cause actual results to differ from
information contained herein. There can be no assurance that such
forward-looking statements will prove to be accurate. Actual
results and future events could differ materially from those
anticipated in such statements. These statements are based on the
estimates and opinions of management on the dates they are made and
are expressly qualified in their entirety by this notice. Except as
required by law, the Company assumes no obligation to update
forward-looking statements should circumstances or management's
estimates or opinions change.
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.
Macro Enterprises Inc.Frank MilesPresident and C.E.O.(250)
785-0033Macro Enterprises Inc.T. Jerrold JacksonC.F.O.(403)
705-7302www.macroindustries.ca
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