CALGARY, April 4, 2014 /CNW/ - Winalta Inc. ("Winalta" or
the "Company") (TSXV:WTA) announces results for the three months
and year ended December 31, 2013 (the
"Period"). Revenues of $19.1 million
and EBITDA of $7.7 million, showed
decreases of $0.8 million and
$1.5 million, respectively, to
revenue of $19.8 million and EBITDA
of $9.2 million for the 12 months
ending December 31, 2012 (the
"Comparative Period"). Winalta's EBITDA for the Period adjusts to
$8.2 million due to a one time,
non-cash impairment of $0.5 million
on a non-core land asset.
Utilization for Wellsites, Drill Camps and Dedicated Geo Labs
(DGL) was up 4% over the Comparative Period. The improved asset
utilization was offset by an average 17% decrease in day rates.
That average includes an expected 10% decrease in Wellsite day
rates with the Company's move to SAGD pad and multilateral drilling
with a 20% decrease in Drill Camp and DGL day rates due to general
market pressures.
Issues related to the first deployment of Integrated Wellsite
Systems (IWS), and operational issues around sub-contractor support
equipment, significantly increased Winalta's direct costs, lowering
EBTIDA margins from 47% in the Comparative Period to 41% for the
Period. IWS deployment issues and sub-contractor support equipment
have been addressed and are not expected to occur for 2014.
Year End Highlights
- SG&A decreased 8% or $300
thousand
- IWS revenue contributed 7% of total revenue for the Period
- EBITDA margin of 41% compared to EBITDA margin of 47% in 2012
- Adjusting for both gains and impairment for 2013 and 2012,
EBITDA margins of 42% for the period compare favourably 43% for the
Comparative Period
Selected Financial Information
Years ended December
31 (all numbers in thousands unless per share)
|
2013
|
2012
|
|
$
|
$
|
Revenue
|
19,059
|
19,833
|
Earnings before
income taxes
|
1,187
|
3,147
|
Net earnings from
continuing operations
|
887
|
3,620
|
Earnings per share -
continuing operations
|
0.02
|
0.09
|
EBITDA
(1)
|
7,735
|
9,229
|
EBITDA per
share
|
0.19
|
0.23
|
Total
assets
|
46,807
|
41,582
|
Total
liabilities
|
22,898
|
17,191
|
Dividends
paid
|
1,615
|
1,603
|
(1) EBITDA is defined as net earnings from continuing
operations before interest and finance costs, income taxes,
depreciation
and amortization. EBITDA does not have a standardized meaning
and is therefore not likely to be comparable with similar measures
used by other issuers. However, Winalta calculates EBITDA
consistently from period to period. While EBITDA is not
considered an alternative to net earnings in measuring performance,
it is a key measure used by the Company and its investors.
The Company believes EBITDA assists investors in assessing
Winalta's performance on a consistent basis without regard to
financing costs, taxes and depreciation which, can vary
significantly from period to period for reasons not directly
related to operations.
Revenue
Winalta's 2013 revenue decreased by 4% or
$0.8 million versus the Comparative
Period. This 4% decrease in revenue is attributable to decreases in
day rates and sub-contractor revenue that were partially offset by
increases in utilization and the addition of five IWS.
Direct Costs
Direct operating costs increased by
$100 thousand over the Comparative
Period. Direct operating costs in the Period increased by
$896 thousand due to additional IWS
servicing costs and growth of service staff headcount. This
increase was offset by decreases in sub-contractor costs of
$796 thousand.
Fleet Expansion
Over the past 12 months, the Company
added 30 Wellsite units and 4 DGL to its fleet.
General and Administrative
For the Period,
administrative costs were $3.7
million, down from $4.0
million, for the Comparative Period. Cost reductions
were shown in professional fees and operating costs of $275 thousand. The Company had a savings of
$176 thousand from a one-time land
disposal cost. These reductions were offset by an increase of
$153 thousand in stock based
compensation, salaries and additional marketing expenses.
Depreciation and Amortization
Depreciation and
amortization was $5.7 million for the
Period as compared to $5.1 million
for the Comparative Period. The increase in depreciation and
amortization expense reflects the net acquisition of $10.8 million of equipment in the trailing 12
months.
Finance Costs
Finance costs, which include interest on
long-term debt and finance leases and fees paid on refinancing,
were $817 thousand for the Period as
compared to $1.03 million for the
Comparable Period. The decrease was the result of the Company
renegotiating its financing facility with its primary lender to
more favorable terms.
Outlook
Winalta's management has a positive outlook
for 2014 based on the Company's expanded rental fleet, introduction
and development of the Company's IWS, and a more diversified
customer base.
The Company continues to pursue other opportunities to deploy
IWS and conventional Wellsites in the SAGD pad and multilateral
drilling space. A shift to deploy equipment within the pad
drilling programs, instead of conventional drilling, should
mitigate some of the seasonal impact on revenue in 2014.
Winalta has contracts with three major energy companies for the
rental of five IWS. These agreements were a new focus for Winalta
in 2013 with the first agreement commencing in June 2013. Demand for, and utilization of,
Wellsite units continued to increase throughout the fourth quarter
of 2013 which continued into the first quarter of 2014. This
activity is expected to continue, adjusted for seasonality, for the
balance of 2014.
The strength of future expected financial results is based on
previously announced new contracts, an expanded focus on marketing
and higher levels of visibility of the Company's IWS fleet.
Winalta's entrance into the SAGD and multi well pad drilling space
is expected to create steadier revenue streams and decrease
historical seasonality.
FOURTH QUARTER RESULTS
Selected Financial Information
3 Months Ending
December 31, 2013 (all numbers in thousands unless per
share)
|
Q4
2013
$
|
Q4
2012
$
|
Revenue
|
6,726
|
5,304
|
Earnings before
income taxes
|
700
|
1,616
|
Net earnings from
continuing operations
|
625
|
2,089
|
Earnings per share -
continuing operations
|
0.01
|
0.05
|
EBITDA
(1)
|
2,494
|
3,149
|
EBITDA per
share
|
0.06
|
0.08
|
(1) EBITDA is defined as net earnings from continuing
operations before interest and finance costs, income taxes,
depreciation and amortization. EBITDA does not have a
standardized meaning and is therefore not likely to be comparable
with similar measures used by other issuers. However, Winalta
calculates EBITDA consistently from period to period. While
EBITDA is not considered an alternative to net earnings in
measuring performance, it is a key measure used by the Company and
its investors. The Company believes EBITDA assists investors
in assessing Winalta's performance on a consistent basis without
regard to financing costs, taxes and depreciation which, can vary
significantly from period to period for reasons not directly
related to operations.
Revenue
Revenue increased $1.4
million or 27%, for the three months ending December 31, 2013 (the "Quarter") from the
quarter ended December 31, 2012 (the
"Comparative Quarter").
The increase in revenue can be attributed to an 18% improvement
in Wellsites, Drill Camps and DGL utilization, which was offset by
a reduction in average day rates of 17%.
The average decrease in day rates is a result of an expected 12%
decrease in Wellsite day rates with the Company's move to less
seasonal SAGD pad and multilateral drilling combined with a 31%
decrease in day rates for Drill Camps and DGL as a result of
general market pressures.
Direct Costs
For the Quarter, direct operating costs
increased by $782 thousand over the
same period in 2012. Direct operating costs increased due to
increases in IWS deployment, sub-contractor costs, wages and
service operating costs.
Costs associated with the IWS initial deployment, start-up costs
and sub-contractor of the IWS support equipment of $200 thousand have been addressed and are not
expected in 2014.
General and Administrative
Administrative costs
increased by $18 thousand for the
Quarter over the Comparative Quarter. The Company saw increases of
$151 thousand in marketing, salaries
and advertising. The increases in subcontractor, wage
and service costs are directly related to increased revenue from
operations in the fourth quarter of 2013 compared to the fourth
quarter of 2012.
Forward-looking information
Certain information set
forth in this press release, including management's assessment of
the potential for increased cash flows, continued growth of the
Company's rental fleet, demand for the Company's rental units and
the Company's expectation regarding the status of the economy and
its impact on the Company, may constitute forward-looking
statements. By their nature, forward-looking statements involve
material assumptions and are subject to numerous risks and
uncertainties, including with respect to market and economic
conditions and their impact on the Company's business, some of
which, are beyond the Company's control. Readers are cautioned not
to place undue reliance on the forward-looking statements as the
assumptions used in the preparation of such information, although
considered reasonable at the time of preparation, may prove to be
imprecise and actual results, performance or outcomes could
materially differ from those expressed or implied in such
forward-looking statements and accordingly, no assurance can be
given that any of the events anticipated by forward looking
statements will transpire or occur, or if any of them do so, what
benefit Winalta will derive therefrom. The Company does not assume
the obligation to revise or update this forward-looking information
after the date of this release or to revise such information to
reflect the occurrence of future unanticipated events, except as
may be required under applicable securities laws.
SOURCE Winalta Inc.