CALGARY, May 15, 2014 /CNW/ - Winalta Inc. ("Winalta" or
the "Company") (TSXV:WTA) is pleased to announce results for the
three months ended March 31, 2014
(the "Period"). Revenues of $9.7
million and EBITDA of $4.3
million, showed increases of $2.8
million or 41% and $0.4
million or 11%, respectively, to revenue of $6.8 million and EBITDA of $3.9 million for the three months ending
March 31, 2013 (the "Comparative
Period").
Utilization and Fleet size increased 8% and 12%, respectively,
but were offset by average day rate decreases of 14%. The decrease
in average day rates was expected with the implementation of
Winalta's strategy of increasing the concentration of revenue
generated from SAGD and other pad drilling activity, which tends to
operate more days per year but commands lower day rates. The
overall positive impact of this increased utilization is expected
to be shown in the second and third quarters of 2014.
Sub-contractor revenue showed an increase of $2.4 million or 157% over the Comparative Period.
Sub-contractor services include different configuration of
Wellsites and Drill Camps, generators and other services. The
increase in revenue associated with these services has a positive
impact on total revenue but reduces EBITDA margin percentages as a
lower margin is realized on the provision of these sub-contracted
services. This is an opportunity for Winalta to continue to monitor
its rental offerings to include services that were sub-contracted
in the Period for which it already has demand from existing
clients.
Quarter End Highlights
- Revenue increased 41% or $2.8
million
- EBITDA increased 11% to $4.3
million or $0.11 per
share
- Net Earnings increased 5% to $1.9
million or $0.04 per
share
SELECTED FINANCIAL HIGHLIGHTS
(Thousands of Canadian dollars, except for per share
amounts)
|
Three Months
Ended
|
|
March 31,
2014
|
March 31,
2013
|
Revenue
|
9,651
|
6,835
|
Net
Earnings
|
1,856
|
1,764
|
Earnings per
share
|
0.05
|
0.04
|
Earnings per share
diluted
|
0.04
|
0.04
|
EBITDA1
|
4,257
|
3,851
|
EBITDA per
share
|
0.11
|
0.10
|
Total
assets
|
49,673
|
43,360
|
Total
liabilities
|
24,669
|
17,509
|
Dividends
|
809
|
403
|
(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.
Dividend Payment
Winalta Inc. announces that its Board of Directors has declared
a quarterly cash dividend of $0.02
per class "A" common share payable on June
27, 2014 to all shareholders of record on June 13, 2014. The ex-dividend date for
this payment is June 11, 2014.
This dividend is an eligible dividend for Canadian income tax
purposes.
Revenue
Winalta increased revenues by $2.8
million or 41% over the Comparative Period. The increase in
revenue was achieved by both improvements in Company owned assets
revenue of $0.4 million (7%) and
sub-contractor revenue of $2.4
million (157%).
Direct Costs
Direct operating costs increased by $2.5
million over the Comparative Period. The majority
($2.2 million or 88%) of the increase
can be attributed to the increase in sub-contractor equipment and
services. The remaining $172
thousand represents increases in the growth in service staff
wages and benefits of $91 thousand
and fleet costs of $81 thousand.
Fleet Expansion
The Company's fleet increased by 32 Wellsite units and 4 IWS
units, which includes the sale of 10 Wellsite units and 1 Drill
Camp over the Comparative Period.
General and Administrative
For the Period, administrative costs were $966 thousand compared to $877 thousand for the Comparative Period.
The Company saw a reduction in professional fees ($37 thousand) and bad debt expense ($10 thousand) which was offset by increases in
staff costs ($96 thousand), marketing
costs ($28 thousand) and office rent
and operating costs ($12
thousand).
Depreciation and Amortization
Depreciation and amortization was $1.5
million for the Period as compared to $1.3 million for the Comparative Period.
The increase in depreciation and amortization expense reflects the
net acquisition of $11.0 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 $235 thousand for the Period as compared to
$183 thousand for the Comparable
Period. The increase was the result of the Company entering
fixed term financing agreements for the purchase of 4 IWS
units. The current rate for the operating loan facility and
the revolving term loan facility is prime plus 1.00% per annum and
prime plus 1.50% per annum, respectively.
Outlook
Winalta's management saw a strong first quarter and have an
optimistic outlook for the balance of 2014 based on continued
development of the Integrated Wellsite System (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, combined with conventional drilling, should
mitigate some of the seasonal impact on revenues in the second and
third quarter of 2014. Demand for, and utilization of,
Wellsite units continued to increase throughout the first quarter
of 2014 and into the second quarter of 2014. This activity is
expected to continue, adjusted for seasonality, for the balance of
2014.
Winalta continues to monitor its rental offerings to include
services that were sub-contracted for which it already has demand
from existing clients. Sub-contractor revenue for the quarter
increased by $2.4 million or 157%
over the three months ended March 31,
2013. Sub-contractor services include different
configuration of Wellsites and Drill Camps, generators and other
services.
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 and
utilization rates for the Company's rental units, possible
expansion of the Company's rental offerings 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.