Loading...
Loading...
CALGARY, ALBERTA--(Marketwire - Nov. 9, 2011) -
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.
The news release contains "forward-looking information and statements" within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the "Cautionary Statement Regarding Forward-Looking Information and Statements" later in this news release. Selected financial and operational information is contained below and should be read in conjunction with the interim financial statements and the related MD&A which are available for review at www.stradenergy.com or www.sedar.com.
Strad Energy Services Ltd., ("Strad" or the "Company") SDY, a North America focused, diversified energy services company, today announced its financial results for the three and nine month periods ended September 30, 2011. All amounts are stated in Canadian dollars unless otherwise noted.
SELECTED FINANCIAL AND OPERATIONAL HIGHLIGHTS:
-- Record third quarter EBITDA(1) of $18.6 million, a 116% increase
compared with $8.6 million in the third quarter of 2010 and a 65%
increase in EBITDA compared with the second quarter of 2011;
-- Capital expenditures of $6.8 million, net of disposals, in the third
quarter. By the end of September, $58.9 million of the $86.5 million
approved capital program for 2011 had been spent;
-- Continued deployment of assets to high growth resource areas in the
United States. Record third quarter United States revenues of $29.6
million increased 132% compared with the third quarter of 2010. Total
gross capital assets based in the United States now comprise 47% of
total Drilling Services gross capital assets compared with 32% at the
end of the third quarter of 2010;
-- Ongoing success in the development of new products, including solids
control, composite matting and satellite communications rental equipment
with $11.3 million spent on new products in the first nine months of
2011; and
-- Total funded debt to trailing EBITDA ratio of 0.7 at the end of the
third quarter.
"For the second straight quarter, Strad has succeeded in generating record-setting financial performance that was driven by strong utilization rates across our Canadian and U.S. operating regions. Following several quarters of sound investment in growing our asset base, third quarter EBITDA more than doubled from the same period a year ago," said Henry van der Sloot, Chief Executive Officer of Strad. "In keeping with our commitment to disciplined growth, we are also mindful of the current volatility of the global macroeconomic picture and are closely monitoring our anticipated capital spending for the balance of 2011 and beyond. We feel we are well positioned to rapidly scale the level of investment in our business as broader industry conditions dictate."
"This quarter's success speaks to the growing strength and depth of our customer base which includes major producers on both sides of the border," said Andy Pernal, President of Strad. "As the industry continues to shift towards increasingly complex and larger-scale projects that require broader rental equipment fleets, it is our growing investment in our asset base and expanded knowledge of our customers' businesses that allows us to penetrate deeper into the marketplace and ensure a growing reliance on the Strad brand."
Notes:
1. Earnings before interest, taxes, depreciation and amortization
("EBITDA") is not a recognized measure under IFRS or previous Generally
Accepted Accounting Principles in Canada ("GAAP"); see "Non-IFRS
Measures Reconciliation" in this press release.
FINANCIAL REVIEW FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2011
Effective January 1, 2011, Strad began reporting its financial results in accordance with International Financial Reporting Standards ("IFRS"). Prior year comparative amounts were changed to reflect results as if Strad had always prepared its financial results using IFRS. Please see additional discussion regarding IFRS later in this news release.
SELECTED FINANCIAL AND OPERATING HIGHLIGHTS
For the three and nine
months ended
September 30,
($000's, except per share Three months ended Nine months ended
amounts) September 30, September 30,
--------------------------------------------------
2011 2010 % chg. 2011 2010 % chg.
--------------------------------------------------
Revenue 78,121 41,615 88 175,482 108,683 61
----------------------------------------------------------------------------
EBITDA(1) 18,599 8,591 116 38,364 20,442 88
Per share ($), basic 0.51 0.44 1.05 1.04
Per share ($), diluted 0.50 0.34 1.04 0.92
----------------------------------------------------------------------------
Net Income 7,436 2,323 220 12,580 4,733 166
Per share ($), basic 0.20 0.12 67 0.34 0.24 42
Per share ($), diluted 0.20 0.10 0.34 0.23
----------------------------------------------------------------------------
Funds from Operations(2) 17,324 10,371 67 37,346 20,541 82
Per share ($), basic 0.47 0.53 1.02 1.04
Per share ($), diluted 0.47 0.41 1.01 0.93
----------------------------------------------------------------------------
Capital Expenditures(3) 6,817 11,544 58,927 30,501
Total assets 260,575 165,445 57 260,575 165,445 57
Long term debt(4) 29,526 36,880 29,526 36,880
Total long term
liabilities 61,175 43,207 61,175 43,207
----------------------------------------------------------------------------
Common Shares - end of
period ('000's) 37,246 20,403 37,246 20,403
Weighted average Common
Shares
basic 36,692 19,727 36,692 19,743
diluted 37,036 25,264 37,018 22,127
Notes:
(1) Earnings before interest, taxes, depreciation and amortization
("EBITDA") is not a recognized measure under IFRS or previous GAAP; see
"Non-IFRS Measures Reconciliation".
(2) Funds from operations is cash flow from operating activities before
changes in working capital. Funds from operations is not a recognized
measure under IFRS or previous GAAP; see "Non-IFRS Measures
Reconciliation".
(3) Includes assets acquired under finance lease. Segmented information does
not include capital expenditures for the corporate segment of Strad as
they are minimal.
(4) Excluding current portion; includes long term portion of finance lease
obligations and convertible debentures less cash.
FINANCIAL POSITION AND RATIOS
September 30,
------------------------------
($000's except ratios) 2011 2010
------------------------------
Working Capital (1) 39,275 11,323
Funded Debt (2) 34,477 59,597
Cash 6,000 -
Total Assets (3) 260,575 165,445
Funded Debt to EBITDA(2) 0.7 2.6
(1) Working capital is calculated as current assets less current
liabilities. See "Non-GAAP Measures Reconciliation".
(2) Funded debt includes bank indebtedness plus current and long-term
portion of debt plus current and long-term obligations under finance
lease plus convertible debentures less cash. EBITDA is based on trailing
twelve months. See "Non-GAAP Measures Reconciliation".
(3) Includes assets acquired under finance lease.
SEGMENTED INFORMATION
Strad operates in Canada and the United States through two business segments: Drilling Services and Production Services. Drilling Services includes a comprehensive range of drilling-related products and services, including a wide range of environmental solutions. Production Services includes mechanical services, production equipment packaging and electrical and instrumentation services. All divisional figures are reported based on these two segments.
For the three and nine months ended September 30,
($000's, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
----------------------------------------------------
($000's) 2011 2010 % chg. 2011 2010 % chg.
----------------------------------------------------
Drilling Services
Revenue 62,675 25,985 141 126,174 62,021 103
EBITDA(1) 19,287 9,622 100 40,487 21,198 91
EBITDA % 30.8% 37.0% 32.1% 34.2%
Capital Expenditures(2) 6,130 9,713 57,880 27,556
Gross Capital Assets 143,238 73,112 143,238 73,112
Total Assets 198,821 106,591 87 198,821 106,591 87
Annualized Return on
Average Total Assets
%(3) 46.0% 45.5% 38.2% 34.2%
Production Services
Revenue 15,446 15,630 (1) 49,308 46,662 6
EBITDA(1) 1,115 593 88 3,224 3,768 (14)
EBITDA % 7.2% 3.8% 6.5% 8.1%
Capital Expenditures(2) 184 1,549 271 1,763
Gross Capital Assets 14,867 16,438 14,867 16,438
Total Assets 56,193 58,080 56,193 58,080
Annualized Return on
Average Total Assets
%(3) 7.7% 3.8% 7.2% 8.0%
Corporate EBITDA(1) (1,802) (1,624) (5,347) (4,524)
Total EBITDA(1) 18,599 8,591 38,364 20,442
Notes:
(1) Earnings before interest, taxes, depreciation and amortization
("EBITDA") is not a recognized measure under IFRS or previous GAAP; see
"Non-IFRS Measures Reconciliation".
(2) Includes assets acquired under finance lease. Segmented information does
not include capital expenditures for the corporate segment of Strad as
they are minimal.
(3) Annualized return on average total drilling assets is not a recognized
measure under IFRS or previous GAAP; see "Non-IFRS Measures
Reconciliation".
RESULTS OF OPERATIONS
The record revenue and EBITDA results for the nine months ended September 30, 2011, are due to the successful execution of Strad's 2010 and 2011 capital programs. In the second quarter, Strad increased its 2011 capital expenditure program to $86.5 million (from $66.5 million), of which 68% had been purchased as of September 30, 2011. Strad's scalable capital program is being driven by continued organic demand for the Company's rental products and services. Horizontal drilling and multi-stage fracing activity have increased in the industry. In addition, there is increasingly stringent regulation and scrutiny of environmental practices, especially around high-profile resource plays in the U.S. These trends have increased the amount of equipment required on sites, the technical nature of the equipment, and the planning time required prior to execution of drilling. Strad partners with customers at the planning phase to ensure all equipment, logistical and safety needs are being satisfied efficiently. The Company's growing United States business provides geographical diversification, exposure to a larger range of resource plays and helps stabilize seasonal impacts for its rental equipment operations.
Consolidated revenue generated for the three and nine months ended September 30, 2011, increased 88% and 61%, respectively, to $78.1 million and $175.5 million compared with $41.6 million and $108.7 million for the same periods in 2010. Higher rental equipment utilization, additional capital expenditures and increased product sales contributed to the significant increase in revenue compared to 2010.
Revenues generated from the Company's Drilling Services segment for the three and nine months ended September 30, 2011, increased 141% and 103%, respectively, to $62.7 million and $126.2 million versus $26.0 million and $62.0 million for the same periods in 2010. Included in revenue for the three and nine months ended September 30, 2011 are product sales of $17.0 million and $28.2 million compared with $0.5 million and $4.8 million for the same periods in 2010. The remaining increase is primarily due to additions to the rental asset fleet in both Canada and the United States. Revenue generated from the United States for the three and nine months ended September 30, 2011, increased to $29.6 million and $54.2 million, respectively, or 131% and 137%, from $12.8 million and $22.9 million in the same periods in 2010. Canadian Drilling Services revenue also improved; for the three and nine months ended September 30, 2011, revenue of $33.1 million and $72.0 million increased 151% and 84%, respectively, compared with revenue of $13.2 million and $39.1 million for the same periods in 2010.
Production Services revenue decreased 1% and improved 6% to $15.4 million and $49.3 million for the three and nine months ended September 30, 2011, respectively, compared with $15.6 million and $46.7 million for the same periods in 2010. Revenue for the year to date period increased as the number of field service technicians in the group grew 13% over September 30, 2010, but was negatively impacted by delays in servicing due to continuing weak industry conditions in the Western Canadian Sedimentary Basin ("WCSB"), which have not changed significantly over that of last year due to depressed natural gas prices.
Consolidated EBITDA for the three and nine months ended September 30, 2011, of $18.6 million and $38.4 million improved 116% and 88%, respectively, compared with $8.6 million and $20.4 million for the same periods in 2010 for the reasons stated above. EBITDA for the quarter, excluding product sales noted above, was $16.9 million. EBITDA as a percentage of revenue for the three and nine months ended September 30, 2011, was 24% and 22% compared with 21% and 19% for the same periods in 2010.
Drilling Services EBITDA for the three and nine months ended September 30, 2011, of $19.3 million and $40.5 million improved 100% and 91%, respectively, compared with $9.6 million and $21.2 million for the same periods in 2010 for the reasons stated above. EBITDA as a percentage of revenue for the three and nine months ended September 30, 2011, was 31% and 32% compared with 37% and 34% for the same periods in 2010. EBITDA as a percentage of revenue for the three and nine months ended September 30, 2011, excluding EBITDA from product sales of $1.7 million and $3.3 million, was 38% compared with 37% and 36% excluding $0.1 million and $0.5 million of product sales EBITDA for the same period in 2010.
Production Services EBITDA for the three and nine months ended September 30, 2011, of $1.1 million and $3.2 million increased 88% and decreased 14%, respectively, compared with $0.6 million and $3.8 million for the same periods in 2010 for the reasons stated above. EBITDA as a percentage of revenue for the three and nine months ended September 30, 2011, was 7% compared with 4% and 8% for the same periods in 2010.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2011, Strad's principal sources of liquidity include working capital of $39.3 million, an increase of $28.0 million compared with September 30, 2010; a syndicated banking facility of $100.0 million consisting of a $15.0 million operating facility of which $nil was drawn; and a revolving facility of $85.0 million of which $31.5 million was drawn as of September 30, 2011. As at September 30, 2011, the Company was in compliance with all of its bank facility covenants.
OUTLOOK
Industry conditions remained strong in the third quarter, driven by activity in increasingly dynamic resource plays focused on oil and liquids rich natural gas. Demand for Strad's services continued to outstrip supply which translated into high utilization rates and strong pricing in key regional markets, trends that management expects to continue through the balance of the year and into 2012.
In the WCSB, drilling utilization of 56% for the third quarter of 2011 was up from 41% in the third quarter of last year; well permits for the third quarter of 2011 increased 15% over the third quarter of 2010; and meters drilled in the third quarter of 2011 increased 37% over that of the third quarter of 2010. Positive industry indicators were also present in the United States where land rig counts grew due to continued growth in the number of rigs currently targeting oil (53%). Horizontal drilling and multi-stage fracing are also being utilized more often to exploit both unconventional resource plays and mature conventional plays. So far this year, 57% of U.S. rig activity was focused on horizontal drilling techniques, compared with 52% in 2010. In Canada, 57% of total wells drilled in 2011 were horizontal, compared with 51% in 2010. Horizontal drilling techniques require a larger footprint and more advanced planning and equipment on the well site. Strad is successfully accessing the emerging market opportunity created by these large and complex initiatives by being one of the few companies able to deploy the volume of equipment and expertise required to support them. Management is increasingly focused on signing contracts associated with these projects, which drives utilization and provides more stable revenue. Management believes the focus on horizontal drilling techniques, as well as increasingly complex completions, are expected to drive growth through the winter drilling season.
On the back of these trends Strad generated record revenue and earnings in the third quarter. These results are a direct reflection of the successful implementation of the Company's strategy to grow its asset base and Strad's return on assets remains strong. On a year-to-date basis, the Company allocated approximately 60% of its total Drilling Services capital expenditures to the U.S. and total gross capital assets in the U.S. now comprise 47% of total Drilling Services gross capital assets. New product initiatives such as solids control, satellite communications equipment and composite mats made up $11.3 million of capital expenditures in the first nine months of 2011. The new products and services enhance the value the Company can offer to its customers and helps to further diversify the product suite. Driving further demand for these new products are the continuously evolving high standards of safety and environmental stewardship that continue to present significant concern for customers, particularly those in high profile, new resource plays. These higher standards, in combination with increasingly large and complex deployments, have created barriers to entry and a drive to use single source, full-service vendors like Strad. On that basis, the Company substantially increased its customer base in 2011 with the majority of customers ranked among the largest companies of their type in Canada and the U.S.
With increased recent volatility in commodity prices, brought on by European economic uncertainty and concerns for a potential downturn in the U.S., management expects Exploration and Production ("E&P") companies to exercise caution and to potentially moderate capital spending in 2012 versus 2011 levels. Formal approval of Strad's 2012 capital expenditure program will be confirmed in December. However, management expects that the program will approximate cash flow for the year.
Management believes it has the flexibility to rapidly scale its capital expenditure program in the coming quarters in concert with changes in broader macroeconomic conditions and spending by E&P customers. Flexibility is the result of Strad manufacturing in-house a substantial portion of the rental equipment in its 2011 capital expenditure program, and maintaining strong relationships with third-party equipment providers. This should allow the Company to take advantage of robust market conditions while they persist and mitigate the potential impact of any deterioration in economic conditions should industry dynamics change in 2012. Management intends to allocate additional capital in the coming months with a focus on continued development of new and technically advanced products. The Company typically averages a three month lag between the date of expenditures and the date that assets are deployed in the field and generating revenue, although the lag varies by product line. The lag is due to internal preparation necessary to ready the equipment for customer use.
Strad remains cognizant that a strong balance sheet is essential to remaining a successful company operating against a backdrop of fluctuating market conditions. The funds raised last November through the initial public offering, operational cash flow and the existing bank facilities, have provided for a strong balance sheet and the required funding for the 2011 capital program. Management views funded debt to EBITDA as an important tool in the prudent management of its balance sheet and intends to continue carefully allocating capital. At September 30, 2011, the funded debt to EBITDA ratio was 0.7.
NON-IFRS MEASURES RECONCILIATION
Certain supplementary measures in this Press Release do not have any standardized meaning as prescribed under IFRS and previous GAAP and, therefore, are considered non-IFRS measures. These measures are described and presented in order to provide shareholders and potential investors with additional information regarding the Company's financial results, liquidity and its ability to generate funds to finance its operations. These measures are identified and presented, where appropriate, together with reconciliations to the equivalent IFRS or previous GAAP measure. However, they should not be used as an alternative to IFRS or previous GAAP, because they may not be consistent with calculations of other companies. These measures are further explained below.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") is not a recognized measure under IFRS and previous GAAP. Management believes that in addition to net income, EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company's principal business activities prior to consideration of how those activities are financed or how the results are taxed. EBITDA is calculated as net income plus interest, taxes, depreciation and amortization, non-controlling interest, loss on disposal of property, plant and equipment, accretion of convertible debentures, loss on foreign exchange, less gain on foreign exchange and gain on disposal of property, plant and equipment. Segmented EBITDA is based upon the same calculation for defined business segments, which are comprised of Drilling Services, Production Services and Corporate.
Funds from operations are cash flow from operating activities excluding changes in working capital. It is a supplemental measure to gauge performance of the Company before non-cash items. Working capital is calculated as current assets minus current liabilities. Working capital is used by Management to gauge what banking facilities are available for reinvestment in the business.
Annualized return on average total assets for the first nine months is calculated as annualized current period EBITDA divided by the average of total assets over Q4 2010, Q1 2011 and Q2 2011. Annualized return on average total assets for the three months ended September 30, 2011, is calculated as annualized current period EBITDA divided by the averaged total assets over the prior quarter. The three month lag represents the time between the purchase of capital assets and when they are deployed in the field and earning revenue.
Funded debt is calculated as bank indebtedness plus current and long-term portion of debt plus current and long-term portion of finance lease obligations plus convertible debentures less cash.
Reconciliation of EBITDA and Funds from Operations
Reconciliation of non-IFRS measures
($000's)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
--------------------------------------------------------
2011 2010 2011 2010
--------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
Net income 7,436 2,323 12,580 4,733
Add:
Depreciation and
amortization 6,173 3,775 16,460 10,667
Accretion of
convertible
debenture - 22 - 22
(Gain)/loss on
disposal of PP&E 63 - (94) (61)
Share-based payments 187 130 642 435
Non-controlling
interest 497 445 830 639
Deferred income tax
expense 2,454 2,916 5,670 2,325
Interest expense 514 760 1,258 1,781
--------------------------------------------------------
Funds from
operations 17,324 10,371 37,346 20,541
Add:
(Gain)/Loss on
foreign exchange (914) (195) (319) 119
Income tax expense 2,376 (1,455) 1,979 217
--------------------------------------------------------
Subtotal 18,786 8,721 39,006 20,877
Deduct:
Share-based payments 187 130 642 435
--------------------------------------------------------
EBITDA 18,599 8,591 38,364 20,442
--------------------------------------------------------
--------------------------------------------------------
Reconciliation of quarterly non-IFRS measures
($000's)
Three months ended
(unaudited)
Sept. 30, Jun. 30, Mar. 31, Dec. 31,
2011 2011 2011 2010 (1)
----------------------------------------
Net income 7,436 3,557 1,587 2,579
Add:
Depreciation and amortization 6,173 5,606 4,681 4,043
Accretion of convertible debenture - - - 13
(Gain)/loss on disposal of PP&E 63 (145) (12) (68)
(Gain)/loss on foreign exchange (914) 325 270 526
Non-controlling interest 497 (210) 543 76
Income tax expense/(recovery) 2,376 (417) 20 (522)
Deferred income tax expense 2,454 2,094 1,122 1,144
Interest expense 514 510 234 569
----------------------------------------
EBITDA 18,599 11,320 8,445 8,360
----------------------------------------
----------------------------------------
(1) 2010 amounts are presented in accordance with IFRS. 2009 amounts are
presented in accordance with previous GAAP.
Reconciliation of quarterly non-IFRS measures
($000's)
Three months ended
(unaudited)
Sept. 30, Jun. 30, Mar. 31, Dec. 31,
2010 (1) 2010 (1) 2010 (1) 2009
----------------------------------------
Net income (loss) 2,323 852 1,558 (11,403)
Add:
Depreciation and amortization 3,775 3,546 3,346 3,080
Accretion of convertible debenture 22 - - -
Impairment of goodwill - - - 11,000
(Gain)/loss on disposal of PP&E - (27) (34) 90
(Gain)/Loss on foreign exchange (195) 185 129 (245)
Non-controlling interest 445 (20) 214 -
Income tax expense/(recovery) (1,455) 653 1,019 (15)
Deferred income tax expense
(recovery) 2,916 (393) (198) (821)
Interest expense 760 560 461 424
----------------------------------------
EBITDA 8,591 5,356 6,495 2,110
----------------------------------------
----------------------------------------
(1) 2010 amounts are presented in accordance with IFRS. 2009 amounts are
presented in accordance with previous GAAP.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS
Certain statements and information contained in this Press Release constitute forward-looking statements. More particularly, this Press Release contains forward-looking statements concerning future capital expenditures of the Company, demand for the Company's products and services, pricing of the Company's products and services and expected exploration and production industry activity. These statements relate to future events or to the Company's future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, levels of activity, performance or achievements to be materially different from future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.
The use of any of the words "expect", "plan", "continue", "estimate", "anticipate", "targeting", "intend", "could", "might", "should", "believe", "may", or "will" and similar expressions are intended to identify forward-looking information or statements. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this Press Release. The forward-looking information and statements included in this Press Release are not guarantees of future performance and should not be unduly relied upon. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated and described in the forward-looking statements. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements. These factors include, but are not limited to, such things as the impact of general industry conditions, fluctuation of commodity prices, industry competition, availability of qualified personnel and management, stock market volatility and timely and cost effective access to sufficient capital from internal and external sources. The risks outlined above should not be construed as exhaustive. Although management of the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Accordingly, readers should not place undue reliance upon any of the forward-looking information set out in this Press Release. All of the forward looking statements of the Company contained in this Press Release are expressly qualified, in their entirety, by this cautionary statement. Except as required by law, the Company disclaims any intention or obligation to update or revise any forward-looking information or statements, whether the results of new information, future events or otherwise.
THIRD QUARTER 2011 EARNINGS CONFERENCE CALL
Strad Energy Services Ltd. has scheduled a conference call to begin promptly at 10:00 a.m. MDT on Thursday, November 10, 2011.
The conference call dial in numbers are 1-877-240-9772 or 1-416-340-8530.
The conference call will also be accessible via webcast at:
www.stradenergy.com
A replay of the call will be available approximately one hour after the conference call ends until Thursday, November 17th. To access the replay, call 1-800-408-3053 or 1-905-694-9451, followed by pass code 8520500.
Strad Energy Services Ltd.
Consolidated Statement of Financial Position
(Unaudited)
----------------------------------------------------------------------------
(in thousands of Canadian dollars)
September 30, December 31,
2011 2010
$ $
Assets
Current assets
Cash and cash equivalents 6,000 8,416
Accounts receivable 58,733 41,700
Inventories 13,981 15,171
Prepaid expenses and deposits 3,682 2,887
Income taxes receivable 114 241
------------------------------
82,510 68,415
Non-current assets
Property, plant and equipment (note 5) 117,959 70,128
Intangible assets (note 6) 9,151 11,446
Goodwill 36,004 36,004
Deferred income taxes 14,951 5,475
------------------------------
Total assets 260,575 191,468
------------------------------
------------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 35,621 26,755
Deferred revenue 499 3,387
Current portion of obligations under finance
lease (note 7) 4,951 4,662
Income taxes payable 2,164 36
------------------------------
43,235 34,840
Non-current liabilities
Long-term debt (note 8) 31,500 -
Obligations under finance lease (note 7) 4,026 5,282
Deferred income tax liabilities 25,649 10,462
------------------------------
Total liabilities 104,410 50,584
Equity
Equity attributable to owners of the parent
Share capital (note 9) 157,043 157,071
Contributed surplus 2,863 2,221
Accumulated other comprehensive income (loss) 207 (924)
Deficit (5,655) (18,235)
------------------------------
154,458 140,133
Non-controlling interests 1,707 751
------------------------------
Total equity 156,165 140,884
------------------------------
Total liabilities and equity 260,575 191,468
------------------------------
------------------------------
Strad Energy Services Ltd.
Consolidated Statement of Income
For the three and nine months ended September 30, 2011 and 2010
(Unaudited)
----------------------------------------------------------------------------
(in thousands of Canadian dollars, except per share data)
Three months ended Nine months ended
September 30 September 30
2011 2010 2011 2010
Revenue 78,121 41,615 175,482 108,683
Expenses
Operating expenses 49,037 25,220 109,867 68,187
Depreciation 5,266 2,859 13,803 7,918
Amortization of intangible assets 907 916 2,657 2,749
Accretion of convertible debentures - 22 - 22
Selling, general and administration 10,298 7,674 26,609 19,619
Share-based payments 187 130 642 435
Loss (gain) on disposal of property,
plant and equipment 63 - (94) (61)
Foreign exchange (gain) loss (914) (195) (319) 119
Net interest expense 514 760 1,258 1,781
----------------------------------------
Income before income tax 12,763 4,229 21,059 7,914
Income tax (note 10) 4,830 1,461 7,649 2,542
----------------------------------------
Net income for the period 7,933 2,768 13,410 5,372
----------------------------------------
----------------------------------------
Net income attributable to:
Owners of the parent 7,436 2,323 12,580 4,733
Non-controlling interests 497 445 830 639
----------------------------------------
7,933 2,768 13,410 5,372
----------------------------------------
----------------------------------------
Earnings per share:
Basic $ 0.20 $ 0.12 $ 0.34 $ 0.24
Diluted $ 0.20 $ 0.10 $ 0.34 $ 0.23
Consolidated Statement of Comprehensive Income
For the three and nine months ended September 30, 2011 and 2010
(Unaudited)
----------------------------------------------------------------------------
(in thousands of Canadian dollars)
Three months ended Nine months ended
September 30 September 30
2011 2010 2011 2010
----------------------------------------
Net income for the period 7,933 2,768 13,410 5,372
----------------------------------------
Other comprehensive income (loss)
Cumulative translation adjustment 2,320 (466) 1,257 (466)
----------------------------------------
Total other comprehensive income
(loss) 2,320 (466) 1,257 (466)
----------------------------------------
Comprehensive income for the period 10,253 2,302 14,667 4,906
----------------------------------------
----------------------------------------
Comprehensive income attributable
to:
Owners of the parent 9,524 1,904 13,711 4,314
Non-controlling interests 729 398 956 592
----------------------------------------
10,253 2,302 14,667 4,906
----------------------------------------
----------------------------------------
Strad Energy Services Ltd.
Consolidated Statement of Cash Flow
For the three and nine months ended September 30, 2011 and 2010
(Unaudited)
----------------------------------------------------------------------------
(in thousands of Canadian dollars)
Three months ended Nine months ended
Cash flow provided by (used in) September 30 September 30
2011 2010 2011 2010
Operating Activities
Net income for the period 7,933 2,768 13,410 5,372
Adjustments for:
Depreciation and amortization 6,173 3,775 16,460 10,667
Accretion of convertible debentures - 22 - 22
Deferred income tax expense 2,454 2,916 5,670 2,325
Share-based payments 187 130 642 435
Net interest expense 514 760 1,258 1,781
Loss (gain) on disposal of
property, plant and equipment 63 - (94) (61)
Changes in items of non-cash working
capital:
Accounts receivable (13,346) (8,071) (17,033) (20,077)
Inventories 2,014 566 1,190 3,994
Prepaid expenses (723) 208 (795) (1,087)
Accounts payable and accrued
liabilities 7,920 (822) 8,866 5,823
Note receivable 2,949 - - -
Other current liabilities (1,113) (1,437) (634) 665
----------------------------------------
Net cash generated from operating
activities 15,025 815 28,940 9,859
----------------------------------------
Investing activities
Purchase of property, plant and
equipment (5,081) (11,264) (55,552) (29,339)
Proceeds from sale of property,
plant and equipment 374 314 826 776
Purchase of intangible assets (28) (26) (366) (180)
----------------------------------------
Net cash generated from investing
activities (4,735) (10,976) (55,092) (28,743)
----------------------------------------
Financing activities
Change in bank indebtedness (10,070) (2,584) - 1,968
Proceeds on issuance of long-term
debt 35,000 14,519 57,000 3,559
Repayment of long-term debt (25,500) - (25,500) -
Repayment of finance lease
obligations (net) (1,259) (1,048) (4,343) (1,052)
Proceeds on issuance of convertible
debentures - - - 16,166
Net interest expense (514) (760) (1,258) (1,781)
Repurchase of share capital - (2) - (12)
Share issuance costs - - (147) -
Repayment of shareholder loan 119 - 119 -
----------------------------------------
Net cash generated in financing
activities (2,224) 10,125 25,871 18,848
----------------------------------------
Effect of exchange rate changes on
cash and cash equivalents (2,066) 36 (2,135) 36
Increase (decrease) in cash and cash
equivalents 6,000 - (2,416) -
Cash and cash equivalents -
Beginning of period - - 8,416 -
----------------------------------------
Cash and cash equivalents - End of
period 6,000 - 6,000 -
----------------------------------------
----------------------------------------
ABOUT STRAD ENERGY SERVICES LTD.
Strad is a diversified energy services company that focuses on providing oilfield solutions to the oil and natural gas industry in the WCSB and throughout the United States. Strad operates with two core divisions: Drilling Services and Production Services. Drilling Services focuses on providing complete customer solutions in drilling-related oilfield equipment for producers active in unconventional resource plays. Production Services focuses on delivering a range of products and services to support the ongoing maintenance of natural gas and oil production.
Strad is headquartered in Calgary, Alberta, Canada. Strad is listed on the Toronto Stock Exchange under the trading symbol "SDY".
Loading...
Loading...
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Posted In: Press Releases
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in
