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 ended March 31, 2018.
2018 First Quarter Business
Highlights
- Revenue for the three months ended
March 31, 2018 increased by $19.2 million or 47% to $60.2 million,
compared with revenue of $41.0 million for the same period in 2017.
Compared to the fourth quarter of 2017, revenue increased by $7.1
million from $53.1 million to $60.2 million;
- Gross profit excluding depreciation
and amortization1 in the first quarter of 2018 increased by $2.5
million to $9.3 million from $6.8 million for the same period in
2017. Comparing to the fourth quarter of 2017, gross profit
excluding depreciation and amortization1 increased by 20% from $7.8
million to $9.3 million;
- Adjusted EBITDA1 in the first
quarter of 2018 increased by $1.8 million to $4.4 million compared
to $2.6 million in the first quarter of 2017. This amount of
Adjusted EBITDA1 continues the strong performance the Company has
experienced throughout fiscal 2017;
- Net loss for the three months ended
March 31, 2018 decreased by $2.2 million to $1.3 million, compared
to a net loss of $3.4 million for the same period in 2017. Loss per
share was $0.02 compared to $0.10 in the comparative period;
- Aveda ended the quarter with a net
asset value per share6 of almost $0.59, $17.7 million in
working capital with a current ratio of 1.52:12, and undrawn cash
availability of $33.0 million on its senior debt facility; and
- On April 16, 2018, the Company
entered into a formal Arrangement Agreement with Daseke, Inc.
(“Daseke”) whereby Daseke proposed to acquire all of the Common
Shares of the Company (the “Transaction”) for $0.90 per share plus
contingent consideration (if any) should certain EBITDA levels be
met post Transaction. Should the Transaction be completed, it would
be subject to customary shareholder and regulatory approvals, none
of which had been obtained at the time these financial statements
were approved.
“Revenue for the first three months of 2018
increased by 47% to $60.2 million,” said Ronnie Witherspoon,
President and Chief Executive Officer at Aveda. “This positive
momentum has continued into to the second quarter of 2018. We are
excited by the substantial increase in activity and look forward to
further enhancing our business through the planned merger with
Daseke.”
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) |
|
|
|
|
|
ThreeMonthsEndedMarch 31,2018 |
ThreeMonthsEndedMarch 31,2017 |
% Change2017 -2018 |
Revenue |
60 202 |
40 962 |
47% |
Gross
profit (loss)1 |
5 580 |
2 932 |
90% |
Gross
margin4 |
9% |
7% |
N/A |
Gross
profit1 excluding depreciation |
|
|
|
and
amortization |
9 340 |
6 798 |
37% |
Gross
margin excluding depreciation |
|
|
|
and
amortization5 |
16% |
17% |
N/A |
Adjusted
EBITDA (loss)1 |
4 399 |
2 559 |
72% |
Adjusted
EBITDA1 as a percentage of |
|
|
|
revenue |
7% |
6% |
N/A |
Net
loss |
(1 262) |
(3 412) |
63% |
Net loss
as a percentage of revenue |
-2% |
-8% |
N/A |
Adjusted
EBITDA (loss)1 per share |
0,08 |
0,07 |
14% |
Loss per
share - basic and diluted |
(0,02) |
(0,10) |
-80% |
Current
ratio2 |
1,5 |
1,4 |
7% |
Debt to
equity ratio3 |
2,2 |
2,1 |
4% |
|
|
|
|
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 2016, both oil and natural gas
prices have rebounded and rig counts have substantially risen
throughout 2017 and in the first quarter of 2018 in most areas
Aveda operates in. Based both on general market enthusiasm with
respect to commodity prices and discussions with Aveda’s customers,
management expects 2018 to be a strong year in terms of drilling
activity.
While overall in the first quarter of 2018 the
rig count has increased in the United States, the increase rate
differs from one operating area to another. The Company has quickly
reacted and adjusted accordingly to relocate its equipment
resources in the areas that are growing at a more rapid pace. As
such, Aveda has closed its operation in Casper, WY and
redistributed its equipment fleet in Midland, TX and Williston, ND
to sustain their growing activity.
With a stabilized market environment and
Company’s intention to invest $12.0 million in its capital program
in 2018, 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 625
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 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 Aveda’s
management discussion and analysis for the three months ended March
31, 2018 Section 6. |
(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 ($34.0 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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