Cordy Oilfield Services Inc. Reports Fourth Quarter and 2012 Annual Results
April 29 2013 - 4:30PM
Marketwired Canada
CORDY OILFIELD SERVICES INC. (the "Corporation" or "Cordy") (TSX VENTURE:CKK)
released today its fourth quarter and 2012 annual results.
The Corporation's revenues from continuing operations for the year ended
December 31, 2012 increased $18.2 million from the same period in 2011 to $112.4
million. While revenues were increased in 2012, the Corporation had much
stronger financial earnings in 2011. There were a number of atypical costs in
2012 including: $1.9 million impairment of equipment, $1.0 million in inventory
obsolescence; $1.2 million in allowance for doubtful accounts; $0.2 million in
demobilization costs on a delayed contract; and $0.2 million in costs on the
assessment of a new venture. In addition there were costs associated with
streamlining the equipment fleet in the construction segment when customers in
the oil & gas and mining industries announced reductions in their CAPEX and
immediate delay of projects.
The net loss from continuing operations of $3.1 million or $0.04 per share for
the year ended December 31 2012, represents a decrease of $6.8 million compared
to earnings from continuing operations of $3.7 million or $0.04 per share in
2011. Earnings before interest, taxes, depreciation, amortization and impairment
and stock-based compensation ("EBITDAS") from continuing operations in 2012 were
$5.2 million for the year compared to $10.9 million in 2011, representing a
year-over-year decrease of $5.7 million.
For the fourth quarter ended December 31, 2012, Cordy reported a loss from
continuing operations of $4.6 million or $0.05 per share, representing a
decrease of $5.1 million compared to earnings from continuing operations of $0.5
million in the fourth quarter of 2011. EBITDAS from continuing operations were a
loss of $3.0 million for the quarter compared to $3.4 million in 2011,
representing a decrease of $0.4 million from the comparative period. Revenue for
the quarter decreased $4.8 million to $25.8 million compared to $30.6 million in
the fourth quarter of 2011.
($ millions except share
price and per share
amounts) 2012 2011 $ Change Q4 2012 Q4 2011 $ Change
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FINANCIAL RESULTS
Revenue 112.4 94.2 18.2 25.8 30.6 (4.8)
EBITDAS (1) 5.2 10.9 (5.7) (3.0) 3.7 (6.7)
Net earnings (loss) and
total comprehensive
income from all
operations (3.2) (1.7) (1.5) (4.6) 1.4 (6.0)
Cash flows generated
from (used in)
operating activities
from all operations 5.7 10.9 (5.2) 0.1 3.7 (3.6)
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SHARE INFORMATION
Earnings per share from
continuing operations
($) (0.04) 0.04 (0.08) (0.05) 0.02 (0.07)
Earnings per share from
discontinued
operations ($) - (0.06) 0.06 - (0.04) 0.04
Earnings per share from
all operations ($) (0.04) (0.02) (0.02) (0.05) (0.02) (0.03)
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(1) Earnings before interest, taxes, depreciation, amortization, impairment
and stock-based compensation (see reader advisory).
OUTLOOK
Management believes activity in 2013 will remain below the 2012 trends for all
segments that Cordy services given the current pricing issues for oil, gas and
coal within western Canada. As a result, Management expects capital investment
in Canada's oil, gas and coal mining industries to be constrained.
Notwithstanding this, there is on-going development and planning for long term
capital projects within the heavy oil and oil sands regions in western Canada
that Management believes will support expansion of Cordy's operations in the
heavy construction and environmental services segments.
Canada's oil and gas industry is resource rich but market constrained. Long-term
projects are likely to be impacted by the timing of when Canada can solve the
infrastructure issues of delivering its oil and gas products to new markets. As
a result, the oil and gas industry and its supporting oilfield services industry
sector will continue to be impacted by the status of economic, political,
infrastructure barriers and other market factors. Given this, the oil and gas
industry could have volatility in the near term. Despite these uncertainties in
the near term, it is management's view that future growth in the sector as a
whole is simply a question of timing for 2013 and beyond.
Cordy's management remains focused on the long term and plans to continue
utilizing its innovative rental and exchange agreement ("Equipment Rental
Program") with its existing equipment distributor. It is management's
expectation that there will be continued profitable growth opportunities and
required investment for the Corporation within the heavy oil and the oil sands
regions.
Cordy will focus in 2013 on aligning its financing structure with the business
model and on realigning its operations so it can continue to provide positive
cash flow from operations to fund the opportunities it sees within its segments.
Complete copies of Cordy's audited consolidated financial statements for the
year ended December 31, 2012 and the associated Management's Discussion and
Analysis are available on our website www.cordy.ca or on SEDAR at www.sedar.com.
READER ADVISORY
Effective January 1, 2011, Cordy began reporting its financial results in
accordance with International Financial Reporting Standards (IFRS). Prior-year's
comparative amounts were changed to reflect results as if Cordy had always
prepared its financial results using IFRS.
This News Release contains certain statements that constitute forward-looking
statements. These statements relate to future events or the Corporation's future
performance. All statements, other than statements of historical fact, that
address activities, events or developments that the Corporation or a third party
expects or anticipates will or may occur in the future, are forward-looking
statements. These include the Corporation's future growth, results of
operations, performance and business prospects and opportunities; prevailing
economic conditions; commodity prices; sourcing, pricing and availability of raw
materials, components and parts, equipment, suppliers, facilities and skilled
personnel; dependence on major customers; uncertainties in weather and
temperature affecting the duration of the service periods and the activities
that can be completed; regional competition; and other factors, many of which
are beyond the Corporation's control. These other factors include future prices
of oil and natural gas and oil and natural gas industry activity, including the
effect of changes in commodity prices on oil and natural gas exploration and
development activity, the ability to complete strategic acquisitions and realize
the anticipated benefits of any acquisitions that are completed, the
Corporation's outlook regarding the competitive environment it operates in, and
the assumptions underlying any of the foregoing. Forward-looking statements are
often, but not always, identified by the use of words such as "seek",
"anticipate", "plan", "continue", "estimate", "expect", "may", "will",
"project", "predict", "potential", "targeting", "intend", "could", "might",
"should", "believe" and similar expressions. These statements involve known and
unknown risks, uncertainties and other factors, many of which are beyond the
Corporation's control, including those discussed under "Risks and Uncertainties"
and elsewhere in this News Release, that may cause actual results or events to
differ materially from those anticipated in such forward-looking statements. The
Corporation believes that the expectations reflected in those forward-looking
statements are reasonable, but no assurance can be given that these expectations
will prove to be correct and such forward-looking statements included in this
News Release should not be unduly relied upon. These statements speak only as of
the date of this News Release. The Corporation does not intend, and does not
assume any obligation, to update these forward-looking statements, whether as a
result of new information, future events or otherwise, except as required under
applicable securities laws. The forward-looking statements contained in this
News Release are expressly qualified by this cautionary statement.
Cordy uses the measures Earnings Before Interest, Taxes, Depreciation,
Amortization and Impairment and Stock Based Compensation (EBITDAS) in this news
release. This measure does not have any standardized meaning prescribed by
International Financial Reporting Standards (IFRS). It is, therefore, considered
to be non-IFRS term and may not be comparable to similar measures presented by
other entities. Management of Cordy uses these non-IFRS measures to improve its
ability to compare financial results among reporting periods and to enhance its
understanding of operating performance, liquidity and ability to generate funds
to finance operations. This non-IFRS measure is also provided to readers as
additional information on Cordy's operating performance, liquidity and ability
to generate funds to finance operations. EBITDAS is an approximate measure of
the Cordy's pre-tax operating cash flow and is generally used to better measure
performance and evaluate trends of individual assets. EBITDAS comprises earnings
before deducting interest and other financial charges, income taxes,
depreciation and amortization, net income attributable to non-controlling
interests and preferred share dividends.
FOR FURTHER INFORMATION PLEASE CONTACT:
For general information:
Cordy Oilfield Services Inc.
David Mullen, Chairman & Chief Executive Officer
403-266-2067
403-266-2087 (FAX)
david.mullen@cordy.ca
For investor relations information:
Cordy Oilfield Services Inc.
David Boomer, CA, Chief Financial Officer
403-266-2067
403-266-2087 (FAX)
dave.boomer@cordy.ca
www.cordy.ca
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