CALGARY, AB, April 29, 2021
/CNW/ - (TSXV: CWC) CWC Energy Services Corp. ("CWC" or the
"Company") announces the release of its operational and financial
results for the three months ended March 31,
2021. The Financial Statements and Management Discussion and
Analysis ("MD&A") for the three months ended March 31, 2021 are filed on SEDAR at
www.sedar.com.
Financial and Operational Highlights
|
|
Three months
ended
|
|
|
March
31,
|
|
$ thousands,
except shares, per share amounts, and margins
|
|
2021
|
|
2020
|
Change
%
|
|
FINANCIAL
RESULTS
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
Contract
Drilling
|
|
7,318
|
|
12,671
|
(42%)
|
|
Production
Services
|
|
17,351
|
|
20,869
|
(17%)
|
|
|
24,669
|
|
33,540
|
(26%)
|
|
Other
income
|
|
1,065
|
|
-
|
n/m(3)
|
|
Adjusted
EBITDA(1)
|
|
4,854
|
|
5,508
|
(12%)
|
|
Adjusted EBITDA
margin (%)(1)
|
|
20%
|
|
16%
|
|
|
Impairment of
assets
|
|
(1,296)
|
|
(25,451)
|
(95%)
|
|
Net income
(loss)
|
|
447
|
|
(19,177)
|
102%
|
|
Net income (loss)
margin (%)(2)
|
|
2%
|
|
(57%)
|
59%
|
|
Capital
expenditures
|
|
1,275
|
|
2,805
|
(55%)
|
|
Per share
information:
|
|
|
|
|
|
|
Weighted average
number of shares outstanding – basic
|
|
506,047,702
|
|
510,936,431
|
|
|
Weighted average
number of shares outstanding - diluted
|
|
512,456,028
|
|
510,936,431
|
|
|
Adjusted
EBITDA(1) per share - basic and diluted
|
$
|
0.01
|
$
|
0.01
|
|
|
Net income (loss) per
share - basic and diluted
|
$
|
0.00
|
$
|
(0.04)
|
|
|
|
|
|
|
|
|
$ thousands,
except ratios
|
March 31,
2021
|
|
December 31,
2020
|
|
FINANCIAL POSITION
AND LIQUIDITY
|
|
|
|
|
|
|
Working capital
(excluding debt)(1)
|
|
16,505
|
|
|
12,069
|
|
Working capital
(excluding debt) ratio(1)
|
|
3.4:1
|
|
|
2.9:1
|
|
Total
assets
|
|
202,191
|
|
|
202,223
|
|
Total long-term debt
(including current portion)
|
|
29,285
|
|
|
30,231
|
|
Shareholders'
equity
|
|
158,108
|
|
|
157,977
|
|
(1)
|
Please refer to the
"Reconciliation of Non-IFRS Measures" section for further
information.
|
|
(2)
|
Net income (loss)
margin is a Non-IFRS Measure which is calculated as net income
(loss) divided by total revenue.
|
|
(3)
|
Not
meaningful.
|
Highlights for the Three Months Ended March 31, 2021
- Average Q1 2021 crude oil price, as measured by West Texas
Intermediate ("WTI"), of US$58.13/bbl
was 36% higher than the Q4 2020 average price of US$42.63/bbl (Q1 2020: US$42.57/bbl) and the price differential between
Canadian heavy crude oil, as represented by Western Canadian Select
("WCS"), and WTI maintained a differential in the range of
US$11.37/bbl to US$13.82/bbl during the first quarter of 2021.
Natural gas prices, as measured by AECO, increased 17% from an
average of $2.52/GJ in Q4 2020 to
$2.94/GJ in Q1 2021 (Q1 2020:
$1.93/GJ).
- CWC's Canadian drilling rig utilization in Q1 2021 of 50% (Q1
2020: 55%) continued to outperform the Canadian Association of
Oilwell Drilling Contractors ("CAODC") industry average of 27% (Q1
2020: 35%). Average revenue per operating day of $22,497 resulted in revenue of $7.1 million (Q1 2020: $7.9 million) from the Canadian drilling
operations. As a result of the COVID-19 health pandemic and the
travel restrictions implemented between Canada and the U.S., CWC's two U.S. drilling
rigs, which operate with Canadian rig crews, did not begin
operations until the last week of March
2021 resulting in 2 operating days in the quarter (Q1 2020:
144 operating days). U.S. Contract Drilling revenue of $0.2 million with an average revenue per
operating day of US$80,000 resulted
primarily from one-time recovery of mobilization costs. Service rig
utilization in Q1 2021 of 64% (Q1 2020: 56%) was driven by 27,087
operating hours which were 11% lower than the 30,442 operating
hours in Q1 2020. Given the tight labour market experienced in the
industry for service rig crews in Q1 2021, CWC parked 15 additional
service rigs at the beginning of the year, resulting in 66 active
service rigs for 2021.
- Revenue of $24.7 million, a
decrease of $8.9 million (26%)
compared to $33.5 million in Q1 2020.
During Q1 2021, the Company earned $1.7
million in revenue on 90 oil and gas sites requiring well
decommissioning under the Alberta Site Rehabilitation Program
("SRP") and 15 oil and gas sites under the Saskatchewan Accelerated
Site Closure Program ("ASCP"). The $1.0
billion Alberta SRP, the $400
million ASCP and the $100
million B.C. Dormant Sites Reclamation Program ("DSRP")
provide grants to eligible oilfield service contractors to perform
well, pipeline, and oil and gas site closure and reclamation work,
creating jobs and supporting the environment until December 31, 2022. CWC's Production Services
segment is well positioned to provide well decommissioning work on
these inactive wells.
- Adjusted EBITDA(1) of $4.9
million, a decrease of $0.6
million compared to $5.5
million in Q1 2020.
- Net income of $0.5 million, an
increase of $19.7 million compared to
a net loss of $19.2 million in Q1
2020.
- During Q1 2021, 2,249,500 common shares (Q1 2020: 3,674,500
common shares) were purchased, cancelled and returned to treasury
under the Normal Course Issuer Bid ("NCIB").
|
(1) Please refer to
the "Reconciliation of Non-IFRS Measures" section for further
information.
|
Operational Overview
Contract Drilling
CWC Ironhand Drilling, the Company's Contract Drilling segment,
has a fleet of nine telescopic double drilling rigs with depth
ratings from 3,200 to 5,000 metres. Eight of nine rigs have top
drives, three have pad rig walking systems, three have 7,500 psi
pumping systems and one has carbon reduction bi-fuel capabilities.
All of the drilling rigs are well suited for the most active depths
for horizontal drilling in the WCSB, including the Montney, Cardium, Duvernay and other deep basin horizons. The
Company also operates in select United
States basins including the Eagle Ford, Denver-Julesburg ("DJ") and Bakken. One of the
Company's strategic initiatives is to continue to increase the
capabilities of its existing fleet to meet the growing demands of
E&P customers for faster drilling times and more
environmentally friendly solutions at a cost effective price while
providing a sufficient internal rate of return for CWC's
shareholders.
|
Three months
ended
|
|
OPERATING
HIGHLIGHTS
|
Mar. 31,
2021
|
Dec. 31,
2020
|
Sep. 30,
2020
|
Jun. 30, 2
020
|
Mar. 31,
2020
|
Dec. 31,
2019
|
Sep. 30,
2019
|
Jun. 30,
2019
|
|
Drilling Rigs –
Canada
|
|
|
|
|
|
|
|
|
|
Total drilling rigs,
end of period
|
7
|
7
|
7
|
7
|
7
|
7
|
7
|
7
|
|
|
|
|
|
|
|
|
|
|
Revenue per operating
day(1)
|
$22,497
|
$21,452
|
$19,214
|
$19,382
|
$22,849
|
$22,161
|
$20,685
|
$22,750
|
|
Drilling rig operating
days
|
317
|
248
|
28
|
68
|
344
|
232
|
130
|
72
|
|
Drilling rig
utilization %(2)
|
50%
|
39%
|
4%
|
11%
|
54%
|
36%
|
19%
|
11%
|
|
CAODC industry average
utilization %
|
27%
|
16%
|
9%
|
4%
|
35%
|
23%
|
23%
|
18%
|
|
|
|
|
|
|
|
|
|
|
Wells
drilled
|
28
|
23
|
4
|
4
|
26
|
18
|
12
|
10
|
|
Average days per
well
|
11.3
|
10.8
|
7.1
|
17.1
|
13.2
|
12.9
|
10.9
|
8.0
|
|
Meters drilled
(thousands)
|
112.4
|
88.5
|
13.7
|
20.2
|
99.6
|
75.6
|
39.6
|
26.7
|
|
Meters drilled per
day
|
354
|
356
|
483
|
295
|
290
|
326
|
304
|
373
|
|
Average meters per
well
|
4,014
|
3,848
|
3,412
|
5,053
|
3,831
|
4,199
|
3,300
|
2,966
|
|
Drilling Rigs –
United States
|
|
|
|
|
|
|
|
|
|
Total drilling rigs,
end of period
|
2
|
2
|
2
|
2
|
2
|
2
|
2
|
2
|
|
|
|
|
|
|
|
|
|
|
Revenue per operating
day (US$)(1)
|
$80,000(3)
|
-
|
-
|
-
|
$25,139
|
$34,448(3)
|
$27,159
|
$54,188(3)
|
|
Drilling rig operating
days
|
2
|
-
|
-
|
-
|
144
|
56
|
155
|
25
|
|
Drilling rig
utilization %(2)
|
1%
|
-
|
-
|
-
|
79%
|
31%
|
84%
|
69%
|
|
|
|
|
|
|
|
|
|
|
Wells
drilled
|
-
|
-
|
-
|
-
|
10
|
5
|
16
|
1
|
|
Average days per
well
|
-
|
-
|
-
|
-
|
14.4
|
11.3
|
9.7
|
16.6
|
|
Meters drilled
(thousands)
|
-
|
-
|
-
|
-
|
40.5
|
14.5
|
50.7
|
2.9
|
|
Meters drilled per
day
|
-
|
-
|
-
|
-
|
282
|
258
|
327
|
177
|
|
Average meters per
well
|
-
|
-
|
-
|
-
|
4,053
|
2,942
|
978
|
2,939
|
|
(1)
|
Revenue per operating
day is calculated based on operating days (i.e. spud to rig release
basis). New or inactive drilling rigs are added based on the first
day of field service
|
|
(2)
|
Drilling rig
utilization is calculated based on operating days (i.e. spud to rig
release basis)
|
|
(3)
|
Revenue is enhanced
by one-time recovery of mobilization costs
|
Canadian Contract Drilling revenue of $7.1 million for Q1 2021 (Q1 2020: $7.9 million) was achieved with a utilization
rate of 50% (Q1 2020: 54%), compared to the CAODC industry average
of 27% (Q1 2020: 35%). CWC completed 317 Canadian drilling rig
operating days in Q1 2021, 8% lower than 344 Canadian drilling rig
operating days in Q1 2020.
U.S. Contract Drilling revenue of $0.2
million for Q1 2021 (Q1 2020: $4.8
million) was achieved with a utilization rate of 1% (Q1
2020: 79%) with 2 U.S. drilling rig operating days, 99% lower than
the 144 U.S. drilling rig operating days in Q1 2020. As a result of
the COVID-19 health pandemic and the travel restrictions
implemented between Canada and the
U.S., CWC's two U.S. drilling rigs, which operate with Canadian rig
crews, did not begin operations until the last week of March 2021.
Production Services
With a fleet of 145 service rigs, CWC is one of the largest well
servicing companies in Canada as
measured by active fleet and operating hours. CWC's service rig
fleet consists of 75 single, 56 double, and 14 slant rigs providing
services which include completions, maintenance, workovers and well
decommissioning with depth ratings from 1,500 to 5,000 metres. In
2021, CWC chose to park 79 of its service rigs and focus its
sales and operational efforts on the remaining 66 active service
rigs due to the reduction in the number of service rigs currently
required to service the WCSB and the tight labour market
experienced in the industry for service rig crews.
CWC's fleet of 12 swabbing rigs operate under the trade name CWC
Swabtech. The swabbing rigs are used to remove liquids from the
wellbore and allow reservoir pressures to push the commodity up the
tubing. The Company chose to park seven of its swabbing rigs and
focus its sales and operational efforts on the remaining five
active swabbing rigs.
|
Three months
ended
|
|
OPERATING
HIGHLIGHTS
|
Mar.
31,
2021
|
Dec.
31,
2020
|
Sep.
30,
2020
|
Jun.
30,
2020
|
Mar.
31,
2020
|
Dec.
31,
2019
|
Sep.
30,
2019
|
Jun.
30,
2019
|
|
Service
Rigs
|
|
|
|
|
|
|
|
|
|
Active service rigs,
end of period
|
66
|
81
|
82
|
82
|
83
|
84
|
84
|
92
|
|
Inactive service rigs,
end of period
|
79
|
64
|
63
|
63
|
62
|
62
|
64
|
56
|
|
Total service rigs,
end of period
|
145
|
145
|
145
|
145
|
145
|
146
|
148
|
148
|
|
|
|
|
|
|
|
|
|
|
Operating
hours
|
27,087
|
22,273
|
15,859
|
4,037
|
30,442
|
33,656
|
29,528
|
23,129
|
|
Revenue per
hour
|
$630
|
$645
|
$605
|
$619
|
$666
|
$664
|
$644
|
$646
|
|
Revenue per hour
excluding top volume customers
|
$651
|
$659
|
$623
|
$653
|
$673
|
$682
|
$660
|
$687
|
|
Service rig
utilization %(1)
|
64%
|
42%
|
29%
|
8%
|
56%
|
62%
|
52%
|
39%
|
|
|
|
|
|
|
|
|
|
|
Swabbing
Rigs
|
|
|
|
|
|
|
|
|
|
Active swabbing rigs,
end of period
|
5
|
5
|
5
|
5
|
5
|
5
|
5
|
8
|
|
Inactive swabbing
rigs, end of period
|
7
|
7
|
7
|
7
|
7
|
8
|
8
|
5
|
|
Total swabbing rigs,
end of period
|
12
|
12
|
12
|
12
|
12
|
13
|
13
|
13
|
|
|
|
|
|
|
|
|
|
|
Operating
hours
|
976
|
1,339
|
686
|
513
|
1,088
|
1,141
|
865
|
661
|
|
Revenue per
hour
|
$286
|
$280
|
$271
|
$288
|
$300
|
$282
|
$284
|
$262
|
|
Swabbing rig
utilization %(1)
|
30%
|
41%
|
21%
|
16%
|
33%
|
35%
|
19%
|
13%
|
|
(1) )
|
Effective September
1, 2019, the CAODC changed its methodology on how it calculates
service rig utilization. Service rig and swabbing rig utilization
is now calculated based on 10 operating hours a day x number of
days per quarter x 5 days a week divided by 7 days in a week to
reflect maximum utilization available due to hours of service
restrictions on rig crews. Utilization percentages have been
retroactively updated to reflect this new CAODC methodology.
Service and swabbing rigs requiring their 24,000 hour
recertification, refurbishment or have been otherwise removed from
service for greater than 90 days are excluded from the utilization
calculation until their first day back in field service.
|
Production Services revenue of $17.4
million in Q1 2021, down $3.5
million (17%) compared to $20.9
million in Q1 2020. The revenue decrease in Q1 2021 was a
continued direct result of the decrease in industry activity, which
started in March 2020, as the global
health solutions to slow the spread of the COVID-19 virus resulted
in a decrease in oilfield service activity compared to Q1 2020.
CWC's service rig utilization in Q1 2021 of 64% (Q1 2020: 56%)
with 27,087 operating hours was 11% lower than the 30,442 operating
hours in Q1 2020. Average revenue per hour of $630 in Q1 2021 was $36 per hour (5%) lower than the $666 per hour in Q1 2020 as a result of customer
requested discounts during the quarter. Q1 2021 average revenue per
hour of $651 excluding the Company's
top volume customers was $22 per hour
(3%) lower than Q1 2020 average revenue per hour of $673.
CWC's swabbing rig utilization in Q1 2021 of 30% (Q1 2020: 33%)
with 976 operating hours was 10% lower than the 1,088 operating
hours in Q1 2020. Average revenue per hour for swabbing rigs of
$286 in Q1 2021 was $14 per hour (5%) lower compared to $300 in Q1 2020.
Capital Expenditures
|
Three months
ended
|
|
|
|
March
31,
|
Change
|
Change
|
|
$
thousands
|
2021
|
2020
|
$
|
%
|
|
Capital
expenditures
|
|
|
|
|
|
Contract
drilling
|
955
|
786
|
169
|
22%
|
|
Production
services
|
320
|
1,993
|
(1,673)
|
(84%)
|
|
Other
equipment
|
-
|
26
|
(26)
|
(100%)
|
|
1,275
|
2,805
|
(1,530)
|
(55%)
|
|
|
|
|
|
|
Growth
capital
|
257
|
1,335
|
(1,078)
|
(81%)
|
|
Maintenance and
infrastructure capital
|
1,018
|
1,470
|
(452)
|
(31%)
|
|
Total capital
expenditures
|
1,275
|
2,805
|
(1,530)
|
(55%)
|
Capital expenditures of $1.3
million in Q1 2021, a decrease of $1.5 million compared to $2.8 million in Q1 2020.
On December 3, 2020, the Company
announced its capital expenditure budget for 2021 of $3.9 million, $2.7
million of which is maintenance and infrastructure capital
related to re-certifications, additions and upgrades to field
equipment for the drilling rig and service rig divisions as well as
information technology infrastructure, with the remaining
$1.2 million being growth capital to
upgrade two of the drilling rigs. On April
29, 2021, the Board of Directors approved an additional
$0.7 million of growth capital to
further upgrade one of the drilling rigs.
Outlook
In March 2020, the World Health
Organization declared a global health pandemic due to COVID-19. In
response to the COVID-19 outbreak, governments around the world
implemented measures to control the spread of the virus from Q2
2020 through Q2 2021 including closure of non-essential businesses,
restricting travel and encouraging its citizens to stay-at-home.
These government actions contributed to a significant deterioration
in the global economy including a material decline in the demand
for crude oil, which initially resulted in a significant decrease
in oil prices. The decline in oil prices negatively affected
current and forecasted drilling and production service activities
in Canada and the United States. In response to the decline
in oil prices, OPEC+ and G20 oil producing nations reduced crude
oil production resulting in a rebound in crude oil prices from the
low US$20/bbl in April 2020 to over US$60/bbl in April
2021. While governments have, at various times, loosened and
then tightened their economic restrictions related to COVID-19,
further caution remains as the number of active COVID-19 cases
globally have recently increased due to the emergence of more
infectious variants of the virus.
Countering the recent increases in COVID-19 cases globally and
the reinstatement by governments to implement measures to control
the spread of the virus, the global COVID-19 vaccinations continue
to be rolled out at increasing speeds resulting in the belief that
the global economy may soon return to normalcy. This belief extends
to the forecast for a steady rise in crude oil demand which has
resulted in crude oil prices staying above US$60/bbl, and has driven an increase in oilfield
service activity in Canada and the
U.S. For the first time in a few years, there is optimism that 2021
will be a robust year for the Canadian oilfield services industry,
supported by the re-opening of the global economy and buoyed by the
financial stimulus provided by governments around the world. CWC
has had a good Q1 2021, outperforming our own cautious expectations
and forecasted activity levels. Activity levels for the remainder
of 2021 appear to be continuing onward from where the winter season
left off. CWC will continue to benefit from the well
decommissioning program provided by the Government of Canada's $1.7
billion in funding to Alberta, Saskatchewan, British Columbia and the Alberta Orphan Well
Association until December 31, 2022.
While there are many positives to look forward to for the remainder
of 2021, capitalizing upon them will primarily be constrained by
the amount of available field labour or rig crews that CWC will be
able to staff up. The labour market was extremely tight in Q1 2021.
As such, the solutions to solve the labour shortage will be an
increase to rig rates charged to our E&P customers to
compensate for the wage inflation required to retain and attract
field labour to work on our drilling and service rigs.
Looking out to the medium and longer term, CWC is optimistic
about the future of the oil and gas industry in Canada. The Canadian oil and gas industry will
continue to grow with the anticipated completion of Enbridge's Line
3 pipeline in late 2021, which will carry 760,000 bbls/day to
Minnesota and eastern refineries
and the Trans Mountain expansion project carrying 890,000 bbls/day
by late 2022 to the west coast for oversea markets.
CWC will remain focused on its operational and financial
performance in the short-term, but recognizes the need to pursue
opportunities that have inevitably been created in this market to
create medium and longer-term value for CWC's shareholders. With
the support of the Board of Directors, management continues to
actively pursue consolidation opportunities in North America. CWC cautions that there can be
no guarantees that strategic opportunities will result in a
transaction, or if a transaction is undertaken, as to its terms or
timing.
Lastly, 2021 will also be the year that CWC produces its
inaugural Environmental, Social and Governance ("ESG") report as
societal demands put more onus on companies to document what and
how they are responding to good corporate stewardship from an ESG
perspective. Management is confident that when this ESG report is
released in the summer of 2021, CWC will be regarded as a leader on
ESG matters in our oilfield services industry.
About CWC Energy Services Corp.
CWC Energy Services Corp. is a premier contract drilling and
well servicing company operating in Canada and the
United States with a complementary suite of oilfield
services including drilling rigs, service rigs, and swabbing rigs.
The Company's corporate office is located in Calgary, Alberta, with a U.S. office in
Denver, Colorado and operational
locations in Nisku, Grande Prairie, Slave Lake, Sylvan
Lake, Drayton Valley,
Lloydminster, Provost and Brooks,
Alberta. The Company's shares trade on the TSX Venture
Exchange under the symbol "CWC".
Duncan T. Au, FCPA, FCA, CFA
President & Chief Executive Officer
Stuart King, CPA, CA
Chief Financial Officer
Forward-Looking Information
This News Release contains certain forward-looking
information and statements within the meaning of applicable
Canadian securities legislation. Certain statements contained in
this News Release, including most of those contained in the section
titled "Outlook" and including statements which may contain such
words as "anticipate", "could", "continue", "should", "seek",
"may", "intend", "likely", "plan", "estimate", "believe", "expect",
"will", "objective", "ongoing", "project" and similar expressions
are intended to identify forward-looking information or statements.
In particular, this News Release contains forward-looking
statements including management's assessment of future plans and
operations, planned levels of capital expenditures, expectations as
to activity levels, expectations on the sustainability of future
cash flow and earnings, expectations with respect to crude oil and
natural gas prices, activity levels in various areas, expectations
regarding the level and type of drilling and production and related
drilling and well services activity in the WCSB and U.S. basins,
expectations regarding entering into long term drilling contracts
and expanding its customer base, and expectations regarding the
business, operations, revenue and debt levels of the Company in
addition to general economic conditions. Although the Company
believes that the expectations and assumptions on which such
forward-looking information and statements are based are
reasonable, undue reliance should not be placed on the
forward-looking information and statements because the Company can
give no assurances that they will prove to be correct. Since
forward-looking information and statements address future events
and conditions, by their very nature they involve inherent risks
and uncertainties. Actual results could differ materially from
those currently anticipated due to a number of factors and risks
including the implications of the COVID-19 health pandemic on the
Company's business, operations and personnel. These factors and
risks include, but are not limited to, the risks associated with
the COVID-19 health pandemic and their implications on the demand
and supply in the drilling and oilfield services sector (i.e.
demand, pricing and terms for oilfield drilling and services;
current and expected oil and gas prices; exploration and
development costs and delays; reserves discovery and decline rates;
pipeline and transportation capacity; weather, health, safety and
environmental risks), significant expansion measures to stop the
spread of COVID-19 further restricting or prohibiting the
operations of the Company's facilities and operations, actions to
ensure social distancing due to COVID-19, the Company's cash saving
initiatives, integration of acquisitions, competition, and
uncertainties resulting from potential delays or changes in plans
with respect to acquisitions, development projects or capital
expenditures and changes in legislation, including but not limited
to tax laws, royalties and environmental regulations, stock market
volatility and the inability to access sufficient capital from
external and internal sources. Accordingly, readers should not
place undue reliance on the forward-looking statements. Readers are
cautioned that the foregoing list of factors is not exhaustive.
Additional information on these and other factors that could affect
the Company's financial results are included in reports on file
with applicable securities regulatory authorities and may be
accessed through SEDAR at www.sedar.com. The forward-looking
information and statements contained in this News Release are made
as of the date hereof and the Company undertakes no obligation to
update publicly or revise any forward-looking information or
statements, whether as a result of new information, future events
or otherwise, unless so required by applicable securities laws. Any
forward-looking statements made previously may be inaccurate
now.
Reconciliation of Non-IFRS Measures
|
Three months
ended
|
|
$ thousands,
except shares, per share amounts and margins
|
March
31,
|
|
2021
|
2020
|
|
NON-IFRS
MEASURES
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
Net income
(loss)
|
447
|
(19,177)
|
|
Add:
|
|
|
|
Stock based
compensation
|
176
|
133
|
|
Finance
costs
|
259
|
684
|
|
Depreciation and
amortization
|
2,696
|
3,172
|
|
Impairment of
assets
|
1,296
|
25,451
|
|
Loss (gain) on sale of
equipment
|
(212)
|
1,051
|
|
Income tax expense
(recovery)
|
192
|
(5,806)
|
|
Adjusted
EBITDA(1)
|
4,854
|
5,508
|
|
Adjusted EBITDA
per share – basic and diluted(1)
|
$
|
0.01
|
$
|
0.01
|
|
Adjusted EBITDA
margin (Adjusted EBITDA/Revenue)(1)
|
20%
|
16%
|
|
Weighted average
number of shares outstanding - basic
|
506,047,702
|
510,936,431
|
|
Weighted average
number of shares outstanding - diluted
|
512,456,028
|
510,936,431
|
|
Gross
margin:
|
|
|
|
Revenue
|
24,669
|
33,540
|
|
Less: Direct operating
expenses
|
17,548
|
23,615
|
|
Gross
margin(2)
|
7,121
|
9,925
|
|
Gross margin
percentage(2)
|
29%
|
30%
|
|
$
thousands
|
March 31,
2021
|
December 31,
2020
|
|
Working capital
(excluding debt):
|
|
|
|
Current
assets
|
23,349
|
18,323
|
|
Less: Current
liabilities
|
(7,570)
|
(7,004)
|
|
Add: Current
portion of long-term debt
|
726
|
750
|
|
Working capital
(excluding debt) (3)
|
16,505
|
12,069
|
|
Working capital
(excluding debt) ratio(3)
|
3.4:1
|
2.9:1
|
|
Net debt:
|
|
|
|
Long-term
debt
|
28,559
|
29,481
|
|
Less: Current
assets
|
(23,349)
|
(18,323)
|
|
Add: Current
liabilities
|
7,570
|
7,004
|
|
Net debt
(4)
|
12,780
|
18,162
|
|
(1)
|
Adjusted EBITDA
(earnings before interest and finance costs, income tax expense,
depreciation, amortization, gain or loss on disposal of asset,
impairment of assets, goodwill impairment, stock based compensation
and other one-time non-cash gains and losses) is not a recognized
measure under IFRS. Management believes that in addition to net
income, Adjusted EBITDA is a useful supplemental measure as it
provides an indication of the Company's ability to generate cash
flow in order to fund working capital, service debt, pay current
income taxes, repurchase common shares under the Normal Course
Issuer Bid, and fund capital programs. Investors should be
cautioned, however, that Adjusted EBITDA should not be construed as
an alternative to net income (loss) determined in accordance with
IFRS as an indicator of the Company's performance. CWC's method of
calculating Adjusted EBITDA may differ from other entities and
accordingly, Adjusted EBITDA may not be comparable to measures used
by other entities. Adjusted EBITDA margin is calculated as Adjusted
EBITDA divided by revenue and provides a measure of the percentage
of Adjusted EBITDA per dollar of revenue. Adjusted EBITDA per share
is calculated by dividing Adjusted EBITDA by the weighted average
number of shares outstanding as used for calculation of earnings
per share.
|
|
(2)
|
Gross margin is
calculated from the statement of comprehensive income (loss) as
revenue less direct operating costs and is used to assist
management and investors in assessing the Company's financial
results from operations excluding fixed overhead costs. Gross
margin percentage is calculated as gross margin divided by revenue.
The Company believes the relationship between revenue and costs
expressed by the gross margin percentage is a useful measure when
compared over different financial periods as it demonstrates the
trending relationship between revenue, costs and margins. Gross
margin and gross margin percentage are non-IFRS measures and do not
have any standardized meaning prescribed by IFRS and may not be
comparable to similar measures provided by other
companies.
|
|
(3)
|
Working capital
(excluding debt) is calculated based on current assets less current
liabilities excluding the current portion of long-term debt.
Working capital (excluding debt) is used to assist management and
investors in assessing the Company's liquidity. Working capital
(excluding debt) does not have any meaning prescribed under IFRS
and may not be comparable to similar measures provided by other
companies. Working capital (excluding debt) ratio is calculated as
current assets divided by the difference of current liabilities
less the current portion of long-term debt.
|
|
(4)
|
Net debt is
calculated based on long-term debt less current assets plus current
liabilities. Net debt is not a recognized measure under IFRS and
does not have any standardized meaning prescribed by IFRS and may
not be comparable to similar measures provided by other companies.
Management believes net debt is a useful indicator of a company's
debt position.
|
SOURCE CWC Energy Services Corp.
