CALGARY,
March 20, 2014 /CNW/ - Northern
Frontier Corp. (TSX-V: FFF) (the "Corporation" or
"Northern Frontier") is pleased to announce its
fourth quarter and fiscal 2013 financial results, its 2014 capital
expenditure budget and declaration of its first dividend.
Selected Financial Highlights
|
|
|
|
(in 000's CAD, except as
noted) |
3 months ended
Dec 31, 2013 |
13 months ended
Dec 31, 2013 |
12 months ended
Dec 31, 2013 (1) |
|
|
|
(pro forma) |
Revenue |
$ 14,522 |
$ 15,017 |
$ 67,167 |
Gross Profit |
2,955 |
3,077 |
17,570 |
as a % of
revenue |
20.3% |
20.5% |
26.2% |
EBITDA (2) |
2,093 |
1,867 |
14,753 |
per
share
as a % of revenue |
$ 0.26
14.4% |
$
0.71
12.4% |
$
1.32
22.0% |
Net loss and comprehensive
loss |
(409) |
(1,967) |
$ 1,732 |
Earnings (loss) per share - basic
and diluted |
$ (0.05) |
$ (0.74) |
$
0.16 |
Funded debt (3) |
32,723 |
32,723 |
|
Weighted average common shares
outstanding (4) |
8,126,304 |
2,643,524 |
11,160,609 |
Common shares outstanding
(4) |
11,160,609 |
11,160,609 |
11,160,609 |
Common share purchase warrants
outstanding |
5,115,639 |
5,115,639 |
|
(1) |
These amounts represent management's pro forma estimate of
Northern Frontier's financial results if it had completed its
business combination on January 1, 2013 rather than the actual date
of September 27, 2013. |
(2) |
EBITDA (earnings before qualifying transaction costs,
finance costs, taxes, depreciation and amortization, gain/loss on
disposal of property and equipment and share-based compensation) is
not a recognized measure under IFRS (defined herein). Refer to
"Non-GAAP Measures". |
(3) |
Funded debt (loans and borrowings before unamortized debt
issue costs and obligations under finance lease less cash and cash
equivalents) is not a recognized measure under IFRS (defined
herein). Refer to "Non-GAAP Measures". |
(4) |
Amounts have been adjusted for the effect of the 1 for 15
common share consolidation completed on February 15, 2013. |
Overview
Northern Frontier completed its first business
acquisition in September 2013, by
purchasing a civil and logistics services provider located within
the steam assisted gravity drainage ("SAGD") Oilsands market
of northeastern Alberta for
$54.3 million. Central to our
strategy is to build on a company with a solid foundation, through
providing an expanding array of industrial services to the
long-term asset base being developed in the resource sectors of
western Canada. This acquisition
has provided that platform, with a substantial asset base, solid
customer relationships and a physical location proximate to
substantial future growth opportunities within the SAGD market.
The company also completed two equity raises for
combined net proceeds of $28.6
million to support growth through strengthening its balance
sheet and deploying capital in anticipation of 2014 demands. As
part of the second capital raise, the board of directors
implemented a dividend policy to support a long-term cost of
capital that will accelerate future acquisitions and growth of the
business.
The fourth quarter of 2013 (post-platform
acquisition) was focused on implementing financial systems and
capital structure that would facilitate the transition of the
business from a privately-held organization to one that will meet
the expectations of the public markets.
Northern Frontier exited fiscal 2013 with a
pro forma EBITDA of $14.8
million. The stand-alone trailing twelve month EBITDA of our
platform acquisition was $16.6
million, exceeding initial expectations when we agreed to
acquire the business. Overall, Northern Frontier's fiscal 2013
performance and post-platform acquisition financial results
(effectively the fourth quarter of 2013) were relatively consistent
with expectations. Financial results in the fourth quarter of 2013
were impacted by wet weather in early October, a deferral of a
couple of client projects and an extended holiday break at the end
of the quarter. This resulted in an increase in labor costs as a
percentage of revenue and a decline in camp utilization. Overall,
management is satisfied with the earnings capacity it acquired
through the platform acquisition and expects to increase the
earnings capacity of the business through fiscal 2014.
Outlook
Management expects the first half of fiscal 2014
to have moderate activity levels compared to fiscal 2013. Demand
for services is currently expected to accelerate in the second half
of fiscal 2014, driven by new construction and successful
production results from existing facilities within the SAGD market
that the Corporation participates in. Northern Frontier also
expects to see growth from its capital expenditures made in the
fourth quarter of 2013, including an expansion to its camp bed
capacity driven by expected employee growth and equipment fleet. In
addition, the Corporation expects deployment of capital into its
logistics strategy in early 2014 to start contributing to earnings
growth in the second half of fiscal 2014.
2014 Capital Expenditure Budget
For fiscal 2014, the Corporation's net capital
expenditure program is $14.3 million,
allocated as follows:
|
|
|
|
|
(in 000's CAD) |
|
Growth |
Sustaining |
Total |
|
|
|
|
|
Automotive |
|
$
- |
$ 355 |
$ 355 |
Construction and excavating |
|
5,375 |
3,020 |
8,395 |
Logistics |
|
6,480 |
- |
6,480 |
|
|
11,855 |
3,375 |
15,230 |
|
|
|
|
|
Estimated proceeds on disposal of equipment |
|
|
(950) |
(950) |
|
|
|
|
|
Capital additions, net |
|
$ 11,855 |
$ 2,425 |
$ 14,280 |
Dividend Declared
Northern Frontier has declared its first
quarterly dividend of $0.065 per
common share, payable on April 15,
2014 to holders of record on April 3,
2014 (ex-dividend April 1,
2014). This represents an annual yield of 7.1% based on the
March 20, 2014 closing price of
$3.65 per common share.
Additional Information
Northern Frontier's audited consolidated
financial statements for the 13 months ended December 31, 2013 and 12 months ended
November 30, 2012 and fiscal 2013
management discussion and analysis ("MD&A") have been
filed with the Canadian securities regulatory authorities and may
be accessed under the Corporation's profile on SEDAR at
www.sedar.com.
Conference call
Management of Northern Frontier will hold a
conference call on Friday, March 21,
2014, at 9:30 a.m.
Calgary / 11:30 a.m. Toronto time. The call will feature
remarks by Chris Yellowega,
President and CEO and Monty
Balderston, Executive Vice President and CFO regarding the
financial results.
Conference dial-in instructions are as
follows:
Toronto: 416-764-8682
North America: 888-390-0549
Conference ID: 95520669
A replay of the call will be available 24 hours after the event
until 11:59 p.m. EST on
March 28, 2014. To access the
archived conference call, please dial 1-888-390-0541 and enter
passcode 520669.
About Northern Frontier Corp.
Northern Frontier's strategic objective is to
create a large industrial and environmental services business
through a buy and build growth strategy. Currently, the Corporation
provides civil construction and excavation services to the
industrial industry, primarily in the in situ Oilsands
region south of Fort McMurray,
Alberta. Through providing these services to large
industrial customers in the steam assisted gravity drainage
("SAGD") region of northeastern Alberta, the Corporation focuses on the
ongoing demand for services to support operating facilities,
sustaining capital expenditures to maintain production levels of
those facilities and the development of new production
capacity.
The Corporation's common shares and common share
purchase warrants are listed on the TSX Venture Exchange under the
trading symbol "FFF" and "FFF.WT", respectively.
Reader Advisory
Forward-Looking Statements
This news release contains forward-looking
information and forward-looking statements based on certain
expectations, projections and assumptions. Certain information in
this news release contains forward-looking statements including
management's assessment of Northern Frontier's future operations,
business prospects and opportunities, management's future
expectations regarding the financial performance of the
Corporation, forecasted 2014 capital expenditures of the
Corporation and expected payment of dividends declared. With
respect to the forward-looking statements contained in this news
release, Northern Frontier has made assumptions, regarding among
other things: that Northern Frontier will continue to conduct its
operations in a manner consistent with past operations. Although
Northern Frontier believes that the expectations reflected in the
forward-looking statements contained in this news release, and the
assumptions on which such forward-looking statements are made, are
reasonable, there can be no assurance that such expectations or
assumptions will prove to be correct. These forward-looking
statements are subject to numerous risks and uncertainties, certain
of which are beyond Northern Frontier's control including, without
limitation, the impact of general economic conditions, industry
conditions, fluctuation of commodity prices, fluctuation of
exchange rates, environmental risks, 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. As a consequence,
actual results may differ materially from those anticipated in the
forward-looking statements. Readers are cautioned that the forgoing
list of factors is not exhaustive. Additional information on these
and other factors that could affect Northern Frontier's operations
and financial results are included in Northern Frontier's MD&A
and other reports on file with Canadian securities regulatory
authorities and may be accessed under the Corporation's profile on
SEDAR at www.sedar.com. Furthermore, the forward-looking
statements contained in this news release are made as at the date
of this news release and Northern Frontier does not undertake any
obligation to update publicly or to revise any of the
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by applicable
securities laws.
This information is subject to a number of
risks and uncertainties, many of which are beyond the Corporation's
control. Users of this information are cautioned that actual
results may differ materially. For additional information refer to
the "Advisory Regarding Forward-Looking Statements" section of the
Corporation's MD&A.
Non-GAAP Measures
Selected financial information for the three
and 13 month periods ended December 31,
2013 is set out above and includes the following measures
that are not recognized under International Financial Reporting
Standards ("IFRS") and are non-generally accepted accounting
principles ("non-GAAP") measures: EBITDA and Funded Debt.
This information should be read in conjunction with the
consolidated financial statements for the three and 13 month
periods ended December 31, 2013 and
the Corporation's MD&A available under the Corporation's
profile on SEDAR at www.sedar.com. Further information
regarding these non-GAAP measures is contained in the Corporation's
MD&A.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
SOURCE Northern Frontier Corp.