CALGARY, Nov. 13, 2014 /CNW/ - Northern Frontier Corp.
(TSXV: FFF) ("Northern Frontier" or the
"Corporation") announces its third quarter 2014 financial
results.
"We are pleased with our third quarter results.
Increasing activity from our low experienced in the second quarter
and the inclusion of Central Water & Equipment Services Ltd.
("Central Water") to our service offering has materially
strengthened Northern Frontier. In the third quarter, we generated
$21.4 million in revenue and
$6.6 million in EBITDA from the
combined businesses. The results demonstrate that the acquisition
of Central Water as a core component of our Logistics division
benefits our strategy well", commented Chris Yellowega, President and Chief Executive
Officer.
For the three months ended September 30, 2014 ("Q3 2014"), management
completed a number of steps in its strategy to build an integrated
industrial energy services business. During Q3 2014 Northern
Frontier:
- restructured its balance sheet through raising $21.3 million in gross equity proceeds and
replacing its existing credit facilities with $77.6 million of senior credit facilities of
which $46.6 million was outstanding
at September 30, 2014;
- completed the acquisition of Central Water for aggregate
consideration of $33.4 million
(including contingent consideration);
- generated $21.4 million in pro
forma revenue; and
- realized pro forma EBITDA of $6.6
million.
Pro forma financial information
Northern Frontier acquired all of the issued and
outstanding shares of Central Water on August 28, 2014. Actual financial results of the
Corporation only reflect the activities of Central Water subsequent
to August 28, 2014. Assuming Northern
Frontier acquired Central Water at the beginning of the fiscal
period, the pro forma consolidated financial results would
have been as follows:
| |
|
|
|
| (in 000's CAD, except as
noted) |
3 months
ended
Sep 30, 2014 |
9 months
ended
Sep 30, 2014 |
Trailing 12
months ended
Sep 30, 2014 |
| |
|
|
|
| Revenue |
$ 21,420 |
$ 55,045 |
$ 77,521 |
| Gross Profit |
8,404 |
16,329 |
24,019 |
| as a % of
revenue |
39% |
30% |
31% |
| EBITDA
(1)(2) |
6,631 |
11,449 |
17,542 |
| as a % of
revenue |
31% |
21% |
23% |
|
(1) |
EBITDA (earnings before finance costs, taxes, depreciation
and amortization, gain/loss on disposal of property and equipment,
share-based compensation and other specified costs) is not a
recognized measure under IFRS. Refer to "Non-GAAP
Measures". |
|
(2) |
EBITDA does not include $500 per annum in management
compensation costs that the Corporation will incur on a go-forward
basis for the former owners of Central Water. |
Select financial information
Northern Frontier did not have active operations
until September 27, 2013 when it
acquired the business referred to as the Corporation's Civil
operating segment. Furthermore, Central Water, was acquired in the
current quarter. The following results only reflect the activities
of the acquired businesses subsequent to their respective
acquisition dates.
| Financial results |
|
|
|
|
|
|
|
|
|
| |
3 months ended |
|
9
months ended (1) |
| (in 000's CAD, except as
noted) |
Sep 30, 2014 |
Sep 30, 2013 |
|
Sep 30, 2014 |
Sep 30, 2013 |
| |
|
|
|
|
|
|
|
|
|
| Revenue |
$ |
15,446 |
$ |
496 |
|
$ |
44,877 |
$ |
496 |
| Gross Profit |
|
4,260 |
|
123 |
|
|
10,739 |
|
123 |
| |
as a % of revenue |
|
28% |
|
25% |
|
|
24% |
|
25% |
| EBITDA (2) |
|
3,022 |
|
(85) |
|
|
7,320 |
|
(225) |
| |
per share |
$ |
0.19 |
$ |
(0.07) |
|
$ |
0.58 |
$ |
(0.23) |
| |
as a % of revenue |
|
20% |
|
(17%) |
|
|
16% |
|
(45%) |
| Net loss and comprehensive loss |
|
(2,583) |
|
(397) |
|
|
(4,745) |
|
(1,564) |
| |
per share - basic and diluted |
$ |
(0.16) |
$ |
(0.35) |
|
$ |
(0.37) |
$ |
(1.59) |
| Dividends declared |
|
580 |
|
- |
|
|
2,038 |
|
- |
| |
per share |
$ |
0.025 |
|
N/A |
|
$ |
0.155 |
|
N/A |
Cash generated by
(used in) operations
(before non-cash working capital) |
|
453 |
|
(338) |
|
|
2,187 |
|
(1,505) |
| |
per share |
$ |
0.03 |
$ |
(0.30) |
|
$ |
0.17 |
$ |
(1.53) |
| Capital expenditures |
|
170 |
|
15 |
|
|
7,740 |
|
15 |
| Capital management:
(3) |
|
|
|
|
|
|
|
|
|
| |
Funded debt to EBITDA |
|
|
|
|
|
|
2.46 |
|
|
| |
Fixed charge coverage ratio (4) |
|
|
|
|
|
|
2.55 |
|
|
| |
Distribution as a % of distributable cash
flow |
|
|
|
|
|
|
6.7% |
|
|
| Weighted average common shares
outstanding - basic |
|
15,702,228 |
|
1,138,111 |
|
|
12,722,621 |
|
984,479 |
| Weighted average common shares
outstanding - diluted |
|
15,702,228 |
|
1,138,111 |
|
|
12,722,621 |
|
984,479 |
| |
|
|
| Financial Position |
|
|
| (in 000's CAD, except as noted) |
Sep 30, 2014 |
Dec 31, 2013 |
| |
|
|
| Working Capital (5) |
$ 8,021 |
$ 5,149 |
| Total assets |
118,650 |
75,463 |
| Funded debt (6) |
47,183 |
32,723 |
| Equity |
50,084 |
31,592 |
| Common shares outstanding |
23,215,622 |
11,160,609 |
| Common share purchase warrants
outstanding |
17,049,042 |
5,115,639 |
|
(1) |
For the 2013 period the Corporation had a 10 month
fiscal period commencing on December 1, 2012. |
|
(2) |
EBITDA is not a recognized measure under IFRS. Refer
to "Non-GAAP Measures". |
|
(3) |
The definition of these measures are in accordance with the
lending agreements and are calculated based on the lenders'
interpretation, which may not be equal to individual financial
statement amounts. |
|
(4) |
Fixed coverage ratio is defined as EBITDA less cash taxes,
unfunded capital expenditures and distributions to required
principal and interest payments on funded debt. |
|
(5) |
Working Capital (current assets excluding cash and cash
equivalents less current liabilities excluding current portion of
loans and borrowings and obligations under finance lease) is not a
recognized measure under IFRS. Refer to "Non-GAAP
Measures". |
|
(6) |
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. Refer to
"Non-GAAP Measures". |
Additional information
Northern Frontier's unaudited condensed interim
consolidated financial statements for the three and nine months
ended September 30, 2014 and three
and ten months ended September 30,
2013 and management's discussion and analysis
("MD&A") for the three and nine months ended
September 30, 2014 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 will hold a conference call on
Friday, November 14, 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:
| |
|
|
|
|
|
|
|
Calgary: (587) 880-2171
Toronto: (416) 764-8688
North America: 1-888-390-0546
Conference ID: 54294273 |
A replay of the call will be available 24 hours
after the event until 11:59 p.m. EST
on November 21, 2014. To access
the archived conference call, please dial 416-764-8677 or
1-888-390-0541 and enter passcode 294273.
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 and bulk water and fluids transfer logistic services
in western Canada.
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 includes certain statements
that constitute forward-looking statements under applicable
securities legislation. All statements other than statements of
historical fact are forward-looking statements. In some cases,
forward-looking statements can be identified by terminology such as
"may", "will", "should", "expect", "plan", "anticipate", "believe",
"estimate", "predict", "potential", "continue", or the negative of
these terms or other comparable terminology. These
forward-looking statements include, among other things, statements
in respect of:
- expectations of future financial performance of the
Corporation; and
- the diversification of the Corporation's
operations.
These statements are only predictions and are
based upon current expectations, estimates, projections and
assumptions, which the Corporation believes are reasonable but
which may prove to be incorrect and therefore such forward-looking
statements should not be unduly relied upon. In making such
forward-looking statements, assumptions have been made regarding,
among other things, industry activity, the state of financial
markets, business conditions, continued availability of capital and
financing, future oil and natural gas prices and the ability of the
Corporation to obtain necessary regulatory approvals. Although the
Corporation believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance and actual
results or developments may differ materially from those in the
forward-looking statements.
By its nature, forward-looking information
involves numerous assumptions, known and unknown risks and
uncertainties, both general and specific, that contribute to the
possibility that the predictions, forecasts, projections and other
forward-looking statements will not occur. Investors are cautioned
that forward-looking statements are not guarantees of future
performance and actual results or developments may differ
materially from those projected in the forward-looking
statements. The Corporation has no obligation to update any
forward-looking statements set out in this news release, except as
required by applicable law.
Non-GAAP Measures
Selected financial information for the three
and nine months ended September 30,
2014 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, Working Capital
and Funded Debt. This information should be read in conjunction
with the consolidated financial statements for the three and nine
months ended September 30, 2014 and
the Corporation's MD&A for the three and nine months ended
September 30, 2014 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.