SAExploration Holdings, Inc. (NASDAQ: SAEX, OTCBB: SAEXW)
today announced consolidated financial results for the fourth
quarter (“Q4”) and fiscal year ended December 31, 2013.
Fourth Quarter 2013 Highlights
- Revenue of $70.7 million, up 55%
from Q4 2012 revenue of $45.7 million
- Gross profit of $17.6 million, up
189% from $6.1 million in Q4 2012
- Gross margin, excluding depreciation
expense, of 31.2%, compared to 19.2% in Q4 2012
- Modified EBITDA of $10.9 million, up
301% from $2.7 million in Q4 2012
- Modified EBITDA margin of 15.4%,
compared to 5.9% in Q4 2012
- Fully diluted earnings per share of
$0.34, compared to $(0.90) per share in Q4 2012
- Contracted backlog of $292 million,
as of December 31, 2013, up 29% from $227 million on December 31,
2012
- Six new project awards totaling $192
million announced
- Presence expanded into Brazil and
Africa
Brian Beatty, CEO and President of SAE, commented, “We are very
pleased with our Q4 2013 results, which we believe to be reflective
of the growth potential associated with the international markets
where we operate. I am extremely proud of our team of talented and
dedicated professionals who continued to work extremely hard in
light of the adversity experienced in the third quarter (“Q3”).
These events were entirely isolated to Q3, and we have taken the
appropriate steps necessary to safeguard against the occurrence of
similar events in the future. Part of our success in Q4 was the
result of an ongoing and dedicated effort to reduce costs and
increase operational efficiencies.”
Mr. Beatty concluded, “We are optimistic about 2014 as we expect
to experience continued growth in many of our core markets. While
we expect Canada to remain a relatively small market for us going
forward, especially in light of the recent decline in demand for
seismic services in the region, South America and Alaska have
exhibited strong levels of bidding activity. We were able to
capitalize on some of these opportunities recently, as announced in
Q4, with the awarding of $192 million of new projects throughout
both regions, which include several multi-season projects. We
continue to view Southeast Asia and Africa as strong growth
catalysts for us going forward, as we continue developing our
presence in Brazil. We believe we are well positioned
internationally in key growth areas around the world. Our
diversification and strategic focus on these new and underdeveloped
areas will continue to benefit our stockholders as we look to
maximize growth through the optimal utilization of available
resources and equipment.”
Fourth Quarter 2013 Financial Results
Revenues for Q4 2013 increased 55% to $70.7 million from $45.7
million in Q4 2012. Revenue growth during the quarter was primarily
due to the continued focus on new project award generation in
Alaska and South America during 2013. Additionally, Q4 2013
revenues were positively impacted by previously delayed projects in
Bolivia and Colombia, as disclosed in SAE’s Q3 2013 earnings
release, being realized during Q4 2013.
Gross profit increased 189% to $17.6 million, or 24.8% of
revenues, compared to gross profit of $6.1 million, or 13.3% of
revenues, in Q4 2012. Higher gross profit and related margin
expansion were the result of increased operational efficiencies and
cost control. Gross profit for Q4 2013 and Q4 2012 included
depreciation expense of $4.5 million and $2.7 million,
respectively. Excluding depreciation, gross margins for Q4 2013 and
Q4 2012 were 31.2% and 19.2%, respectively.
Selling, general and administrative (“SG&A”) expenses in Q4
2013 were $10.8 million compared to $6.1 million in Q4 2012. The
increase in SG&A was partially due to new expenses associated
with being a public company, along with the need to hire additional
personnel to support SAE’s expanding global operations.
Operating income (loss) in Q4 2013 was $6.2 million compared to
$(0.3) million in Q4 2012. This was due primarily to increased
revenue growth and margins.
Interest expense in Q4 2013 rose to $3.8 million from $2.3
million in Q4 2012, due to SAE’s senior credit facility entered
into in late Q4 2012, as well as the former SAE stockholders’
note.
Net income attributable to SAE for Q4 2013 rose to $4.5 million,
or $0.34 per diluted share, compared to a net loss of $(5.3)
million, or $(0.90) per diluted share, in Q4 2012. This was due to
growth in operating income and a tax benefit of $3.1 million in Q4
2013.
Modified EBITDA in Q4 2013 was $10.9 million, or 15.4% of
revenues, up 301% from $2.7 million, or 5.9% of revenues, in Q4
2012.
Capital expenditures for equipment during Q4 2013 were $7.2
million, compared to $13.6 million in Q4 2012.
Fiscal Year 2013 Financial Results
Revenues decreased to $245.3 million from $257.4 million in
2012, or by 5%. In 2012, third-party pass-through revenues totaled
$90.0 million, on which SAE charged only a small administrative
fee, compared to third-party pass-through revenues of only $17.2
million in 2013.
Gross profit was $42.9 million, or 17.5% of revenues, compared
to gross profit of $44.8 million, or 17.4% of revenues, in 2012.
The primary cause of the decrease in gross profit was the costs
incurred on a shallow-water fixed-fee project in Malaysia during Q3
2013 when a vessel experienced more than a week’s downtime for
repair.
In addition, approximately 11% of revenues in 2013 were
generated from summer projects in Canada, which had lower margins
due to the seasonal timing associated with mid-year projects, which
historically face more competition than is typical of SAE’s winter
operations in the region.
Gross profit for 2013 and 2012 included depreciation expense of
$14.8 million and $11.4 million, respectively. Excluding
depreciation expense, gross margin was 23.6% in 2013, compared to
21.8% for the prior year.
SG&A expenses were $32.1 million, compared to $25.7 million
in 2012. This increase was a result of the need to hire personnel
able to support SAE's global operations, certain costs related to
the merger, costs related to the amendments to the Company's 2012
credit agreement, and the additional administrative costs and
staffing necessary to operate as a public company.
Operating income was $8.3 million compared to $18.2 million in
2012.
Interest expense rose to $15.3 million from $3.8 million in
2012, due to a higher level of growth-related borrowing in late
2012 under SAE's senior credit facility and the note due to former
SAE stockholders issued in the merger.
Provision for income tax expense rose to $10.5 million from $1.4
million in 2012. This increase is primarily the result of pre-tax
losses in the U.S., the recording of a valuation allowance for the
prior year’s deferred tax assets, and the current period’s U.S.
losses and foreign tax credits. The pre-tax losses in the U.S.
increased primarily due to the increased operating loss and the
increased interest incurred in 2013 related to the senior credit
facility and the former SAE stockholders’ note.
Net loss attributable to SAE was $(21.1) million, or $(2.10) per
diluted share, compared to net income of $10.0 million, or $1.73
per diluted share, in 2012. The decline in net income was due to a
number of primary factors in 2013, including:
- Higher than normal provision for income
tax expense;
- Higher percentage of revenues at lower
than typical margin;
- Losses experienced on the crew in
Malaysia due to the downtime from repair of the lead vessel;
and
- Higher interest expense.
Weighted average diluted shares outstanding rose to 10.0 million
from approximately 5.8 million in 2012, due primarily to the
issuance of shares to former SAE stockholders in the merger in June
2013.
Modified EBITDA was $25.1 million, or 10.2% of revenues,
compared to $30.9 million, or 12.0% of revenues, in 2012. The
decrease in amount and margin was due mainly to the factors
discussed above.
Capital expenditures for equipment decreased 73% to $11.1
million from $41.7 million in 2012. This decrease was due to the
normalization of SAE’s equipment profile in 2013 following a
multi-year capital investment program in 2011 and 2012.
At December 31, 2013, cash and cash equivalents totaled $17.4
million, working capital was $27.1 million, long-term debt was
$92.3 million, and stockholders’ equity totaled $10.9 million.
Year-End Backlog
As of December 31, 2013, SAE’s backlog rose 29% to approximately
$292 million from $227 million on December 31, 2012. Major changes
to the backlog that occurred during the year include the:
- Addition of $316 million of announced
project awards;
- Removal of $114 million related to the
further delay of a previously-paused 3D project in Alaska; and
- The completion, in whole or in part, of
multiple projects during the year.
The Company’s backlog remains strong. This year demonstrated
SAE’s ability to quickly compensate for a sudden or unexpected loss
of revenue due to an extraordinary event, such as the long-term
postponement of a major contract.
SAE anticipates approximately 89% of the $292 million in backlog
will be realized during 2014 and the remainder during 2015.
However, the approximate estimations of realization from the
backlog can be impacted by a number of factors, including customer
delays or cancellations, permitting or project delays and
environmental conditions.
Summary Financial Guidance for Fiscal Year 2014
As a result of the expected growth in international seismic
spending, in addition to the strength of its current backlog, SAE
expects to record revenue of approximately $400 - $450 million
during 2014. Due to the potential for margin compression from
growth into new markets, SAE estimates Modified EBITDA for 2014 to
range from approximately $45 - $55 million. Additionally, SAE
expects to invest approximately $15 million in capital expenditures
during 2014.
These forward estimations are based on current market conditions
and are subject to change.
Upcoming Investor Conference
SAE is scheduled to present at the Independent Petroleum
Association of America’s Oil and Gas Investor Symposium in New
York, NY on Wednesday, February 12, 2014 at 11:20 a.m. local time.
The presentation will be given by Ryan Abney, Vice President of
Capital Markets and Investor Relations, and will take place at the
Sheraton New York Times Square.
A copy of the presentation materials will be made available on
the Investors section of SAE’s website at www.saexploration.com. In
addition to the slides, a live audio webcast of the presentation
can be accessed at
http://www.investorcalendar.com/CEPage.asp?ID=172425.
About SAExploration Holdings, Inc.
SAE is a leading, vertically-integrated provider of 2D, 3D and
4D seismic data and logistical services with operations throughout
South America, North America, and Southeast Asia. SAE specializes
in logistically complex regions of the world, and provides a wide
range of services to its clients, including surveying, program
design, logistical support, data acquisition, processing,
infrastructure implementation, camp services, catering,
environmental assessment and community relations. SAE services its
multinational client base from offices in Houston, Alaska, Canada,
Peru, Colombia, Bolivia, Brazil, New Zealand and Malaysia. For more
information, please visit SAE’s website at
www.saexploration.com.
The information in SAE’s website is not, and shall not be deemed
to be, a part of this notice or incorporated in filings SAE makes
with the Securities and Exchange Commission.
Forward Looking Statements
This press release contains certain "forward-looking statements"
within the meaning of the federal securities laws. These statements
can be identified by the use of words or phrases such as
"believes," "estimates," "expects," "intends," "anticipates,"
"projects," "plans to," “will,” “should” and variations of these
words or similar words. These forward-looking statements may
include statements regarding SAE’s financial condition, results of
operations and business and SAE’s expectations or beliefs
concerning future periods. These statements are subject to risks
and uncertainties which may cause actual results to differ
materially from those stated in this release. These risks and
uncertainties include fluctuations in the levels of exploration and
development activity in the oil and gas industry, intense industry
competition, a limited number of customers, the need to manage
rapid growth, delays, reductions or cancellations of service
contracts, operational disruptions due to seasonality, weather and
other external factors, crew productivity, the availability of
capital resources, substantial international business exposing SAE
to currency fluctuations and global factors including economic,
political and military uncertainties, the need to comply with
diverse and complex laws and regulations, and other risks
incorporated by reference to SAE’s filings with the Securities and
Exchange Commission. Certain risks and uncertainties related to
SAE’s business are or will be described in greater detail in SAE’s
filings with the Securities and Exchange Commission. The
information set forth herein should be read in light of such risks.
Except as required by applicable law, SAE is not under any
obligation to, and expressly disclaims any obligation to, update or
alter its forward-looking statements, whether as a result of new
information, future events, changes in assumptions or
otherwise.
SAExploration Holdings, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands,
except per share amounts)
Three Months Ended Fiscal Year Ended December
31, December 31, 2013
2012
2013
2012 (Unaudited) Revenue from services $ 70,693 $ 45,712 $
245,268 $ 257,359
Direct operating expenses, including
depreciation expense of $4,465 and $2,683 for the three months
ended December 31, 2013 and 2012, respectively, and $14,843 and
$11,411 in the years ended December 31, 2013 and 2012,
respectively
53,127
39,627 202,336 212,540
Gross profit (loss)
17,566
6,085 42,932 44,819 Selling, general and administrative expenses
10,836
6,138 32,103 25,714 Merger costs 14
-
1,188
-
Depreciation and amortization 472 261 1,253 720 Loss (gain) on sale
of assets 12 (41 ) 133
148 Income (loss) from operations 6,232 (273 ) 8,255 18,237
Other income (expense): Change in fair value of notes payable to
related parties (631 )
-
(631 )
-
Interest expense, net (3,767 ) (2,315 ) (15,256 ) (3,786 ) Loan
prepayment fee
-
(2,209 )
-
(2,209 ) Other, net 170 (1,108 ) (1,124 ) (1,133 ) Foreign exchange
gain (loss), net (576 ) (201 ) (1,755 )
320 Total other expense, net (4,804 ) (5,833 )
(18,766 ) (6,808 ) Income (loss) before income taxes
1,428 (6,106 ) (10,511 ) 11,429 Provision for income tax expense
(benefit) (3,125 ) (783 ) 10,495
1,444 Net income (loss) $ 4,553 $ (5,323 ) $ (21,006
) $ 9,985 Less income (loss) attributable to non-controlling
interest (45 )
-
(45 )
-
Net income (loss) attributable to the Corporation $ 4,508
$ (5,323 ) $ (21,051 ) $ 9,985 Basic and diluted
income (loss) per share: Weighted average basic shares outstanding
13,420 5,927 10,010
5,746 Income (loss) per share – basic $ 0.34 $
(0.90 ) $ (2.10 ) $ 1.74 Weighted average diluted shares
outstanding 13,420 5,927 10,010
5,755 Income (loss) per share – diluted $ 0.34
$ (0.90 ) $ (2.10 ) $ 1.73
SAExploration Holdings, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS (In thousands, except per
share amounts) December
31, 2013 2012
ASSETS Current assets: Cash and cash equivalents $
17,351 $ 15,721 Restricted cash 638 3,701 Accounts receivable
40,928 27,585 Deferred costs on contracts 3,190 5,911 Prepaid
expenses 4,619 8,553 Deferred tax asset, net 1,371
902 Total current assets 68,097 62,373 Property and
equipment, net 64,572 70,456 Intangible assets, net 1,260 1,478
Goodwill 2,150 2,306 Deferred loan issuance costs, net 9,115 9,066
Deferred tax asset, net 743 1,622 Other assets 13
674 Total assets $ 145,950 $ 147,975
LIABILITIES
AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts
payable $ 16,511 $ 12,309 Accrued liabilities 3,124 5,435 Income
and other taxes payable 7,073 5,896 Accrued payroll liabilities
4,497 3,247 Notes payable – current portion 800 800 Notes payable
to related parties 500 53 Deferred revenue – current portion 7,927
6,145 Deferred tax liabilities – current portion 69
-
Capital leases – current portion 485 818 Total
current liabilities 40,986 34,703 Long-term portion of notes
payable, net 79,888 78,493 Long-term portion of notes payable to
related parties 12,406
-
Long-term portion of capital leases 618 1,054 Deferred revenue –
non-current portion
-
3,175 Deferred tax liabilities, net 1,114 241 Warrant liabilities
-
1,244 Total liabilities 135,012 118,910 Commitments
and contingencies: Convertible Series A preferred stock of Former
SAE, $0.0001 par value, 5,000 shares authorized, $1.00 stated
value, 5,000 shares retired as a result of the Merger
-
5,000
Stockholders’ equity: Preferred stock, $0.0001 par
value, 1,000 authorized shares and no outstanding shares
-
-
Common stock, $0.0001 par value, 55,000 shares authorized, and
13,429 and 6,322 issued and outstanding at December 31, 2013 and
2012, respectively 2 1 Additional paid-in capital 27,485 1,907
Retained earnings (deficit) (14,511 ) 21,801 Accumulated other
comprehensive income (loss) (2,083 ) 356 Total
Corporation stockholders’ equity 10,893 24,065 Non-controlling
interest 45
-
Total stockholders’ equity 10,938 24,065 Total
liabilities and stockholders’ equity $ 145,950 $ 147,975
SAExploration Holdings, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands) Three
Months Ended Fiscal Year
Ended December 31, December 31, 2013
2012 2013
2012 (Unaudited) Net income (loss) $ 4,553 $ (5,323) $
(21,006) $ 9,985 Other items of comprehensive income (loss),
foreign currency translation, net of tax (102) 100
(2,439) 966 Total other comprehensive income (loss)
4,451 (5,223) (23,445) 10,951 Less: Comprehensive income
attributable to non-controlling interest (45)
-
(45)
-
Total other comprehensive income (loss) attributable to the
Corporation $ 4,406 $ (5,223) $ (23,490) $ 10,951
SAExploration Holdings, Inc. and Subsidiaries
CONSOLIDATED REVENUES BY REGION (Unaudited) (In
thousands) Three Months
Ended Fiscal Year Ended
December 31, December 31, 2013
2012 2013 2012
North America $ 17,264 $ 11,920 $ 103,198 $ 122,060 South America
47,332 22,685 112,022 118,577 Southeast Asia 6,097
11,107 30,048 16,722 Total $ 70,693 $ 45,712 $
245,268 $ 257,359
SAExploration Holdings, Inc. and
Subsidiaries RECONCILIATION OF MODIFIED EBITDA
(Unaudited) (In thousands)
Three Months Ended
Fiscal Year Ended December 31, December 31,
2013 2012 2013
2012 Net income (loss) $ 4,508 $ (5,323 ) $
(21,051 ) $ 9,985 Net income (loss) attributable to non-controlling
interest 45
-
45
-
Depreciation and amortization 5,320 3,282 18,956 12,470 Interest
expense, net (1) 3,876 2,102 12,396 3,573 Unrealized loss on change
in fair value of notes payable to related parties 139
-
631
-
Provision for income tax expense (benefit) (3,125 ) (783 ) 10,495
1,444 Non-recurring expense 114 3,437
3,620
(2)
3,437
(3)
Modified EBITDA $ 10,877 $ 2,715 $ 25,092 $
30,909
(1) Excludes $383 and $213 of amortization of loan issuance
costs which are included in depreciation and amortization in the
three months ended December 31, 2013 and 2012, respectively, and
$2,860 and $213 of amortization of loan issuance costs which are
included in depreciation and amortization in the fiscal years ended
December 31, 2013 and 2012, respectively.
(2) Principally the cost associated with financing costs,
share-based compensation expense related to the accelerated vesting
of Former SAE’s restricted shares in connection with the Merger,
and costs associated with the merger.
(3) Principally the cost associated with financing costs and
fees for early payment of debt.
Modified EBITDA (arrived at by taking earnings before interest,
taxes, depreciation and amortization, and non-recurring expenses)
is not derived in accordance with generally accepted accounting
principles (“GAAP”). EBITDA is a key metric SAE uses in evaluating
its financial performance. EBITDA is considered a non-GAAP
financial measure as defined by Regulation G promulgated by the SEC
under the Securities Act of 1933, as amended. SAE considers EBITDA
important in evaluating its financial performance on a consistent
basis across various periods. Due to the significance of non-cash
and non-recurring items, EBITDA enables SAE’s Board of Directors
and management to monitor and evaluate the business on a consistent
basis. SAE uses EBITDA as a primary measure, among others, to
analyze and evaluate financial and strategic planning decisions
regarding future operating investments and potential acquisitions.
The presentation of EBITDA should not be construed as an inference
that SAE’s future results will be unaffected by unusual or
non-recurring items or by non-cash items, such as non-cash
compensation. EBITDA should be considered in addition to, rather
than as a substitute for, pre-tax income, net income and cash flows
from operating activities.
SAExploration Holdings, Inc.Ryan Abney, (281) 258-4409Vice
President, Capital Markets & Investor
Relationsrabney@saexploration.com
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