Trio Merger Corp. (NASDAQ:TRIO; OTCBB:TMRGW)(“Trio”) and
its intended merger target, SAExploration Holdings, Inc. (“SAE”
or the “Company”), today announced that SAE had been awarded
seismic data acquisition contracts totaling $61 million during the
last two weeks. Of these awards, $47 million are for new projects
in North America and $14 million are for new projects in Southeast
Asia.
Trio and SAE also announced SAE’s unaudited financial results
for the three months ended March 31, 2013 (“Q1 2013”). These
results conform with the preliminary, unaudited results for Q1 2013
that Trio and SAE announced on May 22, 2013.
Eric Rosenfeld, Chairman and CEO of Trio, commented, “These new
awards focus on complex land and shallow water zones, the
challenging environments within SAE’s core expertise. These
projects are expected to commence in Q3 2013 and extend into Q1
2014. SAE is an experienced seismic service provider with
proficiency in complex environments, a strong QHSE record, and
excellent relationships with local communities. SAE’s management
has long-standing relationships with some of the world’s largest
oil and gas companies.”
Q1 2013 Results
Revenues for Q1 2013 totaled $84.8 million, a 37.2% increase
from $61.8 million in the comparable prior year period. Higher
revenue growth was primarily due to increased operations in more
logistically challenging areas such as Papua New Guinea, Columbia
and Canada.
Gross profit was $18.7 million, or 22.1% of revenues, compared
to gross profit of $14.9 million, or 24.1% of revenue, in Q1 2012.
The decrease in gross margin is primarily due to increased
operating expenses related to projects in PNG, Columbia and Canada.
The company also recorded a depreciation expense of $0.9 million
related to capital additions in 2012.
General and administrative (“G&A”) expenses were $7.5
million, or 8.8% of revenues, compared to $5.4 million, or 8.8% of
revenues in Q1 2012. The increase in G&A was due to the need to
hire additional personnel to support SAE’s expanding worldwide
operations and the upcoming merger with Trio.
Operating income was $10.9 million, an increase of 16.0% from
$9.4 million in Q1 2012.
Net income decreased 37.2% to $4.9 million for Q1 2013, compared
to $7.8 million in Q1 2012 due to significantly higher depreciation
and interest expense.
Cash and cash equivalents totaled $21.4 million, an increase of
$5.7 million, or 36.3%, from December 31, 2012.
Modified EBITDA (as defined) was $14.1 million, a 14.6% increase
from Modified EBITDA of $12.3 million in Q1 2012.
About SAExploration Holdings,
Inc.
SAE is a holding company of various subsidiaries which
cumulatively form a geographically diversified seismic data
acquisition company. SAE provides a full range of 2D, 3D and 4D
seismic data services to its clients, including surveying, program
design, logistical support, data acquisition, processing, camp
services, catering, environmental assessment and community
relations. The Company services its multinational client base from
offices in Canada, Alaska, Peru, Columbia, Bolivia, Papua New
Guinea, New Zealand and Brazil. SAE’s website is
www.saexploration.com.
The information on SAE’s website is not, and shall not be deemed
to be, a part of this notice or incorporated in filings either Trio
or SAE makes with the SEC.
About Trio Merger Corp.
Trio was incorporated in Delaware on February 2, 2011 as a blank
check company whose objective is to effect a merger, capital stock
exchange, asset acquisition or other similar business combination
with an operating business. Trio’s initial public offering was
declared effective June 20, 2011 and was consummated on June 24,
2011, receiving net proceeds of $57.43 million through the sale of
6.0 million units at $10.00 per unit and $3.55 million from the
sale of private placement warrants to the initial stockholders and
the underwriters. On June 24, 2011, the underwriters exercised
their over-allotment option and on June 27, 2011, Trio received net
proceeds of $8.69 million from the sale of 900,000 units. Each unit
was comprised of one share of Trio common stock and one warrant
with an exercise price of $7.50. As of March 31, 2013, Trio held
approximately $61,676,800 in a trust account maintained by an
independent trustee, which will be released upon the consummation
of the business combination.
On December 11, 2012, Trio and SAE jointly announced that the
companies entered into a merger agreement whereby SAE will merge
into a wholly owned subsidiary of Trio. The closing of the
transaction with SAE is subject to, among other matters, approval
by the stockholders of Trio and holders of 496,032 or more of the
shares of Trio’s common stock issued in Trio’s initial public
offering of securities not exercising their rights to convert their
shares into a pro rata share of the trust account in accordance
with Trio’s amended and restated certificate of incorporation.
EBITDA
SAE’s financial information contained herein is unaudited.
Furthermore, it includes certain financial information, such as
EBITDA (earnings before interest, taxes, depreciation and
amortization), 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.
RECONCILIATION OF MODIFIED
EBITDA
($ in thousands) (unaudited)
March 31 2013 2012 Net Income $
4,928 $ 7,753 Depreciation and amortization 4,395 2,782 Interest
Expense (income), net 2,765
(1
)
368 Income tax expense 2,015 1,434 Non-recurring major expense - -
Modified EBITDA $ 14,103 $ 12,337
(1) Excludes $620,000 of amortization of
loan issuance costs which are included in depreciation and
amortization in March 2013.
Not a Proxy Statement
This press release is not a proxy statement or a solicitation of
proxies from the holders of common stock of Trio and does not
constitute an offer of any securities of Trio for sale. Any
solicitation of proxies will be made only by the definitive proxy
statement/information statement of Trio that has been mailed to all
stockholders of record as of May 31, 2013. Investors and security
holders of Trio are urged to read the definitive proxy
statement/information statement and appendices thereto because they
contain important information about Trio and SAE.
Forward Looking
Statements
This press release includes certain forward-looking statements,
including statements regarding future financial performance, future
growth and future acquisitions. These statements are based on SAE’s
and Trio’s managements’ current expectations or beliefs and are
subject to uncertainty and changes in circumstances. Actual results
may vary materially from those expressed or implied by the
statements herein due to changes in economic, business, competitive
and/or regulatory factors, and other risks and uncertainties
affecting the operation of SAE’s business. These risks,
uncertainties and contingencies include: fluctuations in the levels
of exploration and development activity in the oil and gas
industry; business conditions; weather and natural disasters;
changing interpretations of GAAP; outcomes of government reviews;
inquiries and investigations and related litigation; continued
compliance with government regulations; legislation or regulatory
environments; requirements or changes adversely affecting the
business in which SAE is engaged; fluctuations in customer demand;
changes in scope or schedule of customer projects; termination of
contracts at the convenience of clients; management of rapid
growth; intensity of competition from other providers of seismic
acquisition services; general economic conditions; geopolitical
events and regulatory changes; the possibility that the merger does
not close, including due to the failure to receive required
security holder approvals or the failure of other closing
conditions; and other factors set forth in Trio’s filings with the
Securities and Exchange Commission. The information set forth
herein should be read in light of such risks. Neither Trio nor SAE
is 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.
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