Aveda Transportation and Energy Services Inc. (“Aveda” or the
“Company”) (TSX-V:AVE), North America’s largest dedicated rig
moving company, today announced its results for the three months
and nine months ended September 30, 2017.
“We’ve been fortunate to build a team for Aveda
that shows a passion for excellence and commitment to the goals of
the organization, allowing us to execute at a new level,” said
Ronnie Witherspoon, President and Chief Executive Officer for
Aveda. “I’m proud of their achievements over the last year, and
look forward to the excitement of tackling the future together. I
believe our foundation and practices, along with strong vision,
will lead to continued success as we navigate forward.”
2017 Third Quarter Business
Highlights
- Generated record revenue for the three months ended September
30, 2017 of $53.5 million. This is the most revenue Aveda has ever
reported in any quarter in the Company’s history. Aveda has now
reported five sequential quarters of revenue growth and three
sequential quarters of record revenue. Revenue in the third quarter
of 2017 increased by $32.5 million or almost 160%, compared with
revenue of $21.0 million for the same period in 2016;
- For the three months ended September 30, 2017, the Company
reported gross profit before depreciation and amortization1 of $9.2
million. Gross profit excluding depreciation and amortization1 in
the third quarter of 2017 increased by $6.2 million or 215%
compared to $2.9 million in 2016;
- Generated Adjusted EBITDA1 of $4.7 million for the three months
ended September 30, 2017. This amount of Adjusted EBITDA1 continues
the strong performance the Company has experienced throughout
fiscal 2017. Adjusted EBITDA1 in the third quarter of 2017
increased by $4.6 million compared to $0.1 million in the third
quarter of 2016;
- Net loss for the three months ended September 30, 2017
decreased by $4.5 million to $1.1 million, compared to a net loss
of $5.6 million for the same period in 2016. Loss per share was
$0.02 compared to $0.30 in the comparative period;
- Aveda expanded its operational footprint by opening a new
terminal in Martins Ferry, OH. The Ohio terminal is expected to
contribute to fourth quarter results; and
- Aveda ended the quarter with a net asset value per share6 of
$0.64, $20.4 million in working capital with a current ratio of
1.7:1, and undrawn cash availability of $32.8 million on its senior
debt facility.
First Nine Months 2017 Business
Highlights
- Generated record revenue for the nine months ended September
30, 2017 of $146.5 million. This is the most revenue that Aveda has
ever reported in the first three quarters of any year in the
Company’s history. Revenue in the first nine months of 2017
increased by almost $105.0 million or approximately 250%, compared
with revenue of $41.9 million for the same period in 2016;
- Gross profit excluding depreciation and amortization1 in the
first nine months of 2017 increased by $23.1 million to $25.7
million compared to $2.6 million in 2016;
- Reported Adjusted EBITDA1 of $12.4 million for the nine months
ended September 30, 2017. Adjusted EBITDA1 in the first nine months
of 2017 increased by almost $20.0 million compared to a loss of
$7.5 million in the comparative period of 2016;
- Net loss for the nine months ended September 30, 2017 decreased
by almost $20.0 million to $5.8 million, compared to a net loss of
$25.7 million for the same period in 2016. Loss per share was $0.12
compared to $1.35 in the comparative period;
- In addition to the opening of the Martins Ferry, OH terminal
discussed above, Aveda expanded its operational footprint by
opening new terminals in Midland, Texas and Casper, WY in
2017;
- Aveda restructured its debt in the first quarter of 2017 as
further outlined in the September MD&A and in the news release
dated January 13, 2017;
- The Company also raised gross proceeds of $22.9 million through
an equity offering as outlined in the news release dated, February
22, 2017; and
- As a result of both successfully restructuring its debt and
raising the equity outlined above, the Company now has a
significantly stronger balance sheet.
The Company’s consolidated financial statements
and management’s discussion and analysis (“September MD&A”) for
the three and nine months ended September 30, 3017 are available on
the Company’s website at www.avedaenergy.com and the SEDAR website
at www.sedar.com.
Investor Relations Update
The Company has posted an updated corporate
presentation and fact sheet to its website. The updated information
can be found at
www.avedaenergy.com/investor-hub/presentations/default.aspx.
Aveda’s CEO and CFO also expect to be presenting
at the World Outlook Financial Conference on February 2nd and 3rd
2018 in Vancouver.
Conference Call
The Company will host its third quarter fiscal
2017 results conference call on Tuesday, November 21, 2017 at 10:30
a.m. Eastern Time (ET). President and CEO, Ronnie Witherspoon and
Vice-President, Finance and CFO, Bharat Mahajan will discuss
Aveda's financial results for the quarter and then take questions
from securities analysts.
To access the conference call by telephone, dial
(416) 915-3239 or (403) 351-0324. A live audio webcast of the
conference call will be available
at: http://services.choruscall.ca/links/aveda20171121.html
The conference call webcast will be archived and
available until December 31, 2017
at: http://www.avedaenergy.com/investor-hub/conference-calls/default.aspx.
Financial Overview
|
|
|
|
|
(in
thousands, except per share and ratio amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
ThreeMonthsEndedSeptember30, 2017 |
|
|
ThreeMonths EndedSeptember 30, 2016 |
|
|
%Change2016 - 2017 |
|
|
NineMonths EndedSeptember30, 2017 |
|
|
Nine Months Ended September 30, 2016 |
|
|
% Change 2016 - 2017 |
|
Revenue |
53,502 |
|
|
20,955 |
|
|
155 |
% |
|
146,523 |
|
|
41,886 |
|
|
250 |
% |
Gross profit
(loss)1 |
5,288 |
|
|
(1,563 |
) |
|
438 |
% |
|
14,001 |
|
|
(10,930 |
) |
|
228 |
% |
Gross margin4 |
10 |
% |
|
-7 |
% |
|
N/A |
|
|
10 |
% |
|
-26 |
% |
|
N/A |
|
Gross profit1 excluding
depreciation and amortization |
9,154 |
|
|
2,905 |
|
|
215 |
% |
|
25,676 |
|
|
2,577 |
|
|
-896 |
% |
Gross margin excluding
depreciation and amortization5 |
17 |
% |
|
14 |
% |
|
N/A |
|
|
18 |
% |
|
6 |
% |
|
N/A |
|
Adjusted EBITDA
(loss)1 |
4,708 |
|
|
71 |
|
|
6531 |
% |
|
12,370 |
|
|
(7,539 |
) |
|
264 |
% |
Adjusted EBITDA1 as a
percentage of revenue |
9 |
% |
|
0 |
% |
|
N/A |
|
|
8 |
% |
|
-18 |
% |
|
N/A |
|
Net loss |
(1,105 |
) |
|
(5,645 |
) |
|
-80 |
% |
|
(5,802 |
) |
|
(25,696 |
) |
|
-77 |
% |
Net loss as a
percentage of revenue |
-2 |
% |
|
-27 |
% |
|
N/A |
|
|
-4 |
% |
|
-61 |
% |
|
N/A |
|
Adjusted EBITDA (loss)1
per share |
0.08 |
|
|
- |
|
|
N/A |
|
|
0.25 |
|
|
(0.40 |
) |
|
163 |
% |
Loss per share - basic
and diluted |
(0.02 |
) |
|
(0.30 |
) |
|
-93 |
% |
|
(0.12 |
) |
|
(1.35 |
) |
|
-91 |
% |
Current ratio2 |
1.7 |
|
|
2.0 |
|
|
-15 |
% |
|
1.7 |
|
|
2.0 |
|
|
-15 |
% |
Debt to equity
ratio3 |
2.0 |
|
|
3.0 |
|
|
-33 |
% |
|
2.0 |
|
|
3.0 |
|
|
-33 |
% |
|
Outlook
Aveda earns revenue primarily by providing
specialized transportation services to companies engaged in the
exploration, development and production of petroleum resources. As
a result, demand for Aveda’s transportation services is generally
linked to the economic conditions of the energy industry and the
level of drilling activity in the US and the WCSB.
Relative to the first half of 2016, both oil and
natural gas prices have rebounded and rig counts in both Canada and
the United States have substantially risen in the first three
quarters of 2017 and stabilized into the fourth quarter. Based both
on general market enthusiasm with respect to commodity prices and
discussions with Aveda’s customers, management expects 2018 to be
an even stronger year in terms of drilling activity. Accordingly,
the Company is planning for increased activity levels through its
equipment activation and refurbishment program. The Company began
refurbishing its working fleet as well as idled assets in the third
quarter of 2017. This refurbishment program also included upgrading
and enhancing the capabilities of several of the Company’s assets.
In the third quarter of 2017, the Company invested approximately
$1.8 million of capital into its fleet and estimates that its
direct operating expenses were negatively impacted by $0.1 to $0.2
million as result of the refurbishment and reactivation program.
The Company anticipates making similar investments in the fourth
quarter of 2017. Aveda is expected to have most of its equipment
activated and working in the first quarter of 2018 to ensure the
Company is able to take advantage of what appears to be a year of
stronger activity. As these assets are activated and refurbished,
the Company will need additional people to operate them. Aveda is
expecting to hire approximately 120 employees in the fourth quarter
of 2017. Aveda is committed to improving the quality of its revenue
by shifting more revenue to owned equipment versus the use of third
party subcontractors.
The Company also anticipates that it will
increase its hoisting capacity by reengineering several of its
assets in 2018. Accordingly, Aveda is planning to invest $6.0
million in its capital program in 2018, with approximately $3.0 to
$4.0 million allocated towards maintenance capital and the
remainder towards purchasing and reengineering hoisting
equipment.
Based on the information above, Aveda expects to
see continued improvements in revenue, Adjusted EBITDA and net
income results in 2018.
About Aveda Transportation and Energy
Services
Aveda provides specialized transportation
services and equipment required for the exploration, development
and production of petroleum resources in the Western Canadian
Sedimentary Basin and in the United States of America principally
in and around the states of Texas, Pennsylvania, Wyoming, Oklahoma,
Ohio and North Dakota. Aveda balances Performance, Safety and Value
for our Customers through Leadership, Financial Discipline and
Proper Planning, while providing a culture of Family for our
employees. Aveda strives for a world where its operations improve
the daily experience of our customers, our employees, and every
person we meet on the road to success.
Aveda was incorporated in 1994 as a private
company to serve the oil and gas industry. In the spring of 2006
the Company went public on the TSX Venture Exchange. Aveda has
major operations in Calgary, AB, Leduc, AB, Edson, AB, Pleasanton,
TX, Midland, TX, Pecos, TX, Marshall, TX, Williston, ND, Casper,
WY, Williamsport, PA, Martins Ferry, OH and Oklahoma City, OK.
Aveda is publicly traded on the TSX Venture Exchange under the
symbol AVE. Aveda has 15 locations which cover North America’s most
prolific oil and gas plays. The Company has almost 1,500 pieces of
modern, well maintained equipment and employs 560 team members.
Aveda’s unique differentiator is our advanced operational and
safety culture. For more information on Aveda please visit
www.avedaenergy.com.
For more information, please contact:Bharat Mahajan, CAVice
President, Finance and Chief Financial Officer(403)
264-5769bharat.mahajan@avedaenergy.com
This News Release contains certain
forward-looking statements and forward-looking information
(collectively referred to herein as "forward-looking
statements") within the meaning of applicable Canadian
securities laws. All statements other than statements of present or
historical fact are forward-looking statements. Forward-looking
statements are often, but not always, identified by the use of
words such as "anticipate", "achieve", "could", "believe", "plan",
"intend", "objective", "continuous", "ongoing", "estimate",
"outlook", "expect", "may", "will", "project", "should" or similar
words, including negatives thereof, suggesting future outcomes. In
particular, this News Release contains forward-looking statements
relating to: demand for the Company’s services and general industry
activity level; the Company’s growth opportunities; and
expectations regarding the Company’s revenue, EBITDA, Adjusted
EBITDA and equipment utilization. Aveda believes the expectations
reflected in such forward-looking statements are reasonable as of
the date hereof but no assurance can be given that these
expectations will prove to be correct and such forward-looking
statements should not be unduly relied upon.
Various material factors and assumptions are
typically applied in drawing conclusions or making the forecasts or
projections set out in forward-looking statements. Those material
factors and assumptions are based on information currently
available to Aveda, including information obtained from third party
industry analysts and other third party sources. In some instances,
material assumptions and material factors are presented elsewhere
in this News Release in connection with the forward-looking
statements. Readers are cautioned that the following list of
material factors and assumptions is not exhaustive. Specific
material factors and assumptions include, but are not limited
to:
- the performance of Aveda’s businesses, including current
business and economic trends;
- oil and natural gas commodity prices and production
levels;
- the effect of the rebranding on Aveda’s businesses;
- capital expenditure programs and other expenditures by Aveda
and its customers:
- the ability of Aveda to retain and hire qualified
personnel;
- the ability of Aveda to obtain parts, consumables, equipment,
technology, and supplies in a timely manner to carry out its
activities;
- the ability of Aveda to maintain good working relationships
with key suppliers;
- the ability of Aveda to market its services successfully to
existing and new customers;
- the ability of Aveda to obtain timely financing on acceptable
terms;
- currency exchange and interest rates;
- risks associated with foreign operations;
- changes under governmental regulatory regimes and tax,
environmental and other laws in Canada and the United States;
and
- a stable competitive environment.
The forward-looking statements regarding Aveda's
potential revenue, EBITDA and Adjusted EBITDA are included herein
to provide readers with an understanding of Aveda's anticipated
cash flow and Aveda's ability to fund its expenditures based on the
assumptions described herein. Readers are cautioned that this
information may not be appropriate for other purposes.
Forward-looking statements are not a guarantee
of future performance and involve a number of risks and
uncertainties, some of which are described herein. Such
forward-looking statements necessarily involve known and unknown
risks and uncertainties, which may cause Aveda’s actual performance
and financial results in future periods to differ materially from
any projections of future performance or results expressed or
implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to, the risks identified
in Aveda’s annual information form and management discussion and
analysis for the year ended December 31, 2016 (the "MD&A"),
which are available for viewing on SEDAR at www.sedar.com. Any
forward-looking statements are made as of the date hereof and,
except as required by law, Aveda assumes no obligation to publicly
update or revise such statements to reflect new information,
subsequent or otherwise.
This News Release contains the terms “EBITDA”,
“Adjusted EBITDA”, “gross profit”, “gross profit margin”, “gross
profit excluding depreciation and amortization” and “gross margin
excluding depreciation and amortization” which are defined in the
MD&A. The above terms as presented do not have any standardized
meanings prescribed by international financial reporting standards
(“IFRS”) and therefore may not be comparable with the calculation
of similar measures for other entities. Management uses EBITDA,
Adjusted EBITDA, gross profit, gross profit margin, gross profit
excluding depreciation and amortization, and gross margin excluding
depreciation and amortization to analyze the operating performance
of the business. These non-IFRS measures presented are not intended
to represent cash provided by operating activities, net earnings or
other measures of financial performance calculated in accordance
with IFRS.
This News Release contains the terms "cash
flow", "working capital" and "working capital ratio", which do not
have any standardized meanings prescribed by IFRS and therefore may
not be comparable with the calculation of similar measures for
other entities. As an indicator of the Company's performance,
cash flow should not be considered as an alternative to, or more
meaningful than, net cash from operating activities as determined
in accordance with IFRS. The Company considers cash flow to be a
key measure as it demonstrates the Company's underlying ability to
generate the cash necessary to fund operations and support
activities related to its major assets. Cash flow is determined by
adding back changes in non-cash operating working capital to cash
from operating activities. Management calculates working capital as
current assets less current liabilities and uses this measure to
analyze operating performance and leverage.
Notes:
- See September MD&A Section 8.
- Current ratio calculated as current assets divided by current
liabilities.
- Debt includes loans and borrowings and note payable as per
their carrying amounts on the balance sheet.
- Gross margin is calculated as gross profit divided by
revenue.
- Gross margin excluding depreciation and amortization is
calculated by dividing gross profit excluding depreciation and
amortization by revenue.
- Net asset value per share calculated by dividing total equity
($36.5 million) by the common shares outstanding (57.4
million).
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
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