Pulse Seismic Inc. (TSX:PSD) (OTCQX:PLSDF) (“Pulse” or the
“Company”) is pleased to report its financial and operating results
for the three months ended March 31, 2024. The unaudited condensed
consolidated interim financial statements, accompanying notes and
MD&A are being filed on SEDAR (www.sedar.com) and will be
available on Pulse’s website at www.pulseseismic.com.
Pulse’s Board of Directors today approved a 9%
increase to the regular dividend and declared a regular quarterly
dividend of $0.015 per share. This increase results in an
annualized regular dividend of $0.06 per share. The total of the
dividend will be approximately $780,000 based on Pulse’s 51,994,563
common shares outstanding as of April 24, 2024, and will be
paid on May 23, 2024, to shareholders of record on May 14, 2024.
These dividends are designated as an eligible dividend for Canadian
income tax purposes. For non-resident shareholders, Pulse’s
dividends are subject to Canadian withholding tax.
The annual general meeting of the shareholders of
Pulse Seismic Inc. will be held at 11:00 a.m. (MDT) on April 25,
2024 at the offices of McCarthy Tetrault LLP, Suite 4000,
421-7th Avenue SW, Calgary, Alberta.
HIGHLIGHTS FOR THE THREE MONTHS ENDED
MARCH 31, 2024
- A regular quarterly dividend of $0.01375 per share was declared
and paid in the first quarter;
- The special dividend of $0.20 per share totalling $10.5
million, declared in December 2023, was paid in the first quarter;
- Shareholder free cash flow(a) was $5.0 million ($0.10 per share
basic and diluted) compared to $5.3 million ($0.10 per share basic
and diluted) in the first quarter of 2023;
- EBITDA(a) was $6.2 million ($0.12 per share basic and diluted)
compared to $6.6 million ($0.12 per share basic and diluted) in the
first quarter of 2023;
- Net earnings were $2.7 million ($0.05 per share basic and
diluted) compared to net earnings of $2.9 million ($0.05 per share
basic and diluted) in the first quarter of 2023;
- Total revenue was $8.8 million compared to $8.4 million for the
three months ended March 31, 2023;
- In the three-month period ended March 31, 2024, Pulse purchased
and cancelled, through its normal course issuer bid, a total of
627,300 common shares at a total cost of approximately $1.2 million
(at an average cost of $1.89 per common share including
commissions); and
- At March 31, 2024, Pulse was debt-free and held cash of $13.8
million.
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SELECTED FINANCIAL AND OPERATING INFORMATION |
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(Thousands
of dollars except per share data, |
Three months ended
March 31, |
Year
ended |
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numbers of
shares and kilometres of seismic data) |
2024 |
2023 |
December
31, |
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(Unaudited) |
2023 |
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Revenue |
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Data library sales |
8,777 |
8,407 |
39,127 |
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Amortization
of seismic data library |
2,270 |
2,286 |
9,103 |
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Net
earnings |
2,681 |
2,908 |
15,007 |
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Per share basic and diluted |
0.05 |
0.05 |
0.28 |
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Cash
provided by operating activities |
10,464 |
5,413 |
23,524 |
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Per share basic and diluted |
0.20 |
0.10 |
0.44 |
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EBITDA(a) |
6,229 |
6,615 |
30,431 |
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Per share basic and diluted(a) |
0.12 |
0.12 |
0.57 |
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Shareholder
free cash flow(a) |
5,038 |
5,261 |
24,829 |
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Per share basic and diluted(a) |
0.10 |
0.10 |
0.47 |
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Capital
expenditures |
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Seismic data |
225 |
- |
- |
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Property and equipment |
- |
4 |
28 |
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Total
capital expenditures |
225 |
4 |
28 |
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Dividends |
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Regular dividends |
715 |
670 |
2,862 |
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Special dividends |
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- |
18,519 |
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Total dividends |
715 |
670 |
21,381 |
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Weighted
average shares outstanding |
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Basic and diluted |
52,122,006 |
53,614,717 |
53,237,569 |
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Shares
outstanding at period-end |
51,994,563 |
53,596,769 |
52,621,863 |
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Seismic
library |
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2D in kilometres |
829,207 |
829,207 |
829,207 |
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3D in square kilometres |
65,310 |
65,310 |
65,310 |
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FINANCIAL POSITION AND RATIO |
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March 31, |
March
31, |
December
31, |
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(thousands of dollars except ratio) |
2024 |
2023 |
2023 |
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Working
capital |
10,579 |
11,136 |
7,468 |
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Working
capital ratio |
3.8:1 |
13.3:1 |
1.5:1 |
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Cash and
cash equivalents |
13,765 |
10,455 |
15,948 |
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Total
assets |
31,122 |
37,220 |
41,249 |
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Trailing
12-month (TTM) EBITDA(b) |
30,045 |
8,641 |
30,431 |
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Shareholders’ equity |
26,543 |
35,679 |
25,655 |
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(a) The Company’s continuous disclosure
documents provide discussion and analysis of “EBITDA”, “EBITDA per
share”, “shareholder free cash flow” and “shareholder free cash
flow per share”. These financial measures do not have standard
definitions prescribed by IFRS and, therefore, may not be
comparable to similar measures disclosed by other companies. The
Company has included these non-GAAP financial measures because
management, investors, analysts and others use them as measures of
the Company’s financial performance. The Company’s definition of
EBITDA is cash available to invest in growing the Company’s seismic
data library, pay interest and principal on long-term debt when
applicable, purchase its common shares, pay taxes and the payment
of dividends. EBITDA is calculated as earnings (loss) from
operations before interest, taxes, depreciation and amortization.
EBITDA per share is defined as EBITDA divided by the weighted
average number of shares outstanding for the period. The Company
believes EBITDA assists investors in comparing Pulse’s results on a
consistent basis without regard to non-cash items, such as
depreciation and amortization, which can vary significantly
depending on accounting methods or non-operating factors such as
historical cost. Shareholder free cash flow further refines the
calculation by adding back non-cash expenses and deducting net
financing costs and current income tax expense from EBITDA.
Shareholder free cash flow per share is defined as shareholder free
cash flow divided by the weighted average number of shares
outstanding for the period. (b) TTM EBITDA is defined as the sum of
EBITDA generated over the previous 12 months and is used to provide
a comparable annualized measure. These non-GAAP financial measures
are defined, calculated and reconciled to the nearest GAAP
financial measures in the Management's Discussion and Analysis.
OUTLOOK
Following the high level of data licensing and
financial performance achieved in 2023, the Company has also
experienced a solid start to 2024, generating $8.8 million of
revenue in the first quarter. While the outlook for economic and
commodity markets is mixed, several factors are expected to have a
positive impact on the year ahead in the energy industry. The
continued strength in crude oil prices and expectations that global
demand for fossil fuels will continue to trend upward is key. The
completion of the Trans Mountain Pipeline Expansion project is
imminent and the LNG Canada facility is expected to be operational
in 2025. These critical energy projects will provide increased
export capacity for delivering both oil and natural gas to global
markets.
After two high-volume years of industry Merger
& Acquisition activity, Sayer Energy Advisors reported that
they anticipate a year-over-year reduction to approximately $12
billion in 2024. This forecast reflects the stronger balance sheets
and profitability in the industry and, accordingly, fewer assets
and companies for sale. An initial 2024 forecast by Enserva
anticipates industry capital spending growth of a further 10
percent this year. Land sales are also forecast to remain robust.
In November 2023, the Canadian Association of Energy Contractors
issued an initial 2024 drilling forecast of 6,229 wells, up from
5,748 in 2023.
The Company cautions, as always, that industry
conditions do not provide visibility regarding Pulse’s seismic data
library sales levels and remains focused on the business practices
that have served it throughout the full range of conditions. Pulse
maintains a strong balance sheet, has zero debt, no capital
spending commitments, and a disciplined and rigorous approach to
evaluating growth opportunities. This 15-person company, led by an
experienced and capable management team, operates with a low-cost
structure and focuses on developing excellent client relations and
providing exceptional customer service. Pulse’s strong financial
position, high leverage to increased revenue in its EBITDA margin
and careful management of its cash resources have resulted in the
return of capital to shareholders through regular and special
dividends and the repurchase of its shares.
CORPORATE PROFILE
Pulse is a market leader in the acquisition,
marketing and licensing of 2D and 3D seismic data to the western
Canadian energy sector. Pulse owns the largest licensable seismic
data library in Canada, currently consisting of approximately
65,310 square kilometres of 3D seismic and 829,207 kilometres of 2D
seismic. The library extensively covers the Western Canada
Sedimentary Basin, where most of Canada’s oil and natural gas
exploration and development occur.
For further information, please contact:
Neal Coleman, President and CEO Or Pamela
Wicks, Vice President Finance and CFO Tel.: 403-237-5559
Toll-free: 1-877-460-5559 E-mail: info@pulseseismic.com. Please
visit our website at www.pulseseismic.com
This document contains information that
constitutes “forward-looking information” or “forward-looking
statements” (collectively, “forward-looking information”) within
the meaning of applicable securities legislation. Forward-looking
information is often, but not always, identified by the use of
words such as “anticipate”, “believe”, “expect”, “plan”, “intend”,
“forecast”, “target”, “project”, “guidance”, “may”, “will”,
“should”, “could”, “estimate”, “predict” or similar words
suggesting future outcomes or language suggesting an outlook.
The Outlook section herein contain forward-looking information
which includes, but is not limited to, statements regarding:
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The outlook of the Company for the year ahead, including future
operating costs and expected revenues; |
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Recent events on the political,
economic, regulatory, public health and legal fronts affecting the
industry’s medium- to longer-term prospects, including progression
and completion of contemplated pipeline projects; |
> |
The Company’s capital resources
and sufficiency thereof to finance future operations, meet its
obligations associated with financial liabilities and carry out the
necessary capital expenditures through 2024; |
> |
Pulse’s capital allocation
strategy; |
> |
Pulse’s dividend policy; |
> |
Oil and natural gas prices and
forecast trends; |
> |
Oil and natural gas drilling
activity and land sales activity; |
> |
Oil and natural gas company
capital budgets; |
> |
Future demand for seismic
data; |
> |
Future seismic data sales; |
> |
Pulse’s business and growth
strategy; and |
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Other expectations, beliefs, plans, goals, objectives, assumptions,
information and statements about possible future events,
conditions, results and performance, as they relate to the Company
or to the oil and natural gas industry as a whole. |
By its very nature, forward-looking information
involves inherent risks and uncertainties, both general and
specific, and risks that predictions, forecasts, projections and
other forward-looking statements will not be achieved. Pulse does
not publish specific financial goals or otherwise provide guidance,
due to the inherently poor visibility of seismic revenue. The
Company cautions readers not to place undue reliance on these
statements as a number of important factors could cause the actual
results to differ materially from the beliefs, plans, objectives,
expectations and anticipations, estimates and intentions expressed
in such forward-looking information. These factors include, but are
not limited to:
> |
Uncertainty of the timing and volume of data sales; |
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Volatility of oil and natural gas
prices; |
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Risks associated with the oil and
natural gas industry in general; |
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The Company’s ability to access
external sources of debt and equity capital; |
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Credit, liquidity and commodity
price risks; |
> |
The demand for seismic data
and; |
> |
The pricing of data library
licence sales; |
> |
Cybersecurity; |
> |
Relicensing (change-of-control)
fees and partner copy sales; |
> |
Environmental, health and safety risks; |
> |
Federal and provincial government laws and regulations, including
those pertaining to taxation, royalty rates, environmental
protection, public health and safety; |
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Competition; |
> |
Dependence on key management, operations and marketing
personnel; |
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The loss of seismic data; |
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Protection of intellectual
property rights; |
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The introduction of new products;
and |
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Climate change. |
Pulse cautions that the foregoing list of
factors that may affect future results is not exhaustive.
Additional information on these risks and other factors which could
affect the Company’s operations and financial results is included
under “Risk Factors” in the Company’s most recent annual
information form, and in the Company’s most recent audited annual
financial statements, most recent MD&A, management information
circular, quarterly reports, material change reports and news
releases. Copies of the Company’s public filings are available on
SEDAR at www.sedar.com.
When relying on forward-looking information to
make decisions with respect to Pulse, investors and others should
carefully consider the foregoing factors and other uncertainties
and potential events. Furthermore, the forward-looking information
contained in this document is provided as of the date of this
document and the Company does not undertake any obligation to
update publicly or to revise any of the included forward-looking
information, except as required by law. The forward-looking
information in this document is provided for the limited purpose of
enabling current and potential investors to evaluate an investment
in Pulse. Readers are cautioned that such forward-looking
information may not be appropriate, and should not be used, for
other purposes.
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