Trican Well Service Ltd. (TSX:TCW)
--------------------------------
Three months ended
(millions, except per share amounts; March 31, March 31, Dec. 31,
unaudited) 2013 2012 2012
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Revenue $618.4 $716.4 $485.9
Operating income (i) 86.7 161.8 35.1
Net income (loss) 25.2 89.5 (7.7)
Net income (loss) per share (basic) $0.17 $0.61 ($0.05)
(diluted) $0.17 $0.61 ($0.05)
Adjusted net income (loss) (i) 27.4 92.3 (5.4)
Adjusted net income (loss) per
share(i) (basic) $0.18 $0.63 (0.04)
(diluted) $0.18 $0.63 (0.04)
Funds provided by (used in)
operations(i) 58.0 141.5 (14.3)
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Notes:
(i) Trican makes reference to operating income, adjusted net
income (loss) and funds provided by (used in) operations. These are
measures that are not recognized under International Financial
Reporting Standards (IFRS). Management believes that, in addition
to net income (loss), operating income, adjusted net income (loss)
and funds provided by (used in) operations are useful supplemental
measures. Operating income provides investors with an indication of
net income (loss) before depreciation and amortization, foreign
exchange gains and losses, other income, finance costs and income
tax expense. Adjusted net income (loss) provides investors with
information on net income (loss) excluding one-time non-cash
charges and the non-cash effect of stock-based compensation
expense. Funds provided by (used in) operations provide investors
with an indication of cash available for capital commitments, debt
repayments and other expenditures. Investors should be cautioned
that operating income, adjusted net income (loss), and funds
provided by (used in) operations should not be construed as an
alternative to net income (loss) and cash provided (used in)
operations determined in accordance with IFRS as an indicator of
Trican's performance. Trican's method of calculating operating
income, adjusted net income (loss) and funds provided by (used in)
operations may differ from that of other companies and accordingly
may not be comparable to measures used by other companies.
FIRST QUARTER HIGHLIGHTS
Consolidated revenue for the first quarter of 2013 was $618.4
million, a decrease of 14% compared to the first quarter of 2012.
Consolidated net income was $25.2 million compared to net income of
$89.5 million, and diluted income per share was $0.17 compared to
diluted income per share of $0.61 for the same period in 2012.
Funds provided by operations were $58.0 million compared to $141.5
million in the first quarter of 2012.
Our Canadian operations generated quarterly revenue of $338.6
million and operating income of $89.8 million during the first
quarter of 2013. Canadian revenue decreased by 22% and operating
income decreased by 44% compared to the first quarter of 2012. The
majority of the year-over-year decreases in revenue and operating
income were caused by a 19% decline in Canadian pricing. Canadian
activity levels were relatively strong in the first quarter as the
number of wells drilled increased by 4% compared to the first
quarter of 2012 and by 31% compared to the fourth quarter. The
substantial increase in first quarter Canadian activity compared to
the fourth quarter of 2012 led to sequential increases in revenue
of 39% and operating income of 76% for our Canadian operations.
Our U.S. operations generated first quarter revenue of $210.7
million and operating income of $18.0 million. U.S. revenue
increased by 21% compared to the fourth quarter of 2012 due largely
to a 25% increase in equipment utilization. First quarter
utilization for our U.S. operations benefited from Trican's
technology offering. Our U.S. operations were able to secure work
in the first quarter through key technology offerings such as our
BPS Completion Tool and water recycling services. U.S. operating
margins improved by 970 basis points on a sequential basis due to
increased utilization, lower guar costs, and progress made on cost
cutting initiatives. U.S. revenue decreased by 4% compared to the
first quarter of 2012 as a 9% year-over-year decline in pricing was
partially offset by increased activity for our cementing and coiled
tubing service lines.
First quarter revenue for our International operations was $70.1
million and the operating loss was $2.1 million. International
revenue and operating income were below our expectations due
largely to operational delays for several of our Russian customers.
We expect our Russian customers to increase activity levels and
that most of the lost revenue in the first quarter will be
recovered over the remainder of 2013.
Senior Management Changes
We are pleased to announce that James (Jim) McKee will be
joining Trican effective May 14, 2013 as Senior Vice President,
Corporate Development. Jim has over 30 years of experience in
oilfield services, investment banking, and public accounting
industries and will be a tremendous asset to our Trican team. Jim
will be replacing David Jones who will be moving to Cyprus to take
on the role of Vice President, EAME and CIS.
We are also pleased to announce that Michael Baldwin has been
promoted to Senior Vice President, Finance and CFO effective May
14, 2013. Michael has 20 years of oilfield services and accounting
experience and has been a key member of the executive team since he
re-joined Trican in November 2008 as Vice President, Finance and
CFO.
MANAGEMENT'S DISCUSSION AND ANALYSIS
COMPARATIVE QUARTERLY INCOME STATEMENTS ($ thousands, unaudited)
----------------------------------------------------------------------------
Quarter-
Over-
Three months ended % of % of Quarter %
March 31, 2013 Revenue 2012 Revenue Change Change
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Revenue 618,376 100.0% 716,356 100.0% (97,980) (13.7%)
Expenses
Materials and
operating 502,026 81.2% 527,546 73.6% (25,520) (4.8%)
General and
administrative 29,680 4.8% 26,965 3.8% 2,715 10.1%
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Operating income(i) 86,670 14.0% 161,845 22.6% (75,175) (46.4%)
Finance costs 8,488 1.4% 7,035 1.0% 1,453 20.7%
Depreciation and
amortization 47,059 7.6% 35,832 5.0% 11,227 31.3%
Foreign exchange
gain (1,726) (0.3%) (694) (0.1%) (1,032) 148.7%
Other income (2,070) (0.3%) (1,346) (0.2%) (724) 53.8%
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Income before
income taxes 34,919 5.6% 121,018 16.9% (86,099) (71.1%)
Income tax expense 9,727 1.6% 31,636 4.4% (21,909) (69.3%
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Net Income 25,192 4.1% 89,382 12.5% (64,190) (71.8%)
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(i) see first page of this report
CANADIAN OPERATIONS
----------------------------------------------------------------------------
($ thousands, except
revenue per job,
unaudited)
March 31, % of March 31, % of Dec. 31, % of
Three months ended, 2013 Revenue 2012 Revenue 2012 Revenue
----------------------------------------------------------------------------
Revenue 338,649 433,111 244,237
Expenses
Materials and
operating 241,473 71.3% 265,966 61.4% 187,313 76.7%
General and
administrative 7,376 2.2% 8,135 1.9% 5,897 2.4%
--------- --------- -----------
Total expenses 248,849 73.5% 274,101 63.3% 193,210 79.1%
Operating income(i) 89,800 26.5% 159,010 36.7% 51,027 20.9%
Number of jobs 6,955 7,153 5,572
Revenue per job 48,280 60,353 43,545
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----------------------------------------------------------------------------
(i) see first page of this report
Sales Mix
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Three months ended, March 31, March 31, Dec. 31,
(unaudited) 2013 2012 2012
----------------------------------------------------------------------------
% of Total Revenue
Fracturing 64% 70% 61%
Cementing 20% 17% 21%
Nitrogen 7% 7% 6%
Coiled Tubing 4% 3% 5%
Acidizing 3% 2% 3%
Other 2% 1% 4%
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Total 100% 100% 100%
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Operations Review
Canadian drilling activity levels in the first quarter of 2013,
were strong as the number of wells drilled in the Western Canadian
Sedimentary Basin ("WCSB") increased by 4% compared to the first
quarter of 2012, and by 31% compared to the fourth quarter of
2012(1). Our cementing service line tracks closely with drilling
activity and cementing jobs completed by Trican in the first
quarter increased by 8% year-over-year and 30% sequentially.
(1) Wells drilled data obtained from JuneWarren-Nickle's Energy
Group
Compared to the first quarter of 2012, the increase in cementing
activity was more than offset by a decrease in fracturing activity.
Fracturing job count decreased by 25% on a year-over-year basis due
to lower utilization combined with larger fracturing job sizes.
Fracturing utilization was weak at the start of the quarter as
there was not a backlog of wells to be fractured due to the
slowdown in the back half of the fourth quarter. Utilization
increased in February to peak levels and carried into March due to
breakup being delayed. Fracturing stages completed per well
increased by 15% and the average amount of sand pumped per job
increased by 27% compared to the first quarter of 2012. These
factors led to larger jobs sizes and required our fracturing crews
to be on location for a longer period of time, which contributed to
the decrease in fracturing jobs performed compared to the first
quarter of 2012.
Overall pricing for our Canadian operations decreased by 6.5%
compared to the fourth quarter of 2012. Pricing is down 19% from
peak pricing levels seen in the first quarter of 2012. We saw a
significant decline in coiled tubing, nitrogen and acidizing
prices, a decrease in fracturing prices, and flat cementing prices
during the quarter. Most pricing arrangements were negotiated late
in 2012 and were carried into the quarter. Spot market pricing in
the quarter was relatively stable for fracturing and cementing.
We saw continued acceptance of our MVP fracturing fluid system
in Canada during the first quarter of 2013. Our Canadian operations
fractured over 350 stages using the MVP system during the first
quarter compared to approximately 300 stages fractured using the
system for all of 2012.
This was the first quarter of operations for i-TEC AS and its
subsidiaries (collectively referred to as "i-TEC") in Canada. We
are currently integrating this division into our Canadian
operations and, as a result, i-TEC operations did not have a
meaningful impact on our first quarter Canadian results. We will
continue to focus on establishing a market presence for i-TEC and
our Canadian completion tools division throughout the remainder of
2013.
Q1 2013 versus Q1 2012
Canadian revenue decreased by 22% on a year-over-year basis.
Revenue per job decreased by 20% due largely to a 19% decrease in
pricing combined with a decrease in fracturing revenue relative to
total revenue. These factors were partially offset by larger
fracturing job sizes performed during the first quarter of 2013.
The job count decreased by 3% as an increase in cementing jobs was
more than offset by a decrease in fracturing, nitrogen and
acidizing jobs.
As a percentage of revenue, materials and operating expenses
increased to 71.3% from 61.4% due largely to the decrease in
pricing. Lower pricing resulted in decreased operational leverage
on our fixed costs. In addition, certain significant variable
costs, such as repairs and maintenance and variable compensation
paid to operational employees did not decrease to the same extent
as pricing given that activity levels remained relatively strong in
the first quarter. These factors were partially offset by a
decrease in product costs. General and administrative expenses
decreased by $0.8 million due primarily to lower profit sharing
expenses.
Q1 2013 versus Q4 2012
Sequentially, Canadian revenue increased by 39%. The job count
increased by 25% and compares to the 31% sequential increase in
wells drilled in the WCSB during the first quarter of 2013.
Fracturing jobs increased by only 22% as larger job sizes required
our fracturing crews to be on location for a longer period of time,
which contributed to the shortfall relative to the increase in
industry activity levels.
Revenue per job increased by 11% due to an increase in
fracturing job size combined with a larger portion of fracturing
revenue relative to total revenue. These factors were partially
offset by a 6.5% decline in pricing.
As a percentage of revenue, materials and operating expenses
decreased to 71.3% from 76.7%. Increased operational leverage on
our fixed cost structure led to improved operating margins, which
was offset partially by the decrease in pricing. General and
administrative costs increased by $1.5 million due to an increase
in share based compensation.
UNITED STATES OPERATIONS
----------------------------------------------------------------------------
($ thousands, except
revenue per job,
unaudited)
March 31, % of March 31, % of Dec. 31, % of
Three months ended, 2013 Revenue 2012 Revenue 2012 Revenue
----------------------------------------------------------------------------
Revenue 210,685 218,536 173,589
Expenses(i)
Materials and
operating 186,213 88.4% 192,170 88.0% 171,140 98.6%
General and
administrative 6,483 3.1% 4,662 2.1% 4,553 2.6%
--------- --------- ----------
Total expenses 192,696 91.5% 196,832 90.1% 175,693 101.2%
Operating income
(loss)(ii) 17,989 8.5% 21,704 9.9% (2,104) (1.2%)
Number of jobs 2,035 1,680 1,654
Revenue per job 103,696 130,499 105,077
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(i) certain prior period expenses have been reclassified from
materials and operating to general and administrative to conform to
current period classification
(ii) see first page of this report
Sales Mix
----------------------------------------------------------------------------
Three months ended, March 31, March 31, Dec. 31,
(unaudited) 2013 2012 2012
----------------------------------------------------------------------------
% of Total Revenue
Fracturing 92% 96% 90%
Cementing 6% 2% 7%
Coil Tubing 2% 2% 3%
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Total 100% 100% 100%
----------------------------------------------------------------------------
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Operations Review
First quarter U.S. activity levels were down year-over-year but
steady relative to the fourth quarter of 2012 as U.S. rig count
decreased by 12% year-over-year and was effectively unchanged,
sequentially. Despite the sluggish industry activity levels, first
quarter utilization for our U.S. operations was up 25%,
sequentially. Trican's technology provided access to new U.S.
customers and contributed to the increase in utilization. Our U.S.
operations were able to secure work in the first quarter through
key technology offerings such as our BPS Completion Tool and water
recycling services. We will continue to focus on marketing existing
technologies and developing new technologies to meet the needs of
our U.S. customers.
Contracts were renewed for three U.S. fracturing crews late in
the first quarter of 2013. As expected, pricing declined for all
three crews to market levels. These pricing decreases were offset
by pricing increases for two existing fracturing crews working
under contract in dry gas regions. These factors, combined with
relatively stable spot market pricing in our areas of operations,
led to stable overall pricing for our U.S. operations on a
sequential basis. Pricing decreased by 9% compared to the first
quarter of 2012.
We continued to realize improvements in our U.S. cost structure
during the first quarter of 2013. Realized guar prices decreased by
approximately 33%, sequentially and led to a 470 basis point
improvement in U.S. operating margins compared to the fourth
quarter of 2012. We also continued to make progress on our cost
cutting initiatives with meaningful reductions in product
transportation and logistics, employee, and repairs and maintenance
costs.
Our cementing service line continues to grow in the U.S. as
cementing activity increased both sequentially and year-over-year.
We are continuing to establish our coiled tubing service line in
the U.S. and coiled tubing activity levels were up compared to the
first quarter of 2012. However, coiled tubing activity levels were
down slightly, sequentially as this market remained very
competitive during the first quarter.
This was the first quarter of operations for i-TEC in the U.S.
as a Trican managed division. We are currently integrating this
division into our U.S. operations and, as a result, i-TEC
operations did not have a meaningful impact on our first quarter
U.S. results. We have been very pleased with the i-TEC technology
and customer response in the U.S. and have retained all of the U.S.
based i-TEC staff. We will continue to focus on building the market
presence and customer base for i-TEC and our U.S. completion tools
division throughout the remainder of 2013.
Q1 2013 versus Q1 2012
U.S. revenue was down 4% in the first quarter of 2013 compared
to the first quarter of 2012. Revenue per job decreased by 21% due
to a 9% decrease in pricing combined with a decrease in fracturing
revenue relative to the total revenue and a decrease in fracturing
job size. The job count increased by 21% due largely to the growth
of our cementing and coiled tubing service lines.
As a percentage of revenue, materials and operating expenses
increased to 88.4% from 88.0% compared to the same period in 2012.
The margin reduction from pricing decreases was offset by a
reduction in guar expenses and other cost savings from cost-cutting
initiatives. General and administrative costs increased by $1.8
million due to increased shared based compensation, U.S. head
office expenses, and insurance costs.
Q1 2013 versus Q4 2012
On a sequential basis, U.S. revenue increased by 21%. The job
count increased by 23% due largely to the 25% increase in overall
equipment utilization for our U.S. operations. Fracturing
represented the most substantial increase as the job count was up
over 30% for this service line. Revenue per job decreased by 1% as
a marginal increase in fracturing revenue relative to total revenue
and a 2% strengthening of the U.S. dollar relative to the Canadian
dollar were more than offset by smaller fracturing job sizes
performed during the quarter.
As a percentage of revenue, materials and operating expenses
decreased to 88.4% from 98.6%. Operating margins benefitted from
increased operational leverage on our fixed costs and cost
reductions realized for guar, product transportation and logistics,
employee, and repairs and maintenance expenses. General and
administrative expenses increased by $1.9 million due largely to
increased share based compensation and profit sharing expenses.
INTERNATIONAL OPERATIONS
----------------------------------------------------------------------------
($ thousands,
except revenue per
job, unaudited)
March March
31, % of 31, % of Dec. 31, % of
Three months ended, 2013 Revenue 2012 Revenue 2012 Revenue
----------------------------------------------------------------------------
Revenue 70,111 64,709 68,039
Expenses
Materials and
operating 68,384 97.5% 61,302 94.7% 57,941 85.2%
General and
administrative 3,848 5.5% 3,696 5.7% 4,216 6.2%
--------- --------- -----------
Total expenses 72,232 103.0% 64,998 100.4% 62,157 91.4%
Operating (loss)
income(i) (2,121) (3.0%) (289) (0.4%) 5,882 8.6%
Number of jobs 914 942 951
Revenue per job 73,249 64,435 68,586
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----------------------------------------------------------------------------
(i) see first page of this report
Sales Mix
----------------------------------------------------------------------------
Three months ended, March 31, March 31, Dec. 31,
(unaudited) 2013 2012 2012
----------------------------------------------------------------------------
% of Total Revenue
Fracturing 84% 80% 82%
Coiled Tubing 8% 7% 9%
Cementing 5% 9% 6%
Nitrogen 2% 3% 1%
Other 1% 1% 2%
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Total 100% 100% 100%
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Operations Review
Our International operations include the financial results for
operations in Russia, Kazakhstan, Algeria, Australia, Saudi Arabia,
Colombia and Norway.
Our Russian operations comprise the majority of our
international results and activity levels in Russia were below
expectations during the first quarter of 2013. Several of our
Russian customers' work programs were delayed due to various
third-party operational issues. In addition, first quarter activity
in Russia is typically impacted by extreme cold temperatures and,
as a result, the first quarter is normally the weakest quarter of
the year for this region.
First quarter financial results were strong in Kazakhstan for
our two fracturing crews operating in the region. Continued
challenges in Algeria, slower than expected activity levels in
Australia, and start-up costs in Saudi Arabia and Colombia had a
negative impact on first quarter operating margins for our
International operations.
This was the first quarter of operations for i-TEC
internationally as a Trican managed division. We are currently
integrating this division into our international operations and the
integration costs contributed to an operating loss for the i-TEC
international division during the quarter. i-TEC's international
operations are currently focused on expansion into Trican's various
international markets with the most promising near-term growth
expected in Russia. Trican is focused on building i-TEC's market
presence in Russia and expects to be in a position to grow our
Russian tool revenue as the number of horizontal wells grows in
this region.
Q1 2013 versus Q1 2012
Revenue for our International operations increased by 8%
compared to the first quarter of 2012. Revenue per job increased by
14% due primarily to an increase in fracturing revenue relative to
total revenue, a modest increase in Russian pricing, and an
increase in fracturing job size. The increase in horizontal
completions and multi-stage fracturing for our Russian operations
led to an increase in fracturing job size. The job count decreased
by 3% due largely to a year-over-year decrease in cementing
activity for our Russian operations.
As a percentage of revenue, materials and operating expenses
increased to 97.5% from 94.7% compared to the first quarter of
2012. Operating margins were negatively impacted by higher fuel
costs in Russia as well as start-up costs in Saudi Arabia,
Colombia, and integration costs for i-TEC. General and
administrative costs were relatively consistent on a year-over-year
basis.
Q1 2013 versus Q4 2012
International revenue increased by 3% compared to the fourth
quarter of 2012. Revenue per job increased by 7% due largely to the
increase in fracturing revenue relative total revenue, and to a
lesser extent, because of a modest increase in pricing for our
Russian operations. The number of jobs decreased by 4% due largely
to lower sequential activity for our Russian operations.
As a percentage of revenue, materials and operating expenses
increased to 97.5% from 85.2%. Operating margins in Russia were
down on a sequential basis due primarily to higher fuel and product
transportation costs. Weaker sequential margins in Australia, an
increase in start-up costs for our Saudi Arabia and Colombia
operations, and integration costs for i-TEC also had a negative
impact on International operating margins. General and
administrative costs decreased by $0.4 million due to lower
employee costs.
CORPORATE
----------------------------------------------------------------------------
($ thousands,
unaudited)
March March
31, % of 31, % of Dec. 31, % of
Three months ended, 2013 Revenue 2012 Revenue 2012 Revenue
----------------------------------------------------------------------------
Expenses
Materials and
operating 6,663 1.1% 6,409 0.9% 6,603 1.4%
General and
administrative 12,987 2.1% 12,171 1.7% 13,077 2.7%
--------- --------- ----------
Total expenses 19,650 3.2% 18,580 2.6% 19,680 4.1%
Operating loss(i) (19,650) (18,580) (19,680)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) see first page of this report
Q1 2013 versus Q1 2012
Corporate costs increased by $1.1 million due largely to higher
share based employee expenses. Trican's share price increased by
12% during the first quarter of 2013 compared to a decrease of 24%
during the first quarter of 2012.
Q1 2013 versus Q4 2012
Corporate costs were virtually unchanged on a sequential basis.
Cost reductions were realized from decreased professional fees and
donations expenses due to one-time costs associated with the i-TEC
transaction and a large charitable donation recorded in the fourth
quarter of 2012. These decreases were fully offset by increased
profit sharing and share-based compensation paid to employees.
Trican's share price increased by 12% during the first quarter of
2013 compared to 2% during the fourth quarter of 2012.
OTHER EXPENSES AND INCOME
Finance costs increased by $1.5 million on a year-over-year
basis due to increased debt balances. Depreciation and amortization
increased by $11.2 million compared to the same period last year,
largely due to capital additions relating to our capital expansion
program.
The foreign exchange gain of $1.7 million in the quarter versus
a gain of $0.7 million in the same quarter last year was due to the
net impact of fluctuations in the U.S. dollar and Russian rouble
relative to the Canadian dollar. Other income was $2.1 million in
the quarter versus $1.3 million for the same period in the prior
year. Other income is largely comprised of interest income on a
loan to an unrelated third-party and interest income earned on cash
balances.
INCOME TAXES
Trican recorded income tax expense of $9.7 million in the
quarter versus $31.6 million for the comparable period of 2012. The
decrease in tax expense is primarily attributable to a reduction in
Canadian taxable income.
LIQUIDITY AND CAPITAL RESOURCES
Operating Activities
Funds provided by operations decreased to $58.0 million in the
first quarter of 2013 from $141.5 million in the first quarter of
2012 due largely to a decrease in earnings.
At March 31, 2013, Trican had working capital of $591.7 million
compared to $547.4 million at the end of 2012. The increase is
predominantly due to an increase in North American activity, offset
partially by less cash on hand.
Investing Activities
Capital expenditures for the first quarter of 2013 totaled $31.0
million compared with $155.9 million for the same period in 2012. A
substantial decrease in our 2013 capital program relative to the
2012 program resulted in a significant decline in capital
expenditures.
Capital expenditures for the remainder of 2013 are expected to
be $100 to $120 million based on current 2013 budgets and remaining
capital expenditures on previously approved budgets.
During the first quarter of 2013, Trican closed the previously
announced acquisition of i-TEC in exchange for cash consideration
of $30.0 million and 2.4 million Trican common shares valued at
$29.5 million.
Financing Activities
As at May 8, 2013, Trican had 148,831,558 common shares and
8,248,371 employee stock options outstanding.
During the first quarter of 2013, Trican drew an additional
$26.4 million from its $500.0 million revolving credit facility.
The balance of the facility at March 31, 2013, was $280.2 million
leaving $219.8 million of available debt under the facility.
During the first quarter of 2013, Trican received approval from
the Toronto Stock Exchange to renew the normal course issuer bid to
purchase its own common shares, for cancellation, for the one-year
period of March 8, 2013, to March 7, 2014. During the quarter ended
March 31, 2013, no common shares were purchased under the normal
course issuer bid.
Trican currently pays a semi-annual dividend of $0.15 per share.
During the quarter, $22.0 million in dividend payments were made
and we expect approximately $22.0 million in additional payments to
be made in the third quarter of 2013.
OUTLOOK
Canadian Operations
We expect Canadian activity levels to be down year-over-year in
the second quarter due to an expectation of less pad drilling and
completions activity and an extended break-up throughout the WCSB.
Lower activity, combined with a decrease in year-over-year pricing,
is expected to result in lower 2013 second quarter operating
margins compared to the second quarter of 2012 for our Canadian
operations.
For the second half of 2013, we expect activity levels to be up
on a year-over-year basis and do not anticipate any meaningful
additions to Canadian pressure pumping equipment capacity. However,
demand for our services in the second half of the year will be
dependent on several factors, including commodity prices and the
cash flows and spending levels of our customers. Stronger natural
gas prices are positively affecting cash flow for our customers,
although we have not yet seen it translate into increased drilling
programs. We also expect to complete a large Horn River fracturing
project early in the third quarter and are seeing strong Duvernay
activity starting in July or late June that should positively
impact second half activity. Despite the prospect of strong second
half activity in Canada, we expect to see slight decreases in
Canadian pricing in the second half of 2013 as the Canadian market
continues to be competitive.
U.S. Operations
Contracts for three fracturing crews were renewed late in the
first quarter of 2013. Pricing decreased for all three contracts
and, as a result, we expect U.S. pricing to be sequentially lower
in the second quarter; however, we continue to expect spot market
pricing to remain stable for the remainder of 2013.
Utilization of our Marcellus, Hayneville and Eagle Ford crews
were strong in the first quarter and we anticipate these areas to
remain strong in the upcoming quarters. We expect to have
opportunities to improve the utilization of our Permian, Oklahoma
and Bakken crews and will be focusing on this for the remainder of
2013.
There are opportunities to increase utilization through
high-technology product offerings including water recycling
services, fluid systems and completion tools. We believe we have
new products that will differentiate Trican from many of our U.S.
competitors and we will continue to market these products to new
and existing U.S. customers with the goal of increasing our U.S.
market share. We anticipate overall industry activity to remain
stable during the second half of the year but will continue to
monitor the effects of increased natural gas prices on our U.S.
customers' spending plans. We do not anticipate any meaningful
additional equipment entering the market this year.
We will continue to focus on reducing our U.S. cost structure.
Progress was made over the last few quarters but we believe there
are opportunities to further reduce costs. We believe that we can
continue to lower our product handling and transportation costs
through better logistics management. In addition, we expect that
improvements to our U.S. infrastructure will provide opportunities
to lower outsourcing costs for repairs and maintenance and product
storage in the second half of 2013.
We believe that the majority of the cost savings from guar have
been realized. We expect guar prices to remain relatively stable
for the remainder of the year and have a minimal impact on
operating margins.
International Operations
Activity levels in Russia were lower than expected in the first
quarter; however, we expect our Russian customers to increase
activity and that most of the lost revenue in the first quarter
will be recovered over the remainder of 2013. However, we do not
expect to recover all of the lost revenue and now expect Russian
revenue to increase by approximately 15-20%, as measured in Russian
roubles, relative to 2012. Our ability to meet these Russian
revenue targets will be largely dependent on the activity levels of
our Russian customers and weather conditions over the remainder of
2013. Cost inflation continues to negatively impact our Russian
operating margins. As a result, the increase in revenue is expected
to generate only a modest improvement in Russian operating margins
relative to 2012.
We continue to focus on increasing utilization in Australia for
our cementing service line and will look to obtain new work tenders
over the course of 2013. We have recently been awarded additional
contracts in Australia, which are expected to increase sequential
utilization for this region.
Through our joint business arrangements in Saudi Arabia and
Colombia, we are working to establish our presence in these markets
and expect to participate in pressure pumping tenders throughout
the remainder of 2013.
Our Kazakhstan operations continued to be profitable although
year-over-year activity was down in the region. We continue to
expect activity levels to be down slightly year-over-year with
strong operating margins for the remainder of 2013.
The Algerian market slowed in the first quarter partially due to
a pullback in activity after a terrorist attack on a production
facility. The Algerian cementing market remains very competitive
and we will look to increase pricing and utilization for this
service line over the remainder of 2013.
NON-IFRS DISCLOSURE
Adjusted net income (loss), operating income and funds provided
by (used in) operations do not have any standardized meaning as
prescribed by IFRS and, therefore, are considered non-IFRS
measures.
Adjusted net income (loss) and funds provided by operations have
been reconciled to profit, and operating income has been reconciled
to gross profit, being the most directly comparable measures
calculated in accordance with IFRS. The reconciling items have been
presented net of tax.
----------------------------------------------------------------------------
(thousands; unaudited) Three months ended
----------------------------------------------------------------------------
March 31, March 31, Dec. 31,
2013 2012 2012
----------------------------------------------------------------------------
Adjusted net income (loss) $27,380 $92,300 ($5,375)
Deduct:
Non-cash share-based
compensation expense 2,188 2,918 2,455
----------------------------------------------------------------------------
Profit (loss) for the period
(IFRS financial measure) $25,192 $89,382 ($7,830)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(thousands; unaudited) Three months ended
----------------------------------------------------------------------------
March 31, March 31, Dec. 31,
2013 2012(i) 2012(i)
----------------------------------------------------------------------------
Funds provided by (used in)
operations $57,956 $141,487 ($14,317)
Charges to income not
involving cash
Depreciation and
amortization (47,059) (35,832) (41,564)
Amortization of debt
issuance costs (216) (202) (208)
Stock-based compensation (2,188) (2,918) (2,455)
Gain (loss) on disposal of
property and equipment 460 (53) (352)
Net finance costs (7,532) (6,378) (7,824)
Unrealized foreign
exchange gain (loss) 3,296 (193) 4,863
Income tax expense (9,727) (31,636) 2,957
Interest paid 2,791 1,195 8,373
Income tax paid 27,411 23,912 42,697
----------------------------------------------------------------------------
Profit (loss) for the period
(IFRS financial measure) $25,192 $89,382 ($7,830)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) prior period calculations have been revised to conform to
the current period calculation
----------------------------------------------------------------------------
(thousands; unaudited) Three months ended
----------------------------------------------------------------------------
March 31, March 31, Dec. 31,
2013 2012 2012
----------------------------------------------------------------------------
Operating income $86,670 $161,845 $35,123
Add:
Administrative expenses 30,282 27,833 23,083
Deduct:
Depreciation expense (47,059) (35,832) (41,564)
----------------------------------------------------------------------------
Gross profit (IFRS financial
measure) $69,893 $153,846 $16,642
----------------------------------------------------------------------------
----------------------------------------------------------------------------
FORWARD-LOOKING STATEMENTS
This document contains certain forward-looking information and
financial outlook based on Trican's current expectations,
estimates, projections and assumptions that were made by the
Company in light of information available at the time the statement
was made. Forward-looking information and financial outlook that
address expectations or projections about the future, and other
statements and information about the Company's strategy for growth,
expected and future expenditures, costs, operating and financial
results, future financing and capital activities are
forward-looking statements. Some forward-looking information and
financial outlook are identified by the use of terms and phrases
such as "anticipate", "achieve", "achievable", "believe",
"estimate", "expect", "intend", "plan", "planned", and other
similar terms and phrases. This forward-looking information and
financial outlook speak only as of the date of this document and we
do not undertake to publicly update this forward-looking
information and financial outlook except in accordance with
applicable securities laws. This forward-looking information and
financial outlook include, among others:
-- The expectation that we will continue to focus on establishing a market
presence for i-TEC and our Canadian completion tools division throughout
the remainder of 2013;
-- The expectation that we will continue to focus on building the market
presence and customer base for i-TEC and our U.S. completion tools
division throughout the remainder of 2013;
-- The expectation that our Russian customers will increase activity levels
and that most of the lost revenue in the first quarter will be recovered
over the remainder of 2013;
-- The belief that Trican is focused on building i-TEC's market presence in
Russia;
-- The expectation that Trican will be in a position to grow our Russian
tool revenue as the number of horizontal wells grows in this region;
-- The expectation that capital expenditures for the remainder of 2013 will
be $100 to $120 million based on current 2013 budgets and remaining
capital expenditures on previously approved budgets;
-- The expectation that approximately $22.0 million in additional dividend
payments will be made in the third quarter of 2013;
-- The expectation that Canadian activity levels will be down year-over-
year in the second quarter due to an expectation of less pad drilling
and completions activity and an extended break-up throughout the WCSB;
-- The expectation that lower activity combined with a decrease in year-
over-year pricing will result in lower 2013 second quarter operating
margins compared to the second quarter of 2012 for our Canadian
operations;
-- The expectation that second half Canadian activity levels will be up on
a year-over-year basis;
-- The expectation that no meaningful additions to Canadian pressure
pumping capacity will occur in the second half of 2013;
-- The expectation that demand for our services in Canada in the second
half of the year will be dependent on several factors, including
commodity prices and the cash flows and spending levels of our
customers;
-- The expectation that we will complete a large Horn River project early
in the third quarter of 2013;
-- The expectation that strong Duvernay activity will positively impact
second half Canadian activity;
-- The expectation that Canadian pricing will decrease slightly in the
second half of 2013;
-- The expectation that U.S. pricing will be sequentially lower in the
second quarter;
-- The expectation that U.S. spot market pricing will remain stable for the
remainder of 2013;
-- The expectation that utilization for our Marcellus, Haynesville and
Eagle Ford will be strong in the upcoming quarters;
-- The expectation that we will have opportunities to improve the
utilization for Permian, Oklahoma and Bakken crews in the upcoming
quarters;
-- The belief that there are opportunities to increase our U.S. utilization
through high-technology product offerings including water recycling
services, fluid systems and completion tools;
-- The belief that we have new products that will differentiate Trican from
many of our U.S. competitors and we will continue to market these
products to new and existing U.S. customers with the goal of increasing
our U.S. market share;
-- The expectation that U.S. industry activity will remain stable during
the second half of 2013:
-- The expectation that no meaningful additional equipment will enter the
U.S. market this year;
-- The expectation that we will continue to focus on reducing our U.S. cost
structure;
-- The belief that there are opportunities to further reduce U.S. costs;
-- The belief that we can continue to lower our product handling and
transportation costs in the U.S. through better logistics management;
-- The expectation that improvements to our U.S. infrastructure will
provide opportunities to lower outsourcing costs for repairs and
maintenance and product storage in the second half of 2013;
-- The belief that the majority of the cost savings from guar have been
realized;
-- The expectation that guar prices will remain relatively stable for the
remainder of the year and will have a minimal impact on operating
margins;
-- The expectation that Russian revenue will increase by 15-20%, as
measured in Russian roubles, relative to 2012;
-- The expectation that the increase in revenue will generate only a modest
improvement in Russian operating margins relative to 2012;
-- The expectation that we will look to obtain new work tenders over the
course of 2013 in Australia;
-- The expectation that utilization will increase sequentially in
Australia;
-- The expectation that we will participate in pressure pumping tenders
during the remainder of 2013 in Saudi Arabia and Colombia;
-- The expectation that activity levels will be down slightly year-over-
year in Kazakhstan with strong operating margins for the remainder of
2013;
-- The expectation that we will look to increase pricing and utilization
for our cementing service line in Algeria.
Forward-looking information and financial outlook is based on
current expectations, estimates, projections and assumptions, which
we believe are reasonable but which may prove to be incorrect.
Trican's actual results may differ materially from those expressed
or implied and therefore such forward-looking information and
financial outlook should not be unduly relied upon. In addition to
other factors and assumptions which may be identified in this
document, assumptions have been made regarding, among other things:
industry activity; the general stability of the economic and
political environment; effect of market conditions on demand for
the Company's products and services; the ability to obtain
qualified staff, equipment and services in a timely and cost
efficient manner; the ability to operate its business in a safe,
efficient and effective manner; the performance and characteristics
of various business segments; the effect of current plans; the
timing and costs of capital expenditures; future oil and natural
gas prices; currency, exchange and interest rates; the regulatory
framework regarding royalties, taxes and environmental matters in
the jurisdictions in which the Company operates; and the ability of
the Company to successfully market its products and services.
Forward-looking information and financial outlook is subject to
a number of risks and uncertainties, which could cause actual
results to differ materially from those anticipated. These risks
and uncertainties include: fluctuating prices for crude oil and
natural gas; changes in drilling activity; general global economic,
political and business conditions; weather conditions; regulatory
changes; the successful exploitation and integration of technology;
customer acceptance of technology; success in obtaining issued
patents; the potential development of competing technologies by
market competitors; and availability of products, qualified
personnel, manufacturing capacity and raw materials. The foregoing
important factors are not exhaustive. In addition, actual results
could differ materially from those anticipated in forward-looking
information and financial outlook provided herein as a result of
the risk factors set forth under the section entitled "Risks
Factors" in our Annual Information Form dated March 21, 2013.
Readers are also referred to the risk factors and assumptions
described in other documents filed by the Company from time to time
with securities regulatory authorities.
Additional information regarding Trican including Trican's most
recent annual information form is available under Trican's profile
on SEDAR (www.sedar.com).
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
March 31, December 31,
(Stated in thousands; unaudited) 2013 2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 71,580 $ 113,506
Trade and other receivables 545,489 437,038
Current tax assets 7,784 647
Inventory 226,289 211,794
Prepaid expenses 30,661 33,002
----------------------------------------------------------------------------
881,803 795,987
Property and equipment 1,449,019 1,458,562
Intangible assets 9,259 10,081
Deferred tax assets 89,590 76,302
Other assets 19,544 11,898
Goodwill 84,442 43,689
----------------------------------------------------------------------------
$ 2,533,657 $ 2,396,519
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank loans $ 9,258 $ 9,119
Trade and other payables 278,417 228,788
Contingent consideration 2,453 2,860
Current tax liabilities - 7,853
----------------------------------------------------------------------------
290,128 248,620
Loans and borrowings 723,364 694,972
Deferred tax liabilities 79,319 77,012
Shareholders' equity
Share capital 557,395 527,860
Contributed surplus 57,540 55,352
Accumulated other comprehensive income (16,971) (24,100)
Retained earnings 841,063 815,700
----------------------------------------------------------------------------
Total equity attributable to equity holders
of the Company 1,439,027 1,374,812
Non-controlling interest 1,819 1,103
----------------------------------------------------------------------------
$ 2,533,657 $ 2,396,519
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Stated in thousands, except per share amounts;
unaudited)
Three months ended March 31, 2013 2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenue $ 618,376 $ 716,356
Cost of sales 548,483 562,510
----------------------------------------------------------------------------
Gross profit 69,893 153,846
Administrative expenses 30,282 27,833
Other income (1,114) (689)
----------------------------------------------------------------------------
Results from operating activities 40,725 126,702
Finance income (956) (657)
Finance costs 8,488 7,035
Foreign exchange gain (1,726) (694)
----------------------------------------------------------------------------
Profit before income tax 34,919 121,018
Income tax expense 9,727 31,636
----------------------------------------------------------------------------
Profit for the period 25,192 89,382
----------------------------------------------------------------------------
Other comprehensive income
Items which may subsequently be recycled through
profit or loss
Unrealized gain on hedging instruments 100 703
Foreign currency translation differences 7,029 4,600
----------------------------------------------------------------------------
Total comprehensive income for the period $ 32,321 $ 94,685
----------------------------------------------------------------------------
Profit attributable to:
Owners of the Company 25,363 89,460
Non-controlling interest (171) (78)
----------------------------------------------------------------------------
Profit for the period $ 25,192 $ 89,382
----------------------------------------------------------------------------
Total comprehensive income attributable to:
Owners of the Company 32,331 94,763
Non-controlling interest (10) (78)
----------------------------------------------------------------------------
Total comprehensive income for the period $ 32,321 $ 94,685
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Earnings per share
----------------------------------------------------------------------------
Basic $ 0.17 $ 0.61
Diluted $ 0.17 $ 0.61
----------------------------------------------------------------------------
Weighted average shares outstanding - basic 148,593 146,948
Weighted average shares outstanding - diluted 148,892 147,357
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Stated in thousands; unaudited)Three months
ended March 31, 2013 2012
----------------------------------------------------------------------------
Cash Provided By/(Used In):
Operations
Profit for the period $ 25,192 $ 89,382
Charges to income not involving cash:
Depreciation and amortization 47,059 35,832
Amortization of debt issuance costs 216 202
Stock-based compensation 2,188 2,918
(Gain)/loss on disposal of property and
equipment (460) 53
Net Finance Costs 7,532 6,378
Unrealized foreign exchange (gain)/loss (3,296) 193
Income tax expense 9,727 31,636
----------------------------------------------------------------------------
88,158 166,594
Change in inventories (13,203) (25,357)
Change in trade and other receivables (101,438) (37,454)
Change in prepayments 2,839 (5,733)
Change in trade and other payables 73,020 42,795
----------------------------------------------------------------------------
Cash generated from operating activities 49,376 140,845
Interest paid (2,791) (1,195)
Income tax paid (27,411) (23,912)
----------------------------------------------------------------------------
19,174 115,738
Investing
Interest received - 485
Purchase of property and equipment (30,986) (155,887)
Proceeds from the sale of property and
equipment 929 91
Purchase of other assets (4,000) -
Payments received on loan to an unrelated third
party - 226
Business acquisitions (31,009) -
----------------------------------------------------------------------------
(65,066) (155,085)
Financing
Net proceeds from issuance of share capital - 739
Repurchase and cancellation of shares under
NCIB - (3,506)
Issuance of long-term debt, net of financing
costs 26,354 11,776
Dividend paid (21,968) (7,345)
----------------------------------------------------------------------------
4,386 1,664
Effect of exchange rate changes on cash (420) (65)
----------------------------------------------------------------------------
Decrease in cash and cash equivalents (41,926) (37,748)
Cash and cash equivalents, beginning of period 113,506 125,855
----------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 71,580 $ 88,107
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the condensed consolidated financial statements.
SELECTED NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS (UNAUDITED)
BUSINESS ACQUISITIONS
Effective January 11, 2013, Trican acquired all of the issued
and outstanding shares and discharged the existing debt of Petro
Tools Holding AS, the holding company for i-Tec Well Solutions and
its subsidiaries (collectively "i-Tec"), for consideration of $60.5
million, which is made up of cash of $31.0 million and 2,381,381
Trican common shares, issued at $12.73 per share. The initial
accounting for the acquisition is incomplete, as Trican is working
to quantify the opening fair values of the assets acquired,
liabilities assumed and intangible assets arising from the
acquisition. Furthermore, the value of goodwill arising from the
synergies created through the i-Tec acquisition will be determined
once the values at acquisition have been established. In
conjunction with the acquisition, Trican has agreed to pay
contingent consideration of up to U.S. $45 million subject to
agreed upon financial targets for i-Tec for the year ended December
31, 2013. Trican has determined the acquisition fair value of the
contingent consideration to be nil. All of i-Tec's earnings have
been included in Trican's condensed consolidated statement of
comprehensive income since January 11, 2013.
The preliminary acquisition fair values have been determined as
follows:
(Stated in thousands)
----------------------------------------------------------------------------
Fair value of acquired net assets:
Net working capital (including cash) $ 8,099
Property and equipment 4,880
Deferred tax assets 7,275
Goodwill 40,290
----------------------------------------------------------------------------
$ 60,544
----------------------------------------------------------------------------
Financed as follows:
Cash $ 31,009
Shares issued out of treasury 29,535
----------------------------------------------------------------------------
$ 60,544
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Final fair value determinations will be made once the accounting
for the transaction has been completed.
LOANS AND BORROWINGS
Long term debt
March 31, December
2013 31, 2012
----------------------------------------------------------------------------
Notes payable $ 438,438 $ 430,408
Finance lease obligations 33,407 36,324
Revolving credit facility 280,170 255,693
Hedge receivable (6,265) (5,059)
----------------------------------------------------------------------------
Total 745,750 717,366
Current portion of finance lease obligations (1) 13,128 13,275
Russian demand revolving credit facility 9,258 9,119
----------------------------------------------------------------------------
Non-current $ 723,364 $ 694,972
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Current portion of finance lease obligations is included in trade and
other payables.
Trican has a $500.0 million four year extendible revolving
credit facility ("Revolving Credit Facility") with a syndicate of
banks. The Revolving Credit Facility is unsecured and bears
interest at the applicable Canadian prime rate, U.S. prime rate,
Banker's Acceptance rate, or at LIBOR, plus 50 to 325 basis points,
dependent on certain financial ratios of the Company. On October
18, 2012, Trican extended its Revolving Credit Facility by an
additional year to 2016. The Revolving Credit Facility requires
Trican to comply with certain financial and non-financial covenants
that are typical for this type of arrangement. Trican was in
compliance with these covenants at March 31, 2013 (2012 - in
compliance).
INCOME TAXES
Three months ended March 31, 2013 2012
----------------------------------------------------------------------------
Current income tax expense $ 12,422 $ 44,692
Deferred income tax recovery (2,695) (13,056)
----------------------------------------------------------------------------
$ 9,727 $ 31,636
----------------------------------------------------------------------------
----------------------------------------------------------------------------
The net income tax provision differs from that expected by
applying the combined federal and provincial income tax rate of
25.17% (2012 - 25.17%) to income before income taxes for the
following reasons:
Three months ended March 31, 2013 2012
----------------------------------------------------------------------------
Expected combined federal and provincial income
tax $ 8,815 $ 30,457
Statutory and other rate differences (1,217) (915)
Non-deductible expenses 1,524 1,621
Stock based compensation 551 735
Translation of foreign subsidiaries (39) (230)
Other 93 (32)
----------------------------------------------------------------------------
$ 9,727 $ 31,636
----------------------------------------------------------------------------
----------------------------------------------------------------------------
OPERATING SEGMENTS
The Company operates in Canada and the U.S. along with a number
of international regions, which include Russia, Algeria,
Kazhakstan, Saudi Arabia, Colombia, Norway and Australia. Each
geographic region has a General Manager that is responsible for the
operation and strategy of their region's business. Personnel
working within the particular geographic region report to the
General Manager; the General Manager reports to the Corporate
Executive.
The Company provides a comprehensive array of specialized
products, equipment, services and technology to customers through
three operating divisions:
-- Canadian Operations provides cementing, fracturing, coiled tubing,
nitrogen, geological, acidizing, reservoir management, industrial
cleaning and pipeline, and completion systems and downhole tool
services.
-- U.S. Operations provides cementing, fracturing, coiled tubing, nitrogen,
acidizing and completion systems and downhole tool services which are
performed on new and existing oil and gas wells.
-- International Operations provides cementing, fracturing, coiled tubing,
acidizing, nitrogen, and completion systems and downhole tool services
which are performed on new and existing oil and gas wells.
Information regarding the results of each geographic region is
included below. Performance is measured based on revenue and gross
profit as included in the internal management reports which are
reviewed by the Company's executive management team. Each region's
gross profit is used to measure performance as management believes
that such information is most relevant in evaluating regional
results relative to other entities that operate within the
industry. Transactions between the segments are recorded at cost
and have been eliminated upon consolidation.
United
Canadian States International
Operations Operations Operations
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Three months ended March 31, 2013
---------------------------------------------------------------------------
Revenue $ 338,649 $ 210,685 $ 70,111
Gross profit/(loss) 81,341 1,639 (5,239)
Finance income - - -
Finance costs - - -
Tax expense/(recovery) 13,994 (3,247) (1,020)
Depreciation and
amortization 16,683 22,907 6,993
Assets 1,010,906 1,131,014 330,878
Goodwill 63,279 - 21,163
Property and equipment 554,351 769,147 110,326
Capital expenditures 13,313 15,563 2,109
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Three months ended March 31, 2012
---------------------------------------------------------------------------
Revenue $ 433,111 $ 218,536 $ 64,709
Gross profit/(loss) 155,691 7,238 (2,719)
Finance income - - -
Finance costs - - -
Tax expense /(recovery) 32,366 (313) (1,431)
Depreciation and
amortization 11,990 17,461 6,216
Assets 1,048,384 932,758 282,628
Goodwill 22,690 - 21,012
Property and equipment 571,628 618,833 105,187
Capital expenditures 32,114 111,419 12,354
---------------------------------------------------------------------------
Intersegment
Eliminations Corporate Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended March
31, 2013
----------------------------------------------------------------------------
Revenue $ (1,069) $ - $ 618,376
Gross profit/(loss) (708) (7,140) 69,893
Finance income - (956) (956)
Finance costs - 8,488 8,488
Tax expense/(recovery) - - 9,727
Depreciation and
amortization - 476 47,059
Assets (360) 60,619 2,533,057
Goodwill - 84,442
Property and equipment - 15,195 1,449,019
Capital expenditures - - 30,985
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended March
31, 2012
----------------------------------------------------------------------------
Revenue $ - $ - $ 716,356
Gross profit/(loss) - (6,364) 153,846
Finance income - 657 657
Finance costs - (7,035) (7,035)
Tax expense /(recovery) - 1,014 31,636
Depreciation and
amortization - 165 35,832
Assets - 115,539 2,379,309
Goodwill - - 43,702
Property and equipment - 13,487 1,309,135
Capital expenditures - - 155,887
----------------------------------------------------------------------------
The Corporate division does not represent an operating segment
and is included for informational purposes only. Corporate division
expenses consist of salary expenses, stock-based compensation and
office costs related to corporate employees, as well as public
company costs.
Contacts: Trican Well Service Ltd. Dale Dusterhoft Chief
Executive Officerddusterhoft@trican.ca Trican Well Service Ltd.
Michael Baldwin Vice President, Finance & CFOmbaldwin@trican.ca
Trican Well Service Ltd. Gary Summach Director of Reporting and
Investor Relationsgsummach@trican.ca Trican Well Service Ltd. (403)
266 - 0202 (403) 237 - 7716 (FAX) 2900, 645 - 7th Avenue S.W.
Calgary, Alberta T2P 4G8
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