CALGARY, May 2, 2019 /CNW/ - (TSXV: CWC) CWC Energy
Services Corp. ("CWC" or the "Company") announces the release of
its operational and financial results for the three months ended
March 31, 2019. The Financial
Statements and Management's Discussion and Analysis ("MD&A")
for the three months ended March 31,
2019 are filed on SEDAR at www.sedar.com.
Financial and Operational Highlights
|
Three months
ended
March
31,
|
|
$ thousands,
except shares, per share amounts, and margins
|
2019
|
2018
|
%
Change
|
|
|
|
|
FINANCIAL
RESULTS
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
Contract
drilling
|
9,120
|
11,685
|
(22%)
|
Production
services
|
22,139
|
37,240
|
(41%)
|
|
31,259
|
48,925
|
(36%)
|
|
|
|
|
Adjusted EBITDA
(1)
|
4,694
|
7,478
|
(37%)
|
Adjusted EBITDA
margin (%) (1)
|
15%
|
15%
|
0%
|
|
|
|
|
Funds from
operations
|
4,694
|
7,478
|
(37%)
|
|
|
|
|
Net (loss)
income
|
(47)
|
1,196
|
n/m(2)
|
Net (loss)
income
|
(0)%
|
2%
|
(2%)
|
|
|
|
|
|
|
|
|
Per share
information
|
|
|
|
Weighted average number
of shares outstanding – basic
|
512,678,779
|
522,097,878
|
|
Weighted average number
of shares outstanding – diluted
|
512,678,779
|
525,725,595
|
|
Adjusted EBITDA
(1) per share – basic and diluted
|
$0.01
|
$0.01
|
|
Net (loss) income per
share - basic and diluted
|
$(0.00)
|
$0.00
|
|
|
|
|
|
$ thousands,
except ratios
|
March 31,
2019
|
December 31,
2018
|
|
|
|
|
FINANCIAL POSITION
AND LIQUIDITY
|
|
|
|
Working capital
(excluding debt) (1)
|
|
19,903
|
19,028
|
Working capital
(excluding debt) ratio (1)
|
|
3:7:1
|
3.4:1
|
Total
assets
|
|
250,358
|
252,665
|
Total long-term debt
(including current portion)
|
|
43,232
|
44,896
|
Shareholders'
equity
|
|
184,041
|
184,231
|
(1)
|
Please refer to the
"Reconciliation of Non-IFRS Measures" section for further
information.
|
(2)
|
Not
meaningful.
|
Working capital (excluding debt) for March 31, 2019 has increased $0.9 million (5%) since December 31, 2018 driven by a $0.4 million (73%) decrease in cash, $1.2 million (5%) increase in accounts receivable
despite lower revenue in Q1 2019 compared to Q4 2018, a
$1.3 million (47%) decrease in
prepaid expenses and deposits, and a $1.4
million (18%) decrease in accounts payable. Long-term
debt (including current portion) has decreased $1.6 million (4%) from December 31, 2018 as positive funds from
operations were used to fund capital expenditures, purchase shares
under the Normal Course Issuer Bid ("NCIB") and to repay debt.
Highlights for the Three Months Ended March 31, 2019
- In March 2019, CWC signed its
first contract with a multi-national E&P company to provide
contract drilling services in the United
States. A second contract was signed with another U.S.
customer in April 2019. Both drilling
rigs are expected to begin operations in the U.S. in Q2 2019
subject to obtaining working visas for field employees.
- Average Q1 2019 crude oil pricing, as measured by WTI, of
US$54.87/bbl was 8% lower than the Q4
2018 average price of US$59.34/bbl
(Q1 2018: US$62.89/bbl). The price
differential between Canadian heavy crude oil, as represented by
WCS, and WTI tightened during Q1 2019 to under US$10.00/bbl as a result of the Government of
Alberta mandated 325,000 bbls/day
crude oil production curtailment. The effects of the tightening
WTI-WCS price differential in Q1 2019 allowed the Government of
Alberta to announce reductions to
the curtailment of 75,000 bbls/day effective February 2019 and another 25,000 bbls/day in each
of April, May and June 2019. Natural
gas prices, as measured by AECO, increased 20% from an average of
$1.53/GJ in Q4 2018 to $1.84/GJ in Q1 2019 (Q1 2018: $2.06/GJ), but continues to remain very low in
historical terms.
- CWC's drilling rig utilization in Q1 2019 of 47% (Q1 2018: 61%)
exceeded the Canadian Association of Oilwell Drilling Contractors
("CAODC") industry average of 29%. Activity levels decreased 23% to
382 drilling rig operating days in Q1 2019 compared to 498 drilling
rig operating days in Q1 2018. CWC's service rig utilization in Q1
2019 of 37% (Q1 2018: 56%) was driven by 30,875 operating hours
being 43% lower than the 53,979 operating hours in Q1 2018. The
significant drop in Q1 2019 activity level for both the drilling
rigs and our production-oriented service rigs was a direct result
of the lower WTI price during the quarter, compared to a year ago,
and the Government of Alberta
mandated production curtailment temporarily slowing down the need
for newly drilled wells and workover and maintenance work on
producing wells. These lower activity levels resulted in lower
revenue, adjusted EBITDA and a slight net loss in Q1 2019 compared
to Q1 2018 as noted below.
- Revenue of $31.3 million, a
decrease of $17.7 million (36%)
compared to $48.9 million in Q1
2018.
- Adjusted EBITDA (1) of $4.7
million, a decrease of $2.8
million (37%) compared to $7.5
million in Q1 2018.
- Net loss of $0.05 million, a
decrease of $1.2 million compared to
net income of $1.2 million in Q1
2018.
- During Q1 2019, 2,050,500 (Q1 2018: 1,394,500) common shares
were purchased under the Normal Course Issuer Bid ("NCIB") and
1,792,000 common shares (Q1 2018: 1,318,500) were cancelled and
returned to treasury.
(1)
|
Please refer to the
"Reconciliation of Non-IFRS Measures" section for further
information.
|
Operational Overview
Contract Drilling
CWC Ironhand Drilling, the Company's Contract Drilling segment,
has a fleet of nine telescopic double drilling rigs with depth
ratings from 3,200 to 5,000 metres. Eight of nine rigs have top
drives and three have pad rig walking systems. All of the drilling
rigs are well suited for the most active depths for horizontal
drilling in the WCSB, including the Montney, Cardium, Duvernay and other deep basin horizons. The
Company is expanding its drilling rig services into select
United States basins including the
Permian, Eagle Ford and Bakken. One of the Company's
strategic initiatives is to continue to increase the capabilities
of its existing fleet to meet the growing demands of E&P
customers for deeper depths at a cost effective price while
providing a sufficient internal rate of return for CWC's
shareholders.
|
Three months
ended
|
OPERATING
HIGHLIGHTS
|
Mar. 31,
2019
|
Dec. 31,
2018
|
Sep. 30,
2018
|
Jun. 30,
2018
|
Mar. 31,
2018
|
Dec. 31,
2017
|
Sep. 30,
2017
|
Jun. 30,
2017
|
Drilling
Rigs
|
|
|
|
|
|
|
|
|
Active drilling rigs,
end of period
|
9
|
9
|
9
|
9
|
9
|
9
|
9
|
9
|
Inactive drilling
rigs, end of period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total drilling rigs,
end of period
|
9
|
9
|
9
|
9
|
9
|
9
|
9
|
9
|
|
|
|
|
|
|
|
|
|
Revenue per operating
day (1)
|
$23,895
|
$26,642
|
$21,263
|
$21,227
|
$23,485
|
$23,572
|
$19,424
|
$19,575
|
Drilling rig operating
days
|
382
|
491
|
500
|
133
|
498
|
463
|
522
|
155
|
Drilling rig
utilization % (2)
|
47%
|
59%
|
60%
|
16%
|
61%
|
56%
|
63%
|
19%
|
CAODC industry average
utilization %
|
29%
|
28%
|
30%
|
17%
|
52%
|
28%
|
29%
|
17%
|
|
|
|
|
|
|
|
|
|
Wells
drilled
|
39
|
34
|
41
|
11
|
45
|
30
|
29
|
17
|
Average days per
well
|
9.8
|
14.4
|
12.2
|
12.1
|
11.1
|
15.0
|
18.0
|
9.1
|
Meters drilled
(thousands)
|
119.8
|
127.8
|
155.2
|
41.0
|
161.7
|
161.1
|
112.2
|
45.6
|
Meters drilled per
day
|
314
|
261
|
310
|
309
|
325
|
277
|
215
|
294
|
Average meters per
well
|
3,070
|
3,708
|
3,786
|
3,724
|
3,593
|
4,270
|
3,869
|
2,684
|
(1)
|
Revenue per operating
day is calculated based on operating days (i.e. spud to rig release
basis). New or inactive drilling rigs are added based on the first
day of field service.
|
(2)
|
Drilling rig
utilization is calculated based on operating days (i.e. spud to rig
release basis) in accordance with the methodology prescribed by the
CAODC.
|
Contract Drilling revenue of $9.1
million for Q1 2019 (Q1 2018: $11.7
million) was achieved with a utilization rate of 47% (Q1
2018: 61%), compared to the CAODC industry average of 29%.
CWC completed 382 drilling rig operating days in Q1 2019, a
23% decrease from 498 drilling rig operating days in Q1 2018. The
Q1 2019 average revenue per operating day of $23,895 was an increase of 2% from $23,485 in Q1 2018. The significant
reduction in Q1 2019 activity level was a direct result of the
lower WTI price during the quarter, compared to a year ago, and the
Government of Alberta mandated
production curtailment temporarily slowing down the need for newly
drilled wells.
Production Services
With a fleet of 148 service rigs, CWC is the largest well
servicing company in Canada as
measured by operating hours. CWC's service rig fleet consists of 77
single, 57 double, and 14 slant rigs providing services which
include completions, maintenance, workovers and abandonments with
depth ratings from 1,500 to 5,000 metres. CWC has chosen to park 55
of its service rigs and focus its sales and operational efforts on
the remaining 93 active service rigs due to the reduction in the
number of service rigs required to service the WCSB, in part as a
result of the Government of Alberta's mandated crude oil production
curtailments.
CWC's fleet of nine coil tubing units consist of six Class I and
three Class II coil tubing units having depth ratings from 1,500 to
3,200 metres. The Company continues to focus its sales and
operational efforts on servicing steam-assisted gravity drainage
("SAGD") wells that are shallower in depth and more appropriate for
coil tubing operations.
CWC's fleet of 13 swabbing rigs were acquired as part of the
C&J Canada acquisition and operate under the trade name CWC
Swabtech. The swabbing rigs are used to remove liquids from
the wellbore and allow reservoir pressures to push the commodity up
the tubing casing. The Company has chosen to park five of its
swabbing rigs and focus its sales and operational efforts on the
remaining eight active swabbing rigs.
|
Three months
ended
|
OPERATING
HIGHLIGHTS
|
Mar.
31,
2019
|
Dec.
31,
2018
|
Sep.
30,
2018
|
Jun.
30,
2018
|
Mar.
31,
2018
|
Dec.
31,
2017
|
Sep.
30,
2017
|
Jun.
31,
2017
|
Service
Rigs
|
|
|
|
|
|
|
|
|
Active service rigs,
end of period
|
93
|
92
|
102
|
107
|
108
|
111
|
66
|
66
|
Inactive service rigs,
end of period
|
55
|
56
|
46
|
41
|
41
|
38
|
8
|
8
|
Total service rigs,
end of period
|
148
|
148
|
148
|
148
|
149
|
149
|
74
|
74
|
|
|
|
|
|
|
|
|
|
Operating
hours
|
30,875
|
31,232
|
42,316
|
28,831
|
53,979
|
40,879
|
28,320
|
20,047
|
Revenue per
hour
|
$671
|
$663
|
$628
|
$642
|
$637
|
$606
|
$559
|
$551
|
Revenue per hour
excluding top
volume customers
|
$690
|
$696
|
$664
|
$677
|
$681
|
$645
|
$610
|
$608
|
Service rig
utilization % (1)
|
37%
|
37%
|
45%
|
60%
|
56%
|
46%
|
47%
|
33%
|
|
|
|
|
|
|
|
|
|
Coil Tubing
Units
|
|
|
|
|
|
|
|
|
Active coil tubing
units, end of period
|
8
|
8
|
8
|
8
|
8
|
9
|
9
|
9
|
Inactive coil tubing
units, end of period
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
Total coil tubing
units, end of period
|
9
|
9
|
9
|
9
|
9
|
10
|
10
|
10
|
|
|
|
|
|
|
|
|
|
Operating
hours
|
1,730
|
1,647
|
898
|
1,212
|
3,007
|
1,978
|
1,783
|
1,557
|
Revenue per
hour
|
$555
|
$625
|
$731
|
$762
|
$724
|
$725
|
$688
|
$657
|
Coil tubing unit
utilization % (2)
|
24%
|
22%
|
12%
|
17%
|
39%
|
24%
|
22%
|
19%
|
|
|
|
|
|
|
|
|
|
Swabbing
Rigs
|
|
|
|
|
|
|
|
|
Active swabbing rigs,
end of period
|
8
|
8
|
9
|
8
|
8
|
9
|
-
|
-
|
Inactive swabbing
rigs, end of period
|
5
|
5
|
4
|
5
|
5
|
4
|
-
|
-
|
Total swabbing rigs,
end of period
|
13
|
13
|
13
|
13
|
13
|
13
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Operating
hours
|
1,655
|
2,313
|
881
|
958
|
2,258
|
1,063
|
-
|
-
|
Revenue per
hour
|
$288
|
$283
|
$273
|
$265
|
$310
|
$286
|
-
|
-
|
Swabbing rig
utilization % (3)
|
23%
|
30%
|
11%
|
13%
|
31%
|
19%
|
-
|
-
|
|
|
|
|
|
|
|
|
|
(1)
|
Service and swabbing
rig utilization is calculated based on 10 hours a day, 365 days a
year. New service and swabbing rigs are added based on the first
day of field service. Service and swabbing rigs requiring their
24,000 hour recertification, refurbishment or have been otherwise
removed from service for greater than 90 days are excluded from the
utilization calculation until their first day back in field
service.
|
(2)
|
Coil tubing unit
utilization is calculated based on 10 hours a day, 365 days a year.
New coil tubing units are added based on the first day of field
service. Coil tubing units that have been removed from service for
greater than 90 days are excluded from the utilization calculation
until their first day back in field service.
|
Production Services revenue was $22.1
million in Q1 2019, down $15.1
million (41%) compared to $37.2
million in Q1 2018. The significant drop in Q1 2019 activity
level for our production-oriented service rigs was a direct result
of the lower WTI price during the quarter, compared to a year ago,
and the Government of Alberta
mandated production curtailment temporarily slowing down the need
for workover and maintenance work on producing wells.
CWC's service rig utilization in Q1 2019 of 37% (Q1 2018: 56%)
was driven by 30,875 operating hours being 43% lower than the
53,979 operating hours in Q1 2018. However, the Q1 2019 average
revenue per hour of $671 increased
$34 per hour (5%) over the
$637 in Q1 2018. Furthermore, Q1 2019
average revenue per hour excluding the top volume customers of
$690 was $9 per hour (1%) higher than Q1 2018 average
revenue per hour of $681 suggesting
the loss in CWC's service rig operating hours in Q1 2019 were
primarily from CWC's top volume customers who were the most
affected by the Government of Alberta's mandated production curtailment.
CWC's coil tubing utilization in Q1 2019 of 24% (Q1 2018: 39%)
with 1,730 operating hours was 42% lower than the 3,007 operating
hours in Q1 2018. Average revenue per hour for coil tubing services
of $555 in Q1 2019 is 23% lower than
$724 in Q1 2018. Both lower
utilization and pricing reflects the continuing challenge of low
natural gas prices and lower WTI prices during the quarter,
compared to a year ago, as well as the Government of Alberta mandated production curtailments
temporarily slowing down the need for work on SAGD wells.
CWC swabbing rig utilization in Q1 2019 of 23% (Q1 2018: 31%)
with 1,655 operating hours was 27% lower than the 2,258 operating
hours in Q1 2018. Average revenue per hour for swabbing rigs of
$288 in Q1 2019 is 7% lower than
$310 in Q1 2018 reflecting the
continuing challenge of low natural gas prices.
Capital Expenditures
|
Three months
ended
|
|
|
|
March
31,
|
|
|
$
thousands
|
2019
|
2018
|
Change
$
|
Change
%
|
Contract
Drilling
|
94
|
130
|
(36)
|
(28%)
|
Production
Services
|
1,185
|
835
|
350
|
42%
|
Other
Equipment
|
15
|
-
|
15
|
n/m(1)
|
Total capital
expenditures
|
1,294
|
965
|
329
|
34%
|
|
|
|
|
|
Growth
capital
|
-
|
-
|
-
|
n/m(1)
|
Maintenance and
infrastructure capital
|
1,294
|
965
|
329
|
34%
|
Total capital
expenditures
|
1,294
|
965
|
329
|
34%
|
Capital expenditures of $1.3
million in Q1 2019, an increase of $0.3 million (34%) compared to $1.0 million in Q1 2018.
The 2019 capital expenditure budget of $5.4 million was approved by the Board of
Directors on January 16, 2019
comprised entirely of maintenance and infrastructure capital
related to recertifications, additions and upgrades to field
equipment for the drilling rigs, service rigs and coil tubing
divisions as well as information technology infrastructure.
Outlook
Crude oil, as represented by WTI, averaged US$54.87/bbl in Q4 2018, a decrease of 8%
compared to Q4 2018 average price of US$59.34/bbl (Q1 2018: US$62.89/bbl) and finished the quarter on
March 31, 2019 at US$60.14/bbl. Natural gas prices, as
measured by AECO, increased 20% from an average of $1.53/GJ in Q4 2018 to $1.84/GJ in Q1 2019 (Q1 2018: $2.06/GJ), but continues to remain very low in
historically terms. The price differential between Canadian heavy
crude oil, as represented by WCS, and WTI tightened during Q1 2019
to under US$10.00/bbl as a result of
the Government of Alberta mandated
325,000 bbls/day crude oil production curtailment on Alberta oil companies producing more than
10,000 bbls/day. The effects of the tightening WTI-WCS price
differential in Q1 2019 allowed the Government of Alberta to announce reductions of 75,000
bbls/day effective February 2019 and
another 25,000 bbls/day in each of April, May and June 2019 reducing total production curtailment
to 175,000 bbls/day. These reductions in the production curtailment
has and will continue to allow CWC's E&P customers to increase
their production, which in turn has and will continue to gradually
increase CWC's activity levels for its Production Services segment.
CWC has sustainably positioned itself by providing its E&P
customers with the highest quality service from the highest quality
people at reasonable prices. However, uncertainties around
the proposed Government of Canada's Bill C-69 legislation on the creation
of the Canadian Energy Regulator and the Impact Assessment Act,
which may impact the ability to develop new pipelines, as well as
Bill C-48 banning tanker traffic for crude oil on British Columbia's north coast, will continue
to negatively affect investment capital and growth in Canada's oil and gas industry in the near
term. Despite these uncertainties, there appears to be renewed
optimism in Canada's energy
industry as Albertans elected a new government on April 16, 2019 whose leader intends to fight for
Canada's energy sector. As such,
investment capital and growth could show signs of returning as
evident by the positive final investment decisions made in Q4 2018
by proponents of a liquefied natural gas processing facility (LNG
Canada) and the building of its corresponding pipeline (Coastal
GasLink) in northeast British
Columbia
While Canadian oilfield service activity currently remains
muted, the United States energy
industry continues to experience exponential growth. Over the past
year, CWC has been actively identifying opportunities to establish
a U.S. presence and is pleased to report that in March 2019 the Company signed its first U.S.
contract to deliver contract drilling services to a multi-national
E&P company in the Eagle Ford basin in Texas. A second U.S. contract was signed in
April 2019 to move a second drilling
rig for another E&P customer to the Bakken basin in
Wyoming. Both drilling rigs are
expected to begin operations in the U.S. in Q2 2019 subject to
obtaining working visas for field employees. It is the Company's
intent to move an additional two drilling rigs to the U.S. in the
second half of 2019 subject to signing customer contracts such that
CWC positions up to four of its nine drilling rig fleet (44%) in
the U.S. CWC believes these moves will help the Company achieve
higher utilization, revenue and EBITDA for its Contract Drilling
segment over a longer-term period.
While CWC remains focused on its operational and financial
performance, it also recognizes the need to pursue opportunities
that create long-term shareholder value. With the support of the
Board of Directors, management continues to actively pursue
opportunities to consolidate the North American drilling and well
servicing industry. CWC cautions that there are no guarantees that
strategic opportunities will result in a transaction, or if a
transaction is undertaken, as to its terms or timing.
About CWC Energy Services Corp.
CWC Energy Services Corp. is a premier contract drilling and
well servicing company operating in the WCSB and the United States with a complementary suite
of oilfield services including drilling rigs, service rigs,
swabbing rigs and coil tubing units. The Company's corporate office
is located in Calgary, Alberta,
with a U.S. office in Houston,
Texas and operational locations in Nisku, Grande
Prairie, Slave Lake,
Sylvan Lake, Drayton Valley, Lloydminster, Provost and Brooks,
Alberta. The Company's shares trade on the TSX Venture
Exchange under the symbol "CWC".
Forward-Looking Information
This news release contains certain forward-looking
information and statements within the meaning of applicable
Canadian securities legislation. Certain statements contained in
this MD&A, including most of those contained in the section
titled "Outlook" and including statements which may contain such
words as "anticipate", "could", "continue", "should", "seek",
"may", "intend", "likely", "plan", "estimate", "believe", "expect",
"will", "objective", "ongoing", "project" and similar expressions
are intended to identify forward-looking information or statements.
In particular, this MD&A contains forward-looking statements
including management's assessment of future plans and operations,
planned levels of capital expenditures, expectations as to activity
levels, expectations on the sustainability of future cash flow and
earnings, expectations with respect to crude oil and natural gas
prices, activity levels in various areas, expectations regarding
the level and type of drilling and production and related drilling
and well services activity in the WCSB and the United States, expectations regarding
entering into long term drilling contracts and expanding its
customer base, and expectations regarding the business, operations,
revenue and debt levels of the Company in addition to general
economic conditions. Although the Company believes that the
expectations and assumptions on which such forward-looking
information and statements are based are reasonable, undue reliance
should not be placed on the forward-looking information and
statements because the Company can give no assurances that they
will prove to be correct. Since forward-looking information and
statements address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Actual
results could differ materially from those currently anticipated
due to a number of factors and risks. These include, but are not
limited to, the risks associated with the drilling and oilfield
services sector (ie. demand, pricing and terms for oilfield
drilling and services; current and expected oil and gas prices;
exploration and development costs and delays; reserves discovery
and decline rates; pipeline and transportation capacity; weather,
health, safety and environmental risks), integration of
acquisitions, competition, and uncertainties resulting from
potential delays or changes in plans with respect to acquisitions,
development projects or capital expenditures and changes in
legislation, including but not limited to tax laws, royalties and
environmental regulations, stock market volatility and the
inability to access sufficient capital from external and internal
sources. Accordingly, readers should not place undue reliance on
the forward-looking statements. Readers are cautioned that the
foregoing list of factors is not exhaustive. Additional information
on these and other factors that could affect the Company's
financial results are included in reports on file with applicable
securities regulatory authorities and may be accessed through SEDAR
at www.sedar.com. The forward-looking information and statements
contained in this news release are made as of the date hereof and
the Company undertakes no obligation to update publicly or revise
any forward-looking information or statements, whether as a result
of new information, future events or otherwise, unless so required
by applicable securities laws. Any forward-looking statements made
previously may be inaccurate now.
Reconciliation of Non-IFRS Measures
|
Three months
ended
|
|
March
31,
|
$ thousands except
share and per share amounts
|
2019
|
2018
|
NON-IFRS
MEASURES
|
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
Net (loss)
income
|
(47)
|
1,196
|
Add:
|
|
|
Depreciation
|
3,734
|
5,013
|
Finance
costs
|
732
|
690
|
Deferred income tax
expense (recovery)
|
68
|
548
|
Stock based
compensation
|
229
|
285
|
Gain on sale of
equipment
|
(22)
|
(254)
|
Adjusted
EBITDA (1)
|
4,694
|
7,478
|
Adjusted EBITDA
per share – basic and diluted(1)
|
$0.01
|
$0.01
|
Adjusted EBITDA
margin (Adjusted EBITDA/Revenue) (1)
|
15%
|
15%
|
Weighted average
number shares outstanding - basic
|
512,678,779
|
522,097,878
|
Weighted average
number shares outstanding - diluted
|
512,678,779
|
525,725,595
|
|
|
|
Funds from
operations:
|
|
|
Cash flows from
operating activities
|
3,448
|
(735)
|
Add (deduct): Change
in non-cash working capital
|
1,246
|
8,213
|
Funds from
operations
|
4,694
|
7,478
|
|
|
|
Gross
margin:
|
|
|
Revenue
|
31,259
|
48,925
|
Less: Direct operating
expenses
|
22,338
|
36,346
|
Gross margin
(2)
|
8,921
|
12,579
|
Gross margin
percentage (2)
|
29%
|
26%
|
|
|
|
$
thousands
|
March 31,
2019
|
December 31,
2018
|
|
|
|
Working capital
(excluding debt):
|
|
|
Current
assets
|
27,247
|
26,893
|
Less: Current
liabilities
|
(8,762)
|
(8,793)
|
Add: Current
portion of long term debt
|
1,418
|
928
|
Working capital
(excluding debt) (3)
|
19,903
|
19,028
|
Working capital
(excluding debt) ratio (3)
|
3:7:1
|
3.4:1
|
|
|
|
Net debt:
|
|
|
Long term
debt
|
41,814
|
43,968
|
Less: Current
assets
|
(27,247)
|
(26,893)
|
Add: Current
liabilities
|
8,762
|
8,793
|
Net debt
(4)
|
23,329
|
25,868
|
|
|
(1)
|
Adjusted EBITDA
(Earnings before interest and finance costs, income tax expense,
depreciation, amortization, gain or loss on disposal of asset,
goodwill impairment, stock based compensation and other one-time
gains and losses) is not a recognized measure under IFRS.
Management believes that in addition to net income, Adjusted EBITDA
is a useful supplemental measure as it provides an indication of
the Company's ability to generate cash flow in order to fund
working capital, service debt, pay current income taxes, pay
dividends, repurchase common shares under the Normal Course Issuer
Bid, and fund capital programs. Investors should be cautioned,
however, that Adjusted EBITDA should not be construed as an
alternative to net income (loss) determined in accordance with IFRS
as an indicator of the Company's performance. CWC's method of
calculating Adjusted EBITDA may differ from other entities and
accordingly, Adjusted EBITDA may not be comparable to measures used
by other entities. Adjusted EBITDA margin is calculated as Adjusted
EBITDA divided by revenue and provides a measure of the percentage
of Adjusted EBITDA per dollar of revenue. Adjusted EBITDA per share
is calculated by dividing Adjusted EBITDA by the weighted average
number of shares outstanding as used for calculation of earnings
per share.
|
|
|
(2)
|
Gross margin is
calculated from the statement of comprehensive loss as revenue less
direct operating costs and is used to assist management and
investors in assessing the Company's financial results from
operations excluding fixed overhead costs. Gross margin percentage
is calculated as gross margin divided by revenue. The Company
believes the relationship between revenue and costs expressed by
the gross margin percentage is a useful measure when compared over
different financial periods as it demonstrates the trending
relationship between revenue, costs and margins. Gross margin and
gross margin percentage are non-IFRS measures and do not have any
standardized meaning prescribed by IFRS and may not be comparable
to similar measures provided by other companies.
|
|
|
(3)
|
Working capital
(excluding debt) is calculated based on current assets less current
liabilities excluding the current portion of long-term debt.
Working capital (excluding debt) is used to assist management and
investors in assessing the Company's liquidity. Working capital
(excluding debt) does not have any meaning prescribed under IFRS
and may not be comparable to similar measures provided by other
companies. Working capital (excluding debt) ratio is calculated as
current assets divided by the difference of current liabilities
less the current portion of long term debt.
|
|
|
(4)
|
Net debt is not a
recognized measure under IFRS and does not have any standardized
meaning prescribed by IFRS and may not be comparable to similar
measures provided by other companies. Management believes net debt
is a useful indicator of a company's debt position.
|
SOURCE CWC Energy Services Corp.