Enseco Energy Services Corp. Announces Results for the Three Months
Ended March 31, 2014
CALGARY, ALBERTA--(Marketwired - May 23, 2014) - ENSECO ENERGY
SERVICES CORP (TSX-VENTURE:ENS) ("Enseco" or the "Company") (May
23, 2014) announces its financial results for the three months
ended March 31, 2014.
Results from
Operations
|
|
Three months ended March 31, |
|
($ thousands, except per share amounts) |
|
2014 |
|
|
2013 |
|
Revenue |
$ |
23,035 |
|
$ |
17,201 |
|
Gross margin |
$ |
4,726 |
|
$ |
3,872 |
|
Gross margin % |
|
21 |
% |
|
23 |
% |
Adjusted gross margin (1) |
$ |
6,286 |
|
$ |
5,322 |
|
Adjusted gross margin % |
|
27 |
% |
|
31 |
% |
EBITDAS (1) |
$ |
2,433 |
|
$ |
1,613 |
|
EBITDAS % |
|
11 |
% |
|
9 |
% |
Net income (loss) before tax (1) |
$ |
476 |
|
$ |
(259 |
) |
|
Per
common share - basic |
$ |
0.02 |
|
$ |
(0.01 |
) |
|
Per
common share - diluted |
$ |
0.02 |
|
$ |
(0.01 |
) |
Net income (loss) |
$ |
476 |
|
$ |
(401 |
) |
|
Per
common share - basic |
$ |
0.02 |
|
$ |
(0.02 |
) |
|
Per
common share - diluted |
$ |
0.02 |
|
$ |
(0.02 |
) |
Cash flow before changes in non-cash working capital
(1) |
$ |
2,489 |
|
$ |
1,427 |
|
Cash flow from (used in) operating activities |
$ |
(5,243 |
) |
$ |
3,801 |
|
(1)See definition within the Non-IFRS
Measures section of this press release |
Highlights for the
three months ended March 31, 2014
- Q1 2014 was a very encouraging quarter. In recent months,
Enseco has increased its sales presence in nearly every division
and this quarter has seen a 34% increase in quarterly revenue
compared to the prior year period. Each of the four divisions
achieved an increase in their sales for the period, with USA
Directional showing the largest improvements.
- A large percentage of equipment rentals were required due to
the increase in sales activity. The Company will work to reduce
these equipment rentals with owned assets. Efforts are also focused
on reducing repair costs to improve the gross margin and EBITDAS of
each division.
- The USA Directional division continues to create pace setting
drilling records in a number of new areas in which it is now
operating and its service quality continues to improve as more
equipment is being serviced internally through the USA MWD facility
and the Canadian motor shop.
- The Canadian Testing division continues to work for many of the
larger E&P companies and has set new records for the number of
staff working in the field throughout the quarter which translates
into greater revenue for the division.
- In the Canadian Directional division, where nearly 100% of the
motor and MWD fleet are serviced and repaired internally,
enhancements have resulted in continuous service quality
improvements.
Outlook
Enseco expects the
increase in re venue to continue through Q3 and Q4 as its sales
force continues to create new opportunities and its operations
group continue to focus and increase the level of service quality
provided to their clients.
Indications are that
Enseco's clients are expanding their drilling and completion
programs through the remainder of 2014.
Management continues
to work to secure the assets required to promote the revenue growth
and monitor costs to increase profitability while monitoring
operating areas to ensure equipment and manpower are positioned to
provide sustainable equipment utilization rates.
The Company will
continue to search for new opportunities to grow the company while
looking for efficiencies and cost reductions to increase its gross
margins and EBITDAS. It is expected that the pursuit of these
opportunities, accompanied by initiatives to both improve margin
efficiency, and reduce debt levels, will continue to improve the
Company's financial performance going forward.
Filings
Enseco has filed
with Canadian securities regulatory authorities its unaudited
interim consolidated financial statements for the three months
ended March 31, 2014 and accompanying management' discussion and
analysis ("MD&A "). These filings are available under Enseco's
SEDAR profile at www.sedar.com.
About Enseco Energy
Services Corp.
Enseco is a premier
supplier of directional drilling, production testing and frac
flowback services operating throughout the Western Canadian
Sedimentary Basin and select markets in the United States, Our
corporate office is located in Calgary and sales offices are
located in both Calgary and Denver. Enseco is led by an experienced
management team with a focus on continued value creation through
accretive acquisitions and organic growth.
Forward-Looking
Statements
Certain information
and statements contained in this press release constitute
forward-looking information, including, but not limited to:
statements concerning Enseco's future business strategy, focus,
marketing and other plans; expectations regarding the future
performance of the Company's USA Directional Drilling and Canadian
Testing operations, the benefits from the Company's MWD facilities
and Canadian motor shop, including increased reliability; and
expectations regarding future revenues, cash flow, gross margins,
EBITDAS, efficiencies and cost reductions, future debt levels,
sales and services, and other financial results and industry
activity levels; Although management of the Company believes that
the expectations reflected in such forward looking statements are
reasonable, it can give no assurance that such expectations will
prove to have been correct. Accordingly, readers should not place
undue reliance upon any of the forward-looking information set out
in this press release. Readers should review the cautionary
statement respecting forward-looking information that appears
below. All of the forward looking statements of the Company
contained in this press release are expressly qualified, in their
entirety, by this cautionary statement.
The information and
statements contained in this press release that are not historical
facts are forward- looking statements. Forward-looking statements
(often, but not always, identified by the use of words such as
"seek", "plan", "continue", " estimate", "project", "predict",
"potential", "targeting ", "intend", "could", "might", "should",
"believe", "expect", "may", "anticipate" or "will" and similar
expressions) may include plans, expectations, opinions, or guidance
that are not statements of fact. Forward-looking statements are
based upon the opinions, expectations and estimates of management
as at the date the statements are made and are subject to a variety
of risks and uncertainties and other factors that could cause
actual events or outcomes to differ materially from those
anticipated or implied by such forward-looking statements. These
factors include, but are not limited to, such things as changes in
industry conditions (including the levels of capital expenditures
made by oil and gas producers and explorers), the credit risk to
which the Company is exposed in the conduct of its business,
fluctuations in prevailing commodity prices or currency and
interest rates, the competitive environment to which the various
business divisions are, or may be, exposed in all aspects of their
business, the ability of the Company' s various business divisions
to access equipment (including parts) and new technologies and to
maintain relationships with key suppliers, the ability of the
Company's various business divisions to attract and maintain key
personnel and other qualified employees, various environmental
risks to which the Company's business divisions are exposed in the
conduct of their operations, inherent risks associated with the
conduct of the businesses in which the Company's business divisions
operate, timing and costs associated with the acquisition of
capital equipment, the impact of weather and other seasonal factors
that affect business operations, availability of financial
resources or third-party financing and the impact of new laws or
changes in administrative practices on the part of regulatory
authorities.
Forward-looking
information concerning the nature and timing of growth within the
various business divisions is based on the current budget of the
Company (which is subject to change), factors that affected the
historical growth of such business divisions, sources of historic
growth opportunities and expectations relating to future economic
and operating conditions. Forward-looking information concerning
the future competitive position of the Company's business divisions
is based upon the current competitive environment in which those
business divisions operate, expectations relating to future
economic and operating conditions, current and announced build
programs and other expansion plans of other organizations that
operate in the energy service business. Forward-looking information
concerning the financing of future business activities is based
upon the financing sources on which the Company has historically
relied and expectations relating to the continued cooperation of
the Company's lender and future economic and operating conditions.
Forward-looking information concerning future economic and
operating conditions is based upon historical economic and
operating conditions, opinions of third-party analysts respecting
anticipated economic and operating conditions.
With respect to
forward-looking statements contained in this press release, Enseco
has made assumptions regarding commodity prices and royalty
regimes, availability of skilled labor, timing and amount of
capital expenditures, future foreign exchange rates, interest
rates, the impact of increasing competition, conditions in general
economic and financial markets, effects of regulation by
governmental agencies, and future operating costs.
Management has
included the above summary of assumptions and risks related to
forward-looking information provided in this press release in order
to provide shareholders with a more complete perspective on
Enseco's future operations and such information may not be
appropriate for other purposes. Enseco's actual results,
performance or achievement could differ materially from those
expressed in, or implied by, these forward-looking statements and,
accordingly, no assurance can be given that any of the events
anticipated by the forward-looking statements will transpire or
occur, or if any of them do so, what benefits that the Enseco will
derive there from. Readers are cautioned that the foregoing lists
of factors are not exhaustive. These forward-looking statements are
made as of the date of in this press release and Enseco disclaims
any obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or results or
otherwise, other than as required by applicable securities
laws.
Non-IFRS
Measures
EBITDAS means
earnings before interest, taxes, depreciation and amortization, and
stock-based compensation and is equal to earnings before income
taxes from continuing operations plus interest on debt, other
charges and interest expense, depreciation and amortization,
stock-based compensation, unrealized foreign exchange loss, and
loss on sale of equipment. Adjusted gross margin from continuing
operations equals gross margin, plus interest on debt, other
charges and interest expense, depreciation and amortization,
stock-based compensation, impairment loss/recovery, and loss on
sale of equipment. Cash flow means cash flows provided by
continuing operations before changes in non-cash working capital
items.
EBITDAS, adjusted
gross margin from continuing operations, and cash flows from
continuing operations before changes in non-cash working capital
items are not recognized measures under International Financial
Reporting Standards ("IFRS"). Management believes that in addition
to net losses, EBITDAS and cash flows, are useful supplemental
measures as they provide an indication of the results generated by
the Company's primary business activities prior to consideration of
how those activities are financed, amortized or how the results are
taxed in various jurisdictions as well as the cash generated by the
Company's primary business activities. Readers should be cautioned,
however, that EBITDAS and cash flows from continuing operations
before changes in non-cash working capital items should not be
construed as an alternative to net losses determined in accordance
with IFRS as an indicator of Enseco's performance. Enseco's method
of calculating operating losses, EBITDAS and cash flows from
continuing operations before changes in non-cash working capital
items may differ from other organizations and, accordingly, such
measures may not be comparable to measures used by other
organizations. For reconciliation to the appropriate IFRS measure,
see our MD&A.
Neither the TSX
Venture Exchange nor its Regulation Service Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Enseco Energy Services Corp.Kent Devlin, CEO403-806-0088Enseco
Energy Services Corp.Blair Layton,
CFO403-806-0088Info@enseco.com