CALGARY, Nov. 17, 2017 /CNW/ - MATRRIX Energy Technologies
Inc. ("MATRRIX" or the "Corporation") (TSX-V: MXX) announces
financial results for the three month and nine month periods ending
September 30, 2017.
(All monetary amounts contained herein are expressed in
thousands of Canadian dollars, except for per share amounts)
FINANCIAL HIGHLIGHTS
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
(000's CAD
$)
|
2017
|
2016
|
%
Change
|
|
2017
|
2016
|
%
Change
|
Revenue
|
1,933
|
268
|
621%
|
|
4,544
|
1,199
|
279%
|
EBITDA
(i)
|
(151)
|
(539)
|
72%
|
|
(574)
|
(1,373)
|
58%
|
EBITDA per
share
|
|
|
|
|
|
|
|
|
Basic
|
-
|
(0.02)
|
100%
|
|
(0.02)
|
(0.04)
|
50%
|
|
Diluted
|
-
|
(0.02)
|
100%
|
|
(0.02)
|
(0.04)
|
50%
|
Adjusted EBITDA
(ii)
|
(135)
|
(516)
|
74%
|
|
(543)
|
(1,241)
|
56%
|
Adjusted EBITDA per
share
|
|
|
|
|
|
|
|
|
Basic
|
-
|
(0.02)
|
100%
|
|
(0.02)
|
(0.04)
|
50%
|
|
Diluted
|
-
|
(0.02)
|
100%
|
|
(0.02)
|
(0.04)
|
50%
|
Net loss
|
(743)
|
(1,192)
|
38%
|
|
(2,411)
|
(3,383)
|
29%
|
Net loss per
share
|
|
|
|
|
|
|
|
|
Basic
|
(0.02)
|
(0.04)
|
50%
|
|
(0.07)
|
(0.11)
|
36%
|
|
Diluted
|
(0.02)
|
(0.04)
|
50%
|
|
(0.07)
|
(0.11)
|
36%
|
Funds flow from
operations (iii)
|
(116)
|
(503)
|
77%
|
|
(503)
|
(1,214)
|
59%
|
Gross Margin
(iv)
|
582
|
31
|
nm
|
|
1,458
|
351
|
316%
|
Assets
|
13,455
|
16,143
|
(17%)
|
|
13,455
|
16,143
|
(17%)
|
Liabilities
|
780
|
220
|
255%
|
|
780
|
220
|
255%
|
Capital expenditures
(net of lost in hole replacements)
|
-
|
-
|
-
|
|
77
|
34
|
126%
|
Directional and
horizontal systems available
|
25
|
25
|
-
|
|
25
|
25
|
-
|
Weighted Average
common shares outstanding
|
33,862
|
32,185
|
1%
|
|
32,750
|
32,185
|
2%
|
Weighted Average
diluted common shares outstanding
|
33,862
|
32,185
|
1%
|
|
32,750
|
32,185
|
2%
|
nm - not
meaningful
|
|
|
|
|
OVERALL HIGHLIGHTS
For the three and nine month periods ended September 30, 2017, the Corporation experienced
an overall increase in operating days related to horizontal and
directional drilling activity in Canada relative to the comparative 2016
periods. The Corporation's overall increase in operational activity
was due to the addition of new customers.
The Corporation continues to be in a strong financial position
with positive working capital of $4,841 ($0.14/per
share) including $3,349 ($0.09/per share) of cash and cash equivalents on
hand as at September 30, 2017.
THIRD QUARTER 2017 SUMMARY (Compared with the third
quarter of 2016)
- revenue of $1,933, up from
$268
- operating days of 256, up from 42
- net loss of ($743), improved from
($1,192)
- adjusted EBITDA of ($135),
improved from ($516)
NINE MONTHS ENDED 2017 SUMMARY (Compared with the nine
months ended in 2016)
- revenue of $4,544, up from
$1,199
- operating days of 658, up from 136
- net loss of ($2,411), improved
from ($3,383)
- adjusted EBITDA of ($543),
improved from ($1,241)
OPERATIONS REVIEW
MATRRIX continues to deploy horizontal and directional drilling
technology in Canada, while
actively seeking investment opportunities to acquire existing
drilling service businesses and equipment that meet strategic
objectives. As at the date of this press release, MATRRIX
owns 25 sub-surface Horizontal and Directional Systems available
for deployment to the field within the WCSB.
Consistent with strategic initiatives outlined earlier in 2017,
Elson McDougald returned to the
Corporations board of directors, Lyle
Whitmarsh was appointed President - Rig Division,
Terry Kuiper was appointed Sales
Manager - Rig Division, the Corporation purchased three (3)
heavy, telescopic double drilling rigs located in Southeast Saskatchewan from Vortex Drilling
Ltd. through a receivership process, and the Corporation signed a
definitive agreement to purchase all the outstanding shares of
Stampede Drilling Ltd. ("Stampede"), expected to close on or about
November 21, 2017.
Upon closing of the Stampede acquisition, the Corporation will
deliver high quality, regionally focused drilling operations for
its oil and gas clients, utilizing the existing Stampede leadership
and the resulting 6 rig fleet of compatible telescopic double
drilling rigs (which include the 3 rigs acquired from Vortex
Drilling Ltd.).
MATRRIX continues to enjoy strong interest in its proprietary
software platform called D2ROX™ (pronounced DEE-ROCKS),
which allows the Corporation and its oil and gas clients to drive
safe, predictable, repeatable, cost effective drilling operations
at the rig site, for the Corporation's existing horizontal and
directional drilling operation and its emerging drilling rig
business.
WCSB oil and gas producers continually assess capital
expenditures as oil and gas prices fluctuate. With strengthening
commodity prices, the Corporation expects an overall improvement in
the outlook for oil and gas service companies including MATRRIX.
The Corporation believes its strategic entry into the land based
contract drilling sector is timely, and it intends to continue
assessing and executing on this contract drilling consolidation
strategy so long as financially and operationally feasible
opportunities exist.
President Richard Ryan
states:
"Our vision, focus and tenacity to drive change into this
industry appears to be gaining traction, with our horizontal and
directional drilling business improving despite a relatively
unchanged year over year rig count in Western Canada. As for our strategic entry
into the drilling rig business, we've attracted a solid team to
lead that strategic expansion, led by Lyle
Whitmarsh. With Lyle's vision and experience in growing a
drilling rig operation, the foundation we've built in horizontal
and directional drilling, and with confidence demonstrated by the
investment community through our recent $20
million financing that is set to close on or about
November 21st, we're well
positioned to continue with expansion, growth and consolidation at
a very opportune part of the cycle. We've demonstrated the ability
to turn vision into action over the last few months, and are very
pleased to have capital and momentum for execution of this
complementary new strategy."
NON-GAAP MEASURES
This press release contains references to (i) EBITDA; (ii)
Adjusted EBITDA; (iii) Funds Flow; and (iv) Gross Margin. These
financial measures are not measures that have any standardized
meaning prescribed by IFRS and are therefore referred to as
non-GAAP measures. The non-GAAP measures used by the Corporation
may not be comparable to similar measures used by other
companies.
(i)
|
EBITDA is not a
measure recognized under IFRS and does not have a standardized
meaning prescribed by IFRS. EBITDA is defined as "income (loss)
before interest expense, income taxes, depreciation and
amortization.
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
September
30,
|
|
September
30,
|
(000's CAD
$)
|
2017
|
2016
|
%
Change
|
|
2017
|
2016
|
%
Change
|
Net loss
|
(743)
|
(1,192)
|
38%
|
|
(2,411)
|
(3,383)
|
29%
|
|
Depreciation
|
592
|
653
|
(9%)
|
|
1,837
|
2,010
|
(9%)
|
EBITDA
|
(151)
|
(539)
|
72%
|
|
(574)
|
(1,373)
|
58%
|
(ii)
|
Adjusted EBITDA is
defined as "income (loss) before interest income, interest expense,
taxes, business acquisition transaction costs, depreciation and
amortization, shared based compensation expense, gains on disposal
of property and equipment, impairment expenses, interest and other
income, and foreign exchange." Management believes that in addition
to net and total comprehensive income (loss), Adjusted EBITDA is a
useful supplemental measure as it provides an indication of the
results generated by the Corporation's principal business
activities prior to consideration of how these activities are
financed, how assets are depreciated, amortized and impaired: the
impact of foreign exchange, or how the results are affected by the
accounting standards associated with the Corporation's stock based
compensation plan.
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
(000's CAD
$)
|
2017
|
2016
|
%
Change
|
|
2017
|
2016
|
%
Change
|
EBITDA
|
(151)
|
(539)
|
72%
|
|
(574)
|
(1,373)
|
58%
|
|
Gain from equipment
lost in hole
|
(12)
|
-
|
-
|
|
(42)
|
-
|
-
|
|
Interest and other
income
|
(6)
|
(18)
|
(67%)
|
|
(19)
|
(37)
|
(49%)
|
|
Share based
payments
|
71
|
40
|
78%
|
|
124
|
161
|
(23%)
|
|
Foreign exchange
(gain) loss
|
(37)
|
1
|
nm
|
|
(32)
|
8
|
nm
|
Adjusted
EBITDA
|
(135)
|
(516)
|
74%
|
|
(543)
|
(1,241)
|
56%
|
nm - not
meaningful
|
|
|
|
|
|
|
|
|
(iii)
|
Funds flow from
operations is defined as "cash provided by operating activities
before the change in non-cash working capital". Funds flow from
operations is a measure that provides shareholders and potential
investors additional information regarding the Corporation's
liquidity and its ability to generate funds to finance its
operations. Management utilizes this measure to assess the
Corporation's ability to finance operating activities and capital
expenditures.
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
(000's CAD
$)
|
2017
|
2016
|
%
Change
|
|
2017
|
2016
|
%
Change
|
Operating cash
flow
|
(557)
|
(656)
|
15%
|
|
(1,467)
|
(870)
|
(69%)
|
Changes in non-cash
working capital
|
441
|
153
|
188%
|
|
964
|
(344)
|
380%
|
Funds flow
|
(116)
|
(503)
|
77%
|
|
(503)
|
(1,214)
|
59%
|
(iv)
|
Gross margin is
defined as "gross profit from services revenue before stock based
compensation and depreciation". Gross margin is a measure that
provides shareholders and potential investors additional
information regarding the Corporation's cash generating and
operating performance. Management utilizes this measure to assess
the Corporation's operating performance.
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
(000's CAD
$)
|
2017
|
2016
|
%
Change
|
|
2017
|
2016
|
%
Change
|
Revenue
|
1,933
|
268
|
621%
|
|
4,544
|
1,199
|
279%
|
Direct operating
expenses
|
1,351
|
237
|
470%
|
|
3,086
|
848
|
264%
|
Gross margin
(3)
|
582
|
31
|
nm
|
|
1,458
|
351
|
315%
|
Gross margin
%
|
30%
|
12%
|
150%
|
|
32%
|
29%
|
10%
|
nm - not
meaningful
|
|
|
|
|
|
FORWARD-LOOKING INFORMATION
Certain statements contained in this press release constitute
forward-looking information. This information relates to
future events or the Corporation's future performance. All
information other than statements of historical fact is
forward-looking information. The use of any of the words
"anticipate", "plan", "contemplate", "continue", "estimate",
"expect", "intend", "propose", "might", "may", "will", "could",
"believe", "predict" and "forecast" are intended to identify
forward-looking information.
In particular, this press release contains forward-looking
information pertaining to the following: the closing of the
Stampedes acquisition; the Corporation's expectation of an overall
improvement for oil and gas service companies including MATRRIX;
and the Corporation's intention to continue assessing and executing
on its contract drilling consolidation strategy.
This forward-looking information involves material assumptions
and known and unknown risks and uncertainties, certain of which are
beyond the Corporation's control. The Corporation's Annual
Information Form and other documents filed with securities
regulatory authorities (accessible through the SEDAR website
www.sedar.com) describe the risks, the material assumptions and
other factors that could influence actual results and which are
incorporated herein by reference. Actual results, performance or
achievements could differ material from those expressed in, or
implied by, this forward-looking information and, accordingly, no
assurance can be given that any of the events anticipated by the
forward-looking information will transpire or occur, or if any of
them do so, what benefits the Corporation will derive
therefrom.
The forward-looking information contained herein is provided as
at the date hereof and the Corporation does not undertake any
obligation to update publicly or to revise any of the included
forward-looking information, whether as a result of new
information, future events or otherwise, except as may be required
by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE MATRRIX Energy Technologies Inc.