CALGARY, Aug. 15, 2018 /CNW/ - MATRRIX Energy Technologies
Inc. ("MATRRIX" or the "Corporation") (TSX-V: MXX) announces
financial results for the three and six month periods ended
June 30, 2018. The following should
be read in conjunction with the Corporation's unaudited interim
condensed consolidated financial statements and the notes thereto
for the three and six month periods ended June 30, 2018 and related management's discussion
and analysis, which are available on SEDAR at www.sedar.com.
During the first half of 2018, the Corporation continued its
strategic priority to enter into the land based contract drilling
rig business in Western Canada by
completing the acquisitions of D2 Drilling Inc. and the purchase of
substantially all the assets of Red Dog Drilling Inc.
All monetary amounts contained herein are expressed in thousands
of Canadian dollars, except for per share amounts.
SECOND QUARTER 2018 SUMMARY (Compared with the second
quarter 2017)
- Net loss of ($1,421), increased
46% from a net loss of ($976);
- Adjusted EBITDA loss of ($619),
down from an Adjusted EBITDA loss of ($353);
- Revenue of $2,047, up 93% from
$1,061;
- Gross margin of 23%, decreased 12% from 26%.
SIX MONTHS ENDED JUNE 30,
2018 SUMMARY (Compared with the six months ended
June 30, 2017)
- Net loss of ($1,220), improved
27% from a net loss of ($1,667);
- Adjusted EBITDA of $534, up from
an Adjusted EBITDA loss of ($407);
- Revenue of $9,522, up 265% from
$2,611;
- Gross margin of 30%, decreased 12% from 34%.
FINANCIAL HIGHLIGHTS
|
Three months
ended
|
|
Six months
ended
|
|
June 30,
|
|
June 30,
|
|
(000's CAD
$)
|
2018
|
2017
|
%
Change
|
|
2018
|
2017
|
%
Change
|
|
Revenue
|
2,047
|
1,061
|
93%
|
|
9,522
|
2,611
|
265%
|
|
Adjusted EBITDA
(i)
|
(619)
|
(353)
|
(75%)
|
|
534
|
(407)
|
231%
|
|
Adjusted EBITDA per
share
|
|
|
|
|
|
|
|
|
Basic
|
(0.00)
|
(0.01)
|
57%
|
|
0.00
|
(0.01)
|
132%
|
|
Diluted
|
(0.00)
|
(0.00)
|
57%
|
|
0.00
|
(0.01)
|
132%
|
|
Net loss
|
(1,421)
|
(976)
|
(46%)
|
|
(1,220)
|
(1,667)
|
27%
|
|
Net loss per
share
|
|
|
|
|
|
|
|
|
Basic
|
(0.01)
|
(0.03)
|
64%
|
|
(0.01)
|
(0.05)
|
82%
|
|
Diluted
|
(0.01)
|
(0.03)
|
64%
|
|
(0.01)
|
(0.05)
|
82%
|
|
Funds flow
|
(614)
|
(338)
|
(82%)
|
|
204
|
(387)
|
153%
|
|
Gross Margin
(i)
|
464
|
273
|
(70%)
|
|
2,828
|
877
|
(222%)
|
|
Capital
expenditures
|
12,026
|
77
|
nm
|
|
12,339
|
77
|
nm
|
|
Weighted Average
common shares outstanding
|
130,139
|
32,185
|
304%
|
|
130,526
|
32,185
|
306%
|
|
Weighted Average
diluted common shares outstanding
|
130,139
|
32,185
|
304%
|
|
130,526
|
32,185
|
306%
|
|
nm - calculation is
not meaningful
|
|
|
|
|
|
|
Revenue
Consolidated revenue for the three and six month periods ended
June 30, 2018 was $2,047 and $9,522,
respectively, up 93% and 265% from $1,061 and $2,611,
respectively, for the 2017 corresponding periods. Consolidated
revenue for the three and six month periods ended June 30, 2018 was comprised of $1,447 and $6,935,
respectively, related the land based contract drilling rig segment
and $600 and $2,587, respectively, related to the horizontal
and directional drilling segment.
Adjusted EBITDA
Consolidated Adjusted EBITDA for the three and six month periods
ended June 30, 2018 was ($619) and $534,
respectively, as compared to Adjusted EBITDA losses of ($353) and ($407),
respectively, for the 2017 corresponding periods. Consolidated
Adjusted EBITDA for the three and six month periods ended
June 30, 2018 was comprised of
($39) and $1,487, respectively, related the land-based
contract drilling rig segment and ($580) and ($953),
respectively, related to the horizontal and directional drilling
segment.
Net Loss
Consolidated net loss for the three and six month periods ended
June 30, 2018 was ($1,421) and ($1,220), respectively, as compared to net losses
of ($976) and ($1,667), respectively, for the 2017
corresponding periods.
Capital Expenditures
Capital expenditures for the three and six month periods ended
June 30, 2018 were $12,026 and $12,339, respectively, as compared to
$77 for the corresponding 2017
periods. The Q2 2018 capital expenditures were related to the
purchase of drilling rig equipment, recertifications and rig
upgrades. As of the date of this press release, the Corporation has
committed $2,072 for rig upgrades as
part of its 2018 capital program.
OUTLOOK
The Corporation continues to believe activity in the Western
Canadian Sedimentary Basin will remain challenged with similar
activity levels in the second half of 2018 as compared to 2017.
The Corporation has made significant capital investments over
the past year with the intention of ensuring its business is well
positioned to capture new customer demand while growing with its
current customer base. The Corporation will continue its strategic
plan of purchasing high quality assets that may provide a high rate
of return for shareholders.
The Corporation also continues to seek increased market share
with the horizontal and directional drilling segment.
Management believes the Corporation's strong balance sheet
provides flexibility to grow organically and execute on strategic
acquisition opportunities that align with its profitable growth
strategy. The Corporation remains focused on reducing variable
direct operating and administrative expenses without sacrificing
the quality of its service offering. By providing high quality
assets and crews management believes the Corporation will continue
to help its customers grow and continue to create long-term
shareholder value.
NON-GAAP MEASURES
This press release contains references to (i) Adjusted EBITDA
and (ii) gross margin. These financial measures are not measures
that have any standardized meaning prescribed by International
Financial Reporting Standards ("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)
|
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, foreign exchange, non recurring restructuring charges,
accretion of debentures and other income/expenses, and any other
items that the Corporation considers appropriate to adjust given
the irregular nature and relevance to comparable operations."
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. Investors should
be cautioned, however, that Adjusted EBITDA should not be construed
as an alternative to net income (loss) and comprehensive income
(loss) determined in accordance with IFRS as an indicator of the
Corporation's performance. The Corporation's method of calculating
Adjusted EBITDA may differ from that of other organizations and,
accordingly, its Adjusted EBITDA may not be comparable to that of
other companies.
|
|
Three months
ended
|
|
Six months
ended
|
|
June 30,
|
|
June 30,
|
|
(000's CAD
$)
|
2018
|
2017
|
%
Change
|
|
2018
|
2017
|
%
Change
|
|
Net loss
|
(1,421)
|
(976)
|
(46%)
|
|
(1,220)
|
(1,667)
|
27%
|
|
Depreciation
|
748
|
611
|
22%
|
|
1,532
|
1,245
|
23%
|
|
Interest on
Convertible Debenture
|
65
|
-
|
nm
|
|
130
|
-
|
nm
|
|
Gain from disposition
of property and equipment
|
(313)
|
-
|
nm
|
|
(313)
|
-
|
nm
|
|
Gain from equipment
lost in hole
|
-
|
-
|
nm
|
|
(635)
|
(30)
|
2,046%
|
|
Interest and other
income
|
(9)
|
(6)
|
51%
|
|
(27)
|
(13)
|
107%
|
|
Share based
payments
|
66
|
22
|
204%
|
|
147
|
54
|
174%
|
|
Transaction
costs
|
216
|
-
|
nm
|
|
493
|
-
|
nm
|
|
Foreign exchange
(gain) loss
|
6
|
(4)
|
(235%)
|
|
30
|
4
|
589%
|
|
Accretion of
debentures
|
23
|
-
|
nm
|
|
67
|
-
|
nm
|
|
Non-recurring
restructuring charges
|
-
|
-
|
nm
|
|
330
|
-
|
nm
|
|
Adjusted
EBITDA
|
(619)
|
(353)
|
(75%)
|
|
534
|
(407)
|
231%
|
|
nm - not
meaningful
|
|
|
|
|
|
|
|
|
(ii)
|
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
|
|
Six months
ended
|
|
June 30,
|
|
June 30,
|
|
(000's CAD
$)
|
2018
|
2017
|
%
Change
|
|
2018
|
2017
|
%
Change
|
|
Income (loss) from
operations
|
(283)
|
(329)
|
14%
|
|
1,298
|
(348)
|
473%
|
|
Depreciation
|
747
|
602
|
24%
|
|
1,530
|
1,225
|
25%
|
|
Gross
margin
|
464
|
273
|
70%
|
|
2,828
|
877
|
222%
|
|
Gross margin
%
|
23%
|
26%
|
(12%)
|
|
30%
|
34%
|
(12%)
|
|
nm - not
meaningful
|
|
|
|
|
|
|
|
FORWARD-LOOKING INFORMATION
Certain statements contained in this press release constitute
forward-looking statements or forward-looking information
(collectively, "forward-looking information"). Forward-looking
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.
This press release contains forward-looking information
pertaining to, among other things: the Corporation's 2018 capital
program, including the amount committed for rig upgrades; that
industry activity will remain challenged with similar activity
levels in the second half of 2018 as compared to 2017; the
Corporation's strategic plan, including with respect to asset
purchases; the expectation that the Corporation's strategic plans
of acquiring assets may provide a high rate of return for
shareholders; the Corporation's expectation to increase market
share of the horizontal and directional drilling rig segment; and
the Corporation's focus on reducing variable direct operating and
administrative expenses and creating shareholder value.
This forward-looking information involves material assumptions
and known and unknown risks and uncertainties and other factors,
certain of which are beyond the Corporation's control, that may
cause actual results or events to differ materially from those
anticipated in such forward-looking information. This press
release, the Corporation's management's discussion and analysis for
the three and six month periods ended June
30, 2018, the Corporation's annual information form for the
year ended December 31, 2017 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, which include, among other things,
anticipated financial performance; the implementation of the
Corporation's growth strategy; the ability to execute the
Corporation's 2018 capital program; business prospects; conditions
in general economic and financial markets; the ability to get
additional market share with the horizontal and directional
drilling segment; industry conditions; current commodity prices and
royalty regimes; regulatory developments; the impact of increasing
competition; future exchange rates; the availability and cost of
labour and services; the sufficiency of budgeted capital
expenditures in carrying out planned activities; timing and amount
of capital expenditures; the ability of the Corporation to renew
existing contracts and enter into new contracts; utilization and
pricing of the Corporation's systems and rigs; supply and demand
for oil and natural gas services relating to drilling and ancillary
services; effects of regulation by governmental agencies; tax laws;
future operating costs; and the ability to obtain financing on
acceptable terms, which are subject to change based on, amongst
other factors, commodity prices, market conditions and potential
timing delays. Although management of the Corporation considers
these assumptions to be reasonable based on information currently
available to it, such assumptions may prove to be incorrect.
Actual results, performance or achievements could differ material
from those expressed in, or implied by, 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.
Statements, including forward-looking information, are made as
of the date of this press release and the Corporation does not
undertake any obligation to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, except as may be required by applicable securities
laws. The forward-looking information contained in this press
release is expressly qualified by this cautionary statement.
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.