CALGARY, ALBERTA--(Marketwired - May 27, 2013) - ENSECO ENERGY SERVICES CORP. ("Enseco" or the "Company") (TSX VENTURE:ENS) is pleased to announce its financial results for the three months ended March 31, 2013.
|RESULTS FROM OPERATIONS |
|($ thousands, except per share amounts)||Three months ended March 31|
|Adjusted gross margin 1||$||5,322||$||9,039|
|Net income (loss) before tax||$||(259)||$||2,373|
|Per common share - basic||$||(0.01)||$||0.12|
|Per common share - diluted||$||(0.01)||$||0.11|
|Net income (loss)||$||(401)||$||2,282|
|Per common share - basic||$||(0.02)||$||0.11|
|Per common share - diluted||$||(0.02)||$||0.10|
|Cash flow before changes in non-cash working capital 1||$||1,427||$||4,446|
|Cash flow from (used in) operating activities||$||3,801||$||3,221|
|1 See definition within the Non-IFRS Measures below|
HIGHLIGHTS FOR THE THREE MONTHS ENDED MARCH 31, 2013
Enseco achieved the following results for the three months ended March 31, 2013
- Enseco's motor repair facility met all Q1 operating expectations, substantially reducing repair costs as anticipated. The engineering improvements and reductions in rebuild times now available through the motor repair facility, are expected to keep the Company's rental requirements and repair costs low even as activity grows.
- Enseco finalized the manufacturing of its own internal MWD platform with high temperature capabilities.
- Enseco's Electromagnetic Measurement ("EM") tools ran flawlessly with 100 per cent reliability throughout the quarter.
- Enseco's Production Testing division has successfully met emerging technology shifts to successfully transition itself for increasingly complex frac flowback programs.
Sales personnel that have been added to all divisions are gaining momentum and increased sales revenue is expected in the upcoming months.
Enseco continues to develop strategies for the growth of all of its four divisions, balancing directional drilling and production testing revenues as well as USA and Canadian revenues to provide maximum utilization of its resources.
Management's focus continues to be on improving service delivery, cost management and improving utilization and sales.
Our USA Production Testing safety and service quality have resulted in a 2 year extension of a work contract from a major client.
Management believes that activity levels in Canada will continue to be constrained throughout much of 2013 but are cautiously optimistic with their efforts to improve the adjusted gross margin and EBITDAS through continued engineering enhancements, internal repairs, and reduction of reliance on rental equipment.
Enseco has filed with Canadian securities regulatory authorities its unaudited interim condensed consolidated financial statements for the three months ending March 31, 2013 and accompanying management's 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 DISCLAIMER
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; plans to improve service delivery; expectations regarding future rental and repair costs; the benefits to be achieved from Enseco's products and services; expectations regarding future revenues, cash flow, gross margins, EBITDAS, cost management and other financial results; plans to increase the Company's sales presence; plans to improve utilization rates and demand for the Company's services; future geographic and product focus; and statements as to future economic, industry and operating conditions. 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 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 labour, 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.
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.