Gibson Energy Inc. Reports Third Quarter 2013 Financial Results

Marketwired

CALGARY, ALBERTA--(Marketwired - Nov 5, 2013) -

All financial figures are in Canadian dollars unless otherwise stated.

Gibson Energy Inc. ("Gibson" or the "Company") (GEI.TO), announced today results for the third quarter of 2013.

Highlights:

  • Adjusted EBITDA1 in the three months ended September 30, 2013 increased 44% to $103.5 million compared to $72.1 million in the three months ended September 30, 2012. Pro Forma Adjusted EBITDA2 for the twelve months ended September 30, 2013 was $412.0 million;

  • Segment profit3 increased by 38% to $117.1 million in the three months ended September 30, 2013 compared to $84.7 million in the three months ended September 30, 2012 largely due to increases in the Environmental Services, Terminals and Pipelines and Propane segments;

  • During the three months ended September 30, 2013, the Company commissioned two 300,000 barrel crude oil storage tanks on the west side of the Hardisty Terminal;

  • In July 2013, the Company signed a long-term contract with Statoil Canada Ltd. to build infrastructure and provide terminalling services at its Edmonton Terminal;

  • In early August 2013, the Company announced that it had partnered with US Development Group LLC. ('USDG") to construct a new state-of-the-art crude oil unit train rail loading facility near Hardisty, Alberta, with pipeline connectivity from Gibson's Hardisty Terminal. The crude oil unit train initiative is underpinned by long-term customer commitments. The Company will install required pumping equipment and construct a pipeline for the transfer of crude from its Hardisty Terminal and will be the exclusive provider of crude oil to the USDG crude-by-rail facility;

  • On November 5, 2013, the Company declared a quarterly dividend of $0.275 cents per common share to shareholders of record at the close of business on December 31, 2013 that is payable on January 17, 2014; and

  • For the twelve months ended September 30, 2013, distributable cash flow was $272.7 million resulting in a dividend payout ratio of 48%.

"These results represent record third quarter Adjusted EBITDA for the Company. The 44% increase in our third quarter performance versus the same quarter last year was largely a result of the OMNI acquisition in 2012 as well as the growth capital invested in terminal infrastructure and strong propane margins," said Stewart Hanlon, Gibson's President and Chief Executive Officer. "2013 is shaping up to be another successful year for the company when you consider the long-term infrastructure contracts we have signed with large customers, the solid performance of our business segments and the completed integration of OMNI. We continue to expand our integrated services platform in a purposeful and meaningful way which will set us up for an exciting 2014 and beyond."

Other Highlights for the Three and Nine Months ended September 30, 2013:

  • Cash provided by operations in the three and nine months ended September 30, 2013 was $78.3 million and $246.8 million, respectively, compared to $62.9 million and $183.7 million in the three and nine months ended September 30, 2012, respectively. The increase was primarily attributable to an increase in overall segment profitability in the three and nine months ended September 30, 2013 compared to the three and nine months ended September 30, 2012;

  • Capital expenditures were $170.3 million in the nine months ended September 30, 2013, of which $122.1 million related to growth capital. Growth capital expenditures are primarily related to the construction of tanks and pipeline connections at the Company's facilities, in particular at Hardisty and new facility construction in the Environmental Services segment; and

  • The Company declared a dividend of $0.275 per common share in each of the first three quarters of 2013 for total dividends of $33.5 million in the three months ended September 30, 2013 and $100.1 million in the nine months ended September 30, 2013.

Management's Discussion and Analysis and Financial Statements

The Management's Discussion and Analysis and the Condensed Consolidated Financial Statements provide a detailed explanation of Gibson's operating results for the three and nine months ended September 30, 2013 as compared to the three and nine months ended September 30, 2012. These documents are available at www.gibsons.com and at www.sedar.com.

2013 Third Quarter Results Conference Call

A conference call to discuss Gibson's third quarter will be held at 7:00 a.m. MT (9:00 a.m. ET) on Wednesday, November 6, 2013 for interested investors, analysts and media representatives.

The conference call dial-in numbers are:

  • 866-696-5910 from Canada and the US
  • 416-340-2217 from Toronto and International
  • Participant Pass Code: 7015666#

Shortly after the call, an audio archive will be posted on the Investor Relations and Media section at http://www.gibsons.com.

The call will also be recorded and available for playback 60 minutes after the meeting end time, until March 5, 2014, using the following dial in process:

  • 905-694-9451 / 800-408-3053
  • Pass Code: 793281#

About Gibson

Gibson is a large, independent midstream energy company in Canada and an integrated service provider to the oil and gas industry in the United States. Gibson is engaged in the movement, storage, blending, processing, marketing and distribution of crude oil, condensate, natural gas liquids, water, oilfield waste and refined products. Gibson transports energy products by utilizing its network of terminals, pipelines, storage tanks, and trucks located throughout western Canada and through its significant truck transportation and injection station network in the United States. Gibson also provides emulsion treating, water disposal and oilfield waste management services in Canada and the United States and is the second largest retail propane distribution company in Canada.

Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking information and statements (collectively, "forward-looking statements"). These statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "plan", "contemplate", "continue", "estimate", "expect", "intend", "propose", "might", "may", "will", "shall", "project", "should", "could", "would", "believe", "predict", "forecast", "pursue", "potential" and "capable" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These statements speak only as of the date of this news release. In addition, this news release may contain forward-looking statements and forward-looking information attributed to third party industry sources. The Company does not undertake any obligations to publicly update or revise any forward looking statements except as required by securities law. Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks and uncertainties including, but not limited to, the risks and uncertainties described in "Forward-Looking Statements" and "Risk Factors" included in the Company's Annual Information Form dated March 5, 2013 as filed on SEDAR and available on the Gibson website at www.gibsons.com.

This news release refers to certain financial measures that are not determined in accordance with International Financial Reporting Standards ("IFRS"). Adjusted EBITDA and Pro Forma Adjusted EBITDA are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. Management considers these to be important supplemental measures of the Company's performance and believes these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in its industries with similar capital structures. See "Summary of Quarterly Results" in the Company's MD&A for a reconciliation of EBITDA to net income (loss), the IFRS measure most directly comparable to EBITDA, and for a reconciliation of Adjusted EBITDA and Pro Forma Adjusted EBITDA to EBITDA. Distributable cash flow is used to assess the level of cash flow generated from ongoing operations and to evaluate the adequacy of internally generated cash flow to fund dividends. See "Distributable Cash Flow" in the Company's MD&A for a reconciliation of distributable cash flow to cash flow from operations, the IFRS measure most directly comparable to distributable cash flow. Investors are encouraged to evaluate each adjustment and the reasons the Company considers it appropriate for supplemental analysis. Investors are cautioned, however, that these measures should not be construed as an alternative to net income (loss) determined in accordance with IFRS as an indication of the Company's performance.

1. Adjusted EBITDA is defined as net income (loss) before interest expense, income taxes, depreciation, amortization, other non-cash expenses and charges deducted in determining consolidated net income (loss), including movement in the unrealized gains and losses on the Company's financial instruments, stock based compensation expense, impairment of goodwill and intangible assets, and non-cash inventory or asset impairment changes. It also takes into account the impact of foreign exchange movements in the Company's U.S. dollar denominated long-term debt, management fees, debt extinguishment expense and other adjustments that are considered non-recurring in nature.
2. Includes pro forma effect of acquisitions that took place in the twelve month period as if the acquisitions took place at the beginning of the twelve month period in which the acquisition occurred.
3. Segment profit is defined as revenue minus (i) cost of sales; and (ii) operating costs. It excludes depreciation, amortization, impairment charges, stock based compensation and corporate expenses.
Third Quarter- Selected Financial Highlights
Three months ended Sept 30 Nine months ended Sept 30
2013 2012 2013 2012
(in thousands)
Segment Profit:
Terminals and Pipelines $25,806 $19,545 $70,548 $58,900
Truck Transportation 22,834 23,553 61,509 63,865
Environmental Services 24,335 1,836 60,530 5,504
Propane and NGL Marketing and Distribution 13,146 7,866 39,073 28,785
Processing and Wellsite Fluids 12,089 17,470 35,108 29,936
Marketing 18,845 14,454 66,271 40,819
Total Segment Profit 117,055 84,724 333,039 227,809
Statement of Cash Flows Data:
Cash flows provided by (used in):
Operating Activities $78,292 $62,941 $246,779 $183,696
Investing Activities (72,360) (67,372) (155,628) (145,892)
Financing Activities (25,015) (9,053) (41,704) (61,684)
Other Financial Data:
Capital Expenditures:
Growth Capital $55,733 $26,241 $122,130 $92,258
Upgrade and Replacement Capital 19,315 21,274 48,166 43,130
Acquisitions - 7,552 - 12,302
Adjusted EBITDA $103,533 $72,109 $311,753 $205,942

Twelve months ended Sept 30, 2013
Pro Forma Adjusted EBITDA $411,958
Contact:
Gibson Energy Inc.
Ken Hall
Vice President Investor Relations and Communications
(403) 781-2899
ken.hall@gibsons.com
www.gibsons.com

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