FORT ST. JOHN, BRITISH COLUMBIA--(Marketwired - May 28, 2014) - Macro Enterprises Inc. (TSX VENTURE:MCR) -
|Summary of financial results |
(thousands of dollars except per share amounts)
|Three months ended |
|Net earnings per share||$0.07||$0.40|
|Weighted average common shares outstanding (thousands) - basic|| |
Note 1 - References to EBITDA are to net income from continuing operations before interest, taxes, amortization and impairment charge. EBITDA is not an earnings measure recognized by International Financial Reporting Standards ("IFRS") and does not have a standardized meaning prescribed by IFRS. Management believes that EBITDA is an appropriate measure in evaluating the Company's performance. Readers are cautioned that EBITDA should not be construed as an alternative to net income (as determined under IFRS) as an indicator of financial performance or to cash flow from operating activities (as determined under IFRS) as a measure of liquidity and cash flow. The Company's method of calculating EBITDA may differ from the methods used by other issuers and, accordingly, the Company's EBITDA may not be comparable to similar measures used by other issuers.
- Revenue increased significantly to $87.8 million in first quarter 2014 from $60.1 million in first quarter 2013 due to increased pipeline and facility construction activity
- EBITDA and net income were lower than anticipated primarily as a result of a loss on one particular pipeline construction project in the Fort McMurray region. For strategic reasons this project was originally bid at lower than normal margins but the resulting loss was unexpected.
First quarter results
Macro Enterprises Inc. posted consolidated revenue of $87.8 million, a significant increase over last year's first quarter revenue of $60.1 million. This growth in revenue is partially attributable to two large big inch pipeline projects near Fort McMurray, Alberta.
Increased operating costs associated with one of the pipeline projects in Fort McMurray have resulted in lower than anticipated profits for the Company. For strategic reasons, Macro originally bid this job at low margins but unanticipated problems with this project resulted in a loss on the project of $6.9 million.
Macro has entered into discussions with the pipeline operator requesting additional compensation. Additional compensation, if any, will be recorded when such further compensation has been formally agreed to.
"While we are disappointed that we lost money on this particular job, it was an important strategic move for the Company to take on this project to be able to show the pipeline operator that we have the requisite experience to handle these projects," said Frank Miles, Chief Executive Officer. "We believe our customer was pleased with the quality of our work and that we will continue to work on significant projects for this operator."
General and administrative expenses in the quarter were $2.5 million, up from $2.2 million in the same period last year. Expenses were higher this year due mainly to additional staff costs.
Total amortization expense of $2.0 million increased by $0.2 million due to a greater amount of capital assets.
Interest expense of $0.2 million in the quarter was below the first quarter last year due to the conversion (into common shares) of the interest-bearing shareholder loan in June 2013.
Income tax expense in the quarter of $770,000 was at an effective tax rate of 26.3% which approximates the statutory rate.
Net income was $2.5 million ($0.08 per share) compared to $9.7 million ($0.40 per share).
Activity in the oil and gas industry in western Canada remains very active, particularly in the Peace River region and the Fort McMurray area. Macro is continuing to actively bid on numerous pipeline and facility construction projects in targeted regions of western Canada. However, due to the timing of our customers' projects, the Company is expecting revenues in the second quarter of fiscal 2014 to be below those recorded in second quarter of fiscal 2013.
In addition, the Company is seeking out pipeline construction contracts in connection with the Liquefied Natural Gas (LNG) projects being planned on the west coast of British Columbia, an industry that is anticipated to bring substantial economic activity to British Columbia over the next 30 years. Macro has entered into discussions with several of the LNG project owners regarding future pipeline and facilities construction.
Macro's core business is providing pipeline and facilities construction and maintenance services to major companies in the oil and gas industry. The Company is based in Fort St. John, B.C. Its shares are listed on the TSX Venture Exchange under the symbol MCR. Information on the Company's principal operating unit, Macro Industries Inc., can be found at www.macroindustries.ca.
The Company will host a conference call at 8 am PDT on Thursday, May 29, 2014 to discuss the 2014 first quarter results. The conference call can be accessed by dialing 1-888-390-0605 and referencing conference ID 57831328.
Forward Looking Statements
Certain statements in this news release may include forward-looking information that involves various risks and uncertainties. These may include, without limitation, statements regarding expected revenues, expenses and industry trends and the pursuit of strategic acquisitions. These risks and uncertainties include, but are not restricted to, global economic conditions, government regulation of energy and resource companies, seasonal weather patterns, maintaining and increasing market share, terrorist activity, the price and availability of alternative fuels, the availability of pipeline capacity, and potential instability or armed conflict in oil producing regions. These risks and uncertainties may cause actual results to differ from information contained herein. There can be no assurance that such forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These statements are based on the estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, the Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.
Neither 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.