Cabo Drilling Corp.
TSX VENTURE : CBE

Cabo Drilling Corp.

December 01, 2008 09:00 ET

Cabo Announces Record Quarterly Results

NORTH VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 1, 2008) - Cabo Drilling Corp. ("Cabo" or the "Company") (TSX VENTURE:CBE) today reported results for its fiscal year 2009 first quarter ended September 30, 2008.



1st QUARTER HIGHLIGHTS
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(CDN $000s, except earnings Q1 - 09 Q1 - 08 FY 2008
per share) Sept. 30 Sept. 30 June 30
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Revenue 16,617 14,339 58,645
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Earnings (Loss) Before Interest,
Taxes, Amortization, Stock
Based Compensation and Other
Items (EBITDA) 2,504 2,349 6,764
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Net Earnings (Loss) Before
Taxes 1,695 1,759 3,951
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Net Earnings (Loss) After
Taxes 1,090 1,084 3,203
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Earnings (Loss) per Share ($)
(Basic and Diluted) Before
Interest, Taxes, Amortization,
Stock-based Compensation and
Other Items (EBITDA) 0.05 0.05 0.15
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Earnings (Loss) per Share ($)
(Basic and Diluted) 0.02 0.03 0.07
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Cash from Operations(i) 1,821 1,572 2,665
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Gross Margin % 26.0% 26.1% 24.6%
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Working Capital (deficiency) 7,716 6,225 3,272
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(i) before changes in non-cash working capital items


"Cabo recorded its highest ever quarterly revenues for the first quarter fiscal 2009 of $16.62 million compared to our previous high of $16.04 million recorded in the second quarter of fiscal 2008," said John A. Versfelt, President and CEO of Cabo Drilling Corp. "This also represents a 16% increase from the $14.34 million recorded during the first quarter of fiscal 2008. Our international division recorded 27% of the revenues compared to 5% in the first quarter of fiscal 2008 and 19% recorded during fiscal 2008."

"The Company recorded a net income of $1.09 million during the 1st quarter of fiscal 2009 or $0.02 earnings per share compared $1.08 million or $0.03 earnings per share in the 1st quarter of fiscal 2008," noted John A. Versfelt. "EBITDA increased 6.4% to $2.50 million during the first quarter of fiscal 2009, compared to $2.35 million in the previous corresponding period. While these are good results, we are evaluating all cost areas, particularly general and administrative costs, to improve the bottom line even though gross revenues in the coming quarters are expected to be lower."

"We were able to react quickly to the dramatic economic downturn, requiring all of the Cabo divisions to re-evaluate and revise fiscal budgets, as well as implement cost reductions. Salaries, wages and consulting fees have been frozen until further notice. In addition senior management volunteered to take salary cuts," said Mr. Versfelt. "Administration, warehouse and maintenance staff levels were reduced by 25% and a number of general administrative and operating cost reduction measures were taken. As a result of the Company's cost reduction measures, the Company negotiated the return of inventories for credit against accounts payable that should total approximately $1,000,000. We are focused on maintaining and increasing cash flow, tightly managing our inventories and continuing to add to our base of mid-tier and larger capitalized exploration and mining customers with good working capital."

First quarter ended September 30, 2008

Revenue for the quarter ending September 30, 2008 increased 16% to $16.62 million, compared to $14.34 million in the first quarter of fiscal 2008 and 14% compared to the $14.63 million recorded in the fourth quarter of fiscal 2008. The increase can be attributed primarily to significant growth from our international divisions. Revenues from our international divisions represent 27% of first quarter fiscal 2009 revenues as compared to 5 % in the first quarter of fiscal 2008 and 20% in the fourth quarter of fiscal 2008. Management expects international operations to contribute a growing percentage of the Company's total revenue stream as the Albanian division, Balkan States Drilling SH.P.K., begins operations in the second quarter of fiscal 2009.

Direct costs for the quarter ended September 30, 2008 were $12.29 million compared to $10.60 million in the first quarter of fiscal 2008 and $11.72 million in the fourth quarter of fiscal 2008. The increase is a direct result of higher activity, which resulted in higher revenue in fiscal 2008. Gross margins for the quarter ended September 30, 2008 were 26.0% compared to 26.1% during the first quarter of fiscal 2008 and 20.0% in the fourth quarter of the fiscal year 2008. The Company recorded higher gross margins in most divisions during the first quarter of fiscal 2009, but experienced higher costs in the Pacific, United States and Mexico divisions. The lower margins experienced by our Mexico division are a direct result of decreased drill utilization in Mexico during the first quarter of fiscal 2009, as compared to the first quarter of fiscal 2008.

General and administrative expenses decreased by approximately 28.0% or $709 thousand from $2.50 million in the fourth quarter fiscal 2008 to $1.79 million in the first quarter of fiscal 2009. Compared to $1.36 million recorded in the first quarter of fiscal 2008 there was an increase of $160 thousand (10%) in general and administrative expenses. At 10.9%, as a percentage of revenue in fiscal 2008, general and administration costs have increased marginally on a pro-rata quarter to quarter comparison but lower than the 12.4% recorded on an annual basis in fiscal 2008.

To view the Company's complete news release, MD&A, and financial statements please visit the company's website at www.cabo.ca or SEDAR (www.sedar.com).

About Cabo Drilling Corp. (TSX VENTURE:CBE)

Cabo Drilling Corp. is a drilling services company headquartered in North Vancouver, British Columbia, Canada. The Company provides mining related and specialty drilling services through its Canadian divisions in Surrey, British Columbia; Montreal, Quebec; Kirkland Lake, Ontario; and Springdale, Newfoundland; as well as Cabo Drilling de Mexico S.A. de C.V. of Hermosillo, Mexico; Cabo Drilling (Panama) Corp. of Panama, Republic of Panama; Cabo

Drilling Spain S.L. of Sevilla, Spain; Balkan States Drilling SH.P.K. of Tirana, Albania; and Cabo Drilling (International) Inc. The Company's common shares trade on the Frankfurt Exchange under the symbol: DHL and on the TSX Venture Exchange under the symbol: CBE.

ON BEHALF OF THE BOARD

John A. Versfelt, Chairman, President and CEO

Further information about the Company can be found on SEDAR (www.sedar.com).

This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, potential mineral recovery processes and other business transactions timing. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

Cabo Drilling Corp. was recognized as a TSX Venture 50™ company in 2008. TSX Venture 50 is a trade-mark of TSX Inc. and is used under license.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Cabo Drilling Corp.
    Sheri Barton
    Investor Relations
    (403) 217-5830
    or
    Cabo Drilling Corp.
    Mr. John A. Versfelt
    Chairman, President & CEO
    (604) 984-8894
    Email: ir@cabo.ca
    Website: www.cabo.ca