Macro Enterprises Inc.
TSX VENTURE : MCR

Macro Enterprises Inc.

November 25, 2009 17:06 ET

Macro Enterprises Inc. Announces 2009 Third Quarter Results

FORT ST. JOHN, BRITISH COLUMBIA--(Marketwire - Nov. 25, 2009) - Macro Enterprises Inc. (TSX VENTURE:MCR) -

  Summary of financial results 
  (thousands of dollars except per share amounts) 
  Three months ended
September 30
  Nine months ended
September 30
 
  2009  2008  2009  2008 
  (unaudited) 
             
Revenues$3,131 $11,349  $42,199 $47,725 
             
EBITDA1 (994)  221  4,072  (594) 
             
Net earnings (loss) from continuing operations (1,555)  (881)  346  (3,460) 
             
Net loss from discontinued operations (9)  (151)  (362)  (426) 
             
Net earnings (loss) per share from continuing operations($ 0.08) ($ 0.04) $0.00 ($ 0.16) 
             
Net loss per share from discontinued operations ($ 0.00) ($ 0.01) ($ 0.02) ($ 0.03) 
             
Weighted average common shares outstanding (thousands)  

  

  
22,268
  
22,117
 

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 GAAP and does not have a standardized meaning prescribed by GAAP. 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 GAAP) as an indicator of financial performance or to cash flow from operating activities (as determined under GAAP) 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.

Highlights

  • Revenue was down substantially in the third quarter of this year, compared to the same period last year, due to lower levels of activity from several customers and increased competition. On a year-to-date basis, revenue of $42.2 million was 12% less than the same period last year.
  • The Company's financial position remains strong, with $4.4 million of cash and no operating loan at quarter end. In addition, since December 31, 2008, the Company has repaid $1.9 million of long-term debt. Total long-term debt, including current portion, was $5.8 million at September 30, 2009.

Third quarter results

Consolidated revenue was $3.1 million compared to $11.3 million in the third quarter last year. Activity in the third quarter this year decreased substantially from last year due to the overall slowdown in oil and gas activity and increased competition.

Direct costs were 96.7% of revenue in the quarter compared to 81.8% in the same quarter last year. A portion of the direct costs are fixed in nature, and with the substantially lower revenue levels, a greater proportion of revenue is consumed by these costs.

General and administrative expenses were $1.1 million, down from the $1.7 million recorded last year. The Company has reduced costs and reduced staffing levels in response to the lower revenue levels. Also, last year's amount included one-time severance costs which did not occur this year.

Total amortization expense was $0.9 million compared to $1.2 million in the third quarter last year. Amortization expense was lower due to reduced levels of fixed asset additions in the prior year and the goodwill and intangible asset impairment charge taken in the fourth quarter of last year.

Interest expense of $0.2 million was below the $0.3 million last year as there was no operating debt during the third quarter this year, due to improved results in the first half of the year.

Net loss from continuing operations was $1.6 million (a loss of $0.08 per share) compared to a loss from continuing operations last year of $0.9 million (a loss of $0.04 per share).

Discontinued operations

The loss from Access Manufacturing, a business that the Company has classified as discontinued, was $9,000 in the quarter compared to a loss of $0.1 million (a loss of $0.01 per share) in the same quarter last year.

As reported in the Company's 2009 first and second quarter results, effective May 15, 2009, the Company sold most of the inventory and fixed assets of Access for gross proceeds of $750,000. The Company is not expecting any significant additional gain or loss from discontinued operations.

Outlook

The demand for oilfield services in Western Canada continues to be weak due to several factors, including the economic slowdown, low natural gas prices and balance sheet issues in users of oilfield services. However, the Company is encouraged by the recent strong sale of B.C. oil and gas rights. The Company is maintaining a strong balance sheet in order to position itself for future growth.

The Company is expecting revenue in the balance of 2009 to be below the levels of the prior year. The Company continues to reduce capital expenditures and operating costs where possible.

Macro's core business is providing pipeline and facilities construction and maintenance services to major companies in the oil and gas industry in northeastern B.C. and northwestern Alberta. The Company's corporate office is in Calgary, Alberta. 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.

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. For a more detailed description of these risks and uncertainties, please see the section "Risk Factors" in the Company's Annual Information Form for the year ended December 31, 2008 available on SEDAR at www.sedar.com. 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.

Contact Information

  • Macro Enterprises Inc.
    Frank Miles
    President and C.E.O.
    (250) 785-0033
    or
    Macro Enterprises Inc.
    T. Jerrold Jackson
    C.F.O.
    (403) 705-7302
    www.macroindustries.ca