Cordy Oilfield Services Inc.

Cordy Oilfield Services Inc.

November 14, 2007 17:30 ET

Cordy Announces Third Quarter Results

CALGARY, ALBERTA--(Marketwire - Nov. 14, 2007) - Cordy Oilfield Services Inc. ("Cordy" and or the "Company") (TSX VENTURE:CKK) announces its consolidated operating and financial results for the three and nine month periods ended September 30, 2007 with comparisons to the same period last year.


Selected Quarterly Information Three months ended Nine months ended
September 30 September 30
($ millions, except
share amounts) 2007 2006 Change 2007 2006 Change
Revenue 36.8 31.1 5.7 98.3 57.6 40.7
Operating income 1.7 2.3 (0.6) 3.8 2.6 1.2
Net earnings 1.3 1.7 (0.4) 2.4 2.3 0.1
EBITDA (1) 6.1 5.9 0.2 15.7 9.2 6.5
EBITDAS (2) 6.6 6.6 (0.0) 17.1 10.9 6.2

Earnings per share - basic 0.02 0.02 (0.00) 0.03 0.04 (0.01)
Total assets, as at
September 30th 158.9 163.8 (4.9) 158.9 163.8 (4.9)

Cash and equivalents, as at
Sept.30th 16.2 36.8 (20.6) 16.2 36.8 (20.6)
Shareholders' equity, as at
Sept.30th 105.5 97.6 7.9 105.5 97.6 7.9

(1) EBITDA, a non-GAAP measure, is defined by Cordy as earnings before
interest, taxes, depreciation and amortization.
(2) EBITDAS, a non-GAAP measure, is defined by Cordy as earnings before
interest, taxes, depreciation, amortization and stock-based

David Mullen, Cordy's Chief Executive Officer, announces the financial performance of Cordy and advises that the structured diversification within Cordy has produced positive results stating, "The financial results are encouraging in an economy that has seen slower levels of business activity. Our degree of diversification provides protection from the uncertain impacts of the cycles and abrupt changes in the oil and gas sector that we are now experiencing. With our diversification in the construction, pipeline & facilities, manufacturing and environmental segments, our strong Balance Sheet and numerous available opportunities, we believe we are in a position to succeed in a slower economy. "


Consolidated revenues for the nine months to September 30, 2007 were $98.3 million, an increase of $40.7 million from $57.6 million in 2006. The three months' revenue followed a similar trend of increasing over 2006. The increase in revenue period over period is partially attributable to the inclusion of the operations of all ten acquisitions for the full nine months in 2007 and the increased volume of business in the construction segment.

Consolidated net income for the nine months was $2.4 million, up $0.1 million from $2.3 million in 2006. The increase is directly attributed to the income generated from the ten acquisitions for a full nine months in 2007 and by increased profitability in the pipeline & facilities and environmental segments.

Consolidated EBITDAS for the three months ended September 30, 2007 was $6.6 million and for the nine months was $17.1 million which is encouraging in a slower economy.


The consolidated cash resources of the Company at September 30, 2007 were $14.0 million compared to consolidated cash of $35.7 million at December 31, 2006, a decrease of $21.7 million. The decrease in cash partially results from the repayments of debentures in September of $16.7 million, the $3.1 million spent on the acquisition of Bry-Don and the acquisition of equipment.

The Company has $26.1 million of consolidated long-term debt and capital leases (including current portion) at September 30, 2007 as compared to $41.7 million at June 30, 2007. The decrease reflects the repayment of $16.7 million of the debentures as previously mentioned. The consolidated net working capital at September 30, 2007 was $20.6 million and at June 30, 2007 was $19.5 million.

At September 30, 2007, the Company had operating lines of credit totaling $9.9 million, of which $2.2 million was drawn and term loans payable on demand of $3.8 million.


In spite of the uncertainty that surrounds the oil and gas markets with low natural gas prices and declines in the Canadian rig counts, Cordy remains positive about its own operations. If the weather remains cooperative, the Heavy Construction segment should be active for the remainder of 2007 and into 2008 with major contracts in place. The Pipeline and Facilities segment is active in Q4 and should be active in Q1 of 2008 with the agreements it has secured to date. The Environmental Services segment should continue with strong results as the major component of this segment is less dependent upon oil and gas drilling. The Manufacturing and Supply segment is anticipating an active Q4 and Q1 of 2008 with no significant impact from the slump in the oil and gas sector.

Cordy intends to continue its strategy of growth through acquisition and organic growth within its existing subsidiaries. Cordy's management believes that Cordy is well positioned to expand due to a strong financial position and the capital being generated by its subsidiaries. The changes to the taxing of income trusts should result in both a softening of purchase prices for potential acquisitions and fewer competing potential purchasers resulting in additional opportunities for Cordy.

Cordy management will continue to construct efficiencies in relation to its ten business units while proceeding with expansions and new acquisitions. The future of the Alberta oil and gas industry is strong regardless of the softening of market conditions from time to time. Cordy management remains confident in the growth of their businesses in Northern Alberta. Cordy will continue to spread its focus to the infrastructure build out in Alberta and S. E. British Columbia along with the opportunities presented by the Bear Dog partnership in N.W. British Columbia. The Bear Dog partnership includes the recently opened camp facility at Bob Quinn Lake ( Recently incorporated Bear Dog Mining Services Ltd. will focus on providing construction and related services to the mining, pipeline, power transmission and infrastructure projects being performed in the First Nations' traditional territories in N.W. British Columbia.


Cordy presently consists of ten wholly-owned operating subsidiaries, CSC Ltd. ("CSC"), Mesken Contracting Limited ("Mesken"), New West Pipelines Ltd. ("NWP"), Coverall Pipeline Construction Ltd. ("Coverall"), Nohels Group Inc. ("Nohels"), Top-Notch Oilfield Services Inc. ("Top-Notch"), Sphere Drilling Fluids Ltd. ("Sphere"), Hartwell Oilfield, Battle River Oilfield Construction Ltd. ("Battle River") and Lamont Bit Services Ltd. ("Lamont"), each operating as a separate business accountable for its own profitability and performance. The operating businesses provide specialized services that include: small diameter pipeline and facilities construction, oilfield site preparation and reclamation, highway and subdivision construction, environmental services and drilling solutions. The Company provides management and financial expertise, capital resources and strategic planning to enable its subsidiaries to expand and increase profits.

This press release may contain forward-looking statements including expectations of future cash flow and earnings. These statements are based on current expectations that involve a number of risks and uncertainties which could cause actual results to differ from those anticipated. These risks include, but are not limited to: risks associated with the oilfield services sector (e.g. demand, pricing and terms for oilfield services; current and expected oil and gas prices; exploration and development costs and delays; reserves discovery rates; pipeline and transportation capacity; weather, health, safety and environmental risks), integration of acquisitions, competition, and uncertainties resulting from potential delays or changes in plans with respect to acquisitions, development projects or equipment expenditures. Additional information on these and other factors that could affect the Company's operations or financial results are included in the Company's documentation and filings with Canadian securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this press release. The Company does not assume any obligation to update these forward-looking statements, except as required by law.

Additional information on Cordy is available on our website or on SEDAR at

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

Contact Information

  • For general information:
    Cordy Oilfield Services Inc.
    David Mullen, Chairman and CEO
    (403) 266-2067
    (403) 266-2087 (FAX)
    For investor relations information:
    Cordy Oilfield Services Inc.
    David Orr, Senior Vice President
    (403) 266-2067
    (403) 266-2087 (FAX)