Cordy Oilfield Services Inc.

TSX VENTURE : CKK


Cordy Oilfield Services Inc.

May 21, 2014 19:41 ET

Cordy Oilfield Services Inc. Reports First Quarter Results

CALGARY, ALBERTA--(Marketwired - May 21, 2014) - CORDY OILFIELD SERVICES INC. (the "Corporation" or "Cordy") (TSX VENTURE:CKK) released today its first quarter results for the period ending March 31, 2014.

For the period ended March 31, 2014

Cordy's first quarter of 2014 was impacted by customer delays in obtaining permits as well as delays in the start of new projects. Cordy's consolidated revenues decreased by $8.3 million or 22 percent to $29.9 million as compared to consolidated revenues of $38.2 million in the period ended March 31, 2013. The period over period decrease in consolidated revenue was largely attributable to declining revenues experienced in the Heavy Construction segment and Environmental Services segment as compared to the same period in 2013. This was somewhat offset by the increase in revenue in the Manufacturing and Supply segment in the first quarter of 2014 as compared to the same period in 2013.

Effective January 1, 2014, Cordy amalgamated its Pipeline and Facilities segment into its Heavy Construction segment. As a result, Cordy now operates in three segments, being Heavy Construction, Environmental Services and Manufacturing and Supply. The 2013 comparative segmented information for the Heavy Construction segment has been restated to include the results previously presented as Pipeline and Facilities. Results for Cordy by segment are as follows:

  • Heavy Construction segment revenues decreased 21 percent and net earnings decreased 107 percent in the first quarter of 2014 versus 2013. Operations in the oil sands region, pipeline construction and the mining sector were slower due to customer delays, partially offset by increased activity in the natural gas sector.

  • Environmental Services segment revenues decreased 32 percent and net earnings declined 67 percent in the first quarter of 2014 versus 2013 due to reduced activity in the oil sands region as customer demand decreased and projects were delayed.

  • Manufacturing and Supply segment revenues increased 9 percent and net earnings increased 200 percent in the first quarter of 2014 versus 2013. In 2014, the segment continued to focus on PDC drill-bit sales which helped to increase revenues.

For the period ended March 31, 2014, the Corporation had EBITDAS of $0.8 million as compared to $5.9 million in the period ended March 31, 2013, which amounts to a decrease of $5.1 million or 86 percent. By segment, the Corporation's EBITDAS were as follows:

  • The Heavy Construction segment EBITDAS declined by $2.9 million to $0.5 million, primarily as a result of decreased customer demand and delayed projects in the mining sector and oil sands region.

  • The Environmental Services segment EBITDAS declined by $2.4 million to $1.1 million in 2014 versus 2013, due to the loss of a customer and project delays in the oil sands region.

  • The Manufacturing and Supply segment had a positive impact on EBITDAS of $0.2 million in 2014, an improvement from EBITDAS of $nil in the first quarter of 2013.

The Corporation reported a net loss of million from net earnings of $2.7 million

$0.7 million for the three months ended March 31, 2014, a decrease of $3.4 for the three months ended March 31, 2013.

Three month periods ended March 31,
($ millions except share price and per share amounts) 2014 2013 Change ($)
FINANCIAL RESULTS
Revenue 29.9 38.2 (8.3 )
EBITDAS1 0.8 5.9 (5.1 )
Net earnings (loss) and total comprehensive income (loss) (0.7 ) 2.7 (3.4 )
Cash flow s generated from (used in) operating activities (3.4 ) (1.1 ) (2.3 )
SHARE INFORMATION
Earnings per share ($) (0.01 ) 0.03 (0.04 )
1 Earnings before interest, taxes, depreciation, amortization, impairment and share-based payments (see reader advisory)
Three month periods ended March 31,
($ millions) 2014 2013 Change ($)
SEGMENT RESULTS
Revenue
Heavy Construction2 17.0 21.4 (4.4 )
Environmental Services 9.1 13.3 (4.2 )
Manufacturing and Supply 3.8 3.5 0.3
Total 29.9 38.2 (8.3 )
EBITDAS1
Heavy Construction2 0.5 3.4 (2.9 )
Environmental Services 1.1 3.5 (2.4 )
Manufacturing and Supply 0.2 - 0.2
Corporate (1.0 ) (1.0 ) -
Total 0.8 5.9 (5.1 )
1 Earnings before interest, taxes, depreciation, amortization, impairment and share-based payments (see reader advisory).
2 The 2013 comparative segmented information for the Heavy Construction segment has been restated to include the results previously presented as Pipeline and Facilities.

OUTLOOK

The Corporation is dependent, to a degree, on the overall health of western Canada's oil, natural gas, and mining sectors. The prospects for the oil sands region are still anticipated to be the primary driver of potential growth for our Heavy Construction and Environmental Services segments. We anticipate this growth will be slower in the first half of 2014 until customers begin to fully ramp-up their projects in the latter part of 2014. Any significant growth will be dependent upon winning new customers or new projects from existing customers in 2014. Cordy expects that drilling activity in western Canada will be the primary driver of business in Cordy's Manufacturing and Supply segment throughout 2014. Cordy anticipates expanding sales of its PDC drill bits in both North America and select international locations.

Generally, these sectors have projected reduced capital expenditure budgets for 2014 and have delayed projects. These factors imply that our industry remains highly competitive with few opportunities to realize pricing gains in 2014.

Complete copies of Cordy's unaudited interim condensed consolidated financial statements for the quarter ended March 31, 2014 and the associated Management's Discussion and Analysis are available on our website www.cordy.ca or on SEDAR at www.sedar.com.

Neither the 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.

READER ADVISORY

Effective January 1, 2011, Cordy began reporting its financial results in accordance with International Financial Reporting Standards (IFRS). Prior-year's com- parative amounts were changed to reflect results as if Cordy had always prepared its financial results using IFRS.

This News Release contains certain statements that constitute forward-looking statements. These statements relate to future events or the Corporation's future performance. All statements, other than statements of historical fact, that address activities, events or developments that the Corporation or a third party ex- pects or anticipates will or may occur in the future, are forward-looking statements. These include the Corporation's future growth, results of operations, per- formance and business prospects and opportunities; prevailing economic conditions; commodity prices; sourcing, pricing and availability of raw materials, components and parts, equipment, suppliers, facilities and skilled personnel; dependence on major customers; uncertainties in weather and temperature affecting the duration of the service periods and the activities that can be completed; regional competition; and other factors, many of which are beyond the Corporation's control. These other factors include future prices of oil and natural gas and oil and natural gas industry activity, including the effect of changes in commodity prices on oil and natural gas exploration and development activity, the ability to complete strategic acquisitions and realize the anticipated benefits of any acquisitions that are completed, the Corporation's outlook regarding the competitive environment it operates in, and the assumptions underlying any of the foregoing. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the Corporation's control, including those discussed under "Risks and Uncertainties" and elsewhere in this News Release, that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes that the expectations reflected in those forward-looking statements are reasonable, but 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. The Corporation does not intend, and does not assume any obligation, to update these forward- looking statements, whether as a result of new information, future events or otherwise, except as required under applicable securities laws. The forward- looking statements contained in this News Release are expressly qualified by this cautionary statement.

Cordy uses the measures Earnings Before Interest, Taxes, Depreciation, Amortization and Impairment and Share Based Compensation (EBITDAS) in this news release. This measure does not have any standardized meaning prescribed by International Financial Reporting Standards (IFRS). It is, therefore, con- sidered to be non-IFRS term and may not be comparable to similar measures presented by other entities. Management of Cordy uses these non-IFRS measures to improve its ability to compare financial results among reporting periods and to enhance its understanding of operating performance, liquidity and ability to generate funds to finance operations. This non-IFRS measure is also provided to readers as additional information on Cordy's operating performance, liquidity and ability to generate funds to finance operations. EBITDAS is an approximate measure of the Cordy's pre-tax operating cash flow and is generally used to better measure performance and evaluate trends of individual assets. EBITDAS comprises earnings before deducting interest and other financial charges, income taxes, depreciation and amortization, net income attributable to non-controlling interests and preferred share dividends.

Contact Information

  • For general information:
    Cordy Oilfield Services Inc.
    David Mullen, Chairman & Chief Executive Officer
    403-266-2067
    403-237-6278 (FAX)
    david.mullen@cordy.ca

    For investor relations information:
    Cordy Oilfield Services Inc.
    David Boomer, CA, CPA, Chief Financial Officer
    403-266-2067
    403-237-6278 (FAX)
    dave.boomer@cordy.ca
    www.cordy.ca