Cordy Oilfield Services Inc.
TSX VENTURE : CKK

Cordy Oilfield Services Inc.

May 25, 2011 17:59 ET

Cordy Oilfield Services Reports First Quarter Financial Results and Appointment of Chief Financial Officer

CALGARY, ALBERTA--(Marketwire - May 25, 2011) -

This news release contains "forward-looking information and statements" within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the "Forward-Looking Statements" later in this news release. Effective January 1, 2011, Cordy Oilfield Services Inc. ("Cordy", or the "Corporation") began reporting its financial results in accordance with International Financial Reporting Standards ("IFRS"). Prior year comparative amounts have been changed to reflect results as if Cordy had always prepared its financial results using IFRS. Please see additional discussion regarding IFRS later in this news release.

Cordy Oilfield Services Inc. (TSX VENTURE:CKK) reported after tax earnings of $1.6 million or $0.02 per diluted share for the three months ended March 31, 2011 compared to a net loss of $1.2 million or $0.01 loss per share for the first quarter of 2010.

Revenue for the first quarter of 2011 totaled $25.1 million compared to $18.2 million for the first quarter of 2010. Earnings before interest, taxes, depreciation, amortization and impairment and stock-based compensation ("EBITDAS") were $3.5 million for the first quarter of 2011 compared to $0.1 million for the first quarter of 2010. The overall performance of the Corporation improved substantially in the first quarter of 2011 as increased demand for energy related services resulted in a $6.9 million increase in revenue and a $3.4 million increase in EBITDAS, compared to first quarter of 2010. During the quarter, Cordy re-paid $1.0 million of equipment loans, reducing the outstanding equipment debt to $6.5 million on an asset base of $36.9 million.

All four of Cordy's operating segments reported positive net earnings in the quarter. Cordy's access to a modern fleet of equipment, management's continued focus on increased asset utilization, and the further expansion of its client base contributed to each segments positive earnings during the quarter. Last year's change to focus the Corporation on its core areas of expertise further contributed to the significant improvement in the operational results of its business units in first quarter of 2011.

FINANCIAL HIGHLIGHTS

Quarter Ended
Select Financial InformationMarch 31
($ millions, except per share amounts)20112010Change
Revenue25.118.26.9
EBITDAS (1)3.50.13.4
Earnings (Loss)1.6(1.2)2.8
EPS – Basic and Diluted0.02(0.01)0.03
Total Assets68.972.8(3.9)
Total Liabilities20.921.1(0.2)
Cash and Equivalents (bank indebtedness)(1.2)1.3(2.5)
Shareholders' Equity47.951.6(3.7)
(1)Earnings before interest, taxes, depreciation, amortization and impairment and stock-based compensation ("EBITDAS"). Refer to the statement at the end of this news release for further information.

OUTLOOK

Cordy experienced a noticeable increase in the demand for its services in the final quarter of 2010 and this demand continued into 2011. Management's outlook has not changed significantly from that disclosed in the Company's MD&A for the year ended December 31, 2010. Management remains optimistic for the remainder of the year. Stronger financial results compared to 2010 and growth opportunities are expected to continue into the second half of the year. The Heavy Construction, Manufacturing and Environmental operating segments are expected to be the primary beneficiaries of the increase in activity in the energy services sector.

The Corporation's revenue growth opportunities include the following:
  • Alberta Transportation Project (a re-alignment of QE 2 awarded to the corporation in March 2011)
  • Oil sands projects (a SAGD project in the Cold Lake region)
  • Mining activities (in the coal-mines of southern B.C)
  • Access to a modern fleet of new heavy equipment
Management will continue to focus on the following:
  • Monitoring industry trends and forecasts and taking steps to capitalize on opportunities
  • Managing cash resources prudently and ensuring adequate reserves are available to pursue growth opportunities
  • Adjusting capital expenditure levels to align with the revenues growth

Management believes the Corporation's operational diversity and relatively low debt has allowed it to withstand the prior period's uncertainty. Management believes that these same factors should allow the Corporation to continue to benefit from the current market fundamentals.

APPOINTMENT OF CHIEF FINANCIAL OFFICER

Cordy is also pleased to announce the appointment of Matt Braaten, CA as the Corporation's Chief Financial Officer, effective immediately. Mr. Braaten has been serving as the Corporation's Interim, Chief Financial Officer since August 24, 2010. Mr. Braaten is a Chartered Accountant and previously held professional roles in the areas of assurance, advisory, and corporate finance. Prior to his professional career, Mr. Braaten was employed in various operational capacities within the heavy construction, environmental, and pipeline construction sectors.

Since joining Cordy in April of 2010, Mr. Braaten has initiated the Corporation's Enterprise Resource Planning software implementation project, successfully led the transition of Cordy's external reporting to comply with the International Financial Reporting Standards framework, and is leading the integration of the Corporation's internal financial reporting structure. Mr. Braaten will now assist the Company in the capacity of Chief Financial Officer through its next growth phase.

CHANGES TO FINANCIAL REPORTING

The financial information contained in this news release has been presented based on results prepared and reported under IFRS. This is the first period which Cordy has reported under the new framework and as such readers are cautioned that certain comparative figures may have changed from those previously reported under Canadian GAAP. For more information regarding the transition please refer to the Q1 Financial Statements and accompanying notes.

Additional information on Cordy is available on our website www.cordy.ca or on SEDAR at www.sedar.com.

READER ADVISORY

Forward-Looking Statements: Certain statements contained in this news release 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 expects or anticipates will or may occur in the future, including the Corporation's future growth, results of operations, performance and business prospects and opportunities, prevailing economic conditions; commodity prices; sourcing, pricing and availability of raw materials, component 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 control of the Corporation, including future prices of oil and natural gas and oil and gas industry activity including the effect of changes in commodity prices on oil and gas exploration and development activity, ability to complete strategic acquisitions and realize the perceived benefits of any acquisitions that are completed and the Corporation's outlook regarding the competitive environment it operates in, and the assumptions underlying any of the foregoing, are forward-looking statements. 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 control of the Corporation 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.

Further information regarding risks and uncertainties relating to Cordy and its securities can be found in the disclosure documents filed by Cordy with the securities regulatory authorities, available at www.sedar.com.

Non-GAAP Measures - Cordy uses the measures Earnings Before Interest, Taxes, Depreciation, Amortization and Impairment, and Stock Based Compensation (EBITDAS) in this news release. This measure does not have any standardized meaning prescribed by Canadian generally accepted accounting principles (GAAP). It is, therefore, considered to be non-GAAP measures and may not be comparable to similar measures presented by other entities. Management of Cordy uses this non-GAAP 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-GAAP measures 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.

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.

Contact Information

  • For general information:
    Cordy Oilfield Services Inc.
    David Mullen, Chairman and CEO
    (403) 266-2067
    (403) 266-2087 (FAX)
    david.mullen@cordy.ca

    For investor relations information:
    Cordy Oilfield Services Inc.
    H. Allen Cameron, President
    (403) 266-2067
    (403) 266-2087 (FAX)
    al.cameron@cordy.ca
    www.cordy.ca