Logan International Inc.

Logan International Inc.

August 10, 2012 09:00 ET

Logan International Reports 2012 Second Quarter Financial Results

CALGARY, ALBERTA--(Marketwire - Aug. 10, 2012) -

(All reported figures are in US dollars unless otherwise noted)

Logan International Inc. (TSX:LII) ("Logan" or the "Company") today announced the results of its second quarter ended June 30, 2012. Revenue in the second quarter was $40.2 million as compared to $27.7 million in the prior year quarter. Net earnings from continuing operations were $2.4 million, $.07 per diluted share, in this year's second quarter as compared to $848 thousand, $.03 per diluted share, in last year's second quarter. This year's second quarter Modified EBITDA (a non-GAAP measure) increased to $8.2 million from $4.6 million in last year's second quarter. The increases in net earnings from continuing operations and in Modified EBITDA are primarily attributable to the improved operating performance of Logan Oil Tools and, to a lesser extent, the contributions from Kline Oilfield Equipment and Scope Production Development.

Logan recorded revenue of $81.1 million in the first half of 2012 as compared to $60.7 million in the corresponding period of last year and, for the current year-to-date period, reported net earnings from continuing operations of $5.2 million, $.15 per diluted share, as compared to $5.3 million, $.14 per diluted share, in the corresponding period last year. Current year-to-date Modified EBITDA was $16.8 million as compared to prior year-to-date Modified EBITDA of $13.2 million.

This year's second quarter report includes the operating results of Kline Oilfield Equipment ("Kline") and Scope Production Developments ("Scope"), which were both acquired in last year's fourth quarter, for the full quarter and includes the results of Xtend Energy Services ("Xtend") since March 1, 2012 (acquisition date). The prior year's reports did not include the results of these entities. Effective July 29, 2011, the Company completed the sale of substantially all of the assets of its front-end seismic services business and has classified the corresponding operating results as discontinued operations.

Logan's Chief Executive Officer David Barr stated, "Logan Oil Tools' operating results remained strong throughout the quarter. Sales orders for fishing and stroking tools remained near all-time highs. Logan Completion Systems' operating performance exceeded the prior year's performance, in the face of a more difficult industry environment, confirming the turnaround that was begun in the first quarter. Xtend's second quarter financial performance was negatively impacted by the seasonal weakness in Canada. However, the completion of several successful runs in the Bakken and Eagle Ford plays reinforces our confidence of the eventual acceptance of the Xciter tool in U.S. shale plays. Kline Oilfield Equipment, Scope Production Development and Dennis Tool each reported solid operating results."

Mr. Barr continued, "We are looking forward to the second half of 2012, even though there is the potential of slower industry activity. The capacity expansion at Logan Oil Tools will be fully functional by the end of the third quarter and will allow us to better serve our customers. In addition, Logan Oil Tools will open an office in Colombia to better serve the growing Latin America market. We expect Logan Completion Systems' restructured management team together with new products will lead to improved financial results. We are as enthusiastic as ever about Xtend's prospects in the U.S. Operators and international oilfield service companies have expressed interest in the Xciter tool which we expect will translate to a very successful second half for Xtend. Finally, our board of directors has confirmed their confidence in our future by approving the recently-announced common share repurchase program."

Logan manufactures and sells a comprehensive line of quality fishing and intervention tools, including retrieving, surface, stroking and remedial tools for a variety of well workover, intervention, drilling, and completion activities (Logan Oil Tools, Inc.); manufactures and sells high-performance poly-crystalline diamond compact (PDC) cutters and bearings (Dennis Tool Company); manufactures and sells packers, bridge plugs, and other completion products (Kline Oilfield Equipment, Inc.); provides proprietary multi-zonal completion technology and conventional completion production products and services (Logan Completion Systems Inc.); provides proprietary and patented products and services that are focused on production optimization in sand-laden heavy oil wells (Scope Production Development Ltd.); and provides proprietary tools that enhance the effectiveness of horizontal drilling (Xtend Energy Services Inc.). Common shares of Logan are traded on the Toronto Stock Exchange (TSX) under the ticker symbol "LII".

Selected Consolidated Financial Information
(in thousands of US dollars, except per share data)
Three months ended
June 30,
Six months ended
June 30,
2012 2011 2012 2011
Revenue $ 40,176 $ 27,680 $ 81,070 $ 60,722
Net earnings from continuing operations 2,361 848 5,180 5,262
Earnings per share from continuing operations:
Basic $ 0.07 $ 0.03 $ 0.16 $ 0.16
Diluted $ 0.07 $ 0.03 $ 0.15 $ 0.14
EBITDA (1) $ 7,090 $ 3,727 $ 13,969 $ 12,231
Modified EBITDA (1) $ 8,216 $ 4,571 $ 16,815 $ 13,237
June 30, December 31,
2012 2011
Working Capital $ 53,365 $ 40,188
Total Assets $ 264,154 $ 213,557
Debt (2) $ 60,292 $ 25,335
Shareholders' Equity $ 149,525 $ 143,625

Note: The purchase of Xtend Energy Services Inc. ("Xtend") was completed on March 1, 2012, and, accordingly, the Company's six month period ended June 30, 2012 operating results included four months of Xtend.

(1) The Management's Discussion and Analysis ("MD&A") presents: (a) EBITDA as earnings before net finance cost, taxes, depreciation and amortization ("EBITDA"), and (b) Modified EBITDA as EBITDA before acquisition accounting adjustments, transaction fees, share-based compensation payments and severance costs. Neither of these measurements should be considered an alternative to, or more meaningful than, "net earnings from continuing operations" or "cash flow from operating activities" as determined in accordance with International Financial Reporting Standards ("IFRS") as an indicator of the Company's financial performance. EBITDA and Modified EBITDA do not have standardized definitions as prescribed by IFRS; therefore, the Company's presentation of these measurements may not conform to similar presentations by other companies. Management calculates EBITDA and Modified EBITDA each period and evaluates the Company's operating performance based on these measurements. Management believes that Modified EBITDA, which eliminates significant non- cash or non-recurring items of revenue or cost, more accurately presents the results of the Company's ongoing operations and its ability to generate the cash required to fund or finance future growth, acquisitions and capital investments.

Three months ended June 30, Six months ended June 30,
2012 2011 2012 2011
Net earnings from continuing operations $ 2,361 $ 848 $ 5,180 $ 5,262
Depreciation and amortization 2,591 2,031 5,068 3,813
Finance cost, net 1,010 270 1,307 479
Income tax expense 1,128 578 2,414 2,677
EBITDA 7,090 3,727 13,969 12,231
Acquisition accounting adjustments - - 354 -
Transaction fees 560 - 1,209 -
Share-based payments 566 844 1,283 1,006
Modified EBITDA $ 8,216 $ 4,571 $ 16,815 $ 13,237

EBITDA and Modified EBITDA are provided as measures of the Company's operating performance without regard to financing decisions, share-based compensation payments, age and cost of equipment used and income tax impacts, all of which are factors that are not controlled at the operating management level. The transaction fees include the professional and other fees incurred in connection with the acquisitions in 2011 and 2012. The acquisition accounting adjustments reverse the effect related to the increase or step-up in cost basis of inventories acquired in a business combination. The share-based compensation payments relate to non-cash share-based compensation expense related to the Company's stock option and restricted share unit plans.

(2) Includes bank and other borrowed debt and capital leases.

Forward-Looking Statements

This press release contains forward-looking statements. These statements relate to future events or future performance of Logan. When used in this press release, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "propose", "expect", "potential", "continue", and similar expressions, are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such statements reflect Logan's current views with respect to certain events and are subject to certain risks, uncertainties and assumptions. Although Logan believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because we can give no assurance that they will prove to be correct. Many factors could cause Logan's actual results, performance, or achievements to materially differ from those described in this press release. Readers are referred to Logan's Annual Information Form filed on www.sedar.com which identifies significant risk factors which could cause actual results to differ from those contained in the forward-looking statements. Should one or more 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 forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. These statements speak only as of the date of this press release. Logan does not intend and does not assume any obligation, to update these forward-looking statements to reflect new information, subsequent events or otherwise, except as required by law. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities described herein in any jurisdiction.

For more information about Logan International Inc., please visit our website at www.loganinternationalinc.com.

Contact Information

  • Logan International Inc.
    David Barr
    Chief Executive Officer
    281-617-5300 Houston

    Logan International Inc.
    Larry Keister
    Chief Financial Officer
    832-386-2534 Houston