Logan International Inc.

Logan International Inc.

May 09, 2013 16:05 ET

Logan International Reports First Quarter 2013 Results

CALGARY, ALBERTA--(Marketwired - May 9, 2013) - Logan International Inc. (TSX:LII) ("Logan" or the "Company") today announced the financial results for its first quarter of 2013. Revenues for the quarter were $49.2 million as compared to revenues of $40.9 for the last year's first quarter. Net earnings were $5.2 million, or $ 0.16 per diluted share, as compared to $2.8 million, or $0.08 per diluted share, in last year's first quarter. Modified EBITDA, as defined in the financial table below, increased to $12.1 million in this year's first quarter from $8.5 million in last year's first quarter.

The Company completed the acquisition of Xtend Energy Services Inc. ("Xtend") effective March 1, 2012. Therefore, the first quarter report for 2012 includes Xtend's operating results from the acquisition date.

Gerald Hage, Chief Executive Officer, stated, "We are pleased with the Company's quarterly financial results. We are especially pleased with the increase in Modified EBITDA because this is the metric we use most often to evaluate our operating performance. In addition, each of our operating units contributed to the positive comparison, except Logan Completion Systems ("LCS"). Despite a slight industry slowing, we increased both revenues and Modified EBITDA. Logan Oil Tools' increase in sales was produced, in part, by the increase in plant capacity which was completed in 2012. Xtend improved its operating results as a result of increased U.S. rental revenues. Increased international sales to Algeria and Russia boosted Dennis Tool's quarterly operating results. Kline Oilfield Equipment and Scope Production Developments continued to report consistent sales and operating profits. Finally, the slow startup of Canadian oilfield operations caused LCS's first quarter financial results to lag last year's; however, we expect LCS to rebound in the second quarter as sales into China and planned projects in the U.S. and Mexico will counterbalance the "Spring Breakup" effect in Canada."

Recent highlights include:

  • Completion of the acquisition of Sup-R-Jar drilling jar product line on April 17, 2013.
  • LCS successfully completed 6 wells in China and received firm orders for an additional 42 wells to be completed in 2013.
  • Logan Oil Tools increased sales and reduced delivery times as a result of the 2012 plant expansion.

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

Selected Consolidated Financial Information
(in thousands of US dollars, except per share data)
Three month periods ended
March 31,
2013 2012
Revenue $ 49,194 $ 40,894
Net earnings for the period 5,238 2,819
Earnings per share:
Basic $ 0.16 $ 0.08
Diluted $ 0.16 $ 0.08
EBITDA (1) $ 11,770 $ 6,805
Modified EBITDA (1) $ 12,139 $ 8,525
March 31, December 31,
2013 2012
Working Capital $ 81,082 $ 74,295
Total Assets $ 281,072 $ 275,976
Debt (2) $ 61,885 $ 60,192
Shareholders' Equity $ 179,759 $ 175,393
Note: The purchase of Xtend was completed on March 1, 2012 and, accordingly, the Company's three month period ended March 31, 2012 operating results included one month of Xtend.
(1) Management calculates: (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. A reconciliation of EBITDA and Modified EBITDA with net earnings for each period follows.
Three month periods ended
March 31,
2013 2012
Net earnings for the period $ 5,238 $ 2,819
Depreciation and amortization 2,791 2,403
Finance cost, net 1,250 297
Income tax expense 2,491 1,286
EBITDA 11,770 6,805
Acquisition accounting adjustments - 354
Transaction fees 92 649
Share-based compensation payments 277 717
Modified EBITDA $ 12,139 $ 8,525
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 acquisition accounting adjustments reverse the effect of the increase or step-up in cost basis of inventories acquired in a business combination. The transaction fees include the professional and other fees incurred in connection with acquisitions in 2012 and 2013. The share-based compensation payments relate to expense recognized from stock appreciation rights as well as 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 for the year ended December 31, 2012 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.
    Gerald Hage
    Chief Executive Officer
    403-930-6810 Calgary
    832-386-2575 Houston

    Logan International Inc.
    Larry Keister
    Chief Financial Officer
    403-930-6810 Calgary
    832-386-2534 Houston