Logan International Inc.

Logan International Inc.

November 14, 2011 09:00 ET

Logan International Reports Third Quarter Financial Results

CALGARY, ALBERTA--(Marketwire - Nov. 14, 2011) -

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

Logan International Inc. (TSX:LII) ("Logan" or the "Company") reported operating results for its third quarter ended September 30, 2011. Logan earned $2.1 million, $0.06 per diluted share, from continuing operations in this year's quarter as compared to $4.7 million, $0.15 per diluted share, in last year's third quarter. Revenue from continuing operations increased to $37.5 million in the current year quarter from $32.7 million in the prior year quarter. This year's third quarter Modified EBITDA, as defined in the accompanying financial table, decreased to $9.3 million from $10.2 million in last year's third quarter.

For the year-to-date period, Logan recorded revenue of $98.2 million from continuing operations as compared to $76.8 million for the same period last year and reported earnings from continuing operations of $7.3 million, $0.22 per diluted share, as compared to $8.1 million, $0.36 per diluted share, in the corresponding period last year. The current year earnings per share calculation is based on a greater number of outstanding shares which were related to the shares issued in the merger transaction in 2010. Current year-to-date Modified EBITDA was $22.4 million as compared to prior year-to-date EBITDA of $21.5 million.

Effective July 29, 2011, the Company completed the sale of substantially all of the assets and operations of its front-end seismic services segment, Destiny Resource Services, and has classified the corresponding operating results as discontinued operations.

Effective January 1, 2011, the Company began reporting its financial results in accordance with International Financial Reporting Standards ("IFRS"). Prior year comparative amounts have been restated from amounts issued under the previous Canadian generally accepted accounting principles as if the Company had always prepared its financial statements using IFRS.

Logan's Chief Executive Officer David Barr stated, "Our third quarter operating results rebounded from the second quarter performance, as we expected. The demand for fishing tools, stroking tools and power swivels boosted Logan Oil Tools' third quarter sales. We believe we have benefitted from the overall improvement in the industry, as well as, the trend toward horizontal well completions. In addition, the resumption to normal operating activity in Canada provided the support for Logan Completion Systems rebound in the third quarter. Dennis Tool also recorded revenue and earnings gains in the quarter due to the improvement in Canadian drilling activity and, to a lesser extent, in the Gulf of Mexico."

Mr. Barr continued, "We have recently completed two acquisitions – Kline Oilfield Equipment, Inc. ("Kline") and Scope Production Development ("Scope"). We are excited about the prospects that each of these companies bring. Kline has a 33-year history in the packer and bridge plug business and Scope provides innovative products and services to operators who produce from sand laden heavy oil deposits. In addition, we are continuing to develop superabrasive bearing technology and to refine the Multistim completion technology."

Logan manufactures and sells a complete line of quality fishing and intervention tools including retrieving tools, surface tools, stroking and remedial tools (Logan Oil Tools, Inc.) for a variety of well work-over intervention, drilling and completion activities; provides proprietary fracturing products and services including multi-zonal fracturing completion technology and conventional completion products and services (Logan Completion Systems Inc.); sells high-performance polycrystalline diamond compact ("PDC") cutters and bearings (Dennis Tool Company); designs and develops products including packers, bridge plugs and collar locators (Kline); and provides proprietary products and services which enhance production in sand laden heavy oil wells (Scope).

Selected Consolidated Financial Information
(in thousands of US dollars, except per share data)
Three months ended September 30 , Nine months ended September 30 ,
2011 2010 2011 2010
Revenue $ 37,508 $ 32,684 $ 98,230 $ 76,776
Net earnings from continuing operations 2,135 4,721 7,307 8,115
Net earnings (loss) from discontinued operations 3,729 (1,535 ) 6,032 (4,279 )
Net earnings for the period $ 5,864 $ 3,186 $ 13,339 $ 3,836
Earnings per share from continuing operations:
Basic $ 0.06 $ 0.15 $ 0.22 $ 0.36
Diluted $ 0.06 $ 0.15 $ 0.22 $ 0.36
Earnings (loss) per share from discontinued operations:
Basic $ 0.11 $ (0.05 ) $ 0.18 $ (0.19 )
Diluted $ 0.11 $ (0.05 ) $ 0.18 $ (0.19 )
EBITDA (1) $ 6,528 $ 9,161 $ 18,606 $ 17,284
Modified EBITDA (1) $ 9,335 $ 10,239 $ 22,423 $ 21,520
September 30 , December 31 ,
2011 2010
Working Capital $ 50,512 $ 23,169
Total Assets $ 191,067 $ 210,811
Debt (2) $ 8,825 $ 38,618
Shareholders' Equity $ 140,303 $ 127,962
On March 1, 2010, the merger between Destiny Resource Services Corp ("Destiny") and Logan Holdings, Inc. ("Logan") (the "Destiny Merger") was completed as a reverse takeover. Accordingly, the results of operations for the three and nine month periods ended September 30, 2011 and 2010 include the results of the Logan operations for the entire period. In addition, the purchase of Source Energy Tool Services Inc. ("Source Acquisition") was completed on April 30, 2010 and the purchase of Complete Oil Tools Inc. ("Complete") was completed with an effective date of July 31, 2010 and, accordingly, the Company's nine month period ended September 30, 2010 operating results include five months of Source and two months of Complete. Effective July 29, 2011, the Company sold essentially all of the assets of its front-end seismic services segment and as a result Destiny's results of operations for the three and nine month periods ended September 30, 2011 and 2010 are presented as discontinued operations.
(1) EBITDA and Modified EBITDA do not have standardized meanings prescribed by IFRS. Management believes that, in addition to net earnings, EBITDA and Modified EBITDA are useful supplemental measures. EBITDA and Modified EBITDA are provided as measures of operating performance without reference to financing decisions, depreciation and amortization, share-based payments or income tax impacts and, in the case of Modified EBITDA, certain non-recurring items, which are not controlled at the operating management level. Investors should be cautioned that EBITDA and Modified EBITDA should not be considered as alternatives to net earnings determined in accordance with IFRS as indicators of Logan International's performance. EBITDA is calculated as net earnings (loss) from continuing operations adjusted for depreciation and amortization, finance costs and income taxes. Modified EBITDA removes the effect of the following non-recurring or non-cash items: transaction fees incurred in connection with acquisition transactions, severance payments, contingent consideration (earnout) incurred in the Source Acquisition and share-based payments. The Company's method of calculating EBITDA and Modified EBITDA may differ from that of other corporations and, accordingly, may not be comparable to measures used by other corporations.
Three months ended September 30 , Nine months ended September 30 ,
2011 2010 2011 2010
Net earnings from continuing operations $ 2,135 $ 4,721 $ 7,307 $ 8,115
Depreciation and amortization 2,236 1,721 6,049 4,181
Net finance cost 620 230 1,035 705
Income tax expense 1,537 2,489 4,215 4,283
EBITDA 6,528 9,161 18,606 17,284
Contingent consideration – Source
1,994 1,994
Transaction costs 75 247 75 2,271
Severance costs 640 640
Share-based payments 738 191 1,748 1,325
Modified EBITDA $ 9,335 $ 10,239 $ 22,423 $ 21,520
(2) Includes borrowed debt and finance lease liabilities.

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 http://www.sedar.comwww.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
    403-930-6810 Calgary
    281-617-5300 Houston

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