Logan International Inc.
TSX : LII

November 15, 2010 09:00 ET

Logan International Reports Third Quarter Results and Operational Update

CALGARY, ALBERTA--(Marketwire - Nov. 15, 2010) -  (All reported figures are in US dollars unless otherwise noted)

Logan International Inc. (TSX:LII) ("Logan International") today announced its third quarter 2010 results. Consolidated revenue of $44.1 million for the third quarter of 2010 increased by $31.3 million from $12.8 million for the third quarter of 2009. The increase in year-over-year revenue is a result of the contribution from acquisitions closed during 2010 and the later part of 2009 and a significant improvement in revenue in the downhole tool segment. Sequentially, the company's third quarter 2010 revenues were $14.7 million greater than revenues of $29.4 million for the second quarter of 2010. 

For the quarter, Logan International reported net income of $3.3 million from continuing operations ($.10 earnings per diluted share) for the third quarter of 2010 as compared with $364 thousand from continuing operations ($.01 per diluted share) for the third quarter of 2009. Sequentially, the company's third quarter net income from continuing operations was $2.3 million ($.07 earnings per diluted share) greater than net income from continuing operations of $965 thousand ($.03 earnings per diluted share) for the second quarter of 2010. Earnings per share for the quarter ended September 30, 2010 benefited from the improvement in the company's historic downhole tool segment's business along with the results of acquisitions in this segment that closed during 2010. The improvement was achieved despite reduced activity in the front-end seismic segment which was adversely affected by delays in the start-up of projects and one-time costs that resulted from the management restructure.

Modified EBITDA (as defined below) for the third quarter of 2010 was $9.4 million as compared to $1.8 million for the third quarter of 2009 and $4.3 million for the second quarter of 2010.

Gerald Hage, CEO of Logan International summarized, "We are very pleased with our overall financial and operating results and ongoing execution of our consolidation strategy. Demand for our downhole tool products and services remains very strong and our backlog continues to grow. The results from our Multi-Stim horizontal well completions system, which was acquired in the Source transaction, have been better than expected and we expect to have material growth as we expand sales of this system into the United States and internationally in 2011. In addition, we expect that the Marcellus Shale project will generate stable profits for the front-end seismic segment over the next 18-24 months."

Third quarter highlights include:

  • Closed the acquisition of Complete Oil Tools in August which will further strengthen the downhole tool segment's sales and distribution coverage in Canada;
  • Opened the Williamsport office in Pennsylvania to support the increasing Marcellus Shale activity level;
  • Restructured the front-end seismic segment to optimize cost structure and efficiencies while enabling the quality execution of our Marcellus Shale project; and
  • Continued to focus on market share growth and profitability expansion in the downhole tool segment.

Mr. Hage stated, "Logan International has established a strong North American footprint and is strategically positioned to benefit from the increasing industry activity in oil, liquids and natural gas resource plays that are being developed using horizontal drilling and completion technologies. We are in the process of integrating Logan's suite of products and services into our expanded service and distribution network which we anticipate will generate increased revenue through exposure to our broad North American and international customer base. Our twenty distribution locations in North America and three international distribution locations allow Logan to capitalize on our strategy of acquiring and quickly deploying emerging-technology products and services."

During the third quarter Logan International announced that Bruce Libin will retire at the end of January, 2011. Gerald Hage will assume the title and role of President in December, 2010. Pete Scott was named the President of Destiny, the front-end seismic services segment of Logan International.

Selected Consolidated Financial Information
(in thousands of US dollars, except per share data)

    Three month ended September 30,   Nine months ended September 30,
    2010   2009   2010   2009
Revenue:                
    Downhole tools  $      32,684  $ 12,838  $       76,776  $     52,026
    Front-end seismic   11,389   -   19,367   -
   $      44,073  $ 12,838  $       96,143  $       52,026
                 
Operating Income (loss):                
    Downhole tools  $        8,736  $      456  $       18,697  $         8,576
    Front-end seismic   (1,602)   -   (5,537)   -
    Corporate expenses   (1,338)   (712)   (5,715)   (1,951)
   $        5,796  $    (256)  $   7,445  $         6,625
                 
Net income (loss) from continuing operations  $        3,273  $       364  $   4,006  $         4,547
                 
Earnings (loss) per share from continuing operations:            
    Basic  $          0.10  $      0.39  $      0.15  $           4.89
    Diluted  
$
         0.10  $      0.01  $      0.13  $           0.17
                 
EBITDA (1)  $          8,511  $        1,563  $   14,109  $
      10,493
EBITDA – modified (1)  
$
       9,398  $        1,813  $   17,920  $       10,743
                 
            9/30/2010   12/31/2009
                 
Working Capital          $       29,419  $       38,516
Total Assets          $     197,513  $     126,037
Debt (2)          $       33,830  $       15,851
Shareholders' Equity          $     125,612  $       91,443

Note: 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. Accounting treatment requires the presentation of the financial statements of Logan on a historic basis and as if Logan acquired Destiny. As such, the results for the nine months ended September 30, 2010 include the results of the Logan operations for the entire period and the results of Destiny's operations for March 1, 2010 through September 30, 2010 and the comparative results for the nine months ended September 30, 2009 only include the results of Logan's operations. In addition, the purchase of Source was completed on April 30, 2010 and the purchase of Complete was completed with an effective date of July 31, 2010. The Source results from May 1, 2010 through September 30, 2010 and the Complete results from August 12, 2010 to September 30, 2010 are included in the Logan International results.

  1. EBITDA and Modified EBITDA do not have standardized meanings prescribed by Canadian generally accepted accounting principles ("GAAP"). Management believes that, in addition to net income, EBITDA and Modified EBITDA are useful supplemental measures. EBITDA and Modified EBITDA are provided as measures of operating performance without reference to financing decisions, recurring stock-based compensation, depreciation and amortization 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 income determined in accordance with GAAP as indicators of Logan International's performance. EBITDA is calculated as net income (loss) from continuing operations adjusted for depreciation and amortization, recurring stock-based compensation, interest expense and income taxes. Modified EBITDA reflects the impact of the following non-recurring items: professional fees incurred as a result of the Destiny Merger, the acquisitions of Dennis Tool, Source, Complete, and other potential acquisitions; non-recurring compensation expenses related to severance payments and the accelerated recognition of non-cash stock-based compensation resulting from the Destiny Merger. Logan International'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.
  1. 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 International. 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 International's current views with respect to certain events and are subject to certain risks, uncertainties and assumptions. Although Logan International 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 International's actual results, performance, or achievements to materially differ from those described in this press release. Readers are referred to Logan International'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 International 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.

A full copy of Logan International's third quarter 2010 Interim Report, including the financial statement and notes and management's discussion and analysis can be obtained at www.sedar.com or by calling Kelly Lyons at 403-237-6437.

Contact Information

  • Logan International Inc.
    Gerald Hage
    Chief Executive Officer
    403-237-6437 Calgary
    281-617-5300 Houston
    or
    Logan International Inc.
    David Jones
    Chief Financial Officer
    403-237-6437 Calgary
    281-617-5322 Houston
    www.loganinternationalinc.com