Lonestar West Inc.
TSX VENTURE : LSI

Lonestar West Inc.

November 29, 2013 15:37 ET

Lonestar West Reports Q1 Results

SYLVAN LAKE, ALBERTA--(Marketwired - Nov. 29, 2013) - Lonestar West Inc. (TSX VENTURE:LSI) today announced strong revenue growth with the release of financial results for the three month period ending September 30, 2013.

Lonestar is pleased to announce it has once again achieved strong revenues in the first quarter of fiscal 2014 which included strong results in the US, as well as it is continuing its growth strategy by increasing its overall fleet with the addition of 6 HVAC trucks, 1 Vacuum truck and 2 additional Lease Operator units for a total of 61 units available to the Company as of September 30, 2013.

Highlights for the three-month period ended September 30, 2013 include:

  • Revenues increased 34.8% to $8,300,540 from $6,156,643 in the previous year equivalent quarter.

  • EBITDAC decreased 20.6% to $911,634 compared to $1,267,230 in the previous year equivalent quarter.

  • EBITDAC per share decreased 50% to $0.04 from $0.08 for the corresponding quarters as a result in part of the issuance of 2.17 million shares in November 2012 for gross proceeds of approximately $3 million as well as the issuance of 3.90 million shares in July 2013 for gross proceeds of approximately $10.1 million.

  • Income before taxes was $122,481 a $706,104 decrease in comparison to the $828,525 net income before taxes in the previous year equivalent quarter.

  • Net income for the quarter was $91,981 compared to net income of $664,585 in the previous year equivalent quarter.

The Company experienced strong revenues in the first quarter as a result of management implementing its strategy of growing its fleet and market presence in key areas in the U.S. Revenues generated in the U.S. accounting for 25% of the Company's consolidated revenue. EBITDAC declined year over year as a result of management implementing a platform for future growth. In addition, the impact of weather conditions in Canada and a slight slowdown in the oil and gas sector in Canada had a direct impact on our Canadian utilization rates in the first quarter. This along with increased costs that were incurred in relation to the recruiting and training of personnel for the expanding fleet and increased operating costs associated with the increased bases had a direct impact on our net income and EBITDAC in the first quarter of fiscal 2014. Management is focused on growing both return on assets and EBITDAC and believes that both will increase over time as the roll out matures.

The Company is focused on continuing its expansion program by increasing its fleet of HVAC and Vacuum trucks, and geographic spread. Subsequent to September 30, 2013, Lonestar added 3 HVAC units, 1 Vacuum unit, and 1 Lease Operator HVAC to its fleet to bring the total to 66 units available to work. Dependent upon the delivery schedule of HVAC and Vacuum units, management estimates that it will add an additional 8 units by December 31, 2013, which would bring the total of units available to approximately 74. In addition, Lonestar established a base in Odessa, Texas in October 2013 and a base in San Antonio, Texas in November 2013, both bases will service the oil and gas sector in Texas and will help expand the Lonestar brand further in the Southern U.S.

"Lonestar management is pleased with the revenue growth experienced in the first quarter of fiscal 2013," said James Horvath, CEO and President of Lonestar. "While we experienced a decline in EBITDAC year over year as a result of building a platform to base our future growth on, management is working diligently to utilize its current resources. In addition, management continues to focus on increasing its revenues by providing exceptional service to our existing customers as well as winning new customers by increasing our presence in the U.S. with the establishment of our 2 new bases in Texas."

About Lonestar West

Based in Sylvan Lake, Alberta, Lonestar West Inc. operates a fleet of 66 HVAC and Vacuum trucks throughout Western Canada, California and Oklahoma and has recently expanded into Texas. It is focused on profitably growing its HVAC services to become a major competitor in the North American market.

NEITHER THE 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.

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