New West Energy Services Inc.
TSX VENTURE : NWE

New West Energy Services Inc.

August 28, 2015 19:11 ET

New West Energy Services Inc. Announces Its Fourth Quarter and Year End Results

CALGARY, ALBERTA--(Marketwired - Aug. 28, 2015) - New West Energy Services Inc. (TSX VENTURE:NWE) (the "Corporation") is pleased to announce the financial results for the Corporation for its fourth quarter and year ended April 30, 2015.

HIGHLIGHTS

Operational and Financial Results for the fiscal years ended April 30, 2015 and 2014:

  • Revenue of $21.83 million (2014 - $21.97 million).
  • Gross margin of $4.62 million (2014 - $5.46 million).
  • Net loss from operations of $1.69 million before income tax (2014 - net income of $8K).
  • A non-cash loss on goodwill impairment of $1.52 million (2014 - $nil).
  • Loss per share (basic and diluted) after income tax of ($0.039) (2014 - $0.00).
  • EBITDA was a negative $31,000 (2014 a positive $942,000). This calculation is a non-IFRS measure.
  • The Corporation completed the shutdown of operations in Slave Lake, Alberta (formerly Porterco). This division contributed approximately $1 million in revenue and a net loss of $412,000 for the year end. Under-utilized assets from this division were sold during the year and the remainder were moved to the operations in Beaverlodge, Alberta.
  • The Corporation continued the diversification growth strategy operating in Beaverlodge, Alberta. Revenues from this division were approximately $6.8 million compared to $3 million the year prior. The Corporation implemented a cost reduction strategy during the year which included staff and wage reductions in response to the declining oil price and anticipated slow down in the oil and gas industry over the next year.

Financial Results for the fourth quarters ended April 30, 2015 and 2014:

  • Revenue decreased 56% to $3.11 million (2014 - $7.18 million).
  • Gross margin of $516K (2014 - $1.70 million).
  • Net loss from operations of $1 million before income tax (2014 - net income of $122K).
  • A non-cash item of a Loss on goodwill impairment of $874K (2014 - $nil).

Company Developments:

Due to the reduction in Western Canadian drilling activity since November 2014, when oil prices started to decline, the Corporation has initiated steps to reduce costs to prepare for a prolonged period of lower activity. Direct and overhead costs have been reduced significantly and continue to be monitored to stay in line with customer requirements. Management will continue to review the financial position of the Corporation and will consider various options to support its current and future cash flow requirements. Total capital expenditures during the year amounted to approximately $4.3 million for additional trucks and equipment. In addition, selected units from the equipment fleet were sold resulting in net proceeds of approximately $900K. The sold units consisted primarily of end dump trucks and trailers as well as part of the rental equipment fleet operating from Slave Lake, Alberta. Management has decided to reallocate the remaining equipment from Slave Lake to the operations in Beaverlodge, Alberta in order to eliminate operational losses which have occurred during the fiscal year from the Slave Lake operation.

OUTLOOK AND STRATEGY

The Corporation has a solid client base and has been successful in leveraging this client base to include the new diversified services being offered in the production and maintenance sectors of the oil and gas industry. Management will continue to focus on diversification as well as cost reductions through the downturn in the industry and is confident that overall margins will increase in the long term as operating efficiencies are recognized.

OVERVIEW

Through its subsidiaries, the Corporation operates a fleet of straight, combo and hydro vac trucks as well as end dumps, water and tank trucks with bulk transport trailers and environmental services. The Corporation operates throughout Western Canada in the drilling, completions and production sectors of the oil and gas industry with its main service centres located in Beaverlodge and Medicine Hat with its head office in Calgary, Alberta.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

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