New West Energy Services Inc.
TSX VENTURE : NWE

New West Energy Services Inc.

March 31, 2015 16:14 ET

New West Energy Services Inc. Announces Its Third Quarter Results

CALGARY, ALBERTA--(Marketwired - March 31, 2015) - New West Energy Services Inc. (TSX VENTURE:NWE) (the "Corporation") is pleased to announce the financial results for the Corporation for the third quarter ended January 31, 2015.

Operational and Financial Results for the Third Quarters Ended January 31, 2015 and 2014:

  • Revenue increased 7% to $6.85 million from $6.37 million in the previous year equivalent period.
  • Gross margin of $1.59 million (2014 was $1.44 million).
  • Net loss of $792,292 after income tax (2014 had a net income of $82,859). Included in the net loss is a non-cash item of a loss on goodwill impairment of $650,000 (2014 was nil).
  • Earnings per share (basic and diluted) after income tax of ($0.008) (2014 was $0.001).
  • EBITDA was $263,955 (2014 was $383,757). This calculation is a non-IFRS measure.
  • The new diversified service based in Beaverlodge, Alberta operated near capacity during the quarter and generated $2.6 million in revenue with EBITDA of approximately $457,000.
  • The Corporation implemented a cost reduction strategy during the quarter 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.

Company Developments:

Total capital expenditures during the quarter amounted to $281,000 for additional trucks and equipment. During the quarter, the Corporation sold units from the equipment fleet which resulted in net proceeds of approximately $500,000. 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. The Slave Lake operation incurred net losses during the quarter and year to date of approximately $221,000 and $471,000 respectively.

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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