Newalta Corporation
TSX : NAL

Newalta Corporation

August 07, 2013 18:45 ET

Newalta Reports Strong Second Quarter 2013 Results

CALGARY, ALBERTA--(Marketwired - Aug. 7, 2013) - Newalta Corporation ("Newalta") (TSX:NAL) today reported results for the three and six months ended June 30, 2013.

FINANCIAL HIGHLIGHTS1

Three months
ended June 30,
Six months
ended June 30,
($000s except per share data)
(unaudited)
2013 2012 % Increase (Decrease) 2013 2012 % Increase
(Decrease)
Revenue 196,138 171,130 15 367,485 337,628 9
Gross profit 45,377 38,836 17 83,212 81,714 2
- % of revenue 23 % 23 % - 23 % 24 % (4 )
Net earnings 4,944 18,626 (73 ) 19,103 23,445 (19 )
- per share ($) - basic 0.09 0.38 (76 ) 0.35 0.48 (27 )
- per share ($) - diluted 0.09 0.38 (76 ) 0.35 0.48 (27 )
Adjusted net earnings(2) 11,894 4,994 138 17,646 17,246 2
- per share ($) - basic(2) 0.22 0.10 120 0.32 0.35 (9 )
Adjusted EBITDA(2) 38,350 30,248 27 66,070 66,320 -
- per share ($)(2) 0.70 0.62 13 1.21 1.36 (11 )
Cash from operations 29,487 1,679 1656 10,434 37,919 (72 )
- per share ($) 0.54 0.03 1700 0.19 0.78 (76 )
Funds from operations(2) 27,644 19,211 44 51,343 52,556 (2 )
- per share ($)(2) 0.50 0.39 28 0.94 1.08 (13 )
Maintenance capital expenditures(2) 5,178 7,580 (32 ) 8,849 11,192 (21 )
Growth capital expenditures(2) 29,793 42,843 (30 ) 46,663 71,417 (35 )
Dividends declared 6,051 4,730 28 11,525 8,623 34
- per share ($)(2) 0.11 0.10 10 0.21 0.18 17
Dividends paid 3,708 3,753 (1 ) 8,019 7,642 5
Book value per share, June 30, 12.12 11.45 6 12.12 11.45 6
Weighted average shares outstanding 54,928 48,682 13 54,721 48,650 12
Shares outstanding, June 30,(3) 55,006 48,698 13 55,006 48,698 13
(1) Newalta's Unaudited Condensed Consolidated Financial Statements are attached. References to Generally Accepted Accounting Principles ("GAAP") are synonymous with IFRS and references to Unaudited Condensed Consolidated Financial Statements are synonymous with Financial Statements.
(2) These financial measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers.Non-GAAP financial measures are identified and defined later in this document.
(3) Newalta has 55,089,772 shares outstanding as at August 7, 2013.

Management Commentary

"Strong contributions from our growth investments drove the year-over-year growth in Adjusted EBITDA," said Al Cadotte, President and CEO of Newalta.

"For the second half of the year, Adjusted EBITDA is expected to be at least 20 percent higher than last year, driven by returns from our growth capital over the past 18 months. We anticipate commodity prices will remain at current levels for the remainder of the year.

"Our capital investment plans for 2013 remain on budget and we are well-positioned with a solid balance sheet and excellent organization to drive growth in 2014. We remain on track in the execution of our business plan."

Consolidated Overview

Second quarter revenue was up 15% to $196.1 million. Adjusted EBITDA increased 27% to $38.4 million compared to Q2 2012. Improved results were primarily driven by contributions from growth investments in New Markets and Oilfield, further enhanced by a positive impact from commodity prices. Net earnings in the quarter decreased to $4.9 million compared to $18.6 million in the prior year. Excluding higher stock-based compensation expense and net finance charges related to a non-cash loss on embedded derivatives, net earnings would have increased 138% to $11.9 million compared to Q2 2012.

In the first half of 2013, revenue increased 9% to $367.5 million compared to prior year, while Adjusted EBITDA was $66.1 million, flat to 2012. Returns from growth capital investments in New Markets and Oilfield were partially offset by the impact of lower commodity prices.

Operational Overview

Revenue from New Markets in the quarter and year-to-date increased 45% and 30%, respectively, to $56.1 million and $97.0 million compared to prior year. Gross profit in the quarter and year-to-date increased 38% and 15%, respectively, to $19.3 million and $32.3 million compared to 2012. Strong performance in the quarter and year-to-date was primarily driven by returns from growth investments, including our two onsite contracts to process mature fine tailings ("MFT").

Revenue from Oilfield in the quarter and year-to-date was $39.5 million and $88.1 million, respectively, essentially flat to prior year. Gross profit in the quarter and year-to-date increased 32% and 10%, respectively, compared to prior year. Improved results, primarily driven by contributions from growth capital, were partially offset by declines in drilling activity year-over-year.

Revenue from Industrial increased 7% and 5%, respectively, to $100.5 million and $182.4 million in Q2 2013 and year to date, compared to the prior year. Gross profit in the quarter and year-to-date declined $2.1 million and $5.7 million, respectively, to $12.3 million and $17.9 million compared to the prior year.

Other Highlights

Newalta's Board of Directors declared a second quarter dividend of $0.11 per share ($0.44 per share annualized) paid July 15, 2013 to shareholders of record June 28, 2013. This higher dividend rate established earlier this year reflects our positive long-term outlook for the business.

Revenue from contracts generated 11% of consolidated revenue trailing twelve months ("TTM") Q2 2013, compared to 6% in TTM Q2 2012.

Capital expenditures for the three and six months ended June 30, 2013 were $35.0 million and $55.5 million, respectively, focused primarily on growth capital projects in New Markets and Oilfield.

Our Total Debt to Adjusted EBITDA ratio improved to 2.74 in Q2 2013, from 2.94 in Q1 2013. We anticipate ending the year at or near 2.50.

Newalta amended and extended its credit facility effective July 12, 2013. Key changes to the agreement included: extending it by one year, to July 12, 2016, increasing the amount available from $225 million to $250 million and improved pricing.

Outlook

Adjusted EBITDA in the second half of 2013 is expected to be at least 20% higher than last year driven by continued strong returns on our growth investments. We anticipate commodity prices to remain at current levels for the balance of 2013, better than prior year. We expect Ville Ste-Catherine ("VSC") volumes to be in line with our historical quarterly average and SCL to be at the annual permitted capacity by the end of the year.

We continue to focus on growing our portfolio of longer term contracts, strengthening our foundation of stable cash flow, and maximizing cash flow from our existing assets. We have good visibility on our pipeline of organic growth capital projects, extending well into 2014. We are well-positioned to deliver our 2013 capital budget of $190 million. Capital spending will be allocated to projects and long-term contracts which provide the highest returns and more stable cash flows among other factors.

Quarterly Conference Call

Management will hold a conference call on Thursday, August 8, 2013 at 11:00 a.m. (ET) to discuss Newalta's performance for the second quarter ended June 30, 2013. To participate in the teleconference, please call 416-981-9000 or toll free 800-734-8507. To access the simultaneous webcast, please visit www.newalta.com. For those unable to listen to the live call, a taped broadcast will be available at www.newalta.com and, until midnight on Thursday, August 15, 2013 by dialing 800-558-5253 and using pass code 21668198 followed by the pound sign.

The unaudited interim Condensed Consolidated Financial Statements and MD&A, which contain additional notes and disclosures, are available on our website at www.newalta.com under Investor Relations/Financial Reports.

About Newalta

Newalta is North America's leading provider of innovative, engineered environmental solutions that enable customers to reduce disposal, enhance recycling and recover valuable resources from industrial residues. We serve customers onsite directly at their operations and through a network of 85 locations in Canada and the U.S. Our proven processes, portfolio of more than 250 operating permits and excellent record of safety make us the first choice provider of sustainability enhancing services to oil, natural gas, petrochemical, refining, lead, manufacturing and mining markets. With a skilled team of more than 2,000 people, two decade track record of profitable expansion and commitment to commercializing new solutions, Newalta is positioned for sustained future growth and improvement. Newalta trades on the TSX as NAL. For more information, visit www.newalta.com.

SELECTED FINANCIAL INFORMATION

Three months
ended June 30,
Six months
ended June 30,
($000s, except where otherwise noted) (unaudited) 2013 2012 % Increase
(Decrease)
2013 2012 % Increase
(Decrease)
New Markets
Revenue 56,120 38,626 45 96,978 74,757 30
Gross Profit 19,314 13,950 49 32,332 28,150 15
- % of revenue 34 % 36 % (6 ) 33 % 38 % (13 )
Revenue by Business Unit
Heavy Oil 74 % 66 % 12 68 % 65 % 5
U.S. 26 % 34 % 24 32 % 35 % (9 )
Divisional EBITDA(1) 23,516 16,270 45 39,001 32,590 20
Assets Employed(2) 253,501 214,198 18
Assets Contributing(3) 232,901 178,898 30
Oilfield
Revenue 39,501 38,951 1 88,133 89,403 (1 )
Gross Profit 13,783 10,460 32 32,960 29,975 10
- % of revenue 35 % 27 % 30 37 % 34 % 9
Divisional EBITDA(1) 16,761 13,152 27 38,915 35,852 9
Assets Employed(2) 359,339 337,965 6
Assets Contributing(3) 323,139 317,265 2
Industrial
Revenue 100,517 93,553 7 182,374 173,468 5
Gross Profit 12,280 14,426 (15 ) 17,920 23,589 (24 )
- % of revenue 12 % 15 % (20 ) 10 % 14 % (29 )
Revenue by Business Unit
Western Industrial 23 % 25 % (8 ) 23 % 26 % (12 )
Eastern Industrial 77 % 75 % 3 77 % 74 % 4
VSC as a percent of Industrial Division 33 % 32 % 3 36 % 33 % 9
Divisional EBITDA(1) 19,185 20,473 (6 ) 30,377 35,748 (15 )
Assets Employed(2) 426,938 423,204 1
Assets Contributing(3) 418,938 407,004 3
Capital Expenditures
Maintenance capital expenditures 5,178 7,580 (32 ) 8,849 11,192 (21 )
New Markets 640 2,157 (70 ) 892 2,432 (63 )
Oilfield 2,254 2,168 4 4,106 3,523 17
Industrial 1,426 2,087 (32 ) 2,265 3,168 (29 )
Growth capital expenditures 29,793 42,843 (30 ) 46,663 71,417 (35 )
New Markets 15,998 28,174 (43 ) 21,321 45,415 (53 )
Oilfield 5,779 3,173 82 11,021 8,567 29
Industrial 3,268 4,777 (32 ) 6,105 7,709 (21 )
(1) "Divisional EBITDA" is a measure of the division's profitability and an indication of the results generated by the division's principal business activities prior to how the assets are amortized. Divisional EBITDA is the sum of gross profit and amortization.
(2) "Assets employed" is provided to assist management and investors in determining the effectiveness of the use of the assets at a divisional level. Assets employed is the sum of capital assets, intangible assets and goodwill allocated to each division.
(3) "Assets contributing" is provided to assist management and investors to understand how our capital spending contributes to our growth. It excludes assets related to growth capital projects not yet operational.

Condensed Consolidated Balance Sheets

(Unaudited - Expressed in thousands of Canadian Dollars)

June 30, 2013 December 31, 2012
Assets
Current assets
Cash - 409
Accounts and other receivables 173,401 150,347
Inventories 44,086 43,123
Prepaid expenses and other 16,195 10,627
233,682 204,506
Non-current assets
Property, plant and equipment 947,085 929,580
Permits and other intangible assets (Note 4) 58,881 58,614
Other long-term assets 24,390 23,443
Goodwill 103,983 102,615
TOTAL ASSETS 1,368,021 1,318,758
Liabilities
Current liabilities
Bank indebtedness 13,137 -
Accounts payable and accrued liabilities 137,487 181,876
Deferred revenue 19,102 6,494
Dividends payable (Note 9) 6,051 5,426
175,777 193,796
Non-current liabilities
Senior secured debt (Note 5) 129,500 76,500
Senior unsecured debentures (Note 6) 246,653 246,334
Other liabilities (Note 7) 1,735 4,228
Deferred tax liability 79,933 77,519
Decommissioning liability 67,734 78,941
TOTAL LIABILITIES 701,332 677,318
Shareholders' Equity
Shareholders' capital 404,885 394,048
Contributed surplus 2,881 2,881
Retained earnings 255,143 247,565
Accumulated other comprehensive income (loss) 3,780 (3,054 )
TOTAL SHAREHOLDERS' EQUITY 666,689 641,440
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1,368,021 1,318,758

Condensed Consolidated Statements of Operations

(Unaudited - Expressed in thousands of Canadian Dollars)

(Except per share data)

For the three months
ended June 30,
For the six months
ended June 30,
2013 2012 2013 2012
Revenue 196,138 171,130 367,485 337,628
Cost of sales 150,761 132,294 284,273 255,914
Gross profit 45,377 38,836 83,212 81,714
Selling, general and administrative 24,327 15,430 47,290 44,968
Research and development 412 587 615 1,396
Earnings before finance charges and income taxes 20,638 22,819 35,307 35,350
Finance charges 7,010 6,507 13,603 13,265
Embedded derivative loss (gain) (Note 11) 6,931 (6,680 ) (137 ) (8,050 )
Net financing charges expense (recovery) 13,941 (173 ) 13,466 5,215
Earnings before income taxes 6,697 22,992 21,841 30,135
Income tax expense 1,753 4,366 2,738 6,690
Net earnings 4,944 18,626 19,103 23,445
Net earnings per share (Note 8) 0.09 0.38 0.35 0.48
Diluted earnings per share (Note 8) 0.09 0.38 0.35 0.48
Supplementary information:
Amortization included within cost of sales 14,085 11,059 25,081 22,476
Amortization included in selling, general and administrative 3,608 3,322 7,002 6,643
Total amortization 17,693 14,381 32,083 29,119

Condensed Consolidated Statements of Comprehensive Income

(Unaudited - Expressed in thousands of Canadian Dollars)

For the three months
ended June 30,
For the six months
ended June 30,
2013 2012 2013 2012
Net earnings 4,944 18,626 19,103 23,445
Other comprehensive income (loss):
Unrealized exchange gain (loss) on translating foreign operations 4,505 1,255 6,866 (443 )
Unrealized loss on available for sale financial assets (Note 11) - (63 ) (32 ) (127 )
Other comprehensive income (loss) 4,505 1,192 6,834 (570 )
Total comprehensive income 9,449 19,818 25,937 22,875

Condensed Consolidated Statement of Changes in Equity

(Unaudited - Expressed in thousands of Canadian Dollars)

Shareholders' capital Contributed surplus Retained earnings Accumulated other comprehensive income (loss) Total
Balance, December 31, 2011 317,386 2,700 223,679 (1,844 ) 541,921
Changes in equity for the six months ended June 30, 2012
Exercise of options 1,510 - - - 1,510
Cancellation of shares (181 ) 181
Dividends declared - - (8,623 ) - (8,623 )
Other comprehensive loss - - - (570 ) (570 )
Net earnings for the period - - 23,445 - 23,445
Balance, June 30, 2012 318,715 2,881 238,501 (2,414 ) 557,683
Changes in equity for the six months ended December 31, 2012
Exercise of options 933 - - - 933
Issuance of shares 74,400 - - - 74,400
Dividends declared - - (10,295 ) - (10,295 )
Other comprehensive loss - - - (640 ) (640 )
Net earnings for the period - - 19,359 - 19,359
Balance, December 31, 2012 394,048 2,881 247,565 (3,054 ) 641,440
Changes in equity for the six months ended June 30, 2013
Exercise of options 7,832 - - - 7,832
Reduction of 2012 share issuance costs 124 - - - 124
Shares issued under dividend reinvestment plan 2,881 - - - 2,881
Dividends declared - - (11,525 ) - (11,525 )
Other comprehensive income - - - 6,834 6,834
Net earnings for the period - - 19,103 - 19,103
Balance, June 30, 2013 404,885 2,881 255,143 3,780 666,689

Condensed Consolidated Statements of Cash Flows

(Unaudited - Expressed in thousands of Canadian Dollars)

For the three months
ended June 30,
For the six months
ended June 30,
2013 2012 2013 2012
Cash provided by (used for):
Operating Activities
Net earnings 4,944 18,626 19,103 23,445
Adjustments for:
Amortization 17,693 14,381 32,083 29,119
Income tax expense 1,753 4,366 2,738 6,690
Income tax paid (refund) 364 (33 ) 157 (43 )
Stock-based compensation recovery (332 ) (7,542 ) (4,645 ) (160 )
Finance charges 7,010 6,507 13,603 13,265
Embedded derivative loss (gain) (Note 11) 6,931 (6,680 ) (137 ) (8,050 )
Finance charges paid (10,942 ) (10,305 ) (11,948 ) (11,289 )
Other 223 (109 ) 389 (421 )
Funds from Operations 27,644 19,211 51,343 52,556
Decrease (increase) in non-cash working capital (Note 12) 2,715 (16,950 ) (39,009 ) (13,702 )
Decommissioning costs incurred (872 ) (582 ) (1,900 ) (935 )
Cash (used in) from Operating Activities 29,487 1,679 10,434 37,919
Investing Activities
Additions to property, plant and equipment (Note 12) (29,626 ) (33,645 ) (69,408 ) (66,510 )
Other 463 259 (3,182 ) 434
Cash used in Investing Activities (29,163 ) (33,386 ) (72,590 ) (66,076 )
Financing Activities
Issuance of shares 714 642 2,361 642
Increase in senior secured debt 3,499 33,000 53,000 38,471
(Decrease) increase in bank indebtedness (1,630 ) 1,261 13,137 (3,453 )
Decrease in note receivable 73 68 124 123
Dividends paid (Note 9) (3,708 ) (3,753 ) (8,019 ) (7,642 )
Cash (used in) from Financing Activities (1,052 ) 31,218 60,603 28,141
Effect of foreign exchange on cash 728 489 1,144 16
Change in cash - - (409 ) -
Cash, beginning of period - - 409 -
Cash, end of period - - - -

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document constitute "forward-looking statements". When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", and similar expressions, as they relate to Newalta Corporation and the subsidiaries of Newalta Corporation, or their management, are intended to identify forward-looking statements. In particular, forward-looking statements included or incorporated by reference in this document include statements with respect to:

  • future operating and financial results;
  • anticipated industry activity levels;
  • expected demand for our services;
  • business prospects and strategy;
  • capital expenditure programs and other expenditures;
  • the amount of dividends declared or payable in the future;
  • realization of anticipated benefits of growth capital investments, acquisitions and our technical development initiatives;
  • our projected cost structure; and
  • expectations and implications of changes in legislation.

Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, including, without limitation:

  • general market conditions of the industries we service;
  • strength of the oil and gas industry, including drilling activity;
  • fluctuations in commodity prices for oil and the price we received for our recovered oil;
  • fluctuations in commodity prices for lead including the price differential we pay for lead feedstock and the price we receive for our lead products;
  • fluctuations in base oil prices including the price differential we pay for used oil and the price we receive for our finished lube oil products;
  • fluctuations in interest rates and exchange rates;
  • supply of waste lead acid batteries as feedstock to support direct lead sales;
  • demand for our finished lead products by the battery manufacturing industry;
  • our ability to secure future capital to support and develop our business, including the issuance of additional common shares;
  • the highly regulated nature of the environmental services and waste management business in which we operate;
  • dependence on our senior management team and other operations management personnel with waste industry experience;
  • the competitive environment of our industry in Canada and the U.S.;
  • success of our growth, acquisition and technical development strategies including integration of businesses and processes into our operations and potential liabilities from acquisitions;
  • potential operational and safety risks and hazards and obtaining insurance for such risks and hazards on reasonable financial terms;
  • the seasonal nature of our operations;
  • costs associated with operating our landfills and reliance on third party waste volumes;
  • risk of pending and future legal proceedings;
  • risk to our reputation;
  • our ability to attract and retain skilled employees and maintain positive labour union relationships;
  • open access for new industry entrants and the general unprotected nature of technology used in the waste industry;
  • possible volatility of the price of, and the market for, our common shares, and potential dilution for shareholders in the event of a sale of additional shares;
  • financial covenants in our debt agreements that may restrict our ability to engage in transactions or to obtain additional financing; and
  • such other risks or factors described from time to time in reports we file with securities regulatory authorities.

By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. Many other factors could also cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements and readers are cautioned that the foregoing list of factors is not exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and are expressly qualified by this cautionary statement. Unless otherwise required by law, we do not intend, or assume any obligation, to update these forward-looking statements.

The information contained on our website does not form part of this press release.

RECONCILIATION OF NON-GAAP MEASURES

This Press Release contains references to certain financial measures, including some that do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS" or "GAAP") and may not be comparable to similar measures presented by other corporations or entities. These financial measures are identified and defined below:

"EBITDA", "EBITDA per share", "Adjusted EBITDA", and "Adjusted EBITDA per share" are measures of our operating profitability. EBITDA provides an indication of the results generated by our principal business activities prior to how these activities are financed, assets are amortized or how the results are taxed in various jurisdictions. In addition, Adjusted EBITDA provides an indication of the results generated by our principal business activities prior to recognizing stock-based compensation. Stock-based compensation, a component of employee remuneration, can vary significantly with changes in the price of our common shares. As such, Adjusted EBITDA provides improved continuity with respect to the comparison of our operating results over a period of time. EBITDA and Adjusted EBITDA are derived from the condensed consolidated statements of operations and comprehensive income. EBITDA per share and Adjusted EBITDA per share are derived by dividing EBITDA and Adjusted EBITDA by the basic weighted average number of shares.

They are calculated as follows:

Three months
ended June 30,
Six months
ended June 30,
($000s) 2013 2012 2013 2012
Net earnings 4,944 18,626 19,103 23,445
Add back (deduct):
Income taxes 1,753 4,366 2,738 6,690
Net finance (income) expense 13,941 (173 ) 13,466 5,215
Amortization 17,693 14,381 32,083 29,119
EBITDA 38,331 37,200 67,390 64,469
Add back (deduct):
Stock-based compensation expense (recovery) 19 (6,952 ) (1,320 ) 1,851
Adjusted EBITDA 38,350 30,248 66,070 66,320
Weighted average number of shares 54,928 48,682 54,721 48,650
EBITDA per share 0.70 0.76 1.23 1.33
Adjusted EBITDA per share 0.70 0.62 1.21 1.36

"Divisional EBITDA" provides an indication of the results generated by the division's principal business activities prior to how the assets are amortized. Divisional EBITDA is the sum of gross profit and amortization for the respective division. Divisional EBITDA is derived from EBITDA as follows:

Three months
ended June 30,
Six months
ended June 30,
($000s) 2013 2012 2013 2012
Divisional EBITDA
New Markets 23,516 16,270 39,001 32,590
Oilfield 16,761 13,152 38,915 35,852
Industrial 19,185 20,473 30,377 35,748
Subtotal 59,462 49,895 108,293 104,190
Deduct:
Selling, general and administrative(1) (20,719 ) (12,108 ) (40,288 ) (38,325 )
Research and development (412 ) (587 ) (615 ) (1,396 )
EBITDA 38,331 37,200 67,390 64,469
(1) Selling, general and administrative excludes amortization of $3,608 and $7,002 for Q2 2013 and 2013 year-to-date, respectively, and $3,322 and $6,643 for Q2 2012 and 2012 year-to-date, respectively.

"Adjusted net earnings" and "Adjusted net earnings per share" are measures of our profitability. Adjusted net earnings provides an indication of the results generated by our principal business activities prior to recognizing stock-based compensation recovery or expense and the gain or loss on embedded derivatives. Stock-based compensation, a component of employee remuneration, can vary significantly with changes in the price of our common shares. The gain on the embedded derivative is a result of the change in the trading price of the debentures and the volatility of the applicable bond market. As such, Adjusted net earnings provides improved continuity with respect to the comparison of our results over a period of time. Adjusted net earnings per share is derived by dividing Adjusted net earnings by the basic weighted average number of shares.

Three months
ended June 30,
Six months
ended June 30,
($000s) 2013 2012 2013 2012
Net earnings 4,944 18,626 19,103 23,445
Add back (deduct):
Stock-based compensation expense (recovery) 19 (6,952 ) (1,320 ) 1,851
Embedded derivative gain 6,931 (6,680 ) (137 ) (8,050 )
Adjusted net earnings 11,894 4,994 17,646 17,246
Weighted average number of shares 54,928 48,682 54,721 48,650
Adjusted net earnings per share 0.22 0.10 0.32 0.35

"Book value per share" is used to assist management and investors in evaluating the book value compared to the market value.

Six months ended
June 30,
($000s) 2013 2012
Total Equity 666,689 557,683
Shares outstanding, June 30, 55,006 48,698
Book value per share 12.12 11.45

"Funds from operations" is used to assist management and investors in analyzing cash flow and leverage. Funds from operations as presented is not intended to represent operating funds from operations or operating profits for the period, nor should it be viewed as an alternative to cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. Funds from operations is derived from the consolidated statements of cash flows and is calculated as follows:

Three months
ended June 30,
Six months
ended June 30,
($000s) 2013 2012 2013 2012
Cash (used in) from operations 29,487 1,679 10,434 37,919
Add back (deduct):
(Decrease) increase in non-cash working capital (2,715 ) 16,950 39,009 13,702
Decommissioning obligations incurred 872 582 1,900 935
Funds from operations 27,644 19,211 51,343 52,556
Weighted average number of shares 54,928 48,682 54,721 48,650
Funds from operations per share 0.50 0.39 0.94 1.08

References to EBITDA, EBITDA per share, Adjusted EBITDA, Adjusted EBITDA per share, Divisional EBITDA, Adjusted net earnings, Adjusted net earnings per share, Funds from operations, and Funds from operations per share throughout this document have the meanings set out above. Adjusted SG&A is defined as SG&A adjusted for stock-based compensation and amortization.

Contact Information

  • Newalta Corporation
    Anne M. Plasterer
    Executive Director, Investor Relations
    (403) 806-7019
    www.newalta.com