Phoenix Oilfield Hauling Inc.

Phoenix Oilfield Hauling Inc.

August 23, 2011 18:55 ET

Phoenix Oilfield Hauling Inc. Announces Quarterly Financial Results

CALGARY, ALBERTA--(Marketwire - Aug. 23, 2011) -


Phoenix Oilfield Hauling Inc. (TSX VENTURE:PHN) (the "Company") announces its financial and operating results for the three and six months ended June 30, 2011 ("2011 Q2"). Effective January 1, 2011, the Company began reporting its financial results in accordance with International Financial Reporting Standards ("IFRS"). Prior year comparative amounts have been restated to reflect results as if the Company had always prepared its financial results using IFRS.

Highlights for 2011 Q2 include:

  • Exceeded the financial covenant requirements established by the Company's senior lender for the first time since 2009
  • Revenue of $34.5 million for the six months ended 2011 Q2 is the highest for any two consecutive quarters in the Company's history
  • Quarterly revenue of $14.1 million for 2011 Q2, a 172% increase compared to 2010 Q2
  • Quarterly EBITDA of $1.5 million for 2011 Q2, a 320% increase compared to 2010 Q2 and the highest amount for any Q2 in the Company's history
  • Paid down debt by $4.1 million during the six months ended 2011 Q2
  • The Company continued to benefit from its strategic redeployment of assets to certain markets in its ongoing effort to optimize equipment in key locations and long term utilization levels

In commenting on the results Christopher W. Challis, President and CEO, stated, "Although many of our customers in Canada experienced setbacks in their second quarter operations, due to flooding in Southeast Saskatchewan and Southwest Manitoba and the tragic fires in Slave Lake, Alberta, the Company was able to work through these challenges and continue to produce positive results. The equipment redeployment and new market development strategy into the US has continued to have a positive impact.

"The second quarter is typically the most challenging quarter for energy service and supply companies in the Western Canadian Sedimentary Basin ("WCSB") due to the seasonal spring break up period. This year the Company's second quarter did not experience as sharp a drop off in performance due to continued contribution from US operations, because spring break up started later than normal in some of our Canadian locations, and because we were able to extend work through spring break up in one of our Canadian locations.

"These results are a direct reflection of the commitment and dedication of our team and our strategic planning. The Company experienced a 25% reduction in operating costs as a percentage of revenue as these costs were prudently managed and pricing improved in certain market areas. EBITDA also improved year over year as a percentage of revenue to 11% in 2011 Q2 from (14%) in 2010 Q2. The focus on developing solid relationships based on safety and performance with strategic customers in both Canada and the US had a tremendous impact on our ability to achieve profitability."


The Company has realized improved utilization of its equipment, successfully achieving the benefits expected from redeploying assets to certain markets. This initiative has improved revenue and EBITDA levels during 2011 as compared to 2010. The Company expects to continue generating higher revenue and EBITDA during the remainder of 2011 as compared to 2010.

Current activity in several petroleum resource regions where the Company has operations remains robust, as do future expectations. Most other regions where the Company operates, although less robust, currently appear stable. The Company is exploring alternatives to increase its presence in its most active current markets, as well as to pursue opportunities to establish operations in new markets where it believes it can generate profitable results and diversify operations.

The Company has identified a number of opportunities to improve its financial results. These opportunities include purchasing certain assets currently being rented under high-cost operating leases and purchasing additional assets to increase its ongoing revenue and profit. Purchased assets could be deployed either in the Company's existing locations, or these assets could allow the Company to pursue expansion into certain new markets in which it expects it can achieve profitable results. The Company is exploring ways to increase its access to capital, thereby providing the ability to pursue opportunities to enhance financial results.

Officer Resignation

The Company announces Mr. Danny LaChance has resigned from the position of Chief Operating Officer – US Operations for personal, family and other reasons. The Board of Directors acknowledges Mr. LaChance's contributions in expanding operations in Texas and Pennsylvania since joining the Company in 2008 as part of the acquisition of Rodan Transport (USA) Ltd.

Summary of Quarterly Results

The Company's financial information for the past eight quarters is presented below. Quarterly figures for 2011 and 2010 are presented in accordance with IFRS. Quarterly figures for 2009 are presented in accordance with previous Canadian GAAP.

2011 2010 2009
Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3
Revenue $ 14,058 20,443 14,865 10,031 5,177 9,750 7,157 5,862
EBITDA1 $ 1,546 4,241 2,473 1,089 (702 ) 1,342 422 (971 )
EBITDA1, % of revenue 11 % 21 % 17 % 11 % (14 %) 14 % 6 % (17 %)
EBITDA per share –
basic & diluted
$ 0.01 0.02 0.01 0.01 (0.00 ) 0.01 0.01 (0.01 )
Income (loss) $ (1,088 ) 1,675 5,212 (557 ) (1,979 ) (885 ) (3,512 ) (5,084 )
Income (loss), % of revenue (8 %) 8 % 35 % (6 %) (38 %) (9 %) (49 %) (87 %)
Earnings (loss) per share – basic & diluted $ (0.01 ) 0.01 0.03 (0.00 ) (0.01 ) (0.01 ) (0.05 ) (0.08 )
Weighted average shares – basic & diluted 171,766 170,375 169,041 168,541 168,541 161,722 66,248 66,248

1 See Non-IFRS measures.

Non-IFRS Measures – EBITDA

The Company defines EBITDA as earnings before finance costs, taxes, depreciation, amortization, impairments related to equipment and leaseholds, goodwill and intangible assets, gains or losses on disposal of equipment and leaseholds and stock based compensation. Management believes that in addition to income (loss), EBITDA is a useful supplemental performance measure as it used by management to evaluate the results generated by the Company's principal business activities prior to depreciation, amortization and impairment charges or reversals, consideration of how these activities are financed and how the results are taxed in various jurisdictions. The Company modified its method of calculating EBITDA after December 31, 2010, and has revised prior period EBITDA amounts to be consistent with this modified definition. EBITDA is not a recognized measure under IFRS and consequently does not have a standard prescribed meaning. The Company's method of calculating EBITDA may differ from other companies, and accordingly, it may not be comparable to a similarly described measure used by another company.

The Company's consolidated financial statements and Management's Discussion and Analysis are available on the SEDAR website at

Reader Advisory

This news release may contain certain forward-looking statements, which include assumptions with respect to (i) future operations; (ii) future economic conditions; (iii) future capital expenditures; and (iv) EBITDA. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such risks and uncertainties include, without limitation, risks associated with loss of markets, volatility of commodity prices, fluctuations in foreign exchange or interest rates environmental risks, competition from other companies, ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, the lack of availability of qualified personnel or management, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Corporation will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All forward-looking statements contained in this press release are expressly qualified in their entirety by these cautionary statements.

The forward-looking statements contained in this news release are made as at the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Neither 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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