Pro-Trans Ventures Inc.

TSX VENTURE : PVI


Pro-Trans Ventures Inc.

April 25, 2014 17:50 ET

Pro-Trans Reports Fiscal 2013 Financial Results

CALGARY, ALBERTA--(Marketwired - April 25, 2014) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Pro-Trans Ventures Inc. (the "Company") (TSX VENTURE:PVI) today reported financial results for the Company's year ended December 31, 2013.

"Due primarily to the current levels of commodity prices, last year was an extremely challenging year for our customers and a result, for our Company," stated Mr. Martin Carsky, President and Chief Executive Officer of the Company. "The management team is grateful to all of our employees who worked extremely hard in spite of the difficult business circumstances but unfortunately, we still were not able to make the business profitable," added Mr. Carsky.

2013 HIGHLIGHTS

  • Revenue for the year was $57.4 million as compared to $63.6 million in 2012
  • EBITDA for the year was $2.7 million as compared to $5.2 million in 2012 due primarily to higher operating expenses
  • Comprehensive loss for the year was $8.0 million as compared to a profit of $0.6 million in 2012, primarily due to the write-down of $6.2 million in goodwill

The full version of the Company's financial statements and Management's Discussion and Analysis can be viewed on the Company's website at www.protransventures.com, or on SEDAR at www.sedar.com. All financial information is prepared in accordance with IFRS and all dollar amounts are expressed in Canadian dollars unless otherwise indicated.

OUTLOOK

The Company was hampered by significantly higher repairs and maintenance costs and higher than expected equipment downtime during much of the fourth quarter and, as a result, haul volumes for the Brule operation were down from the third quarter. Also, the hauling requirements of two other customers were reduced which had an impact on the Company's overall cash flows. Lastly, while the Company was successful in negotiating a new contract with one of its customers, the new terms did not take effect until December 2013. As a result, the financial results for the fourth quarter were extremely poor and caused a significant strain on the Company's working capital.

The operational situation was the same for the first quarter of 2014 and as a result, the strain on working capital continued. In addition, under the terms of one of its hauling contracts, the Company incurred financial penalties which further affected its profitability.

Looking ahead to the next two quarters management believes that there will be an improvement in equipment availability as the weather improves, that haul volumes will increase for two of the three operations, and that no future hauling penalties will be incurred. That, together with the new contract in place for the third customer, should increase the prospects for future profitability. However, the news on April 15, 2014 from the Company's largest customer creates uncertainty as to what will happen in 2015. Management is currently assessing the potential impacts on the business and is having ongoing discussions with its customer.

Lastly, the Company is still undercapitalized and continues to seek additional financing to remedy the situation. There are material uncertainties with respect to the ongoing discussions with the Company's lenders as a result of current period covenant violations and forecasted future period covenant violations. The successful future operations of the Company are dependent on the ability of the Company to secure sufficient funds through operations, bank financing, or other sources, and there are no assurances that such funding will be available when needed.

ABOUT PRO-TRANS

Pro-Trans is a Calgary based public company listed on the TSX Venture Exchange. The Company is actively involved in specialized transportation and logistics services within Western Canada, through its wholly owned subsidiary, Maple Leaf Loading Ltd. ("Maple Leaf"), based in Prince George, BC. Maple Leaf, a mining support company, offers specialized transportation services related to the management, handling, and transportation of coal and ore concentrates for customers in the mining industry in BC, Alberta, and the Yukon.

NON-IFRS MEASURES

The discussion of financial results in this press release includes reference to EBITDA which is a non-IFRS measure. The Company provides this measure as additional information regarding the Company's financial results and performance. Please refer to the Company's MD&A for the three months and year ended December 31, 2013 for a definition and reconciliation of these measures to the Company's financial statements.

FORWARD-LOOKING INFORMATION

This press release contains certain statements or disclosures relating to Pro-Trans that are based on the expectations of Pro-Trans as well as assumptions made by and information currently available to Pro-Trans which may constitute forward-looking information under applicable securities laws. In particular, this press release contains forward-looking information related to the future financial and operational performance of the Corporation, with respect to the Corporation's customer base, future equipment utilization and the requirement for additional future financing. Such forward looking information involves material assumptions and known and unknown risks and uncertainties, certain of which are beyond Pro-Trans' control. Many factors could cause the performance or achievement by Pro-Trans to be materially different from any future results, performance or achievements that may be expressed or implied by such forward looking information. Pro-Trans' Management's Discussion and Analysis and other documents filed with securities regulatory authorities (accessible through the SEDAR website at www.sedar.com) describe certain risks, material assumptions and other factors that could influence actual results. Pro-Trans disclaims any intention or obligation to publicly update or revise any forward looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

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.

Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws.

PRO-TRANS VENTURES INC.

Consolidated Statements of Financial Position

As at December 31, 2013 and 2012

2013 2012
$ $
Assets
Current assets:
Cash 15,863 7,956
Accounts receivable 4,292,427 4,249,118
Corporate income taxes receivable 1,210,564 1,006,502
Inventories 1,244,781 1,332,229
Prepaid expenses and deposits 603,205 1,684,438
7,366,840 8,280,243
Prepaid deposits on leases 145,231 260,726
Property, plant and equipment 26,949,958 22,811,252
Goodwill and intangible assets 2,550,000 8,973,754
37,012,029 40,325,975
2013 2012
$ $
Liabilities and Shareholders' Equity
Current liabilities
Bank indebtedness 1,757,578 134,280
Accounts payable and accrued liabilities 7,400,833 4,970,648
Deferred revenue and customer deposits 390,844 1,562,541
Current portion of long term debt 1,028,400 291,566
Current portion of obligations under capital leases 12,362,518 13,474,622
Current portion of due to former shareholder 79,719 159,319
Demand loans payable 172,287 571,442
23,192,179 21,164,418
Non-current liabilities
Long term debt 46,473 80,935
Obligations under capital leases 2,859,354 1,473,227
Convertible debenture loan 4,792,863 4,609,124
Payable to former shareholders of subsidiary - 79,720
Deferred income taxes 2,122,694 1,851,694
33,013,563 29,259,118
Shareholders' equity
Share capital - common shares 9,654,820 8,851,069
Contributed surplus 1,611,538 1,524,901
Equity component of convertible debt 525,000 525,000
Retained earnings (deficit) (7,792,892) 165,887
3,998,466 11,066,857
Commitments
37,012,029 40,325,975

PRO-TRANS VENTURES INC.

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

Years ended December 31, 2013 and 2012

2013 2012
$ $
Revenue:
Operating 57,382,174 63,637,365
Leasing 267,165 300,560
57,649,339 63,937,925
Expenses:
Operating 46,597,926 49,962,096
Depreciation 3,567,142 2,925,163
Equipment rentals and leases 3,977,574 4,612,459
General and administrative 4,208,199 4,069,578
Amortization of intangible asset 200,000 200,000
Net finance costs 1,627,159 1,540,092
Gain on sale of property, plant and equipment (186,623) (254,923)
Share-based compensation 87,987 62,500
Goodwill impairment expense 6,223,754 -
66,303,118 63,116,965
Income (loss) before income taxes (8,653,779) 820,960
Income tax expense (recovery)
Current (966,000) (312,694)
Deferred 271,000 488,777
(695,000) 176,083
Net income (loss) and comprehensive income (loss) for the year (7,958,779) 644,877
Weighted average shares outstanding 27,319,917 25,194,623
Earnings (loss) per share - basic and diluted ($0.29) $0.03

PRO-TRANS VENTURES INC.

Consolidated Statements of Changes in Shareholders' Equity

Years ended December 31, 2013 and 2012

Equity Portion Retained
Common Shares Contributed Convertible Earnings
Number Amount Surplus Debt (Deficit) Total
$ $ $ $ $
Balances January 1, 2013 26,256,903 8,851,069 1,524,901 525,000 165,887 11,066,857
Grant of options - - 87,987 - - 87,987
Exercise of options 270,000 28,350 (1,350) - - 27,000
Shares issued on conversion of warrants 1,500,000 - - - -
Shares issued through private placement 13,333,333 775,401 - - - 775,401
Net income (loss) and comprehensive income (loss) - - - - (7,958,779) (7,958,779)
Balances December 31, 2013 41,360,236 9,654,820 1,611,538 525,000 (7,792,892) 3,998,466
Balances January 1, 2012 23,810,000 8,088,140 2,250,330 525,000 (478,990) 10,384,480
Shares issued on conversion of warrants 2,446,903 762,929 (762,929) - - -
Grant of options - - 37,500 - - 37,500
Net income and comprehensive income - - - - 644,877 644,877
Balances December 31, 2012 26,256,903 8,851,069 1,524,901 525,000 165,887 11,066,857

PRO-TRANS VENTURES INC.

Consolidated Statements of Cash Flows

Years ended December 31, 2013 and 2012

2013 2012
Cash provided by (used in): $ $
Operations:
Net income (loss) for the year (7,958,779) 644,877
Adjustments for:
Depreciation and amortization 3,567,142 2,925,163
Finance costs 1,627,159 1,540,092
Gain on sale of property, plant and equipment (186,623) (254,923)
Share-based compensation 87,987 37,500
Change in prepaid deposits on leases 115,495 119,363
Amortization of intangible assets 200,000 200,000
Goodwill impairment expense 6,223,754 -
Income tax expense (recovery) (695,000) 176,083
Changes in items of working capital:
Accounts receivable (43,309) 1,128,152
Inventories 87,448 (158,174)
Prepaid expenses and deposits 1,081,233 (435,702)
Accounts payable and accrued liabilities 2,430,185 (993,286)
Deferred revenue and customer deposits (1,171,697) 1,545,843
Interest paid (1,443,419) (1,289,300)
Income tax recovered (paid) 761,938 (493,208)
Net cash provided by (used in) operating activities 4,683,514 4,692,480
Financing:
Proceeds of bank indebtedness 1,623,298 134,280
Repayment of demand loans payable (399,155) (126,842)
Proceeds of long term debt 920,056 1,286,947
Repayment of long-term debt (217,684) (1,667,354)
Repayment of obligations under capital leases (3,702,662) (4,373,600)
Repayments to former shareholders of subsidiary (159,320) (313,338)
Proceeds on exercise of stock options 27,000 -
Proceeds on issue of common shares 775,401 -
Net cash provided by (used in) financing activities (1,133,066) (5,059,907)
Investing:
Proceeds on disposal of property, plant and equipment 3,089,321 2,628,714
Purchase of property, plant and equipment (6,631,862) (2,315,992)
Net cash used in investing activities (3,542,541) 312,722
Increase (decrease) in cash 7,907 (54,705)
Cash, beginning of year 7,956 62,661
Cash, end of year 15,863 7,956

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