CALGARY, ALBERTA--(Marketwire - Aug. 10, 2012) - CORDY OILFIELD SERVICES INC. (the "Corporation" or "Cordy") (TSX VENTURE:CKK.V - News) released today its second quarter results for the period ending June 30, 2012.
For the six months ended June 30, 2012, Cordy reported revenue from continuing operations of $52.9 million, $12.8 million higher than the $40.1 million achieved in the same period of 2011. Earnings before interest, taxes, depreciation, amortization, impairment and stock-based compensation (EBITDAS) were $3.9 million in the six months ended June 30, 2012 compared to $4.2 million during the comparable period in 2011. Cordy generated net earnings from continuing operations of $0.2 million for the six months ended June 30, 2012 compared to $1.7 million for the same period of 2011. Additionally, Cordy had net earnings from discontinued operations of $nil for the six months ended June 30, 2012 compared to a net loss of $1.4 million for the comparative period of 2011. Overall, the Corporation's first-half 2012 performance remained positive with $0.2 million in net earnings from all operations, down from net earnings from all operations of $0.3 million in the comparative period of 2011.
For the second quarter of 2012, Cordy's revenue from continuing operations was $17.8 million, $2.4 million higher than the $15.4 million achieved in the same period of 2011. EBITDAS was a loss of $2.3 million in the three months ended June 30, 2012 compared to $0.3 million in earnings during the comparable period in 2011.. Cordy incurred a second-quarter net loss from continuing operations of $3.2 million compared a net loss of $0.4 million for the comparative period of 2011. Additionally, Cordy incurred a second-quarter net loss from discontinued operations of $0.2 million compared to a net loss of $0.8 million for the comparative period of 2011. Overall, the Corporation's second-quarter performance resulted in a net loss of $3.5 million from all operations, an increase from the net loss from all operations of $1.3 million incurred during the comparative period of 2011.
For the quarters ended
($ millions except share
price and per share Q2 YTD Q2 YTD
amounts) Q2 2012 Q2 2011 $ Change 2012 2011 $ Change
Revenue 17.8 15.4 2.4 52.9 40.1 12.8
EBITDAS(2) (2.3) 0.3 (2.6) 3.9 4.2 (0.3)
Net earnings (loss) from all
operations (3.5) (1.3) (2.2) 0.2 0.3 (0.1)
Funds flow from operating
activities 1.8 2.6 (0.8) 5.2 1.9 3.3
(AT JUNE 30 2012 AND
DECEMBER 31, 2011)
Fixed term debt obligations
(includes current portion) 18.1 8.4 9.7 - - -
Total assets 75.5 77.1 (1.6) - - -
Total liabilities 29.4 31.3 (1.9) - - -
Net assets 46.1 45.8 0.3 - - -
Earnings per share from
continuing operations ($) (0.04) 0.00 (0.04) 0.00 0.02 (0.02)
Earnings per share from
discontinued operations ($) 0.00 (0.01) 0.01 0.00 (0.02) 0.02
Earnings per share from all
operations ($) (0.04) (0.01) (0.03) 0.00 0.00 0.00
(2) Earnings before interest, taxes, depreciation, amortization, impairment
and stock-based compensation (see reader advisory).
The sooner-than-expected spring break-up, followed by a wetter-than-normal June that effectively extended spring break-up to the end of the second quarter held back Cordy's financial performance. Historically, the Corporation experiences a strong June, which largely offsets losses incurred during the first two months of the second quarter. Overall, however, Cordy and most of its business segments remained marginally profitable for the first half of 2012. Given the tight labour market, this year Cordy elected to minimize its usual seasonal layoffs in order to keep experienced and productive personnel available to the Corporation. This will contribute to the higher labour costs in 2012 over 2011, a common condition faced throughout the energy service and supply sector. Finally, during the second quarter of 2012, the increased rental costs negatively affected the Corporation's financial performance as new equipment was secured for projects that were either rained out or delayed due to a longer-than-expected spring break-up.
For the balance of 2012, Cordy's management is optimistic that business conditions in Western Canada's oil, natural gas and mining sectors will remain solid, with essentially stable year-over-year activity levels, despite the continued weak outlook for natural gas prices. If the demand for services related to oil and liquids-rich gas drilling is materially reduced, management may further soften its outlook for 2012. On balance, Cordy's management expects the second half of the year to be strong, but not likely strong enough to fully offset the second quarter's results and thereby achieve original expectations for 2012.
Management will continue seeking opportunities to expand Cordy's operations organically in the regions where its business segments operate. Cordy's newer fleet of heavy equipment should support this expansion as well the continued ability to attract and retain staff. Operationally, Management will work to achieve further internal cost savings by streamlining Cordy's operations, facilitating more efficient operational delivery of Cordy's services and higher margins. Management is confident the Corporation will remain on-track to achieve its operational objectives and deliver results to shareholders that build on the gains achieved in 2011.
Complete copies of Cordy's consolidated financial statements for the quarter ended June 30, 2012 and the associated Management's Discussion and Analysis are available on our website www.cordy.ca or on SEDAR at www.sedar.com.
Effective January 1, 2011, Cordy began reporting its financial results in accordance with International Financial Reporting Standards (IFRS). Prior-year's comparative amounts were changed to reflect results as if Cordy had always prepared its financial results using IFRS.
This News Release contains certain statements that constitute forward-looking statements. These statements relate to future events or the Corporation's future performance. All state- ments, other than statements of historical fact, that address activities, events or developments that the Corporation or a third party expects or anticipates will or may occur in the future, are forward-looking statements. These include the Corporation's future growth, results of operations, performance and business prospects and opportunities; prevailing economic conditions; commodity prices; sourcing, pricing and availability of raw materials, components and parts, equipment, suppliers, facilities and skilled personnel; dependence on major customers; uncertain- ties in weather and temperature affecting the duration of the service periods and the activities that can be completed; regional competition; and other factors, many of which are beyond the Corporation's control. These other factors include future prices of oil and natural gas and oil and natural gas industry activity, including the effect of changes in commodity prices on oil and natural gas exploration and development activity, the ability to complete strategic acquisitions and realize the anticipated benefits of any acquisitions that are completed, the Corpora- tion's outlook regarding the competitive environment it operates in, and the assumptions underlying any of the foregoing. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the Corporation's control, including those discussed under "Risks and Uncertainties" and elsewhere in this News Release, which may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this News Release should not be unduly relied upon. These statements speak only as of the date of this News Release. The Corporation does not intend, and does not assume any obligation, to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required under applicable securities laws. The forward-looking statements contained in this News Release are expressly qualified by this cautionary statement.
Cordy uses the measures Earnings Before Interest, Taxes, Depreciation, Amortization and Impairment and Stock Based Compensation (EBITDAS) in this news release. This measure does not have any standardized meaning prescribed by International Financial Reporting Standards (IFRS). It is, therefore, considered to be non-IFRS term and may not be comparable to similar measures presented by other entities. Management of Cordy uses these non-IFRS measures to improve its ability to compare financial results among reporting periods and to enhance its understanding of operating performance, liquidity and ability to generate funds to finance operations. This non-IFRS measure is also provided to readers as additional information on Cordy's operating performance, liquidity and ability to generate funds to finance operations. EBITDAS is an approximate measure of the Cordy's pre-tax operating cash flow and is generally used to better measure performance and evaluate trends of individual assets. EBITDAS comprises earnings before deducting interest and other financial charges, income taxes, depreciation and amortization, net income attributable to non-controlling interests and preferred share dividends.
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.
Cordy Oilfield Services Inc.
For general information:
David Mullen, Chairman & Chief Executive Officer
Cordy Oilfield Services Inc.
For investor relations information:
Matthew Braaten, CA, Chief Financial Officer