Cabo Drilling Corp. ("Cabo" or the "Company") (TSX VENTURE:CBE) reports its
fiscal year 2012 third quarter results for the quarter ended March 31.
3rd QUARTER HIGHLIGHTS
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3 months 3 months 9 months 9 months
(CDN $000s, except earnings per ending ending ending ending
share) Mar 31/12 Mar 31/11 Mar 31/12 Mar 31/11
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Revenue 14,046 9,540 45,339 30,395
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Earnings (Loss) Before Interest,
Taxes, Amortization, Stock
Based Compensation and Other
Items (EBITDA) 1,551 (30) 6,075 2,243
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Net Earnings (Loss) Before Taxes 230 (801) 3,130 (7)
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Net Earnings (Loss) After Taxes 430 (624) 2,389 (34)
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Earnings (Loss) per Share ($)
(Basic and Diluted) Before
Interest, Taxes, Amortization,
Stock-based Compensation and
Other Items (EBITDA) 0.02 0.00 0.08 0.04
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Earnings (Loss) per Share ($)
(Basic and Diluted) 0.01 (0.01) 0.03 0.00
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Cash from Operations(i) 1,012 248 3,968 1,608
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Gross Margin % 23.2% 18.8% 24.0% 23.1%
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Working Capital 9,639 8,040 9,639 8,040
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(i) before changes in non-cash working capital items
The Company reports:
-- Record quarterly revenue for the 3rd quarter fiscal 2012 of $14.05
million, a 47% improvement compared to $9.54 million in the 3rd quarter
fiscal 2011.
-- 3rd quarter fiscal 2012 earnings before interest, taxes, amortization,
stock-based compensation and other items (EBITDA) of $1.55 million
compared to 3rd quarter fiscal 2011 earnings before interest, tax,
amortization, stock based compensation and other items (EBITDA) of
$(30,039), resulting in 3rd quarter fiscal 2012 earnings before
interest, taxes, amortization, stock-based compensation and other items
of $0.02 per share and $0.00 per share in the 3rd quarter of fiscal
2011.
-- Net before tax income for the 3rd quarter of fiscal 2012 of $230,300
compared to a 3rd quarter fiscal 2011 before tax loss of $800,862.
-- Net after tax earnings for the 3rd quarter of fiscal 2012 of $429,692
compared to a net after tax loss for the 3rd quarter of fiscal 2011 of
$624,422, resulting in 3rd quarter fiscal 2012 net after tax earnings of
$0.01 per share compared to a net after tax loss for 3rd quarter fiscal
2011 of $0.01 per share.
-- Gross margin percentage for the 3rdquarter fiscal 2012 was 23.2%
compared with a gross margin of 18.8% in 3rd quarter fiscal 2011 and
24.0% in the 2nd quarter of fiscal 2012.
-- Cash from operations, before changes in non-cash working capital items,
was $3.97 million for the 3rd quarter fiscal 2012 compared to 3rd
quarter fiscal 2011 cash from operations of $1.61 million.
-- A current asset balance of $26.02 million and working capital of $9,639
million.
-- Total assets of $41.84 million and total liabilities of $17.86 million.
"Cabo Drilling generated record revenues for the first nine months of fiscal
2012 of $45.34 million. This represents a 49% increase over the $30.40 million
recorded in the comparable period in fiscal 2011. The Company has exceeded the
$43.22 million reported for all of fiscal 2011, by the end of the third quarter
of fiscal 2012." stated Mr. Versfelt, Cabo's President & CEO. "The Company's
quarterly gross revenue for the three months ending March 31, 2012 also
increased by 47% to $14.05 million, compared to $9.54 million in the comparable
three month period in fiscal 2011."
"Revenues from our international divisions continue to represent a significant
part of Cabo Drilling's operations with 30% or $13.39 million, as compared to
$6.78 million during the nine month period ending March 31, 2011. This
represents a 102% increase in international revenues in fiscal 2012 as compared
to fiscal 2011," commented Mr. Versfelt. "The Company experienced a 35% increase
in revenues from the Canadian divisions to $31.95 million in fiscal 2012, as
compared to $23.60 million in the same period in fiscal 2011."
"Gross margin remained healthy at 23.2% or $3.25 million during the third
quarter, fiscal 2012," said Mr. Versfelt. "Our gross margin for this quarter is
down slightly compared to 24.1% in the second quarter of fiscal 2012 but higher
than the 18.8% in the third quarter of fiscal 2011."
"EBITDA improved to $1.55 million or $0.02 per share for the quarter ending
March 31, 2012 from $(30,039) in the comparable period of fiscal 2011," stated
Mr. Versfelt. "For the nine months ending March 31, 2012, EBITDA improved to
$6.08 million or $0.08 per share, compared to $2.24 million or $0.04 per share
for the same period in 2011."
"Cabo was once again profitable in the quarter with net income after taxes for
the third quarter, fiscal 2012, increasing to $429,692," commended Mr. Versfelt.
"This is a significant improvement compared to a net loss of $624,422 for the
same period in 2011."
"Additionally, Cabo has generated $3.97 million in cash flow from operating
activities in the first nine months of fiscal 2012, a147% increase from the
$1.61 million generated in the comparable period in 2011," commented Mr.
Versfelt. "Of this amount in 2012, $2.11 million has gone to reducing the
Company's total debt outstanding, while $1.92 million has been reinvested in the
business in the form of capital expenditures.
Third quarter ended March 31, 2012
Cabo's gross revenues for the three months ending March 31, 2012 increased by
47% to $14.05 million, compared to $9.54 million in the comparable three month
period in fiscal 2011. The Canadian divisions represented 67% of total revenues
for the third quarter of fiscal 2012, as compared to 70% during the second
quarter of fiscal 2012. International revenues increased to $4.87 million,
slightly higher than the previous quarter of $4.30 million and $2.07 million
higher (135%) than the comparable quarter in fiscal 2011. All the Company's
divisions reported improved revenues compared to the same period last year.
Direct costs for the three month period ended March 31, 2012 were $10.79 million
compared to $7.75 million in the comparable three month period ended March 31,
2012. Gross margins for the three month period ended March 31, 2012 were 23.2%,
compared to 18.8% during the quarter ended March 31, 2011 and 24% in the second
quarter of fiscal 2012. The decreased margin during the third quarter of fiscal
2012 is a direct result of the increased wage and material costs.
General and administration costs increased to $1.90 million in the quarter ended
March 31, 2012 compared to $1.71 million incurred in third quarter of fiscal
2011 and the $1.89 million in the second quarter of fiscal 2012. This increase
is attributable to increased administration costs in the international
locations, increased travel costs, increased professional fees (legal and
accounting) and one time charges incurred in investigating new debt facilities.
General and administration includes stock based compensation expense in the
amount of $146,060 in the quarter ended March 31, 2012 compared to $nil in the
third quarter of 2011.
General and administration costs as a percentage of revenue have decreased to
14% in the third quarter of fiscal 2012 as compared to 18% in the third quarter
of fiscal 2011.
Depreciation of property, plant and equipment for the three months ending March
31, 2012 increased to $664,994 from $662,254 in the third quarter of fiscal 2011
and $664,324 incurred during the quarter ended December 31, 2011.
Net income for the third quarter of fiscal 2012 was $429,692 compared to net
loss of $624,422 in the third quarter of fiscal 2011 and a net income of
$439,638 in the second quarter of fiscal 2012.
Accounts receivable increased by $483,369 or 5% to $11.05 million at March 31,
2012 from $10.59 million at June 30, 2011. The increase is primarily due to
increased activity during the third quarter of fiscal 2012.
Property, plant & equipment increased by $87,776 at March 31, 2012 to $13.08
million from $12.99 million at June 30, 2011. The Company increased capital
equipment by $1.95 million during the first nine months of fiscal 2012. Included
in this amount is over $500,000 in new trucks. Other significant equipment
capital expenditures included reverse circulation and helicopter support drills.
During the first nine months of fiscal 2012, the Company acquired one new drill,
financed by an equipment manufacturer, and completed major overhauls of four
other drills that were mobilized to new projects. These acquisitions and capital
expenditures generally occur in three year cycles. Consequently, Cabo does not
expect significant acquisitions for trucks and major drill overhauls through the
end of fiscal 2012 and fiscal 2013.
Consolidated Financial Results for nine months ending March 31, 2012
Revenue for the nine months ending March 31, 2012 increased approximately 49% to
a record $45.34 million, compared to $30.40 million in the comparable period in
fiscal 2011. Revenues from our international divisions continue to represent a
significant part of Cabo Drilling's operations with 30% or $13.39 million, as
compared to $6.78 million during the nine month period ending March 31, 2011.
This represents a 102% increase in international revenues in fiscal 2012 as
compared to fiscal 2011. The Company experienced a 35% increase in revenues from
the Canadian divisions to $31.95 million in fiscal 2012, as compared to $23.60
million in the same period in fiscal 2011.
Surface drilling increased by 48% during the nine month period ending March 31,
2012 to $36.45 million, on the strength of increased reverse circulation
drilling carried out by the Ontario division and the increased core drilling
revenues in the Colombia and Pacific divisions. Underground drilling increased
by 79% during the nine month period ending March 31, 2012 to $8.03 million as
compared to $4.48 million during the comparable period in fiscal 2011. The
increase came primarily from underground drilling operations in Ontario,
Atlantic and Albania divisions.
Direct costs for the nine months ended March 31, 2012 were $34.47 million
compared to $23.38 million in the comparable period in fiscal 2011. Gross
margins for the nine months ended March 31, 2012 were 24% compared to 23% during
the nine months ended March 31, 2011. The increased margins are attributed to
higher margins earned on international projects.
General and administrative expenses increased by approximately 17% or $835,957
from $4.71 million in the first nine months of fiscal 2011 to $5.54 million in
the first nine months of fiscal 2012. The increase is consistent with a
generally higher level of overall business activity and a direct result of
increased travel costs, increased professional fees, higher administration costs
in the international divisions and increased costs incurred in securing new
credit facilities, as well as $146,000 attributed to stock based compensation.
As a percentage of revenues general and administration decreased to represent
12% of revenues during the nine months ending March 31, 2011 as compared to 15%
in the comparable period in fiscal 2011.
The stock based compensation expense in the amount of $146,060 in the first nine
months of 2012 compares to $23,033 in the first nine months of 2011.
Net income for the first nine months of fiscal 2012 was $2.39 million compared
to net loss of $33,746 in the comparable period of fiscal 2011.
Cash flow from operations (before changes in non-cash operating working capital
items) was $3.97 million during the first nine months of fiscal 2012, compared
to $1.61 during the first nine months of fiscal 2011.
The mineral drilling industry is dependent on demand for and supply of precious,
base and strategic metals as well as precious stones. Demand and supply factors
for these commodities can change dramatically up and down, as we have witnessed
in the past, causing dynamic shifts in the supply of drills and drilling
personnel from under supply to over supply. The financial stress in European
financial credit markets, readjustments in China and Brazil, as well as
significant global currency and economic shifts, have caused substantial
uncertainty in the global financial markets. While this uncertainty has not
caused major changes in the non-ferrous metal markets to date, the Company
remains very vigilante to any substantial market moves that can impact the
demand for its services. Management has initiated comprehensive cost and
spending controls, as well as risk management procedures throughout the Company.
Senior management is focused on careful cash management, realignment of debt,
high customer relations and high employee relations.
About Cabo Drilling Corp. (TSX VENTURE:CBE)
Cabo Drilling Corp. is a drilling services company headquartered in North
Vancouver, British Columbia, Canada. The Company provides mining specialty
drilling services through its Canadian divisions in Surrey, British Columbia;
Montreal, Quebec; Kirkland Lake, Ontario; and Springdale, Newfoundland; as well
as Cabo Drilling (Nevada) Inc. of the United States; Cabo Drilling (Panama)
Corp. of Panama, Republic of Panama; Cabo Drilling Panama-Pacifico Corp. of
Panama, Republic of Panama doing business as Cabo Drilling Colombia Corp.;
Balkan States Drilling SH.P.K. of Tirana, Albania; and Cabo Drilling
(International) Inc. The Company's common shares trade on the Frankfurt Exchange
under the symbol: DHL and on the TSX Venture Exchange under the symbol: CBE.
ON BEHALF OF THE BOARD
John A. Versfelt, Chairman, President and CEO
Further information about the Company can be found on the Cabo website
(http://www.cabo.ca) and SEDAR (www.sedar.com) or by contacting Sheri Barton or
Mr. John A. Versfelt.
This news release may contain forward-looking statements including but not
limited to comments regarding the timing and content of upcoming work programs,
geological interpretations, potential mineral recovery processes and other
business transactions timing. Forward-looking statements address future events
and conditions and therefore, involve inherent risks and uncertainties. Actual
results may differ materially from those currently anticipated in such
statements.
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