CALGARY, May 17, 2013 /CNW/ - Winalta Inc. ("Winalta"
or the "Company") announces results for the three months ended
March 31, 2013. Revenue of
$6.8 million and EBITDA of
$3.9 million, showed decreases of
$2.2 million and $1.0 million, respectively, to revenue of
$9.0 million and EBITDA of
$4.9 million for the comparative 3
month period in 2012. The 24% decrease in revenue was due to
decreases in third party revenue utilization and to decreased
industry activity levels.
Winalta's focus on cost control showed in its Q1 2013 EBITDA
margins which were up 2% to 56% and decreased G&A and interest
expense for the quarter.
Quarter End Highlights
- Increased EBITDA margin, 56% in Q1 2013 from 54% in Q1
2012
- G&A expenses decreased by 11%, a $105 thousand reduction
- Interest expense was down by 49%, a decrease of $175 thousand over the comparable period
Selected Financial Information
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Three Months Ended |
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March 31, 2013 |
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March 31, 2012 |
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Revenue |
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6,835 |
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8,986 |
Net Earnings |
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1,764 |
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3,325 |
Earnings per share and diluted earnings per
share |
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0.04 |
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0.08 |
EBITDA |
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3,851 |
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4,901 |
EBITDA per share |
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0.10 |
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0.12 |
Total Equity |
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25,851 |
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25,631 |
Dividends |
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403 |
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The Company has reported areas of improved results in the first
quarter of 2013 versus the first quarter of 2012. These
improvements were offset by some adverse results. One area
where the Company showed improvement was in this EBITDA
margin. Winalta generated an EBITDA margin of 56% of sales,
which as a percentage, improved 2% over first quarter 2012.
The Company also decreased its third party, low margin, business
activity in the quarter.
Revenue
The Company saw a decrease in revenues from the Comparative
Period. The decrease can be attributed to a significant
reduction in third party rentals, specifically the loss of third
party camp rentals in 2013. The decrease in third party
camp equipment rentals was equal to $1.6
million in revenue during the quarter. Third party
rental equipment is only required after Winalta reaches close to
full utilization of its own fleet of equipment, which happens most
often at times of high industry activity. As Q1 2013 utilization
and industry activity levels were down from the comparable period,
third party rentals was negatively impacted. The Company saw
an increase in demand for its Wellsite units which was offset by a
decrease in demand for its other equipment lines as customers
adjusted their drilling activity over the winter drilling
season.
Actual rental days for Wellsite units increased by 1% in the
Period, compared to the Comparative Period.
Utilization of Camp units for the Period was 70% as compared to
90% for the Comparative Period as customers maintained drilling
activities which required camp services but to a lesser degree in
2013. Actual rental days for Camp units decreased by 23% in
the Period, compared to the Comparative Period.
Actual rental days for Dedicated Geo-Lab units decreased by 8%
in the Period, compared to the Comparative Period.
Over the past 12 months, the Company has added 21 Wellsite units
and 16 Dedicated Geo-Lab units. The Company's build program
is part of its strategy to provide newer Wellsite units to its
customers in order to provide the correct combination of units to
meet their needs in the field.
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Revenue Drivers Q1 2013 versus
Q1 2012 |
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% Increase |
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2013 |
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2012 |
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Fleet size |
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13% |
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334 |
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297 |
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Utilization |
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(16%) |
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71% |
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85% |
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Fleet Expansion
Over the past 3 months, the Company has added 4 Wellsite units and
6 Dedicated Geo-Labs. The Company continues to expand its fleet,
maintaining a low average age of equipment which enables it to
maintain its status as a premium provider of surface rental
equipment.
Utilization
Utilization of Wellsite units was 65% as compared to 76% for the
comparative period. The number of actual rental days for Wellsite
units increased by 1%, over the comparative period.
Utilization of Drill Camps was 70% as compared to 90% for the
comparative period as customers maintained drilling activities
which required camp services but to a lesser degree in 2013 than in
201. Utilization of Dedicated Geo-Labs units was 36% as compared to
87% for the Comparative Period. Actual rental days for Dedicated
Geo-Lab units decreased by 8%, compared to the Comparative
Period.
Over the past 12 months, the Company has added 21 Wellsite units
and 16 Dedicated Geo-Lab units. Winalta now has, what it perceived
to be the correct ratio of Dedicated Geo-Lab units to Wellsites,
and is not planning on building more Geo-Lab in 2013. The Company's
build program is part of its strategy to provide newer Wellsite
units to its customers in order to provide the correct combination
of units to meet their needs in the field.
General and Administrative
For Q1 2013, administrative costs were $877
thousand, down from $982
thousand for the comparative period. The Company has
continued to focus on cost controls and reductions occurred in
office rent and related operating costs of $76 thousand; travel, meals and entertainment of
$18 thousand; and, professional fees
of $28 thousand. These
reductions were offset by an increase of $7
thousand relating to the investment in land at Sylvan Lake.
Depreciation and Amortization
The increase in depreciation and amortization expense of
$110 thousand in Q1 2013 reflects the
acquisition of $5.5 million of
equipment in the trailing 12 month period.
Interest Expense
Interest expense for Q1 2013 was $183
thousand as compared to $358
thousand for the comparable period. The decrease in
interest expense was the result of the Company renegotiating its
financing facility to more favorable terms.
Outlook
The beginning of the first quarter of 2013 unfolded as expected,
however, the last month of the quarter had less activity than
expected which resulted in the Company not meeting targets for the
month of March. This trend has carried into the beginning of
the second quarter. However, the Company has started to
receive more inquiries as to availability of equipment and there is
more promise for equipment towards the end of the second
quarter. This activity should lead into stronger utilization
going into the balance of 2013.
The Company implemented a two tiered, summer and winter, pricing
strategy in April 2013 which should
better fit industry activity levels and improve utilization rates
in all categories over the slower second and third quarters of
2013. The Company continues to look at ways to decrease low
margin third party revenue and replace that revenue with its own
fleet of equipment. In anticipation of an expected increase in
demand and to service our customers with a good mix of equipment,
the Company is continuing to expand the fleet of oilfield Wellsite
units and Intergraded Wellsite Systems (IWS).
The Company continues to explore opportunities to enhance its
rental fleet by expanding into the IWS, which would provide a
longer term level revenue stream as compared to the traditional
spot rate rental business. This new concept product line
should help mitigate some of the seasonal impact the Company
experiences.
The Company has entered into an agreement to supply one IWS,
commencing in Q3 2013. This agreement will continue to the
end of 2014. The Company is currently in discussions with
other interested parties for the rental of additional IWS which, if
successful, would increase rental activity commencing in the
third quarter of 2013 and going forward.
Winalta Oilfield Rentals, specializes in innovative and
high-quality modular buildings for the Western Canadian Oil and Gas
Industry. Winalta's rental fleet is comprised of single-unit
Wellsites, Integrated Wellsite Systems (IWS), Dedicated Geo Labs,
and Drill Camps.
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.
Forward-looking information
Certain information set forth in this press release, including
management's assessment of the potential for increased cash flows,
continued growth of the Company's rental fleet, demand for the
Company's rental units, the Company's pricing strategy, the impact
of the Company's expansion into IWS and the Company's expectation
regarding the status of the economy and its impact on the Company,
may constitute forward-looking statements. By their nature,
forward-looking statements involve material assumptions and are
subject to numerous risks and uncertainties, including with respect
to market and economic conditions and their impact on the Company's
business, some of which, are beyond the Company's control. Readers
are cautioned not to place undue reliance on the forward-looking
statements as the assumptions used in the preparation of such
information, although considered reasonable at the time of
preparation, may prove to be imprecise and actual results,
performance or outcomes could materially differ from those
expressed or implied in such forward-looking statements and
accordingly, no assurance can be given that any of the events
anticipated by forward looking statements will transpire or occur,
or if any of them do so, what benefit Winalta will derive
therefrom. The Company does not assume the obligation to revise or
update this forward-looking information after the date of this
release or to revise such information to reflect the occurrence of
future unanticipated events, except as may be required under
applicable securities laws.
SOURCE Winalta Inc.