CALGARY, ALBERTA -- (Marketwire) -- 03/06/13 -- Xtreme Drilling and Coil Services (TSX: XDC) announce fourth quarter 2012 and full year operating results. It is anticipated that filing will take place on SEDAR of audited Consolidated Financial Statements and Notes to the audited Consolidated Financial Statements and Management's Discussion and Analysis for the twelve months ended December 31, 2012 on Friday, March 8, 2013.
Xtreme has scheduled a conference call to discuss results with investors, analysts, and stakeholders on Thursday, March 7, 2013, beginning promptly at 9:00 am MT (10:00 am CT, 11:00 am ET).
Tom Wood, Chief Executive Officer, will host the conference call with participation from Matt Porter, Chief Financial Officer.
Conference operator dial-in numbers
To participate in the conference call, please dial in as follows approximately ten minutes before the start time in your time zone.
+1 866-225-2055 (North America Toll-Free) or +1 416-340-8410 (Alternate)
An audio replay of the call will be available until Thursday, March 14, 2013. To access the replay, call +1 800-408-3053 or +1 905-694-9451 and enter pass code 9289172.
Highlights
-- In light of the dramatic turnaround in financial and operating performance, the Board of Directors has removed the interim designation and appointed Tom Wood as Chief Executive Officer and suspended the CEO search. As a founding shareholder Mr. Wood has been involved in the reorganization of the Drilling Segment which has led to significantly improved profitability. In addition, Mr. Wood led the restructuring effort to turn the Coil Services segment to profitability over the past six months. While the financial performance has recovered significantly from the second quarter 2012 low, the Company is focused on maintaining this momentum to attain a profitability level in the top quartile among peers, by year end. The executive team is fully dedicated to achieving this target while focusing on strengthening the balance sheet and liquidity generation to drive organic growth.-- Record adjusted EBITDA of $14.8 million in the fourth quarter of 2012, an increase of 44% over the previous quarter and 140% over the fourth quarter of 2011. The record quarter was driven by strong performance in both the Drilling and Coil Services segments. The US operations for both the Drilling and Coil Services segments recognized a significant increase in operating margin due to recent cost controls and process improvements. For the year ended December 31, 2012, adjusted EBITDA increased to $39.7 million as compared to $21.9 million for the prior year.-- Record revenue of $50.4 million in the fourth quarter of 2012, an increase of 6% over the previous quarter and 61% over the fourth quarter of 2011. For the year ended December 31, 2012 the Company recognized revenue of $174.2 million, an increase of 67% or $70.2 million from 2011. In addition, operating days for 2012 increased to 6,550 as compared to 4,602 in 2011. The increase in revenue for the year was a function of 42% more operating days in 2012 and an increase in average revenue per day to $26,588 from $22,594 in 2011.-- The Coil Services segment (includes U.S. and Saudi Arabia XSR) increased operating profit to $2.6 million in the fourth quarter of 2012 as compared to a loss in the previous quarter of $260 thousand. This was driven by the US division which generated an operating profit on strong cost controls and operational reorganization as well as the Saudi Arabia division which increased profitability on stronger utilization for the quarter.-- Completed aggressive capital expansion program in which the Company built eight XDR 500 drilling rigs, converted three XDR 400 rigs to XDR 500 rigs and built five new XSR large diameter coiled tubing units. With the subsequent sale of one of the new-build XSR rigs in the first quarter of 2013, the Company currently has 21 XDR rigs and 7 XSR units available to work.-- Renewed the $150 million credit facility with the existing syndicate of banks at year end. Finished 2012 with $142 million in net debt (total debt less cash) and a funded debt to EBITDA ratio of 3.63. This marks significant improvement from the peak funded debt to EBITDA ratio of 5.73 at June 30, 2012. With the continued focus on improving the balance sheet, the Company is committed to aggressively bring down leverage ratios over the coming quarters. Free cash flow generation should be significant during 2013 with planned maintenance capital expenditures currently at $15 million. This is down significantly from total capital expenditures of $115 million in 2011 and $112 million in 2012. Subsequent to quarter end, the Company paid down $5 million on the $10 million HSBC demand note issued in 2012. The Company anticipates paying down the remaining $5 million by the April 30, 2013 due date.-- Xtreme recognized an impairment loss on the prototype XSR unit 111 during the fourth quarter of $3.1 million. This relates to the sale of the unit to a group overseas. The sale closed in February 2013. It was required that the Company move the asset to available for sale, as it was contracted at year end. Additionally, the Company recognized approximately $2 million in additional depreciation expense in the fourth quarter related to a change in accounting estimate for depreciation of spares.
