EDMONTON, ALBERTA -- (Marketwired) -- 05/13/13 -- Bri-Chem Corp. ("Bri-Chem" or "Company") (TSX: BRY), a leading North American wholesale distributor and manufacturer of oil and gas drilling fluids and steel pipe is pleased to announce its financial results for the first quarter ended March 31, 2013.
During the first quarter of 2013, Bri-Chem has continued to sustain exceptional year over year sales growth in its USA fluids distribution division, a 176% increase, and in its steel pipe manufacturing division, a 113% increase. Despite the overall Q1 2013 decline in drilling and completion activity across the Western Canadian Sedimentary Basin ("WCSB"), Bri-Chem's consolidated revenues remained solid at $49,695,536 for the quarter ended March 31, 2013, compared to $52,706,137 in Q1 2012, a decrease of 5.7%. Net earnings for the three months ended March 31, 2013 were $1,834,704 or $0.11 diluted earnings per share compared to net earnings of $2,893,604 or $0.18 diluted earnings per share for 2012, a decrease of 36.6%. Adjusted earnings before interest, taxes, amortization and share-based payments expense ("Adjusted EBITDAC") was $4,389,964 or $0.25 per share, a decrease of $910,481 compared to 2012. The decrease in earnings and Adjusted EBITDAC is mainly due to two significant non-cash related items being foreign exchange, as the US dollar rose in comparison to the Canadian dollar, resulting in a $513,775 foreign exchange difference from the prior period, as well as a $242,126 increase in stock-based compensation.
The Company's North American oil and gas drilling fluids divisions recorded sales of $41,525,559 for the three months ended March 31, 2013, a decrease of 4.7% compared to the same period in 2012. In Canada, drilling rig utilization averaged 60.9% for the quarter ended March 31, 2013, a decrease of 6.8% from 2012 when utilization rates average 67.7%. The Canadian fluids division generated sales of $33,782,959 for the quarter ended March 31, 2013, compared to sales of $40,627,807 over the comparable period in 2012. The decrease in Canadian fluid sales was mainly due to the lower rig utilization and a decline in quarter over quarter liquid invert sales.
With the completion of the December 31, 2012 acquisition of General Supply Company and their three key Oklahoma warehouse locations, Bri-Chem has now expanded to fourteen warehouses in the USA. Although the USA rig count has decreased 11.7% quarter over quarter, the Company's USA drilling fluids division grew by 176% to $7,742,600 for quarter ended March 31, 2013 compared to sales of $2,798,103 for the same period in 2012. This increase is the result of the strategic warehouse and infrastructure investment that occurred throughout 2012. With fourteen warehouses operating in all the major resource plays in the USA, the division will focus on continuing to grow its market share.
The steel pipe distribution division recorded sales of $3,836,292 for the three months ended March 31, 2013, compared to revenues of $7,115,801 for the same period in 2012. The steel distribution division experienced a decrease in demand for seamless pipe in November 2012 and it continues to be negatively affected by reduced demand from steel pipe service suppliers into Q1 2013. The Canadian market has excess steel pipe inventory as many distributors were anticipating a more robust demand for steel pipe product during the winter drilling season. The steel pipe distribution division will concentrate on reducing inventory and increasing turns while maintaining superior customer service, with the appropriate quantities and sizes of steel pipe to meet the demand of its customers.
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