Highlights include the following:
•Revenue for the current quarter of
Selected Statement of
Comprehensive Income Information
Three Months Ended
Total revenue – continuing operations
Gross profit – continuing operations
Gross profit (%)
EBITDAS – continuing operations
Profit (loss) – continuing operations
Profit (loss) per share – basic ($)
Profit (loss) per share – diluted ($)
Second quarter 2014 revenues of
Second quarter 2014 gross profit (refer to NON-IFRS MEASURES) of
Second quarter 2014 EBITDAS (refer to NON-IFRS MEASURES) was
Second quarter 2014 loss from continuing operations of
Selected Financial Position Information
Total current assets
Total cash and short term deposits
Total current liabilities
Total bank indebtedness
Total interest bearing debt
Current ratio (current assets divided by current liabilities)
2.15 to 1:00
1.83 to 1.00
Debt to equity ratio (interest bearing debt divided by shareholders' equity)
0.28 to 1.00
0.31 to 1.00
Total assets of
Total liabilities of
The restructuring of the operation and organization of the Company continued in the second quarter with several major steps accomplished. As has been written in previous disclosures, the Board has determined that the Company will better serve its stakeholders by management streamlining its operations and simplifying its business with the objective of focusing on a few cores operations.
Congruent with this plan,
To strengthen the balance sheet and provide the company with the financial flexibility to execute its restructuring strategy, on
Operationally, the Company executed several moves that over time will contribute towards the overall plan. The paint facility, a small and marginally profitable wholly-owned subsidiary, was closed and its closure has been completed with no future financial obligations.
The administrative offices were consolidated in a single, newer, Company-owned building allowing the Company to substantially reduce its monthly rent obligations and enhance management effectiveness by having all key administrative and engineering personnel in the same facility. The enhanced communications and information flow alone will contribute to efficiency in the future. While the move was not fully completed until the end of July, going forward this is expected to save the Company over quarter a million dollars per year.
The main warehouse for the distribution division, currently the company's largest in terms of revenue, moved into a new facility only minutes from the main fabrication facility and head office. Other divisions continue to be reviewed to evaluate their relevance to the company's long-term business strategy.
Operational staff is being both augmented in key areas such as sales, procurement, internal processes and systems, and rationalized in areas where cost saving are available. Due to severance and other one-time restructuring costs, the long term goal of reduced fixed costs on overall SG&A expenses is not apparent in the Q2 financial results, nor will it appear in Q3 as the foregoing issues are resolved.
The Board and management is confident that the initiatives underway will yield lower fixed costs as a percentage of total revenue from the fourth quarter of 2014 and onwards.
The general operating environment in which the Company operates remains robust. Exploration and production (E&P) company capital expenditures remain strong in 2014 driving demand for drilling and well servicing rigs and related oilfield service activities. As a result of rising production volumes, steady oil prices and higher natural gas prices, E&P companies are enjoying improved financial performance on a year-to-date basis in 2014 compared to 2013. This creates the free cash for re-investment that ultimately drives drilling and well servicing activity and the Company's business.
Forward Looking Statements
This report contains certain forward-looking statements under the heading "Outlook" and elsewhere concerning future events or the Company's operations, anticipated financial performance, business prospects and strategies of Hyduke. Forward-looking information typically contains statements with words such as "anticipate", "believe", "estimate", "expect", "plan", "intend" or similar words suggesting future outcomes or outlooks on, without limitation, estimates of business activity, supply and demand for the Company's products, the estimated amounts and timing of capital expenditures, anticipated future debt levels, or other expectations, beliefs, plans, objectives, assumptions or statements about future events or performance. Readers are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties both general and specific that may cause actual future results to differ materially from those contemplated and contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. These factors may affect anticipated earnings or assets and include, but are not limited to: industry activity levels, market liquidity, customer credit risk, competition, oil and gas prices, product liability, fixed price contracts, development of new products, uninsured and underinsured losses, access to additional financing, source of supply of raw material and third party components, availability of key personnel, agreements and contracts, government regulations, foreign exchange exposure, interest rate risk, international scope of operations, environmental health and safety regulations and Hyduke's anticipation of and success in managing the risks implied by the foregoing. The Company cautions that the foregoing list of important factors is not exhaustive. The Company believes that the expectations reflected in the 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 report should not be unduly relied upon. The forward-looking statements in this report speak only as of the date of this report. Hyduke undertakes no obligation to update publicly or otherwise revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required pursuant to applicable securities legislation.
Trading on the TSX under the symbol "HYD,"
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