The Company's working capital increased $2.6 million during the quarter to $3.3 million including a net cash deficit of $5.7 million. Operating lines and a $3.0 million draw on long-term debt were required to fund working capital requirements in certain jurisdictions, repay $1.1 million of regular finance leases and related interest and fund $5.1 million of capital expenditures during the fourth quarter of 2012.
Total long-term borrowings grew by $1.9 million during the quarter to $22.2 million. Draws on long-term debt of $3.0 million were partially offset by regular payments made on outstanding finance leases.
Shareholders' equity increased $0.2 million to $63.4 million during the quarter as the loss incurred during the quarter was more than offset by an increase in accumulated other comprehensive income due to the weakening of the Canadian dollar against the functional currency of the Company's foreign subsidiaries along with an increase in contributed surplus relating to share-based payment charges.
2012 Financial Results:
Gross margin improved in 2012 compared to 2011, despite a drop in revenues. The Company's consolidated revenues including reimbursables decreased 15% in 2012 compared to 2011 while the Company's revenue excluding reimbursables increased 1%. Additional revenues for Tesla Offshore and Tesla Trinidad were more than offset by declines in revenues for Tesla Canada, Tesla USA and Tesla International. The Company had improvements in gross margin across all entities except for Tesla International with the biggest growth coming from North American land operations. Gross margin as a percentage of total revenue (including reimbursables) increased to 27% in 2012 from 18% in 2011 due to improvements from Tesla Canada and Tesla USA, including a significant decrease in flow-through reimbursables associated with these operations. Further, 2011 was negatively impacted by the low margin nature of the front-end phase of the Trinidad operations being conducted mainly by a third-party contractor. Gross margin as a percentage of revenue (excluding reimbursables) improved to 32% in 2012 compared to 25% in 2011 as improvements from Tesla Canada, Tesla USA and Tesla Trinidad more than offset the decline of Tesla International. Tesla Offshore's gross margin as a percentage of revenue (excluding reimbursables) remained consistent with the prior year.
Tesla Canada's revenues remained strong with the decline in total revenue driven entirely by a significant drop in reimbursables. Tesla Canada's gross margin benefitted from improved rates during the peak winter season compared to 2011 driven by continued demand for 3C services, better productivity due to the mild winter and a reduced level of rental equipment.
Tesla USA's revenues decreased with a decline in activity levels and a significant drop in associated reimbursables. Tesla USA's gross margin improved due to the term nature of a large portion of the work performed, the benefits of utilizing the Hawk system and a significant reduction in rental costs.
Tesla Trinidad's operations generated slightly higher revenues from recording activities during the first four months of 2012 exceeding revenues generated from front-end operations completed in 2011. Tesla Trinidad contributed margin during 2012 with almost all of the recording on the Guayaguayare program completed during 2012 allowing for the recognition of turnkey revenues that had been deferred at the end of 2011.
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