CALGARY, ALBERTA -- (Marketwired) -- 04/29/13 -- CORDY OILFIELD SERVICES INC. (the "Corporation" or "Cordy") (TSX VENTURE: CKK) released today its fourth quarter and 2012 annual results.
The Corporation's revenues from continuing operations for the year ended December 31, 2012 increased $18.2 million from the same period in 2011 to $112.4 million. While revenues were increased in 2012, the Corporation had much stronger financial earnings in 2011. There were a number of atypical costs in 2012 including: $1.9 million impairment of equipment, $1.0 million in inventory obsolescence; $1.2 million in allowance for doubtful accounts; $0.2 million in demobilization costs on a delayed contract; and $0.2 million in costs on the assessment of a new venture. In addition there were costs associated with streamlining the equipment fleet in the construction segment when customers in the oil & gas and mining industries announced reductions in their CAPEX and immediate delay of projects.
The net loss from continuing operations of $3.1 million or $0.04 per share for the year ended December 31 2012, represents a decrease of $6.8 million compared to earnings from continuing operations of $3.7 million or $0.04 per share in 2011. Earnings before interest, taxes, depreciation, amortization and impairment and stock-based compensation ("EBITDAS") from continuing operations in 2012 were $5.2 million for the year compared to $10.9 million in 2011, representing a year-over-year decrease of $5.7 million.
For the fourth quarter ended December 31, 2012, Cordy reported a loss from continuing operations of $4.6 million or $0.05 per share, representing a decrease of $5.1 million compared to earnings from continuing operations of $0.5 million in the fourth quarter of 2011. EBITDAS from continuing operations were a loss of $3.0 million for the quarter compared to $3.4 million in 2011, representing a decrease of $0.4 million from the comparative period. Revenue for the quarter decreased $4.8 million to $25.8 million compared to $30.6 million in the fourth quarter of 2011.
($ millions except share price and per share amounts) 2012 2011 $ Change Q4 2012 Q4 2011 $ Change----------------------------------------------------------------------------FINANCIAL RESULTS Revenue 112.4 94.2 18.2 25.8 30.6 (4.8) EBITDAS (1) 5.2 10.9 (5.7) (3.0) 3.7 (6.7) Net earnings (loss) and total comprehensive income from all operations (3.2) (1.7) (1.5) (4.6) 1.4 (6.0) Cash flows generated from (used in) operating activities from all operations 5.7 10.9 (5.2) 0.1 3.7 (3.6)----------------------------------------------------------------------------SHARE INFORMATION Earnings per share from continuing operations ($) (0.04) 0.04 (0.08) (0.05) 0.02 (0.07) Earnings per share from discontinued operations ($) - (0.06) 0.06 - (0.04) 0.04 Earnings per share from all operations ($) (0.04) (0.02) (0.02) (0.05) (0.02) (0.03)----------------------------------------------------------------------------(1) Earnings before interest, taxes, depreciation, amortization, impairment and stock-based compensation (see reader advisory).
Management believes activity in 2013 will remain below the 2012 trends for all segments that Cordy services given the current pricing issues for oil, gas and coal within western Canada. As a result, Management expects capital investment in Canada's oil, gas and coal mining industries to be constrained. Notwithstanding this, there is on-going development and planning for long term capital projects within the heavy oil and oil sands regions in western Canada that Management believes will support expansion of Cordy's operations in the heavy construction and environmental services segments.
Canada's oil and gas industry is resource rich but market constrained. Long-term projects are likely to be impacted by the timing of when Canada can solve the infrastructure issues of delivering its oil and gas products to new markets. As a result, the oil and gas industry and its supporting oilfield services industry sector will continue to be impacted by the status of economic, political, infrastructure barriers and other market factors. Given this, the oil and gas industry could have volatility in the near term. Despite these uncertainties in the near term, it is management's view that future growth in the sector as a whole is simply a question of timing for 2013 and beyond.
Cordy's management remains focused on the long term and plans to continue utilizing its innovative rental and exchange agreement ("Equipment Rental Program") with its existing equipment distributor. It is management's expectation that there will be continued profitable growth opportunities and required investment for the Corporation within the heavy oil and the oil sands regions.
Cordy will focus in 2013 on aligning its financing structure with the business model and on realigning its operations so it can continue to provide positive cash flow from operations to fund the opportunities it sees within its segments.
Complete copies of Cordy's audited consolidated financial statements for the year ended December 31, 2012 and the associated Management's Discussion and Analysis are available on our website www.cordy.ca or on SEDAR at www.sedar.com.
Effective January 1, 2011, Cordy began reporting its financial results in accordance with International Financial Reporting Standards (IFRS). Prior-year's comparative amounts were changed to reflect results as if Cordy had always prepared its financial results using IFRS.
This News Release contains certain statements that constitute forward-looking statements. These statements relate to future events or the Corporation's future performance. All statements, other than statements of historical fact, that address activities, events or developments that the Corporation or a third party expects or anticipates will or may occur in the future, are forward-looking statements. These include the Corporation's future growth, results of operations, performance and business prospects and opportunities; prevailing economic conditions; commodity prices; sourcing, pricing and availability of raw materials, components and parts, equipment, suppliers, facilities and skilled personnel; dependence on major customers; uncertainties in weather and temperature affecting the duration of the service periods and the activities that can be completed; regional competition; and other factors, many of which are beyond the Corporation's control. These other factors include future prices of oil and natural gas and oil and natural gas industry activity, including the effect of changes in commodity prices on oil and natural gas exploration and development activity, the ability to complete strategic acquisitions and realize the anticipated benefits of any acquisitions that are completed, the Corporation's outlook regarding the competitive environment it operates in, and the assumptions underlying any of the foregoing. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the Corporation's control, including those discussed under "Risks and Uncertainties" and elsewhere in this News Release, that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes that the expectations reflected in those 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 News Release should not be unduly relied upon. These statements speak only as of the date of this News Release. The Corporation does not intend, and does not assume any obligation, to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required under applicable securities laws. The forward-looking statements contained in this News Release are expressly qualified by this cautionary statement.
Cordy uses the measures Earnings Before Interest, Taxes, Depreciation, Amortization and Impairment and Stock Based Compensation (EBITDAS) in this news release. This measure does not have any standardized meaning prescribed by International Financial Reporting Standards (IFRS). It is, therefore, considered to be non-IFRS term and may not be comparable to similar measures presented by other entities. Management of Cordy uses these non-IFRS measures to improve its ability to compare financial results among reporting periods and to enhance its understanding of operating performance, liquidity and ability to generate funds to finance operations. This non-IFRS measure is also provided to readers as additional information on Cordy's operating performance, liquidity and ability to generate funds to finance operations. EBITDAS is an approximate measure of the Cordy's pre-tax operating cash flow and is generally used to better measure performance and evaluate trends of individual assets. EBITDAS comprises earnings before deducting interest and other financial charges, income taxes, depreciation and amortization, net income attributable to non-controlling interests and preferred share dividends.
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For general information:
Cordy Oilfield Services Inc.
David Mullen, Chairman & Chief Executive Officer
For investor relations information:
Cordy Oilfield Services Inc.
David Boomer, CA, Chief Financial Officer