CALGARY, ALBERTA -- (Marketwired) -- 08/23/13 -- ENSECO ENERGY SERVICES CORP ("Enseco" or the "Company")(TSX VENTURE: ENS) announces its financial results for the three and six months ended June 30, 2013
Results from Operations
---------------------------------------------------------------------------- Three months ended Six months ended June 30, June 30,($ thousands, except per share amounts) 2013 2012 2013 2012----------------------------------------------------------------------------Revenue $ 6,843 $ 13,919 $ 24,044 $ 38,419Adjusted gross margin (1) $ 1,293 $ 3,996 $ 6,615 $ 13,035EBITDAS (1) $ (1,994) $ 154 $ (381) $ 4,693Net income (loss) before tax (1) $ (3,793) $ (2,138) $ (4,049) $ 233 Per common share - basic $ (0.17) $ (0.10) $ (0.18) $ 0.02 Per common share - diluted $ (0.17) $ (0.10) $ (0.18) $ 0.01Net income (loss) $ (3,337) $ (2,418) $ (3,737) $ (138) Per common share - basic $ (0.17) $ (0.11) $ (0.19) $ (0.01) Per common share - diluted $ (0.17) $ (0.11) $ (0.19) $ (0.01)Cash flow before changes in non-cash working capital (1) $ (1,899) $ (593) $ (472) $ 4,299Cash flow from (used in) operating activities $ 3,860 $ 6,099 $ 7,661 $ 9,766----------------------------------------------------------------------------
(1) See definition within the Non-IFRS Measures section of this press release.
Highlights for the three and six months ended June 30, 2013
-- Q2 2013 was a disappointing quarter. Enseco saw a 37% decline in revenue in the 6 months, and 52% decline in revenue in the 3 months ended June 30, 2013. These declines are due to slower activity levels in the industry and an untypically wet spring.-- Enseco has spent the last few quarters working to minimize costs in an effort to improve gross margins and EBITDAS. The Company continues to consider all of its expenses and to restructure its operations.-- Enseco has minimized its spending on capital and other items to maintain fiscal strength through this period of slower industry activity.
Enseco expects improvement in Q3 and Q4 as work that was delayed due to weather in the later part of Q2 now gets completed in Q3 and Q4.
Enseco's clients continue to drill but capital spending continues to be constrained due to weak capital markets.
Management continues to carefully monitor industry activity levels in the Western Canada and US operating areas to ensure equipment and manpower are positioned to provide sustainable equipment utilization rates.
The Company will continue to search for efficiencies and cost reductions to increase its gross margins and EBITDAS. It is expected that the pursuit of these opportunities, accompanied by initiatives to both improve margin efficiency, and reduce debt levels, will continue to improve the Company's financial performance going forward.
Certain information and statements contained in this press release constitute forward-looking information, including, but not limited to: statements concerning Enseco's future business strategy, focus, marketing and other plans; expectations regarding future revenues, cash flow, gross margins, EBITDAS, cost management and other financial results; plans to improve utilization rates and demand for the Company's services; statements as to future economic, industry and operating conditions, including commodity prices and industry activity levels,. Although management of the Company believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Accordingly, readers should not place undue reliance upon any of the forward-looking information set out in this press release. Readers should review the cautionary statement respecting forward-looking information that appears below. All of the forward looking statements of the Company contained in this press release are expressly qualified, in their entirety, by this cautionary statement.
The information and statements contained in this press release that are not historical facts are forward-looking statements. Forward-looking statements (often, but not always, identified by the use of words such as "seek", "plan", "continue", "estimate", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "expect", "may", "anticipate" or "will" and similar expressions) may include plans, expectations, opinions, or guidance that are not statements of fact. Forward-looking statements are based upon the opinions, expectations and estimates of management as at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. These factors include, but are not limited to, such things as changes in industry conditions (including the levels of capital expenditures made by oil and gas producers and explorers), the credit risk to which the Company is exposed in the conduct of its business, fluctuations in prevailing commodity prices or currency and interest rates, the competitive environment to which the various business divisions are, or may be, exposed in all aspects of their business, the ability of the Company's various business divisions to access equipment (including parts) and new technologies and to maintain relationships with key suppliers, the ability of the Company's various business divisions to attract and maintain key personnel and other qualified employees, various environmental risks to which the Company's business divisions are exposed in the conduct of their operations, inherent risks associated with the conduct of the businesses in which the Company's business divisions operate, timing and costs associated with the acquisition of capital equipment, the impact of weather and other seasonal factors that affect business operations, availability of financial resources or third-party financing and the impact of new laws or changes in administrative practices on the part of regulatory authorities.
Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide shareholders with a more complete perspective on Enseco's future operations and such information may not be appropriate for other purposes. Enseco's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Enseco will derive there from. Readers are cautioned that the foregoing lists of factors are not exhaustive. These forward-looking statements are made as of the date of in this press release and Enseco disclaims any obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.
EBITDAS means earnings before interest, taxes, depreciation and amortization, and stock-based compensation and is equal to earnings before income taxes from continuing operations plus interest on debt, other charges and interest expense, depreciation and amortization, stock-based compensation, unrealized foreign exchange loss, and loss on sale of equipment. Adjusted gross margin from continuing operations equals gross margin, plus interest on debt, other charges and interest expense, depreciation and amortization, stock-based compensation, impairment loss/recovery, and loss on sale of equipment. Cash flow means cash flows provided by continuing operations before changes in non-cash working capital items.
EBITDAS, adjusted gross margin from continuing operations, and cash flows from continuing operations before changes in non-cash working capital items are not recognized measures under International Financial Reporting Standards ("IFRS"). Management believes that in addition to net losses, EBITDAS and cash flows, are useful supplemental measures as they provide an indication of the results generated by the Company's primary business activities prior to consideration of how those activities are financed, amortized or how the results are taxed in various jurisdictions as well as the cash generated by the Company's primary business activities. Readers should be cautioned, however, that EBITDAS and cash flows from continuing operations before changes in non-cash working capital items should not be construed as an alternative to net losses determined in accordance with IFRS as an indicator of Enseco's performance. Enseco's method of calculating operating losses, EBITDAS and cash flows from continuing operations before changes in non-cash working capital items may differ from other organizations and, accordingly, such measures may not be comparable to measures used by other organizations. For reconciliation to the appropriate IFRS measure, see our MD&A.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Enseco Energy Services Corp.
Enseco Energy Services Corp.