Horizon North Logistics Inc. Provides Operational Update
TSX Symbol: HNL
CALGARY, Jan. 27, 2014 /CNW/ - Horizon North Logistics Inc. ("Horizon" or "the Corporation") announced today that based on a preliminary review of its fourth quarter operating results, it expects to report significantly lower revenues and earnings before finance costs, taxes, depreciation, amortization, gain/loss on disposal of property, plant and equipment, and share based compensation ("EBITDAS") as compared to its record results reported in Q3 2013.
These preliminary estimates are being provided despite the fact that Horizon's auditors have not yet completed their procedures with respect to such information and have not yet completed their audit with respect to Horizon's results for the 2013 fiscal year. Horizon expects to release its Q4 2013 and full year 2013 results after markets close on February 19, 2014.
As anticipated, Horizon's manufacturing capacity in Q4 2013 was more heavily allocated towards the execution of internal rental fleet construction and deployment, as opposed to external revenue generating projects, as compared to Q3 2013. In addition, Horizon was able to accommodate customer driven delays on certain ongoing external revenue generating projects which resulted in slightly more production capacity being allocated to internal projects during Q4 2013 than expected. These factors had the effect of significantly reducing manufacturing sales revenues in Q4 2013 as compared to Q3 2013.
Horizon experienced reduced overall margins in its camp rental and catering operations in Q4 2013 as a result of maintaining core operating capabilities in certain strategic areas which experienced significantly lower utilization in Q4 2013 as compared to Q3 2013.
Horizon's matting operations experienced generally lower activity levels in Q4 2013 as compared to Q3 2013 as customer demand for rentals, sales and the associated services decreased in conjunction with colder weather experienced during the quarter.
As a result, Horizon estimates that Q4 2013 consolidated revenues will decrease by approximately 35% to 40% as compared to Q3 2013, with Q4 2013 consolidated EBITDAS expected to be decrease by approximately 60% to 65% as compared to Q3 2013.
Activity levels in the camp rental and catering operations in early Q1 2014 are consistent with levels experienced in the same period of 2013. Bidding activity for Horizon's products and services remains robust for projects in the Alberta oil sands and for projects associated with LNG development in north east British Columbia and Horizon anticipates additional contract awards related to these areas in the near future.
Based on its current manufacturing project backlog and bidding activity, Horizon expects that revenues from manufacturing sales for 2014 will be more in line with the results experienced in 2011 and 2012.
Horizon continues to maintain a strong balance sheet with total debt levels at the end of 2013 of approximately $80 million, including bank debt of approximately $71 million which represents 47% of Horizon's available credit facilities of $150 million. Horizon's balance sheet strength continues to provide a foundation for future growth and maintain the Corporation's financial flexibility.
In addition to the reduction in consolidated revenues and EBITDAS noted above, Horizon also expects to record a one-time loss in Q4 2013 of approximately $2.2 million (net of tax) related to the disposal of its blast resistant structures business.
This press release contains certain statements or disclosures relating to Horizon that are based on the expectations of its management as well as assumptions made by and information currently available to Horizon which may constitute forward-looking information under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that Horizon anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-looking information. In some cases, forward-looking information can be identified by terms such as "forecast", "future", "may", "will", "expect", "anticipate", "believe", "potential", "enable", "plan", "continue", "contemplate", "pro-forma", or other comparable terminology. As all amounts shown in this press release are unaudited, Horizon's actual audited results may differ from these preliminary estimates.
Additional information related to the Corporation, including the Corporation's annual information form, press releases, financial statements and MD&A are available on SEDAR at www.sedar.com
SOURCE Horizon North Logistics Inc.For further information:
Bob German, President and Chief Executive Officer or Scott Matson, Vice President Finance and Chief Financial Officer, 1600, 505 - 3rd Street S.W., Calgary, Alberta T2P 3E6; Telephone (403) 517-4654, Fax: (403) 517-4678; website: www.horizonnorth.ca