HSE announces results for first quarter 2012, reschedules annual general meeting
CALGARY, May 10, 2012 /CNW/ - HSE Integrated Ltd. ("HSE" or the "Corporation") today announced the financial results for the Corporation for the quarter ended March 31, 2012.
Selected Financial Information
March 31, 2012
March 31, 2011
|Direct operating expenses||19,832||19,948||(0.6%)|
|Operating margin %||29.6%||18.5%|
|Selling, general and administrative||2,755||2,047||34.6%|
|Total long-term liabilities||$||11,336||$||9,228|
|(1)||See Non-GAAP Measures|
Revenue increased 15.1% year-over-year for the three months ended March 31, 2012, primarily due to increased oilfield revenue related to a significant non-recurring emergency response event which contributed $4.2 million in revenue for the quarter. EBITDA more than doubled for Q1 2012 compared to the same period in the prior year, while net earnings experienced a ten times increase primarily as a result of increased operating margins and a capital asset impairment reversal of $4.14 million.
After normalizing adjustments for the impairment reversal, earnings per share for the quarter ended March 31, 2012, was $0.06 per basic share, as compared to $0.13 per basic share as stated. This is still a significant improvement over the $0.01 per share earned in the first quarter of the prior fiscal year.
David Yager, Interim CEO and Chairman of the Board, made the following comments on the first quarter financial performance. "Considering that the price of natural gas - the commodity that used to be a major driver of HSE's Oilfield business - is at historical lows and industry activity in this area has declined accordingly, the performance of HSE in the first quarter was excellent. In the past few years we have replaced all the revenue we lost from natural gas development and more. In the first quarter revenue grew, operating income increased, EBITDA more than doubled and, even after excluding the impairment reversal, operating profits increased six-fold on a per share basis. Our business in the United States through Boots & Coots HSE Services, LLC ("BCHSE") continues to expand as we move more equipment into several active markets. We were pleased that a valued client engaged HSE to respond to a major emergency incident that not only enhanced our financial performance, but more importantly, resolved a difficult situation safely and expeditiously."
This report makes reference to Operating margin and EBITDA, measures that are not recognized under IFRS.
Operating margin is defined as revenue less all direct operating expenses incurred by field operations and support functions such as fleet management. Management believes that, as a supplement to net earnings, operating margin provides a useful supplementary indication of operating efficiency.
Management believes that, in addition to net earnings, EBITDA is a useful supplementary measure. EBITDA provides investors with an indication of earnings before provisions for interest and bank charges, taxes, depreciation, amortization, foreign exchange gains or losses, gains or losses on the disposal of property and equipment and the non-cash effect of stock-based compensation expense, changes in provisions, and expiry of contingent consideration.
Investors should be cautioned that these measures should not be construed as an alternative to net earnings determined by GAAP as an indication of the Corporation's performance. HSE's method of calculating Operating Margin and EBITDA may differ from that of other companies' and, accordingly, may not be comparable to measures used by other companies.
As a result of the impending acquisition by DXP Enterprises, Inc. the Corporation will not be hosting a conference call for this quarter.
RESCHEDULING OF SHAREHOLDER MEETING
As an additional result of the impending acquisition by DXP Enterprises, Inc., the Corporation has determined to reschedule the upcoming annual shareholder meeting originally scheduled for May 16, 2012, and instead hold an annual and special meeting of shareholders on June 29, 2012. An amended and restated information circular in respect of the June 29, 2012 meeting is anticipated to be mailed to shareholders in early June.
For further information:
David Yager, Interim CEO and Chairman of the Board
Telephone: (403) 266-1833
Lori McLeod-Hill, CFO
Telephone: (403) 266-1833