Flint Energy Services Ltd. announces first quarter earnings



    (TSX: FES)

    CALGARY, May 14 /CNW/ - Flint Energy Services Ltd. ("Flint" or the
"Company") reported today that revenue for the three months ended March 31,
2009 was $530.2 million, an increase of $14.6 million compared to $515.6
million for the same period in 2008. Increased revenues from Facility
Infrastructure and Maintenance Services offset decreases in Production
Services and Oilfield Services. Canadian operations generated $424.2 million
in revenues and were up $20.9 million as a result of increased activity during
the quarter, while the United States operations generated $105.9 million in
revenue, down $6.4 million as a result of reduced drilling activity in the
United States. Revenues from the United States were 20.0% of Company revenues
for the quarter, down as a result of lower United States revenues and
increased revenues from Canadian operating segments.
    Net earnings for the quarter were $18.5 million or $0.40 per fully
diluted common share, compared to earnings of $18.4 million or $0.38 per fully
diluted common share in the first quarter of 2008.
    Gross margin for the quarter was $88.7 million (16.7%) compared to $91.8
million (17.8%) in the comparative quarter last year. The decrease in the
gross margin percentages was attributed to a decline in activity and increased
competitive pressures. Also, increased revenue activity in the Facility
Infrastructure and Maintenance Services operating segments as a percentage of
total revenue, which are generally at lower margins, contributed to the
decrease in gross margin.
    General and administrative expenses for the three months ended March 31,
2009 were $42.3 million compared to $38.1 million in 2008. The Company
realized additional costs in information technology of $2.0 million in the
quarter to support increasing system requirements as portions of the Oilfield
Services, Tubular Management and United States operations are integrated into
its Enterprise Resource Planning (ERP) system, JD Edwards, and partially
related to Flint's International Financial Reporting Standards (IFRS)
convergence project, and the consolidation of administration and support
services as part of the restructuring. These are one-time costs and have been
partially offset by the suspension of the 2009 annual pay increases for
executives, management, and salaried employees. In addition, the Company has
implemented unpaid leave for salaried employees and selective layoffs of
administrative staff have been made as cost control measures.
    EBITDA for the period of $46.4 million (8.8%) for the three months ended
March 31, 2009 was down compared to $53.7 million (10.4%) in the comparative
quarter last year.
    Amortization of property, plant, equipment and intangible assets for the
three months ended March 31, 2009 was $14.0 million compared to $17.8 million
in the comparative quarter. This decrease of $3.8 million was partially due to
reduced amortization charges on intangible assets of $2.2 million as a result
of the intangible assets impairment charge in 2008.
    Interest expenses for the three months ended March 31, 2009 decreased
$1.3 million from $6.6 million in the comparative quarter to $5.3 million, as
a result of reductions in the average long-term debt balance.
    Taxes for the quarter were $7.6 million compared to $10.4 million for the
comparable period last year. Current taxes were $18.4 million compared to
$17.9 million, offset by future recoveries of $10.8 million as opposed to $7.5
million last year.
    The Company restructured its business segments as part of the process to
streamline operations. The Company began reporting in the new structure, which
consists of four operating segments, in 2009. The new segments are: Production
Services, Facility Infrastructure, Oilfield Services, and Maintenance
Services.
    Selected financial information for the new business segments are as
follows:

    
    -------------------------------------------------------------------------
    (in thousands               Facility                   Main-
     of Canadian  Production      Infra-    Oilfield     tenance
     dollars)       Services   structure    Services    Services       Total
    -------------------------------------------------------------------------
    Three months
     ended
     March 31, 2009
    Revenue        $ 254,960   $ 143,310   $  70,239   $  61,642   $ 530,151
    EBITDA(1)         19,303      12,668       8,558       5,869      46,398
    EBITDA %            7.6%        8.8%       12.2%        9.5%        8.8%
    Amortization       6,081       1,840       5,088       1,030      14,039
    Capital
     expenditures      1,565         694       1,078         707       4,044
    -------------------------------------------------------------------------
    Three months
     ended
     March 31, 2008
     (restated)
    Revenue        $ 289,830   $ 101,051   $  86,115   $  38,587   $ 515,583
    EBITDA(1)         29,214       8,028      13,620       2,838      53,700
    EBITDA %           10.1%        7.9%       15.8%        7.4%       10.4%
    Amortization       8,835       2,300       6,360         302      17,797
    Capital
     expenditures      1,457         369       2,869       1,772       6,467
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    (in thousands               Facility                   Main-
     of Canadian  Production      Infra-    Oilfield     tenance
     dollars)       Services   structure    Services    Services       Total
    -------------------------------------------------------------------------
    As at
     March 31, 2009
    Goodwill               -           -           -           -           -
    Total assets     448,550     253,072     251,597      96,478   1,049,697
    -------------------------------------------------------------------------
    As at
     December 31, 2008
     (restated)
    Goodwill               -           -           -           -           -
    Total assets     514,290     275,217     251,743      47,620   1,088,870
    -------------------------------------------------------------------------
    

    As at March 31, 2009, the Company's net working capital was $342.7
million compared to $313.1 million at December 31, 2008, representing an
increase of $29.6 million. This increase in working capital is primarily
attributed to a reduction in accounts payable, an increase in the current
portion of long-term debt and an increase in accounts receivable offset by a
reduction in revenue in excess. At March 31, 2009, the revolving operating
loan was $52.9 million compared to $40.9 million as at December 31, 2008.
    During the quarter, the Company continued its efforts to improve the
effectiveness of billing and collections, which has resulted in significant
decreases in revenue in excess of billing during the quarter. Revenue in
excess of billing for the three months ended March 31, 2009 was $123.5
million, a decrease of $46.2 million from $169.7 million at the end of 2008.
The Company anticipates seeing continued improvements in the billing and
collections processes as additional efficiencies are created during the
restructuring of operations.

    Additional Information

    Complete copies of the Company's Q1 2009 Management Discussion and
Analysis (MD&A), Interim Financial Statements and the Notes to Financial
Statements are available on SEDAR at www.sedar.com. Additional information
related to the Company is available on SEDAR, including a copy of the latest
Annual Information Form. Electronic copies of the company's quarterly and
annual reports and other public filings may also be obtained by visiting
www.flintenergy.com.
    A conference call with Flint management is scheduled for 11:00 AM Eastern
Time on Friday, May 15, 2009. Information on how to participate in the call or
listen to live or archived playback of the call is available on Flint's
website www.flintenergy.com.

    Flint Energy Services Ltd. is a market leader providing an expanding
range of integrated products and services for the oil and gas industry
including: production services; field construction; oilfield transportation;
process equipment design and manufacturing; and tubular management services.
Flint provides this unique breadth of products and services through over 60
strategic locations in the oil and gas producing areas of western North
America, from Inuvik in the Northwest Territories to Mission, Texas on the
Mexican border. Flint is a preferred provider of infrastructure construction
management, module fabrication, maintenance services for upgrading, and
production facilities in Alberta's oil sands sector.
http://www.flint-energy.com

    FORWARD LOOKING STATEMENTS

    Certain statements in this news release are "forward-looking statements",
which reflect current expectations of the management of Flint regarding future
events or Flint's future performance. All statements other than statements of
historical fact contained in this news release may be forward-looking
statements. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or events to
differ materially from those anticipated in the forward-looking statements.
Flint believes that the expectations reflected in such forward-looking
statements are reasonable, but no assurance can be given that these
expectations will prove to be correct and such forward-looking statements
should not be unduly relied upon. The forward-looking statements are expressly
qualified in their entirety by this cautionary statement. The forward-looking
statements are made as of the date of this news release and Flint assumes no
obligation to update or revise them to reflect new events or circumstances,
except as expressly required by applicable securities law. Further information
regarding risks and uncertainties relating to Flint and its securities can be
found in the disclosure documents filed by Flint with the securities
regulatory authorities, available at www.sedar.com.

    %SEDAR: 00017156E




For further information:

For further information: Guy Cocquyt, Director of Investor Relations, 
Telephone: (403) 218-7100, Fax: (403) 215-5481, Email:
gcocquyt@flint-energy.com

Organization Profile

FLINT ENERGY SERVICES LTD.

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