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
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