Hyduke announces fiscal 2014 audited financial results

NISKU, AB, March 25, 2015 /CNW/ - Hyduke Energy Services Inc. (HYD - TSX), announced operating results for years ended December 31, 2014 and 2013.  Hyduke's Financial Statements and Management's Discussion and Analysis have been filed with regulators and are available at www.hyduke.com and at www.sedar.com.

Highlights include the following:

  • Revenue for the year of $48.1 million, a decline of 16.2% from $57.4 million in 2013.
  • Gross profit for the year of $8.5 million, a decline of $2.8 million in the prior year.
  • Gross profit margin of 17.7% is decreased 1.9 basis points from the prior year.
  • In 2014, impairments recognized on current and long term assets increased losses by $4.5 million.
  • Net loss from continuing operations for the year of $5.5 million.
  • Loss per share (basic) for the year of $0.32.
  • EBITDAS (Earnings Before Interest, Taxes, Depreciation, Amortization and Stock Based Compensation) for continuing operations for the year of ($4.8) million.
  • Working capital remains positive at $16.9 million with a current ratio at 3.0 to 1.00.
  • Cash on hand at December 31, 2014 $3.8 million
  • Debt to equity ratio remains low at 0.36 to 1.00

 







Year ended

 Dec 31, 2014

Year-over-year
change
(%)

Year ended

Dec 31, 2013

(restated)(1)

Year ended

Dec 31, 2012

(restated)(1)

Revenue

48,067

(16.2%)

57,383

99,469

Cost of goods sold

39,585

(14.2%)

46,126

78,079

Gross margin

8,482

(24.6%)

11,257

21,391

Gross margin %

17.7%

(10.7%)

19.6%

21.5%

Selling, general & administrative

9,920

10.3%

8,959

9,935

Net earnings (loss) from continuing operations

(5,532)

(766.5%)

830

11,060

Net earnings (loss)

(8,834)


(5,054)

795

Per share – basic

(0.32)


(0.21)

0.03

Per shares – diluted

(0.32)


(0.21)

0.03

EBITDAS – continuing operations

(4,822)

(299.1%)

2,422

13,672

Total assets

38,023

(14.2%)

44,300

58,155

Total liabilities

16,115

(7.9%)

17,497

26,246

(1) Prior year numbers have been restated due to reclassification of entities to discontinued operations

 

Total revenue for the year was $48.1 million.  This represents a decline of $9.3 million or 16.2% over the prior year.  The decline is due to the completion a significant turn key package for an international customer in addition to completing a 6 pump package for another international customer in the prior year.

Gross margin of $8.5 million or 17.7% declined 10.7% from 2013 gross margin of $11.3 million or 19.6%. 

General and administrative expenses increased $1.3 million or 15.9% to $9.3 million.  The Company settled all legal claims against the company resulting in an expense of $0.8 million.  The Company also incurred $0.2 in expenses related to consulting and valuation services in conjunction with the possible divestiture of one of its subsidiaries.  Administrative and employment expenses of $5.6 million increased $0.5 million from 2013 due to restructuring within the Company.  Approximately $555 thousand in severances was incurred for terminations in executive and senior management during the year.

Negative EBITDAS for continuing operations was $4.8 million for 2014, a decline of $7.2 million from positive EBITDAS of $2.4 in 2013.  The decline in EBITDAS was largely the result of impairments and write-downs on current and long term assets, including intangibles, inventory and accounts receivables, of $4.5 million.

At December 31, 2014, Hyduke maintained a strong balance sheet as measured by liquidity (current ratio of 3.0 to 1.00) and debt to equity (ratio of 0.36 to 1.00)

Total assets of $38.0 million as at December 31, 2014 represents a decrease of $6.3 million (14.2%) from December 31, 2013 and is due primarily to the collection of accounts receivable and a reduction in inventory and unbilled revenue offset by an increase in cash. 

Total liabilities of $16.1 million as at December 31, 2014 represents a decrease of $1.4 million (7.9%) from December 31, 2013.  Total current liabilities decrease of $8.2 million relates primarily to a reclass of term debt to long term in the current year.

OUTLOOK
The 2014 fiscal year was one of significant restructuring for Hyduke. Despite the short-term challenges facing the domestic oil and gas industry, Hyduke's long-term objective is to complete its transformation into a more focused organization providing a true value proposition to its four key stakeholders – customers, employees, shareholders and debt capital providers.

Hyduke will be affected by the dramatic drop in the price of oil and the subsequent decline in drilling activity. Fortunately, Hyduke began to take numerous pro-active measures in 2014 to make the company more efficient and effective. These include management and work force reductions, facilities consolidation and discontinuing money-losing operations. As activity has declined these initiatives have been augmented by executive salary reductions and work-sharing. The Board of Directors has also agreed to take an across-the-board fee reduction of 25% effective January 1, 2015 which will stay in place until market and corporate conditions improve.

Hyduke remains committed to creating a safe, progressive and nurturing environment to enable employee development. As the price of oil has dropped, management is finding ever-growing opportunities for the Company to enhance its workforce and improve its workplace safety, quality and productivity initiatives.

Hyduke engages in two distinct but synergistic businesses.

- Industrial supply and distribution to the drilling and service rig industry
- Oilfield components manufacturing, assembly and service based out of Nisku

The Company will concentrate on organic growth while retaining an open attitude towards complimentary acquisitions. Hyduke is also examining absorbing redundant assets from other companies that are complementary to the Company's product and service line when those assets reduce overhead for those companies and enhance spreading Hyduke's overhead expenses over a larger revenue base.

Forward Looking Statements
This report contains certain forward-looking statements under the heading "Outlook" and elsewhere concerning future events or the Company's operations, anticipated financial performance, business prospects and strategies of Hyduke.  Forward-looking information typically contains statements with words such as "anticipate", "believe", "estimate", "expect", "plan", "intend" or similar words suggesting future outcomes or outlooks on, without limitation, estimates of business activity, supply and demand for the Company's products, the estimated amounts and timing of capital expenditures, anticipated future debt levels, or other expectations, beliefs, plans, objectives, assumptions or statements about future events or performance.  Readers are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties both general and specific that may cause actual future results to differ materially from those contemplated and contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur.  These factors may affect anticipated earnings or assets and include, but are not limited to: industry activity levels, market liquidity, customer credit risk, competition, oil and gas prices, product liability, fixed price contracts, development of new products, uninsured and underinsured losses, access to additional financing, source of supply of raw material and third party components, availability of key personnel, agreements and contracts, government regulations, foreign exchange exposure, interest rate risk, international scope of operations, environmental health and safety regulations and Hyduke's anticipation of and success in managing the risks implied by the foregoing.  The Company cautions that the foregoing list of important factors is not exhaustive.  The Company believes that the expectations reflected in the forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this report should not be unduly relied upon.  The forward-looking statements in this report speak only as of the date of this report.  Hyduke undertakes no obligation to update publicly or otherwise revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required pursuant to applicable securities legislation.

About Hyduke

Trading on the TSX under the symbol "HYD," Hyduke Energy Services Inc. is a supplier of equipment and services to the oil and gas drilling and well servicing industry. 

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this News Release.

SOURCE Hyduke Energy Services Inc.

For further information: Patrick Ross, President & Chief Executive Officer, (780) 955-0355; Veronica Dutchak, CA, Chief Financial Officer, (780) 955-0355

RELATED LINKS
http://www.hyduke.com

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