IROC Energy Services Corp. announces increased net income and filing of
quarterly financial statements

/THIS PRESS RELEASE IS NOT FOR DISSEMINATION IN UNITED STATES OR TO ANY UNITED STATES NEWS SERVICES/

CALGARY, May 26 /CNW/ - IROC Energy Services Corp. ("IROC" or the "Corporation") (TSX Venture Exchange: "ISC") is pleased to present a summary of its operating and financial results for the three month period ended March 31, 2010. For a complete copy of IROC's quarterly financial statements and management's discussion and analysis ("MD&A") please visit www.sedar.com.

    
    HIGHLIGHTS FOR THE THREE MONTHS ENDED MARCH 31, 2010:
    -----------------------------------------------------

    -   Total revenue from continuing operations increased 16% to $16.2
        million for the three months ended March 31, 2010 as compared to
        $14.0 million in the comparable period of the prior year.

    -   Gross margin from continuing operations increased 17% to $5.6 million
        for the three months ended March 31, 2010 as compared to $4.8 million
        in the comparable period of the prior year.

    -   EBITDAS from continuing operations increased 31% to $3.4 million for
        the three months ended March 31, 2010 as compared to $2.6 million in
        the comparable period of the prior year.

    -   Net income from continuing operations increased 539% to $524 thousand
        for the three months ended March 31, 2010 as compared to $82 thousand
        in the comparable period of the prior year.

    -   The Corporation paid a cash dividend of $0.02 per common share on
        January 29, 2010.

    OPERATIONS
    ----------
    

IROC's continuing operations are reported in three segments; the Drilling and Production Services segment, the Technology Services segment and Corporate Services. The following is a discussion of the reporting segments in which IROC operates.

DRILLING AND PRODUCTION SERVICES

The Drilling and Production Services segment provides services and rental equipment to oil and gas exploration, development and production companies with most of our customers and operations being located in western Canada, in the provinces of Alberta and Saskatchewan.

The Drilling and Production Services segment consists of two divisions:

Eagle Well Servicing ("Eagle") contracts service rigs to oil and gas companies to perform various completion, work-over and maintenance services on oil and natural gas wells. Eagle has offices and equipment in Red Deer, Grande Prairie and Lloydminster in Alberta and an office and equipment in Estevan, Saskatchewan with equipment being used in those geographic areas.

Aero Rental Services ("Aero") provides rental equipment for surface pressure control in drilling and work-over operations and tubular handling equipment used for the work over, re-entry and completion operations. Aero has an office in Red Deer, Alberta with equipment being rented for use primarily in Alberta. Aero's results are directly affected by the level of new well drilling activity.

This segment generated revenue of $13.5 million, or 83% of the Corporation's total revenue, for the three month period ended March 31, 2010.

Eagle currently has a fleet of 36 service rigs with our fleet amongst the newest in the industry. All Eagle's service rigs are internally guyed (no requirement for external anchors) which reduces set up time and corresponding costs when compared to anchored rigs.

Service rig utilization, as measured by IROC's internal methodology, improved in the quarter to 55%. This is the best utilization since the third quarter of 2008 and is the third consecutive quarter of improvement. This trend is attributed to the improving environment in the energy sector due to improved and stabilizing oil prices. Natural gas focussed activity continues to be constrained at current price levels. Pricing for services continues to be very competitive and, notwithstanding the increases in utilization, has not been able to recover to year ago levels.

Aero rentals has followed a similar trend over the past three quarters with improving gross margin returns on capital used for rental equipment.

TECHNOLOGY SERVICES

The Technology Services segment is comprised solely of our Canada Tech division. Canada Tech develops, manufactures and sells or rents a wide line of tools and systems that measure pressures, temperatures and other attributes in the down-hole and surface environment of oil and gas wells.

This segment generated revenue of $2.7 million, or 17% of the Corporation's total revenue, for the three month period ended March 31, 2010. During the quarter 25% of Canada Tech's sales were to Canadian customers, 25% were to the customers located in the United States and 50% were to international customers.

Canada Tech's customers require data that is reliable, consistent and accurate. Our products utilize new and superior technology enabling our gauges and systems to operate in higher temperatures and more challenging environments. Canada Tech's competitive advantage continues to be the ability to look at each well individually and adapt a system to match the needs of the customer within the well parameters.

Canada Tech differs from our other divisions in that the capital requirement is smaller and the value of the division is contained in its patents and proprietary technology. A significant portion of Canada Tech's costs are fixed and as such increased sales volumes have a magnified effect on the EBITDAS of IROC. We expect improved performance from this division in the coming quarters as we increase sales to international markets and introduce new products and technology both domestically and internationally.

Canada Tech's operations were consolidated in our Calgary facility in the current quarter and we expect to start to see the benefit of reduced overall costs as we continue through the year. Previously, Canada Tech had offices and facilities in both Red Deer, and Calgary, Alberta.

CORPORATE SERVICES

IROC's non-operating segment, Corporate Services, captures general and administrative expenses associated with supporting each of the reporting segments operations noted above, plus costs associated with being a public company. Also, included in Corporate Services is interest expense for debt servicing and income tax expense.

    
    FINANCIAL RESULTS AND SELECTED FINANCIAL INFORMATION
    ----------------------------------------------------

    -------------------------------------------------------------------------
    $ 000's except number                   Three months ended
     of shares and per        March 31,  December 31, September 30,  June 30,
     share amounts              2010         2009         2009         2009
    -------------------------------------------------------------------------
    Revenue:
      Eagle Well Servicing     11,731       10,537        7,166        5,349
      Aero rentals              1,776        1,501        1,013          900
    -------------------------------------------------------------------------
      Total drilling &
       production services     13,507       12,038        8,179        6,249
      Technology services       2,741        3,445        2,052        3,053
    -------------------------------------------------------------------------
    Total revenue              16,248       15,483       10,231        9,302
    -------------------------------------------------------------------------

    Operating costs:
      Eagle Well Servicing      7,570        6,982        4,652        3,919
      Aero rentals              1,309        1,047          702          840
    -------------------------------------------------------------------------
      Total drilling &
       production services      8,879        8,029        5,354        4,759
      Technology services       1,751        2,356        1,554        1,808
    -------------------------------------------------------------------------
    Total operating costs      10,630       10,385        6,908        6,567
    -------------------------------------------------------------------------

    Gross margin(1)
      Eagle Well Servicing      4,162        3,555        2,509        1,434
      Aero rentals                467          455          311           60
    -------------------------------------------------------------------------
      Total drilling &
       production services      4,629        4,010        2,820        1,494
      Technology services         989        1,088          498        1,245
    -------------------------------------------------------------------------
    Total gross margin          5,618        5,098        3,318        2,739
    -------------------------------------------------------------------------

    Gross margin %(1):
      Eagle Well Servicing        35%          34%          35%          27%
      Aero rentals                26%          30%          31%           7%
    -------------------------------------------------------------------------
      Total drilling &
       production services        34%          33%          34%          24%
      Technology services         36%          32%          24%          41%
    -------------------------------------------------------------------------
    Total gross margin %          35%          33%          32%          29%
    -------------------------------------------------------------------------

    EBITDAS(1):
      Eagle Well Servicing      3,566        3,057        2,129        1,001
      Aero rentals                316          331          206          (53)
    -------------------------------------------------------------------------
      Total drilling &
       production services      3,882        3,388        2,335          948
      Technology services         475          512           29          556
      Corporate                  (979)        (927)        (992)        (928)
    -------------------------------------------------------------------------
    Total EBITDAS               3,378        2,973        1,372          576
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    General and
     administrative             2,240        2,125        1,951        2,159
    -------------------------------------------------------------------------
    Depreciation and
     amortization               1,991        2,392        2,073        1,978
    -------------------------------------------------------------------------
    Interest expense net
     of interest income           360          446          308          205
    -------------------------------------------------------------------------
    Stock based compensation      178           74           57           85
    -------------------------------------------------------------------------
    Provision for current
     and future income taxes      235          380         (268)        (785)
    -------------------------------------------------------------------------
    Loss (gain) on foreign
     exchange                      97           43          168          354
    -------------------------------------------------------------------------
    Net income (loss) from
     continuing operations        524         (395)      (9,314)      (1,260)
    -------------------------------------------------------------------------
    Net income (loss)             524         (481)      (9,324)      (1,260)
    -------------------------------------------------------------------------
    Net income (loss) per
     common share from
     continuing operations:
      - Basic                   $0.01       $(0.01)      $(0.21)      $(0.03)
    -------------------------------------------------------------------------
      - Diluted                 $0.01       $(0.01)      $(0.21)      $(0.03)
    -------------------------------------------------------------------------
    Net income (loss) per
     common share:
      - Basic                   $0.01       $(0.01)      $(0.21)      $(0.03)
    -------------------------------------------------------------------------
      - Diluted                 $0.01       $(0.01)      $(0.21)      $(0.03)
    -------------------------------------------------------------------------
    Weighted average common
     shares outstanding:
      - Basic              43,576,971   43,565,754   43,947,852   44,200,651
    -------------------------------------------------------------------------
      - Diluted            43,576,971   43,565,754   43,947,852   44,200,651
    -------------------------------------------------------------------------
    (1) See Non-GAAP Measures



    -------------------------------------------------------------------------
    $ 000's except number                   Three months ended
     of shares and per        March 31,  December 31, September 30,  June 30,
     share amounts              2009         2008         2008         2008
    -------------------------------------------------------------------------
    Revenue:
      Eagle Well Servicing     10,444       12,238       12,275        6,852
      Aero rentals              1,362        1,367        1,329          567
    -------------------------------------------------------------------------
      Total drilling &
       production services     11,806       13,605       13,604        7,419
      Technology services       2,201        3,398        5,043        2,735
    -------------------------------------------------------------------------
    Total revenue              14,007       17,003       18,647       10,154
    -------------------------------------------------------------------------

    Operating costs:
      Eagle Well Servicing      6,544        7,117        6,891        4,725
      Aero rentals                994        1,001          864          808
    -------------------------------------------------------------------------
      Total drilling &
       production services      7,538        8,118        7,755        5,533
      Technology services       1,688        2,573        3,154        1,986
    -------------------------------------------------------------------------
    Total operating costs       9,226       10,691       10,909        7,519
    -------------------------------------------------------------------------

    Gross margin(1)
      Eagle Well Servicing      3,900        5,121        5,384        2,127
      Aero rentals                368          366          465         (241)
    -------------------------------------------------------------------------
      Total drilling &
       production services      4,268        5,487        5,849        1,886
      Technology services         513          825        1,889          749
    -------------------------------------------------------------------------
    Total gross margin          4,781        6,312        7,738        2,635
    -------------------------------------------------------------------------

    Gross margin %(1):
      Eagle Well Servicing        37%          42%          44%          31%
      Aero rentals                27%          27%          35%         (43%)
    -------------------------------------------------------------------------
      Total drilling &
       production services        36%          40%          43%          25%
      Technology services         23%          24%          37%          27%
    -------------------------------------------------------------------------
    Total gross margin %          34%          37%          41%          26%
    -------------------------------------------------------------------------

    EBITDAS(1):
      Eagle Well Servicing      3,434        4,397        4,814        1,772
      Aero rentals                261          241          344         (382)
    -------------------------------------------------------------------------
      Total drilling &
       production services      3,695        4,638        5,158        1,390
      Technology services        (165)         159        1,354          245
      Corporate                  (950)        (895)        (994)      (1,151)
    -------------------------------------------------------------------------
    Total EBITDAS               2,580        3,902        5,518          484
    -------------------------------------------------------------------------

    General and
     administrative             2,201        2,410        2,220        2,150
    -------------------------------------------------------------------------
    Depreciation and
     amortization               2,011        1,791        1,959        1,914
    -------------------------------------------------------------------------
    Interest expense net of
     interest income              273          512          976        1,085
    -------------------------------------------------------------------------
    Stock based compensation      110           67           59           63
    -------------------------------------------------------------------------
    Provision for current
     and future income taxes       54          615          538         (686)
    -------------------------------------------------------------------------
    Loss (gain) on foreign
     exchange                      54         (616)         (24)           6
    -------------------------------------------------------------------------
    Net income (loss) from
     continuing operations         82        1,532        2,024       (1,894)
    -------------------------------------------------------------------------
    Net income (loss)             488        1,268          315       (2,142)
    -------------------------------------------------------------------------
    Net income (loss) per
     common share from
     continuing operations:
      - Basic                    $  -        $0.05        $0.05       $(0.04)
    -------------------------------------------------------------------------
      - Diluted                  $  -        $0.05        $0.05       $(0.04)
    -------------------------------------------------------------------------
    Net income (loss) per
     common share:
    -------------------------------------------------------------------------
      - Basic                   $0.01        $0.04        $0.01       $(0.05)
    -------------------------------------------------------------------------
      - Diluted                 $0.01        $0.04        $0.01       $(0.05)
    -------------------------------------------------------------------------
    Weighted average common
     shares outstanding:
      - Basic              44,296,448   44,304,504   44,304,504   44,301,080
    -------------------------------------------------------------------------
      - Diluted            44,296,448   44,324,122   44,324,122   44,321,531
    -------------------------------------------------------------------------
    (1) See Non-GAAP Measures


    OUTLOOK
    -------
    

With the continued firming of oil prices, the return to more normal winter activity and the expansion of horizontal drilling technology in Western Canada there is a great deal more optimism in our industry than we saw during the summer and fall of 2009. While we expect activity to increase on a year over year basis, we will face a tight labour market and margins that continue to be pressured. We do not expect this situation will change noticeably over the coming months but the expected increase in activity will provide the basis for improvement in both these areas. It should be noted that the activity currently being achieved is happening despite continuing low natural gas prices and difficulties brought on by the Alberta government royalty tax changes introduced in 2009. Recent changes to the Alberta royalty structure and conventional gas activity provides further reason for optimism as we head into the last half of 2010.

About IROC Energy Services Corporation

IROC Energy Services Corp. is an Alberta oilfield services company that, through the IROC Energy Services Partnership, provides a diverse range of products, services and equipment to the oil and gas industry that are among the newest and most innovative in the WCSB. IROC combines cutting-edge technology with depth of experience to deliver a product and services offering in three core areas: Well Servicing & Equipment, Downhole Temperature & Pressure Monitoring Tools, and Rental Services. For more information on IROC Energy Services Corp. visit our website at www.iroccorp.com.

Cautionary Statements

Certain statements contained in this press release may constitute forward looking statements concerning, among other things, expected revenues, expected expenses, profits, developments and strategies for IROC's operations all of which are subject to certain risks, uncertainties and assumptions. These forward looking statements are identified by their use of terms and phrases such as "anticipate", "continue", "estimate", "expect", "may", "will", "projected", "should", "believe" and other similar terms and phrases. By its nature, such forward looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements. These risks include, but are not limited, to the risks associated with the oil and gas industry generally, fluctuating prices in crude oil and natural gas, changes in drilling activity, general global economic, political and business conditions, weather conditions, regulatory changes and availability of products, qualified personnel and manufacturing capacity and raw materials. If any of these uncertainties materialize, or if assumptions are incorrect actual results may vary materially from those expected. IROC relies on litigation protection for any forward looking statements.

The Common Shares of IROC have not and will not be registered on the United States Securities Act of 1933, as amended (the "United States Securities Act") or any state securities laws and are not offered or sold in the United States or to any US person except in certain transactions exempt from the registration requirements of the United States Securities Act and applicable state securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

    
    NON-GAAP MEASURES
    -----------------
    

The financial statements have been prepared in accordance with GAAP. Certain supplementary information and measures not recognized under GAAP are provided where Management believes they assist the reader in understanding IROC's results. These measures include:

    
    1.  EBITDAS and EBITDAS per share - EBITDAS is defined as earnings before
        interest, taxes, depreciation and amortization, stock-based
        compensation expense, foreign exchange gains and losses, goodwill
        impairment, note receivable impairment, and gains or losses on
        disposal of property and equipment. EBITDAS and EBITDAS per share are
        not recognized measures under GAAP. The Corporation believes that
        EBITDAS is provided as a measure of operating performance without
        reference to financing decisions, income tax impacts and non-cash
        expenses, which are not controlled at the operating management level.
        Accordingly, the Corporation believes EBITDAS is a useful measure for
        prospective investors in evaluating the financial performance of the
        Corporation, and specifically, the ability of the Corporation to
        service the interest on its indebtedness. Investors should be
        cautioned that EBITDAS should not be construed as an alternative to
        net income determined in accordance with GAAP as an indicator of the
        Corporation's performance. IROC's method of calculating EBITDAS may
        differ from those of other companies, and accordingly, EBITDAS may
        not be directly comparable to measures used by other companies.

    2.  Gross margin is defined as revenue less operating expenses. Gross
        margin % is defined as gross margin divided by revenue. The Company
        believes that gross margin and gross margin % are useful measures
        which provide an indicator of the Corporation's fundamental ability
        to make money on the products and services it sells. The Corporation
        believes the relationship between revenues and costs expressed by the
        gross margin % is a useful measure when compared between different
        financial periods as it demonstrates the trending relationship
        between revenues, costs and margins. Gross margin and gross margin %
        are not recognized measures of GAAP and do not have any standardized
        meaning prescribed by GAAP. IROC's method of calculating gross margin
        and gross margin % may differ from those of other companies, and
        accordingly, may not be directly comparable to measures used by other
        companies. Gross margin is reconciled to revenue - continuing
        operations in the FINANCIAL HIGHLIGHTS table.
    

The following is a reconciliation of EBITDAS and EBITDAS per share to net income from continuing operations:

    
    -------------------------------------------------------------------------
    $ 000's except number                   Three months ended
     of shares and per        March 31,  December 31, September 30,  June 30,
     share amounts              2010         2009         2009         2009
    -------------------------------------------------------------------------
    Net income (loss) from
     continuing operations        524         (395)      (9,314)      (1,260)

    Depreciation and
     amortization               1,991        2,392        2,073        1,978
    Loss (gain) on foreign
     exchange                      97           43          168          354
    Stock based compensation
     expense                      178           74           57           85
    Loss (gain) on disposal
     of equipment                  (7)          33           (2)          (1)
    Other interest                 81           92           50           54
    Interest on long-term
     debt                         290          373          276          187
    Interest income               (11)         (19)         (18)         (36)
    Goodwill Impairment             -            -        6,850            -
    Note Receivable
     Impairment                     -            -        1,500            -
    Income taxes:
      Current (recovery)            -            -            -            -
      Future (recovery)           235          380         (268)        (785)

    -------------------------------------------------------------------------
    EBITDAS - continuing
     operations                 3,378        2,973        1,372          576
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EBITDAS per share
      Basic                     $0.08        $0.07        $0.03        $0.01
      Diluted                   $0.08        $0.07        $0.03        $0.01
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    $ 000's except number                   Three months ended
     of shares and per        March 31,  December 31, September 30,  June 30,
     share amounts              2009         2008         2008         2008
    -------------------------------------------------------------------------
    Net income (loss) from
     continuing operations         82        1,532        2,024       (1,894)

    Depreciation and
     amortization               2,011        1,791        1,959        1,914
    Loss (gain) on foreign
     exchange                      54         (616)         (24)           6
    Stock based
     compensation expense         110           67           59           63
    Loss (gain) on disposal
     of equipment                  (4)           1          (14)          (4)
    Other interest                 73          155           68           23
    Interest on long-term
     debt                         212          357          756          827
    Interest income               (12)           -            -            -
    Interest and accretion
     on debentures                  -            -          152          235
    Goodwill Impairment             -            -            -            -
    Note Receivable Impairment      -            -            -            -
    Income taxes:
      Current (recovery)            -          (45)           -            -
      Future (recovery)            54          660          538         (686)

    -------------------------------------------------------------------------
    EBITDAS - continuing
     operations                 2,580        3,902        5,518          484
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EBITDAS per share
      Basic                     $0.06        $0.09        $0.12        $0.01
      Diluted                   $0.06        $0.09        $0.12        $0.01
    -------------------------------------------------------------------------
    

SOURCE IROC Energy Services Corp.

For further information: For further information: IROC Energy Services Corp., Mr. Thomas M. Alford, President and CEO, Telephone: (403) 263-1110, Email: investorrelations@iroccorp.com

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