Lockerbie & Hole Announces Fiscal 2009 Second Quarter Results



    TSX: LH

    EDMONTON, Oct. 9 /CNW/ - Lockerbie & Hole Inc. (the "Company" or
"Lockerbie") releases results for the three and six months ended August 31,
2008.

    
                          ---------------------------------------------------
                                  Three months ended        Six months ended
                                           August 31,              August 31,
    -------------------------------------------------------------------------
    (unaudited, in
     thousands, except per
     share amounts)                 2008        2007        2008        2007
    -------------------------------------------------------------------------
    Contract revenue            $146,455    $105,877    $259,050    $180,210
    -------------------------------------------------------------------------
    Adjusted EBITDA(1)             7,923       9,640      16,466      18,141
    -------------------------------------------------------------------------
    Net income                     5,238       5,879      10,261      10,755
    -------------------------------------------------------------------------
    Basic earnings per share        0.19        0.26        0.37        0.51
    -------------------------------------------------------------------------
    Backlog(1)                                         1,482,900   1,037,000
    -------------------------------------------------------------------------

    (1) For a definition of Adjusted EBITDA and Backlog as used in this press
        release, see "Advisories - Non - GAAP Measures" at the end of this
        press release.


    Highlights

    -   Revenue increased $41.0 million from the first quarter due to
        increased activity on oil sands projects.
    -   Excluding $2.5 million in additional profit from unspent cost
        contingencies earned on projects in the second quarter of the
        previous year, Adjusted EBITDA increased $0.8 million in the second
        quarter over the same period in fiscal 2008.
    -   The Company secured $208.0 million in new contracts and change orders
        during the second quarter as Backlog rose to a record
        $1,482.9 million.
    -   To accommodate anticipated increases in project activity, the Company
        has increased staff levels by 20% in the past six months.
    -   The Company has no bank debt, has $92.0 million in cash and cash
        equivalents, and has $50 million in credit available under its credit
        agreement with its Canadian bank.
    

    Overall Performance

    Net income for the Company was $5.2 million ($0.19 per share) for the
three months ended August 31, 2008 compared to $5.9 million ($0.26 per share)
for the three months ended August 31, 2007, a decrease of $0.7 million
(11.9%). For the six months ended August 31, 2008 net income was $10.3 million
($0.37 per share) compared to $10.8 million ($0.51 per share) for the six
months ended August 31, 2007, a decrease of $0.5 million (4.6%). Net income
decreased from the previous year due to increased overhead expenses to prepare
for increased project activity and lower margins as the Company's contract mix
shifts towards lower margin, lower risk cost reimbursable contracts.
    Adjusted EBITDA was $7.9 million, a decrease of $1.7 million (17.7%),
compared to $9.6 million over the same three month period in fiscal 2008 and
was $16.5 million, a decrease of $1.6 million (8.8%), compared to
$18.1 million over the same six month period in fiscal 2008. Although revenue
increased, over the same period in the previous fiscal year, Adjusted EBITDA
decreased as the prior year three and six month results include $2.5 million
more of profit from unspent cost contingencies on fixed price contracts.
    For a definition of Adjusted EBITDA as used in this press release, see
"Advisories - Non - GAAP Measures" at the end of this press release.

    Outlook

    The outlook for the Company remains positive. The Company will be focused
on executing its Backlog and pursuing a number of opportunities in the
Industrial and Infrastructure operating segments. To date, there has been no
impact to our operations as a result of recent developments in the credit and
equity markets.

    Second Quarter Fiscal 2009 Financial Statements and MD&A

    Lockerbie will file its second quarter fiscal 2009 financial statements
and management's discussion and analysis ("MD&A") for such period on the
System for Electronic Data Retrieval ("SEDAR") at www.sedar.com under the
Company's profile on Friday, October 10, 2008. Such financial statements and
MD&A will also be available on Lockerbie's website at www.lockerbiehole.com on
October 9, 2008.

    Second Quarter Fiscal 2009 Conference Call

    As previously announced, Gordon L. Panas, President and Chief Executive
Officer, and Michael G. Slapman, Chief Financial Officer, will host a
conference call to discuss the second quarter fiscal 2009 results on Friday,
October 10 at 9:00 a.m. MDT (11:00 a.m. EDT). Interested parties are
encouraged to participate by calling (800) 733-7571 or (416) 644-3414 (in
Toronto, Ont.) at least ten minutes before the start of the call in order to
participate. For those unable to phone into the live call, a replay will be
available up to 14 days after the event at (416) 640-1917 (in Toronto) or
(877) 289-8525, passcode 21284974 followed by the pound sign, and on
Lockerbie's website at www.lockerbiehole.com.

    About Lockerbie

    Lockerbie was founded in 1898 and is one of the largest mechanical
construction contractors in Canada. Lockerbie is a multi-disciplined
contractor providing mechanical, electrical, instrumentation, pipe
fabrication, module assembly, boiler erection, insulation and civil
construction services primarily to the oilsands, mining, institutional,
municipal and commercial market sectors. Lockerbie is headquartered in
Edmonton, Alberta.

    Advisories

    Non-GAAP Measures

    "Adjusted EBITDA" represents income before interest expense and bank
charges, interest income, income taxes, depreciation, and discontinued
operations. Adjusted EBITDA is not a recognized performance measure under GAAP
and does not have a standardized meaning prescribed by GAAP. The Company
believes that Adjusted EBITDA is a useful complementary measure of pre-tax
profitability commonly used by the financial and investment community for
valuation purposes. The most directly comparable measure to Adjusted EBITDA
calculated in accordance with GAAP is net income. For a reconciliation of the
Company's Adjusted EBITDA to net income, see the Company's MD&A which will be
available on SEDAR and on Lockerbie's website at www.lockerbiehole.com on
October 9, 2008.

    "Backlog" means the total value of work that has not yet been completed
that: (a) is assessed by the Company as having a high certainty of being
performed by the Company or its subsidiaries by either the existence of an
executed contract or work order specifying job scope, value and timing; or (b)
has been awarded to the Company or its subsidiaries, as evidenced by an
executed binding or non-binding letter of intent or agreement, describing the
general job scope, value and timing of such work, and with the finalization of
a formal contract respecting such work currently assessed by the Company's
management as being reasonably assured. Backlog is not a recognized
performance measure under GAAP and does not have any standardized meaning
prescribed by GAAP. The Company believes that Backlog is a useful
complementary measure of projected activity in future periods commonly used by
management to evaluate the Company's projected activity in future periods.
There is no direct comparable measure to Backlog in GAAP.

    Forward Looking Statements

    This press release contains statements concerning Lockerbie's outlook and
expectations for its future performance, the outlook for the oilsands and
infrastructure markets, Backlog, Lockerbie's business plan and objectives and
other expectations, plans, goals, objectives, assumptions, information or
statements about future events or conditions that may constitute
forward-looking statements or information under applicable securities
legislation. Such forward-looking statements or information are based on a
number of assumptions which may prove to be incorrect. Assumptions have been
made regarding, among other things, the successful implementation of
Lockerbie's business plan, the availability to Lockerbie of qualified
personnel, the continuation and completion of the projects forming Lockerbie's
Backlog, and general economic, business and market conditions. Although
Lockerbie believes that the expectations reflected in such forward-looking
statements or information are reasonable, undue reliance should not be placed
on forward-looking statements because Lockerbie can give no assurance that
such expectations will prove to be correct. The forward-looking statements are
based on Lockerbie's current expectations, estimates and projections, and are
subject to a number of significant risks and uncertainties that could cause
actual results to differ materially from those anticipated. Such risks and
uncertainties include, among others, Lockerbie's ability to be retained for
existing and new project work by existing and new clients, Lockerbie's ability
to retain and hire qualified personnel required, oil and gas prices, the delay
or cancellation of projects forming Lockerbie's Backlog, general economic,
business and market conditions and other risks as are detailed from time to
time in continuous disclosure filings of Lockerbie. Should one or more of
these risks or uncertainties materialize, or should assumptions underlying the
forward-looking statements prove incorrect, actual results may vary materially
from those described herein as anticipated, believed, estimated or expected.
These forward-looking statements are made as of the date of this press
release, and Lockerbie assumes no obligation to update or revise them to
reflect new events or circumstances, except as required by applicable laws.

    %SEDAR: 00025533E




For further information:

For further information: Gordon L. Panas, President & Chief Executive
Officer, or Michael G. Slapman, Chief Financial Officer at: Telephone: (780)
452-1250, Fax: (780) 452-1284, Website: www.lockerbiehole.com

Organization Profile

LOCKERBIE & HOLE INC.

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