Lockerbie & Hole Announces Second Quarter Fiscal 2008 Results



    TSX: LH

    EDMONTON, Oct. 15 /CNW/ - Lockerbie & Hole Inc. (the "Company" or
"Lockerbie") releases results for the three and six months ended August 31,
2007, the Company's second quarter of fiscal 2008.

    
    -------------------------------------------------------------------------
    (unaudited)                     Three months ended      Six months ended
                                             August 31             August 31
    -------------------------------------------------------------------------
    (in thousands, except
    per share amounts)                 2007       2006       2007       2006
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Contract revenue               $105,877    $68,822   $180,210   $158,565
    -------------------------------------------------------------------------
    Net income                        5,879      1,666     10,755      2,614
    -------------------------------------------------------------------------
    Net income per share,
     basic and diluted                 0.26       0.08       0.51       0.13
    -------------------------------------------------------------------------
    EBITDA                            9,640      6,152     18,141      9,281
    -------------------------------------------------------------------------

    Highlights

      -  Initial public offering ("IPO") completed during the second quarter
         with the issuance of 7.3 million common shares from treasury at
         $10.25 per share
      -  Contract revenues were higher than expected due to accelerated
         schedules on two industrial projects
      -  Profit margins on contracts improved as project risks were mitigated
         and associated cost contingencies for these risks were not spent
    

    Overall Performance

    The Company's overall profit performance for the three months ended
August 31, 2007 improved over the same period in the previous fiscal year. Net
income for the Company was $5.9 million ($0.26 per share) for the three months
ended August 31, 2007 compared to $1.7 million ($0.08 per share) for the three
months ended August 31, 2006. For the six months ended August 31, 2007, net
income was $10.8 million ($0.51 per share) compared to $2.6 million ($0.13 per
share) for the six months ended August 31, 2006. EBITDA was $9.6 million, an
increase of $3.4 million (54.8%), compared to $6.2 million over the same three
month period in fiscal 2008 versus fiscal 2007 and was $18.1 million, an
increase of $8.8 million (94.6%), compared to $9.3 million over the same six
month period in fiscal 2008 versus fiscal 2007. Solid project execution and
higher than anticipated revenues within the Industrial segment combined with a
continued focus on risk management and productivity resulted in increased
profitability.
    For a definition of EBITDA as used in this press release, see "Advisories
- Non-GAAP Measures".

    Selected Financial Information

    The Company generated stronger than expected results for the second
quarter ended August 31, 2007. The following table summarizes key financial
data, which was derived from and should be read in conjunction with, the
interim consolidated financial statements for the second quarter of fiscal
2008 and 2007.

    
    -------------------------------------------------------------------------
    (unaudited)                     Three months ended      Six months ended
                                             August 31             August 31
    -------------------------------------------------------------------------
    (in thousands, except
    per share amounts)                 2007       2006       2007       2006
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Contract revenue               $105,877    $68,822   $180,210   $158,565
    -------------------------------------------------------------------------
    Income before income taxes
     and discontinued operations      9,110      5,109     16,826      7,354
    -------------------------------------------------------------------------
    Income before discontinued
     operations                       5,606      3,257     10,366      4,710
    -------------------------------------------------------------------------
      Basic earnings per share         0.25       0.16       0.49       0.23
    -------------------------------------------------------------------------
      Diluted earnings per share       0.25       0.16       0.49       0.23
    -------------------------------------------------------------------------
    Net income                        5,879      1,666     10,755      2,614
    -------------------------------------------------------------------------
      Basic earnings per share         0.26       0.08       0.51       0.13
    -------------------------------------------------------------------------
      Diluted earnings per share       0.26       0.08       0.51       0.13
    -------------------------------------------------------------------------
    Cash from continuing operations   5,781     23,657     15,059     25,039
    -------------------------------------------------------------------------
    EBITDA                            9,640      6,152     18,141      9,281
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                                            As at      As at
                                                           August   February
                                                         31, 2007   28, 2007
    -------------------------------------------------------------------------
    Working capital                                      $ 98,116   $(29,217)
    -------------------------------------------------------------------------
    Total assets                                          223,211    126,240
    -------------------------------------------------------------------------
    Loans payable                                             Nil      6,155
    -------------------------------------------------------------------------
    Shareholders' equity (deficiency)                     121,193     (7,577)
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    EBITDA Reconciliation:          Three months ended      Six months ended
                                             August 31,            August 31,
    -------------------------------------------------------------------------
    (in thousands)                     2007       2006       2007       2006
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Net income                       $5,879     $1,666    $10,755     $2,614
    -------------------------------------------------------------------------
    Depreciation                        655        743      1,282      1,362
    -------------------------------------------------------------------------
    Interest and bank charges          (125)       300         33        565
    -------------------------------------------------------------------------
    Income taxes                      3,504      1,852      6,460      2,644
    -------------------------------------------------------------------------
    Income (loss) from
     discontinued operations           (273)     1,591       (389)     2,096
    -------------------------------------------------------------------------
    EBITDA                            9,640      6,152     18,141      9,281
    -------------------------------------------------------------------------
    

    Second Quarter Fiscal 2008 Financial Statements and MD&A

    Lockerbie has filed its second quarter fiscal 2008 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. Such financial statements and MD&A are also available on
Lockerbie's website at www.lockerbiehole.com.

    Second Quarter Fiscal 2008 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 2008 results on Tuesday,
October 16 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,
Ontario) at least ten minutes before the start of the call in order to
participate. For those unable to participate in 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 21248950 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

    EBITDA is a non-GAAP performance measure. EBITDA represents income before
interest and bank charges, income taxes, depreciation, discontinued
operations, and the change in the redemption value, where applicable, of
redeemable common shares. EBITDA is not a recognized performance measure under
GAAP and does not have a standardized meaning prescribed by GAAP. The
Corporation believes that EBITDA is a useful complementary measure of pre-tax
profitability commonly used by Management to evaluate its performance. The
most directly comparable measure to EBITDA calculated in accordance with GAAP
is net income.

    Forward Looking Statements

    This press release contains statements concerning Lockerbie's business
plan and objectives or 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, Telephone: (780)
452-1250, Fax: (780) 452-1284, Website: www.lockerbiehole.com

Organization Profile

LOCKERBIE & HOLE INC.

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