Lockerbie & Hole Announces Third Quarter Fiscal 2008 Results



    TSX: LH

    EDMONTON, Jan. 14 /CNW/ - Lockerbie & Hole Inc. (the "Company" or
"Lockerbie") releases results for the three and nine months ended November 30,
2007, the Company's third quarter of fiscal 2008.

    
    -------------------------------------------------------------------------
    (unaudited)                     Three months ended     Nine months ended
                                        November 30           November 30
    -------------------------------------------------------------------------
    (in thousands, except
     per share amounts)                2007      2006       2007       2006
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Contract revenue               $114,152   $79,878   $294,642   $238,444
    -------------------------------------------------------------------------
    Net income                        6,535     3,101     17,290      5,715
    -------------------------------------------------------------------------
    Basic and diluted earnings
     per share                         0.23      0.16       0.74       0.29
    -------------------------------------------------------------------------
    EBITDA                            8,194     5,849     26,335     15,131
    -------------------------------------------------------------------------

    Highlights

    -   Contract revenues were higher than the comparable three and nine
        month periods due to increased activity from oilsands and mining
        projects.
    -   Profit margins on contracts improved as project risks were mitigated
        and associated cost contingencies for these risks were mitigated.
    -   The Company secured $168 million in new contracts and change orders.
    

    Overall Performance

    Overall profit performance for the three months ended November 30, 2007
improved over the same period in the previous fiscal year. Net income for the
Company was $6.5 million ($0.23 per share) for the three months ended
November 30, 2007 compared to $3.1 million ($0.16 per share) for the three
months ended November 30, 2006. For the nine months ended November 30, 2007,
net income was $17.3 million ($0.74 per share) compared to $5.7 million
($0.29 per share) for the nine months ended November 30, 2006. EBITDA was
$8.2 million, an increase of $2.4 million (41.4%), compared to $5.8 million
over the same three month period in fiscal 2008 versus fiscal 2007 and was
$26.3 million, an increase of $11.2 million (74.2%), compared to $15.1 million
over the same nine month period in fiscal 2008 versus fiscal 2007. Net income
and EBITDA increased from higher revenues in the periods and from unspent cost
contingencies on projects, which is a result of solid project execution and a
continued focus on risk management and productivity.
    For a definition of EBITDA and profit margins on contracts as used in
this press release, see "Advisories - Non-GAAP Measures" at the end of this
press release.

    Selected Financial Information

    The Company generated strong results for the third quarter ended
November 30, 2007. The following table summarizes key financial data, which
was derived from and should be read in conjunction with, the interim unaudited
consolidated financial statements for the third quarter of fiscal 2008 and
2007.

    
    -------------------------------------------------------------------------
    (unaudited)                     Three months ended     Nine months ended
                                        November 30           November 30
    -------------------------------------------------------------------------
    (in thousands, except
     per share amounts)               2007       2006       2007       2006
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Contract revenue               $114,152    $79,878   $294,642   $238,444
    -------------------------------------------------------------------------
    Income before income taxes
     and discontinued operations      8,958      4,735     25,784     12,090
    -------------------------------------------------------------------------
    Income before discontinued
     operations                       5,511      3,253     15,877      7,963
    -------------------------------------------------------------------------
      Basic and diluted earnings
       per share                       0.20       0.16       0.68       0.40
    -------------------------------------------------------------------------
    Net income                        6,535      3,101     17,290      5,715
    -------------------------------------------------------------------------
      Basic and diluted earnings
       per share                       0.23       0.16       0.74       0.29
    -------------------------------------------------------------------------
    Cash from continuing operations   3,239      2,053     18,297     17,063
    -------------------------------------------------------------------------
    EBITDA                            8,194      5,849     26,335     15,131
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                                            As at     As at
                                                          November  February
                                                          30, 2007  28, 2007
    -------------------------------------------------------------------------
    Working capital                                       $104,234  $(29,217)
    -------------------------------------------------------------------------
    Total assets                                           231,927   126,240
    -------------------------------------------------------------------------
    Loans payable                                              Nil     6,155
    -------------------------------------------------------------------------
    Shareholders' equity (deficiency)                      128,660    (7,577)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    EBITDA Reconciliation:          Three months ended     Nine months ended
                                        November 30           November 30
    -------------------------------------------------------------------------
    (in thousands)                    2007       2006       2007       2006
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Net income                       $6,535     $3,101    $17,290     $5,715
    -------------------------------------------------------------------------
    Depreciation                        816        748      2,098      2,110
    -------------------------------------------------------------------------
    Interest expense and
     bank charges                       176        441      1,006      1,120
    -------------------------------------------------------------------------
    Interest income                  (1,756)       (75)    (2,553)      (189)
    -------------------------------------------------------------------------
    Income taxes                      3,447      1,482      9,907      4,127
    -------------------------------------------------------------------------
    Discontinued operations          (1,024)       152     (1,413)     2,248
    -------------------------------------------------------------------------
    EBITDA                            8,194      5,849     26,335     15,131
    -------------------------------------------------------------------------
    

    Outlook

    The outlook for the Company remains positive. In the long-term, oilsands
and infrastructure investment in western Canada continues to increase, and the
Company is positioned to capitalize on the opportunities within these markets.

    Third Quarter Fiscal 2008 Financial Statements and MD&A

    Lockerbie has filed its third 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.

    Third 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 third quarter fiscal 2008 results on Tuesday,
January 15 at 9:00 a.m. MDT (11:00 a.m. EDT). Interested parties are
encouraged to participate by calling 800.732.6179 or 416.644.3417 (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 21258397 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 expense and bank charges, interest income, income taxes, depreciation
and discontinued operations. 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.
    Profit margin on contracts is calculated by first subtracting all
contract costs from contract revenue and then dividing the net difference by
contract revenue. Profit margin on contracts is not a recognized performance
measure under GAAP and does not have any standardized meaning prescribed by
GAAP. The Company believes that profit margin on contracts is a useful
complementary measure of project profitability commonly used by Management to
evaluate its performance. There is no direct comparable measure to profit
margin on contracts in GAAP.

    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.





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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