Hyduke Announces First Quarter Fiscal 2014 Financial Results

NISKU, AB, May 12, 2014 /CNW/ - Hyduke Energy Services Inc. (HYD - TSX), announced operating results for the three months ended March 31, 2014.  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 current quarter of $13.2 million up 2.9% from $12.8 million in the prior quarter.
  • Gross profit for the current quarter of $2.5 million up 32.3% from $1.9 million in the prior quarter.
  • Gross profit percentage for the current quarter of 18.7% reflects an increase of 4.1 basis points over the prior quarter.
  • Net income from continuing operations for the current quarter of $436 thousand.
  • Earning per share (basic) from continuing operations for the current quarter of $0.014.
  • EBITDAS for continuing operations for the current quarter of $483 thousand.
  • During the quarter the Company discontinued the operations its manufacturing business unit based in Houston, Texas and its machining facility located in Nisku, Alberta.
  • Liquidity remains positive with current ratio at 1.96 to 1.00
  • Debt to equity ratio remains low at 0.30 to 1.00

Selected Statement of

Comprehensive Income


Three Months Ended

($000's, except per share data)

Mar 31


Dec 31


Mar 31



Total revenue – continuing operations




Gross profitcontinuing operations




Gross profit (%)




EBITDAS – continuing operations




Profit (loss) – continuing operations




Profit (loss)




Profit (loss) per share – basic ($)




Profit (loss) per share – diluted ($)





First quarter 2014 revenues of $13,216,639 increased $378 thousand (3%) over the prior quarter due to an increase in activity of drilling and well service contractors in Western Canada and a resulting increase in demand for supplies and services. 

First quarter 2014 gross profit (refer to NON-IFRS MEASURES) of $2,471,636 increased $603 thousand (32%) over the prior quarter and was due to higher realized margins on a large supply contract in the supply and service segment. 

First quarter 2014 EBITDAS (refer to NON-IFRS MEASURES) was $483 thousand, a $1.6 million increase from the prior quarter.  This is a result an increase in revenue and an increase in gross margin percentage. 

First quarter 2014 income from continuing operations of $338 thousand represents an increase of $1.4 million over the prior quarter.

Selected Financial Position Information

 ($000's, except ratios)

March 31


December 31


Total assets



Total current assets



Total cash and short term deposits



Total liabilities



Total current liabilities



Total bank indebtedness



Total interest bearing debt



Total equity



Current ratio (current assets divided by

current liabilities)

1.96 to 1.00

1.83 to 1.00

Debt to equity ratio (interest bearing debt

divided by shareholders' equity)

0.30 to 1.00

0.31 to 1.00


At March 31, 2014 Hyduke maintained a very strong balance sheet as measured by liquidity (current ratio of 1.96 to 1.00) and debt to equity (ratio of 0.30 to 1.00)

Total assets of $42.8 million as at March 31, 2014 declined $1.5 million (3.3%) from December 31, 2013 due to the collection of accounts receivable in addition to a decline in property plant and equipment as equipment from the discontinued operations is liquidated. 

Total liabilities of $16.2 million as at March 31, 2014 represents a decrease of $1.3 million (7.6%) from December 31, 2013.  Total current liabilities decrease of $1.2 million relates primarily to a decrease in trade and other payables of $1.1 million, a decrease in current portion of long term debt of $0.3 million.


The first quarter of the 2014 fiscal year was characterized by major changes in the direction for the company through the departure of the Chief Executive Officer as well as the President of what has historically been Hyduke's largest operating division.

Thanks to strong business brands in the marketplace, loyal customers, a dedicated staff and management, administrative cost cuts, an enhanced internal focus on business performance, and generally improving conditions for the upstream oil and gas industry in the main market of western Canada, Hyduke increased EBITDAS by nearly 50% in the first quarter compared to last year despite a 17% drop in revenue. The highlights of the quarter were:

  • Core operating units of supply, machining and drilling equipment fabrication performed well with acceptable operating margins.
  • Business streamlining initiatives resulted in the closing of the Nisku machining facility and the Houston fabrication facility, neither of which had contributed positive cashflow in 2013.
  • Administrative expenses increased slightly on a comparative quarter basis however many of these were one-time, non-recurring costs related to the foregoing.
  • A new CEO, Patrick Ross, was appointed on May 1. Mr. Ross has spent a year on the Board of Directors and three months as Chair of the interim management group. He is very familiar with the Company's operations and is committed to quickly enacting the changes required to get Hyduke back on a stable footing.


At the Annual General and Special Meeting of Shareholders on June 13, 2013, there was a major change in the composition of the Board of Directors of the Company. The new board undertook to engage executive management in a complete operational and strategic review of all operations with a view to improving financial performance and efficiency. This process has led to changes that are intended to improve efficiency and profits by reducing Hyduke's business lines, focusing on those operations with the greatest opportunities and leading Hyduke towards a future that exploits its full potential. In the first quarter this process precipitated significant changes among the senior executive officers of the Company.

Due to the unpredictability and high sales cost of international revenues, part of the go-forward focus will be on ensuring maximum participation in domestic markets. Activities in the first quarter were congruent with this objective. While Hyduke will participate in international opportunities as they arise, the primary focus of management will be enhancing the performance of the core businesses with positive cashflow and expansion opportunities in domestic markets.

Western Canada showed increasingly fundamental strength as measured by the total amount of revenue available for Hyduke's core client base. The price of natural has rebounded significantly from recent multi-year lows. World oil prices have remained relatively stable while the pricing differentials (discounts) in North America have declined because of improvements in oil transportation infrastructure. The Canadian dollar has declined which helps Canadian producers selling commodities priced in U.S. dollars.

The cumulative impact of the foregoing is that the cash value of the oil and gas produced in Canada in 2014 could be the highest in history. According to estimates published May 6, 2014 by ARC Financial of Calgary, the value of all existing and anticipated production in 2014 could reach $158 billion. This is higher than the last record value of $145 billion in 2008 and $47 billion greater than the similar figure for 2012.

Historically, when oil company clients have the cash to spend they create market conditions favorable to the financial success of Hyduke's client base. This in turn assists Hyduke's business.

Based on the foregoing operational and management activities which took place in the first quarter, new executive leadership and the generally improving market conditions, management is of the view that the cumulative impact of the past and future changes will be a Company built on a more predictable income stream leading to a return to profitability.

The overall objective of Hyduke's Board of Directors and new CEO is to create a less complex business as measured by number and size of operating divisions. Hyduke will focus efforts and capital on businesses in which Hyduke can achieve continued growth, attractive margins, and market leadership. In the simplest terms, Hyduke intends to do fewer things better and in so doing, grow both the  bottom line and shareholder value.

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
Hyduke is an integrated oilfield services company with over thirty years experience in the manufacture, repair and distribution of oilfield equipment and supplies in Canada and worldwide.  Hyduke specializes in providing customized, integrated solutions to the drilling and well service industries including:

  • Turn-Key Equipment - drilling rig and service rig packages including in-house design, engineering and drafting, major component procurement and overall project management;
  • Life Cycle Management - inspection, certification, service, repair and supply services throughout the operating life of the drilling or well service rig; and
  • Single Source Supply - providing new capital equipment, repair and maintenance on existing capital equipment and supply of operating consumables.


During the year, the Company restructured its business operations into two operating segments and one corporate services segment as follows:

Hyduke Rig Equipment: the Hyduke Rig Equipment segment includes the design, manufacture and refurbishment of land-based drilling rigs, workover rigs, drilling and well service support equipment.

Hyduke Supply and Service: the Hyduke Supply and Service segment includes the procurement and distribution of spare parts, equipment components, operating supplies and pneumatic controls to the drilling and well service industries, the service and repair of drilling rig, workover rig, service rig and truck mounted equipment, and the inspection and certification of drilling rig and well service equipment. 

Corporate Services: The Corporate Services segment includes costs for management and administration, sales and marketing, accounting and finance and engineering and drafting services provided to all Hyduke operating segments.

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



Jetez un coup d’œil sur nos forfaits personnalisés ou créez le vôtre selon vos besoins de communication particuliers.

Commencez dès aujourd'hui .


Remplissez un formulaire d'adhésion à CNW ou communiquez avec nous au 1-877-269-7890.


Demandez plus d'informations sur les produits et services de CNW ou communiquez avec nous au 1‑877-269-7890.