Wolverine Energy and Infrastructure Inc. Announces the Filing of Fiscal First Quarter 2022 Results and Operations Overview

/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR
FOR DISSEMINATION IN THE UNITED STATES/

EDMONTON, AB, Aug. 30, 2021 /CNW/ - Wolverine Energy and Infrastructure Inc. ("Wolverine" or the "Company") (TSXV: WEII) is pleased to announce the filing of its Fiscal First Quarter 2022 Results on SEDAR and provide an operational update.    

Highlights:

• Closed on May 27, 2021, the divestiture of Clean Energy Assets for total proceeds of $101.5 million in cash and shares
• Reported Revenue and Adjusted EBITDA of $23.3 million and $2.0 million, respectively, in the first fiscal quarter. Revenue increased by $4.2 million, with Adjusted EBITDA down by $0.5 million, respectively, over the same period in the prior year related to increased costs of divestiture and expansion activities in the water midstream division, while the rentals division maintained margin percentages
• Ended the quarter with net liquid assets of approximately $74.9 million, when adding other long-term investments to current assets less accounts payable and accrued liabilities
• Divested an additional $1.7 million of redundant and aged assets
• Advanced strategic organizational changes to further service our current clients and emerging sector clients. The intention of the organizational changes are to further enhance service offering to our clients and establish a leading Infrastructure and Energy business unit. In addition, the consolidation of business units is expected to result in significant cost savings through general and administrative savings

FINANCIAL HIGHLIGHTS

3 Months Ended June 30	2021	2020	$ Change
Revenue	23,296,776	19,112,063	4,184,713
Gross profit	1,865,010	3,381,364	(1,516,354)
Earnings (loss) from operations	(9,776,753)	(6,880,452)	(2,896,301)
Net income (loss)	19,595,827	(5,344,582)	24,940,409
Funds from (used-in) operations	(1,594,447)	29,585	(1,624,032)
Cash from (used-in) operations	(365,630)	4,731,837	(5,097,467)
Capital expenditures (proceeds), net	(30,828,162)	(760,847)	(30,067,315)
Total assets	191,001,972	246,067,605	(55,065,633)
Total liabilities	124,577,298	168,171,660	(43,594,362)
Shares outstanding	105,997,998	105,997,998	-

NON-IFRS MEASURES

3 Months Ended June 30	2021	2020	$ Change
Net income (loss)	19,595,827	(5,344,582)	24,940,409
Income tax expense (recovery)	5,865,577	(1,781,527)	7,647,104
Depreciation and amortization	6,776,817	6,956,465	(179,648)
Finance costs	2,547,592	2,439,930	107,662
EBITDA^1	34,785,813	2,270,286	32,515,527
Acquisition costs	750,000	66,874	683,126
Share-based compensation	(535,240)	-	(535,240)
Foreign exchange (gain) loss	1,077,317	-	1,077,317
(Gain) loss on investments	2,537,372	-	2,537,372
(Gain) loss on disposal of equipment	19,927	99,786	(79,859)
Bank EBITDA^2	35,408,883	2,436,946	32,971,937
Bad debt expense (recovery)	1,977,534	-	1,977,534
(Gain) on disposal of midstream assets	(38,648,980)	-	(38,648,980)
Adjusted EBITDA^3	1,963,743	2,436,946	(473,203)

¹EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is a non-IFRS measure, calculated by adding back the impacts of income tax, finance costs, depreciation and amortization to net income (loss) for the period. EBITDA does not have a standardized meaning prescribed by IFRS and is not necessarily comparable to similar measures provided by other companies.

²Bank EBITDA is defined as earnings before interest, taxes, depreciation and amortization, and adjusted for certain items, as reported to the Company's lenders for covenant calculations.

³Adjusted EBITDA is defined as EBITDA adjusted for certain non-operating, non-recurring and non-cash items. Adjusted EBITDA is used by management to evaluate the earnings and performance of the Company before consideration of capital, financing and tax structures that may vary from company to company. Prior period Adjusted EBITDA has been calculated and presented in accordance with the current period calculation and presentation. 

OPERATIONS OVERVIEW

For the quarter ending June 30, 2021, activity levels were modest from a slower ramp-up in customer spending levels, in addition to a typically slow period in Western Canada due to spring breakup. That being said, recent client conversations and results for the second fiscal quarter to date show increased spending and activity levels for which Wolverine is very well positioned and has translated into increased revenues and margins. Wolverine has strategically maintained margins throughout its Rental division through the use of the pass through of Canadian wage subsidy programs, with the intent to maintain margins following the completion of the subsidy programs. In the US, operations have been slower to ramp up due to the pandemic and industry consolidation, however exiting the fiscal second quarter of 2022, activity levels are showing a significant pick up in operations, including non-conventional industry activity. The US wage subsidy programs have been used to maintain skilled employs throughout the pandemic and have benefited Wolverine on accelerating maintenance capital requirements to ready the company for increasing activity levels following the pandemic impact.

INDUSTRY OUTLOOK

Moving forward in fiscal 2022, Wolverine is focused on providing industry leading services to both conventional and clean energy projects throughout North America and creating shareholder value in line with its industry leading return on equity track record. Within this strategy, Wolverine has adjusted its business model to further service our current and emerging sector clients. Specifically, Wolverine has streamlined and consolidated various aspects of its energy services offerings and has actively begun diversifying its existing infrastructure and clean energy business to further enhance the Company's service offerings and respond to the emerging needs and demands of the energy industry and the Company's clients. Combined with the ongoing strength in commodity prices, Wolverine is strongly positioned to benefit from sustained increases in activity levels across North America in fiscal 2022.

Wolverine also continues to be strongly positioned to participate in the consolidation of the energy services sector in North America. If the prolonged challenges in the Western Canadian energy market and the moderate slow-down in United States oil and gas activity did not further increase the need for service sector consolidations, the COVID-19 pandemic has undoubtedly accelerated that need. Management continues to believe that overheads throughout the sector can be reduced by the removal of management salaries and that consolidation and scale will help the sector to return to a healthier position. Wolverine's strong financial position, long-term, strategic financial lenders, and diverse customer base position the Company to be an industry leader in consolidating the energy services space in North America and to take advantage of strategic, synergistic and accretive opportunities going forward. To this end, Wolverine has executed a key strategic divestiture of certain midstream assets during the quarter that has provided the Company with significant liquidity and the ability to position the business for future growth opportunities while optimizing its capital structure.

About Wolverine

Wolverine is an industry leading, TSXV publicly–traded diversified energy (conventional and renewables) and infrastructure service provider in western Canada and the United States. Wolverine's focus is to ensure in the safest, most innovative and cost-effective way to bring the world's most reliable and responsible energy to market.

Cautionary Statements

This news release contains forward-looking statements and/or forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws.  When used in this release, the words "would", "will" and similar expressions, as they relate to Wolverine or its management, are intended to identify such forward-looking statements.  Such forward-looking statements reflect the current views of Wolverine with respect to future events, and are subject to certain risks, uncertainties and assumptions.  Many factors could cause Wolverine's actual results, performance or achievements to be materially different from any expected future results, performance or achievement that may be expressed or implied by such forward-looking statements.  In particular, this news release contains or implies forward-looking statements pertaining to: non-core asset dispositions; and the use of proceeds from the Offering. These forward-looking statements are subject to numerous risks and uncertainties, including but not limited to: the impact of general economic conditions in Canada and the United States; industry conditions including changes in laws and regulations including adoption of new environmental laws and regulations, and changes in how they are interpreted and enforced, in Canada and the United States; competition; lack of availability of qualified personnel; obtaining required approvals of regulatory authorities, in Canada and the United States; volatility in market prices for oil and gas; fluctuations in foreign exchange or interest rates; environmental risks; changes in income tax laws or changes in tax laws and incentive programs relating to the oil industry; ability to access sufficient capital from internal and external sources; risk that the board of directors of Wolverine determines that it would be in the best interests of Wolverine to deploy the proceeds of the Offering for some other purpose; and other factors, many of which are beyond the control of the Company.

These forward-looking statements reflect material factors, expectations and assumptions.  Forward-looking statements included in this news release should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such forward-looking statements.  Although the forward-looking statements contained in this document are based upon assumptions which management of the Company believes to be reasonable, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this document, Wolverine has made assumptions regarding among other things: the successful listing of the Common Shares on the TSXV; availability of skilled labour; timing and amount of capital expenditures; future exchange rates; the price of oil and gas; the impact of increasing competition; conditions in general economic and financial markets; effects of regulation by governmental agencies; the continued availability of adequate equity financing and funds from operations to fund its planned expenditures; timing of drilling and completion of wells; and other matters. Wolverine's business is subject to a number of risks and uncertainties. Readers are encouraged to review and carefully consider the risk factors pertaining to Wolverine's business described in PetroMaroc's management information circular and proxy statement dated as of November 14, 2018, which is accessible on Wolverine's SEDAR issuer profile at www.sedar.com.  The forward-looking statements contained in this release are made as of the date of this release, and except as may be expressly be required by law, Wolverine disclaims any intent, obligation or undertaking to publicly release any updates or revisions to any forward-looking statements contained herein whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

Management of the Company has included the above summary of assumptions and risks related to forward-looking information provided in this document in order to provide shareholders with a more complete perspective on Wolverine's current and future operations and such information may not be appropriate for other purposes. Wolverine's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits Wolverine will derive therefrom.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy the Common Shares in any jurisdiction. The Common Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

Non-GAAP Measures

The Company uses accounting principles that are generally accepted in Canada ("GAAP"), which includes International Financial Reporting Standards ("IFRS"). Certain financial measures in this document do not have any standardized meaning as prescribed by IFRS, including the non-GAAP measure "proforma trailing 12-month EBITDA". This non-GAAP measure used by the Company, may not be comparable to similar measures presented by other reporting issuers, and is included because management uses the information to analyze the Company's operating performance. Therefore, this non-GAAP financial measure should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.  Proforma trailing 12-month EBITDA is defined by the Company as net income (loss) before finance costs, equipment rent, taxes, depreciation, (gain) loss on bargain purchase, and amortization. 

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) has in any way approved or disapproved the contents of this news release.  The TSXV does not accept responsibility for the adequacy or accuracy of this release.

SOURCE Wolverine Energy and Infrastructure Inc.

For further information, please contact Nikolaus Kiefer, Chief Financial Officer at [phone] or [email protected] or visit www.wnrgi.com.