Canyon Services Group Inc. Announces New Syndicated Credit Facility

TSX - FRC

CALGARY, July 22, 2015 /CNW/ - Canyon Services Group Inc. ("Canyon" or the "Company") is pleased to announce that, effective July 21, 2015, it has increased its existing bank lines by entering into a new extendible revolving operating credit facility ("Facility") with a syndicate of financial institutions (collectively, the "Lenders") led by Canadian Imperial Bank of Commerce as sole lead arranger and administrative agent.  The principal amount of the Facility totals CDN $100 million with an accordion feature that allows for the expansion of the Facility by up to an aggregate maximum principal amount of CDN $50 million.  The accordion feature is available upon request by Canyon, subject to review and approval by the Lenders.  The Facility has a term of three years, extendible annually, and bears interest at variable rates depending on certain financial ratios and metrics.

Under the Facility Canyon will not be subject to a debt to EBITDA covenant from July 21, 2015 through June 30, 2016.  The financial covenants in place, under the Facility, are comprised of a debt to capitalization ratio which shall not exceed 0.25 to 1.00 and a debt service coverage ratio which shall not be less than 1.25 to 1.00, each measured at the end of each fiscal quarter.  The debt to capitalization ratio will be replaced by a debt to EBITDA ratio beginning with the fiscal quarter ending September 30, 2016.  Once enacted, the debt to EBITDA ratio shall not exceed 3.50 to 1.00 at any time during the fiscal quarter ended September 30, 2016 and 3.00 to 1.00 thereafter. 

Brad Fedora the President and CEO of Canyon stated that, "We believe that our history of financial prudence has allowed us to enter into this new credit facility on terms which will provide Canyon with the stability and flexibility necessary to operate through these uncertain economic times".

Canyon's common shares trade on the Toronto Stock Exchange under the symbol "FRC".  Canyon provides high-quality fracturing and related stimulation services to the oil and gas industry in the Western Canadian Sedimentary Basin.

Non-GAAP Measures

This press release contains non-GAAP measures.  These statements do not have any standardized meaning as prescribed by International Financial Reporting Standards (IFRS) and therefore are unlikely to be comparable to similar measures used by other companies.  The non-GAAP measure disclosed by the Company in this press release is EBITDA (as defined in the Facility). 

Canyon calculates EBITDA, before share-based payments, as profit and comprehensive income for the year adjusted for depreciation and amortization, equity settled share-based payment transactions, gain or loss on sale of property and equipment, finance costs, foreign exchange (gain) loss and income tax expense.  EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company's principal business activities prior to consideration of how those activities are financed and how the results are taxed.

SOURCE Canyon Services Group Inc.

Canyon Services Group Inc., 2900 Bow Valley Square lll, 255-5th Avenue S.W., Calgary, Alberta, T2P 3G6, Fax: [phone]; Brad Fedora, President & CEO, Phone: [phone]; or Barry O'Brien, Vice President, Finance & CFO, Phone: [phone]