CALGARY, March 27, 2012 /CNW/ - HSE Integrated Ltd. ("HSE" or the "Corporation") today announced the audited financial results for the Corporation for the reporting quarter and fiscal year ended December 31, 2011.
SELECTED FINANCIAL INFORMATION
|Three months ended December 31,||Year ended December 31,|
|Direct Operating Expenses||18,242||17,920||1.8%||75,203||67,301||11.7%|
|Operating margin %||25.8%||20.1%||23.5%||18.0%|
|Selling, general and administrative||2,862||2,045||40.0%||9,951||7,936||25.4%|
|Total long-term liabilities||$||9,480||$||9,085||4.3%|
(1) See Non-GAAP Measures
Revenue in fiscal 2011 increased 19.8% to $98.2 million from $82.0 million in 2010, as both Oilfield and Industrial revenue posted double digit percentage gains. Oilfield work increased as a result of improved drilling activity in the Western Canadian Sedimentary Basin and increased penetration in the US market. Industrial revenue increased, partly due to work associated with a large construction project and partly due to higher levels of shutdown work. Operating margin increased 56.5% to $23.0 million from $14.7 million in 2010 as a result of cost reduction initiatives adding to the effect of increased leverage on fixed cost. SG&A increased 25.4% from $7.9 million to $10.0 million as a result of increased business development initiatives coupled with increased bonuses accrued due to improved profitability. The result of these operating improvements and cost reductions was that EBITDA increased 92.8% from $6.8 in 2010 to $13.1 million in 2011. For the 2011 fiscal year HSE reported net earnings of $6.0 million or $0.14 per fully diluted share. This compares to net earnings of $0.4 million or $0.01 per fully diluted share in 2010.
Financial performance in the fourth quarter also improved year-over-year. Revenues rose 9.7% from $22.4 million in Q4 2010 to $24.6 million in Q4 2011. EBITDA rose 41.7% from $2.5 million to $3.5 million. Improved operating performance, combined with a reduction in a provision for an onerous rent contract of $1.0 million, resulted in earnings of $3.1 million for the quarter compared to $0.9 million for the same period in 2010.
HSE's working capital position and balance sheet remain strong. At December 31, 2011 working capital was $16.1 million. Tangible assets totaled $55.6 million. This exceeded tangible liabilities (current liabilities, provisions and other interest bearing debt obligations) by $37.2 million. This provides the Corporation with significant financial strength to explore growth opportunities as they arise.
Tom Hickey, President and CEO, made the following comments on 2011's financial performance.
"We are extremely pleased with our year. We said our main focus would be on financial performance and increasing margins, and we accomplished our goals. We are very excited now to turn the page into growth mode and move quickly into expanding our US operations and continuing our organic growth in Canada. We also feel that we can further improve margins and increase efficiencies in 2012 by implementing new systems to measure performance."
This report makes reference to Operating margin and EBITDA, measures that are not recognized under IFRS.
Operating margin is defined as revenue less all direct operating expenses incurred by field operations and support functions such as fleet management. Management believes that, as a supplement to net earnings, operating margin provides a useful supplementary indication of operating efficiency.
Management believes that, in addition to net earnings, EBITDA is a useful supplementary measure. EBITDA provides investors with an indication of earnings before provisions for interest and bank charges, taxes, depreciation, amortization, foreign exchange gains or losses, gains or losses on the disposal of property and equipment and the non-cash effect of stock-based compensation expense, changes in provisions, and expiry of contingent consideration.
Investors should be cautioned that these measures should not be construed as an alternative to net earnings determined by GAAP as an indication of the Corporation's performance. HSE's method of calculating Operating Margin and EBITDA may differ from that of other companies' and, accordingly, may not be comparable to measures used by other companies.
HSE will be hosting a conference call to discuss its 2011 financial results:
Conference Call Time and Date: Wednesday March 28, 2012 11:00 AM ET (9:00 AM MT)
Dial-in Number: 1-647-427-7450 (Toronto area) or 1-888-231-8191 (Conference ID 61368759)
Conference Replay to April 26, 2012 (Passcode: 61368759):
|1-855-859-2056 (Toll free)|
HSE Integrated Ltd. trades on the TSX under the symbol "HSL"
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