EDMONTON, March 30, 2012 /CNW/ - Hyduke Energy Services Inc. (HYD - TSX), announced operating results for the three and twelve months ended December 31, 2011. 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 year of $84.5 million is up $18.5 million or 28% over the prior year.
- Revenue from International markets of $19.0 million represents 22% of total revenues in the current year.
- Gross profit for the current year of $11.5 million is up $7.6 million or 194% over the prior year.
- Gross profit percentage for the current year of 13.6% reflects an improvement of 7.7 basis points over the prior year.
- Profit for the current year of $1.7 million is up $4.3 million over the prior year.
- Profit per share (basic) for the current year of $0.07 is up $0.18 per share over the prior year.
- EBITDAS for the current year of $4.1 million is up $5.9 million over the prior year.
- The company is exiting fiscal 2011 with a positive cash position of $4.8 million.
- Liquidity remains strong with current ratio at 1.86 to 1.00
- Debt to equity ratio remains strong at .04 to 1.00
A summary of those results is as follows:
| Selected Statement of
Comprehensive Income Information
|Three Months Ended||Year Ended|
|($000's, except per share data)|| Dec 31
| Sept 30
| Dec 31
| Dec 31
| Dec 31
|Gross profit (%)||14.7%||14.3%||(3.0%)||13.6%||5.9%|
|Profit (loss) per share-basic ($)||0.04||0.02||(0.07)||0.07||(0.11)|
|Profit (loss) per share-diluted ($)||0.04||0.02||(0.07)||0.07||(0.11)|
Strong Canadian activity combined with continued success internationally have resulted in an increase in current year revenue of 28% over the prior year. The Company's international business development efforts were successful again with $19.0 million in revenues being generated outside of Canada. In the latter half of fiscal 2011 the Company was awarded approximately $50 million in turn-key drilling rig projects of which approximately $9 million was earned in 2011. Therefore, the company is expecting at least an additional $41 million in international revenues for 2012.
A significant improvement in gross profit percentage realized in the current year contributed significantly to an increase in gross profit of $7.6 million or 194% over the prior year. Gross profit percentage in the current year of 13.6% represents an increase of 7.7 basis points over the prior year. This increase in gross profit percentage reflects an improved pricing environment in 2011 and improved efficiencies in our manufacturing processes.
Fiscal 2011 saw a return to profitability with a profit of $1.7 million reflecting an improvement of $4.3 million over the prior year.
Fiscal 2011 EBITDAS increased $5.9 million over the prior year and is due to an increase in revenue levels and improved gross profit percentages.
|Selected Financial Position Information||As At|
|($000's, except ratios)|| December 31
| December 31
| December 31
|Total current assets||40,720||29,332||26,862|
|Total current liabilities||21,915||12,717||9,213|
|Total cash (bank indebtedness)||4,824||(1,631)||509|
|Total interest bearing debt||1,149||1,550||1,823|
| Current ratio (current assets divided by current
|1.86 to 1.00||2.31 to 1.00||2.92 to 1.00|
| Debt to equity ratio (interest bearing debt
divided by shareholders' equity)
|0.04 to 1.00||0.05 to 1.00||0.07 to 1.00|
Total assets of $55.5 million as at December 31, 2011 represents an increase of $11.2 million from the prior year. This increase relates primarily to an accounts receivable increase of $5.1 million, a result from an increase in sales, and increase in cash of $4.8 million and an increase in progress payments received on international sales contracts.
Total liabilities of $24.5 million as at December 31, 2011 represents an increase of $9.4 million from the prior year. This increase relates primarily to an increase in accounts payable and accrued liabilities of $4.5 million, the result of an increase in sales activity, and an increase in unearned revenue of $6.2 million resulting from the receipt of progress payments on international sales contracts. This increase is offset by a decrease of $1.6 million in bank indebtedness.
The Company continues to maintain a strong current ratio at 1.86 to 1.00 and a debt to equity ratio of 0.04 to 1.00. Subsequent to year end, the Company increased its long term debt to approximately $6 million. The proceeds of this increase in term debt is being used to finance working capital requirements associated with the previously mentioned international turn-key drilling rig projects.
Industry expectations for western Canada for 2012 are expected to be consistent with activity experienced in 2011. The Canadian Association of Oilwell Drilling Contractors (CAODC) have forecast the number of wells to be drilled (on a completion basis) for 2012 to be 12,672 which is consistent with 2011 activity. The Petroleum Services Association of Canada (PSAC) have forecast the number of wells to be drilled (on a rig released basis) for 2012 to be 13,350, which represents a slight increase over 2011. Continued low natural gas pricing is the primary factor impacting these historically low levels of activity.
It is expected that new rig builds for use in western Canada during 2012 will increase approximately 4% and will be focused on larger, heavier rigs with the capacity to drill long reach horizontal wells. Hyduke looks to continue to benefit from the increase in size of the western Canadian fleet. Hyduke continues to actively market its products and services to international markets in the Russian Federation, India, South America, North Africa, Middle East, Asia-Pacific and Latin America. While the project decision making cycle is longer on international work, active quoting continues on a significant number of international opportunities. In 2011, Hyduke was successful in winning over $52 million in turn-key equipment and services contracts for international customers. Approximately 80% of the revenue associated with these projects will be earned in fiscal 2012. It is expected that the volume and proportion of international revenue will continue as these international relationships are further developed.
The steady levels of industry activity forecast for 2012 and the increase in the activity in Hyduke's international sector will have far reaching effects in the Hyduke consolidated group of companies. Not only will the manufacturing segments of the organization benefit, but a positive impact will be felt in the Life Cycle Management businesses such as repair and maintenance, inspections and certification, and consumables. The Company will continue to focus on increasing market share through marketing Hyduke's Life Cycle Management and Single Source Supplier platforms to customers. These platforms benefit customers by offering continued support throughout the useful life of their equipment and by offering a wide array of consistent, reliable services from a single source.
Hyduke recognizes that it must continue to focus on all aspects of its operations in order to maximize its return and prepare itself for future industry declines. Operationally, we continue to focus on cost control, realizing on vertical integration opportunities and prudent cash management and investment. Specifically, we have identified a need for improved manufacturing efficiencies on larger projects and are actively implementing lean manufacturing concepts onto the manufacturing floor.
Hyduke is very proud of its accomplishment in enduring the industry downturn and returning to profitability in 2011. We are confident that the strong efforts of our sales and marketing team, management's continued focus in fulfilling its strategic plan and the dedication of our employee base to customer service will see this continue into 2012.
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.
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.
The Company operates its businesses through a number of subsidiaries operating in four segments:
The Manufacturing segment includes the design, manufacture, refurbishment and repair of land-based drilling rigs, well service and workover rigs, drilling support equipment and well service and workover support equipment.
The Distribution segment includes the procurement and distribution of spare parts, equipment components, operating supplies and pneumatic controls to the drilling and well service industries.
Truck Mounted Equipment
The Truck Mounted Equipment segment includes the distribution, service and repair of truck-mounted cranes, winches and dump boxes.
The Other Services segment includes the inspection and certification of drilling rig and well service equipment, the design, manufacture and distribution of cased hole and overburden drilling downhole tools, custom and production machining services, industrial sandblasting and painting, and corporate head office expenses.
The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this News Release.
For further information:
Gordon R. McCormack, CA
President and Chief Executive Officer
Veronica Dutchak, CA
Chief Financial Officer