Hyduke Announces Third Quarter and Year to Date Fiscal 2015 Financial results

NISKU, AB, Nov. 13, 2015 /CNW/ - Hyduke Energy Services Inc. (HYD - TSX), announced operating results for three and nine months ended September 30, 2015 and 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 for the current quarter include the following:

  • Revenue for the current quarter of $5.8 million, a decline of 52% from $12.0 million in 2014 and up 21.6% from the second quarter of 2015.
  • Gross profit for the quarter of $0.8 million, a decline of 59.7% from $1.9 million in 2014 and an increase of 107.4% from $0.4 million in the second quarter of 2015.
  • Gross profit margin for the quarter of 13.1% decreased 16.0% from 15.6% in 2014 and up from 7.7% in the second quarter of 2015.
  • Net loss from continuing operations for the quarter of $1.0 million, an increase of $0.6 million from a loss of $1.5 million in 2014 and an increase of $0.5 million from the second quarter of  2015.
  • Loss per share (basic) for the period of $0.035.
  • Negative EBITDAS (Earnings Before Interest, Taxes, Depreciation, Amortization and Stock Based Compensation) for continuing operations for the quarter of $0.6 million, increased $1.2 million from negative EBITDAS of $1.8 million in 2014 and increased $0.4 million from the second quarter of 2015.

Year to date highlights:

  • Revenue for the nine months of $17.4 million, a decline of 49% from $34.2 million in 2014
  • Gross profit for the nine months of $2.0 million, a decline of 68.6% from $6.5 million in 2014
  • Gross profit margin for the quarter of 11.7% decreased 38.3% from 18.9% in 2014
  • Net loss from continuing operations for the nine months of $3.1 million, a decrease of $1.9 million from a loss of $1.2 million in 2014.
  • Loss per share (basic) for the period of $0.127.
  • Negative EBITDAS (Earnings Before Interest, Taxes, Depreciation, Amortization and Stock Based Compensation) for continuing operations for the nine months of $1.9 million, decreased $0.8 million from negative EBITDAS of $1.1 million in 2014.

Balance Sheet Highlights for the Quarter

  • Cash on hand at September 30, 2015 is $3.5 million
  • Working capital remains positive at $13.4 million with a current ratio at 3.72 to 1.00.
  • Debt to equity ratio remains low at 0.44 to 1.00
  • During Q3 Hyduke renegotiated its covenants with its senior secured term lender and at September 30 was in compliance with all lending covenants. At June 30, 2015, the Company was not in compliance with the covenants in place at that time. 

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 Sept 30, 2015



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Sept 30, 2014


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 Sept 30, 2015



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Sept 30, 2014









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(1) Prior year numbers have been restated due to reclassification of entities to discontinued operations

Sept 30, 2015

December 31, 2014

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Total liabilities



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Low oil prices and a greatly reduced drilling and well servicing activity have persisted and Hyduke believes they will continue well into 2016 and perhaps even 2017. As a result we have experienced and reported the expected decline in our rig building and supply businesses. Based upon our historic business offerings, it is impossible for Hyduke to outperform our industry or our clients.

That said, because Hyduke is publicly traded and because of our financial condition – including our cash reserves and a strong working capital position – we have secured customers by highlighting the importance of dealing with companies like Hyduke where the financial condition is public. This gives clients the confidence that when we start a project with a critical delivery date, the final product will indeed arrive in the right place at the required time.

Our machining division has also experienced a material decline in business volumes over the past year. However, in the current market the availability of experienced and qualified personnel has improved tremendously. Therefore, in this division we took the opportunity to replace and upgrade the skills and diversity of the management group.

As much as low oil prices depress business volumes and margins, they also create opportunities for well run, well-capitalized companies to act on strategic business opportunities and attract talented employees. We are pleased with the caliber of personnel who are choosing to join Hyduke because they see an employer with a plan and a future.

Our company's multiyear plan to retool and become an employer and supplier of choice has required investments which are expenses today but will ultimately build a foundation for future growth. Part of our commitment to an enhanced workplace is a commitment to health and safety. As a result we have reduced our TRIF (total recordable incident frequency) by over 80% in the past two years. There is always been more to be done in this area. We have regained our CWB designation and we are ready for our API audit sometime before the end of 2015. All of these are investments in top-quality personnel building top-quality products and supplying top-quality service.

Our long-term plan to diversify from an historic focus on drilling and service rigs and enter the structural steel business has resulted in purchase orders from three major industrial contractors who Hyduke have never dealt with before. The objective has been to diversify the revenue base away from the highly cyclical "wellhead" side of the upstream oil and gas business into production which is significantly more stable.

Our initiative to enter the field storage tank, inspection, repair and construction business has resulted in purchase orders from three major oil and midstream companies with which Hyduke has never done business before and we continue to look for opportunities in the well completion, workover and production sector as well as prospects arising from LNG export opportunities on Canada's West coast.

Hyduke recognizes the opportunity available by assembling good people, good companies and good expertise under a single corporate umbrella. To this end, Hyduke is investing time and effort into assembling a number of like-minded companies and individuals to collaborate on and participate in larger turnkey and project management opportunities. The combined expertise and shared marketing efforts will help us all.

While "new builds" of significant quantities drilling and well servicing equipment is likely a long way off in the current market environment, the existing oil and gas infrastructure of all types must be maintained. Hyduke intends to be an important regional inspection and repair/ rebuild resource.

As much as major downturns like the one the upstream petroleum industry is enduring result in significant disruption for many, they also create opportunities. Long before the current slump began, Hyduke realized it needed a different business model to deliver upon positive long commitments to our three key stakeholders: employees, clients, and capital providers. By making significant tough decisions and changes before the current downturn began, the company put itself in a better position than others to adapt to the times and exploit the opportunities negative market conditions can create.

We are committed to be one of the survivors of this prolonged downturn.

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

Trading on the TSX under the symbol "HYD," Hyduke Energy Services Inc. is a supplier of equipment and services to the oil and gas drilling and well servicing industry. 

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


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