Petrowest Energy Services Trust announces 2009 third quarter financial
results
Revenue from continuing operations for the three months ended
For the three month period ended
Revenue from continuing operations for the nine months ended
As at
On
FINANCIAL HIGHLIGHTS
Three months ended Nine months ended
September 30 September 30
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(thousands of dollars,
except per unit
amounts, margins and
ratios) 2009 2008 2009 2008
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Revenue from
continuing operations 32,138 53,467 87,277 138,071
Gross margin from
continuing
operations(1) 6,414 13,404 10,991 29,407
Gross margin
percentage(1) 20% 25% 13% 21%
General and
administrative 2,230 2,534 5,487 6,286
EBITDA from
continuing
operations(1) 4,184 10,870 5,504 23,121
EBITDA margin
percentage(1) 13% 20% 6% 17%
Net earnings (loss)
and comprehensive
income (loss) from
continuing operations (1,877) 3,546 (47,658) (6,017)
Discontinued
operations, net of tax (85) (770) (7,588) (2,045)
Net earnings (loss)
and comprehensive
income (loss) (1,962) 2,776 (55,246) (8,062)
Cash provided from
operating activities 1,249 (5,221) 8,529 (3,138)
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Total units
outstanding 32,946,308 32,926,308 32,946,308 32,926,308
Weighted average
units outstanding
- basic 32,946,308 33,171,308 32,938,030 33,238,104
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(1) See "Non-GAAP Measures" in Trust's MD&A (available at www.sedar.com)
The Trust continues to focus on diversification into industrial and civil infrastructure activities. This diversification objective has had limited success due to pricing pressures in the bidding process with increased number of parties providing bids. However, the Construction segment has more non-energy related activities with 65% of activities directly relating to the energy sector during the three month period ended
The oil and natural gas drilling sector will continue to impact the Trust's operations and financial results and will remain an important part of the Trust's operations going forward. However, infrastructure project demand is expected to be strong over the next couple of years as a result of government stimulus packages, with more of the Trust's activities and resources anticipated to be focused and deployed in this area during the summer construction season. The amount of the Trust's services relating to the oil and gas sector will fluctuate as the activity in this sector changes in addition to the amount of non-oil and gas related projects which the Trust is successful in securing. The Trust continued to pursue geographic diversification in 2009 with redeployment of equipment and skilled personnel to capitalize on demand in nearby regions plus improving utilization rates and financial results. With the shift in the North American natural gas markets towards unconventional shale gas basins, the Trust has moved quickly to position itself in two of North America's premier shale gas plays. The Trust has opened a full service office and maintenance facility in Fort Nelson and increased marketing emphasis in the northeastern British Columbia emerging Horn River and Montney shale gas plays. Petrowest has also undertaken a strategy to expand its presence in the oil sands mining sector by appointing a divisional vice president and by securing office and industrial space in Fort McMurray. This sector represents the largest area of potential growth for the Trust.
SELECTED FINANCIAL INFORMATION
Selected financial information for the three and nine month periods ended
FORWARD LOOKING INFORMATION
This news release contains forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are identified by their use of terms and phrases such as "anticipate," "achievable," "believe," "expect," "estimate," "plan," "intend," "project," "may," "should", "could", "predict", "may," "will," or similar words suggesting future outcomes or language suggesting an outlook. Forward-looking statements and information are based on Petrowest's current beliefs as well as assumptions made by and information currently available to Petrowest concerning anticipated business performance. Although management of Petrowest considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward-looking statements are subject to many external variables that are beyond Petrowest's control, such as fluctuating prices for crude oil and natural gas, changes in drilling activity, and general local and global economic, political, business and weather conditions. If any of these, or other uncertainties, materialize the actual results of Petrowest may vary materially from those expected.
Petrowest Energy Services Trust
Consolidated Balance Sheets
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(Unaudited)
As at As at
September 30, December 31,
(In thousands of dollars) 2009 2008
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Assets
Current assets
Cash and cash equivalents - 2,348
Accounts receivable 33,268 44,306
Prepaid expenses and other 2,750 1,083
Inventory 4,426 4,495
Assets related to discontinued operations 194 4,549
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40,638 56,781
Property and equipment 71,610 87,636
Intangible assets 9,415 13,402
Goodwill - 34,321
Future income taxes 3,587 727
Discontinued assets held for sale - 11,880
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125,250 204,747
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Liabilities
Current liabilities
Bank overdraft 3,557 -
Accounts payable and accrued liabilities 12,743 15,918
Revolving bank term loan 67,950 83,500
Current portion of obligations under
capital leases 573 651
Liabilities related to discontinued operations 169 2,447
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84,992 102,516
Obligations under capital leases 461 874
Future income taxes 5,856 12,463
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91,309 115,853
Unitholders' Equity
Units 292,498 292,492
Contributed surplus 922 635
Accumulated loss (221,516) (166,270)
Accumulated distributions to unitholders (37,963) (37,963)
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33,941 88,894
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125,250 204,747
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Petrowest Energy Services Trust
Consolidated Statements of Earnings (Loss), Comprehensive Income (Loss)
and Accumulated Loss
-------------------------------------------------------------------------
(Unaudited)
Three months ended Nine months ended
September 30 September 30
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(In thousands of
dollars, except
per unit amounts) 2009 2008 2009 2008
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Revenue 32,138 53,467 87,277 138,071
Expenses
Operating expenses 25,724 40,063 76,286 108,664
General and
administrative 2,230 2,534 5,487 6,286
Interest 1,269 1,472 3,608 4,916
Amortization of
property and
equipment 5,361 6,330 15,644 19,096
Amortization of
intangible assets 904 1,106 2,861 3,527
Impairment of
property and
equipment 5,301 - 5,301 -
Impairment of
goodwill and
intangible assets - - 35,446 1,874
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40,789 51,505 144,633 144,363
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(8,651) 1,962 (57,356) (6,292)
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Other income (loss)
Gain (loss) on
disposal of
property and
equipment 175 (37) 156 (2,172)
Interest and other
income 73 - 75 10
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Net earnings (loss)
and comprehensive
income (loss) before
taxes (8,403) 1,925 (57,125) (8,454)
Future income tax
recovery (6,526) (1,621) (9,467) (2,437)
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Net earnings (loss)
and comprehensive
income (loss) from
continuing operations (1,877) 3,546 (47,658) (6,017)
Discontinued operations,
net of tax (85) (770) (7,588) (2,045)
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Net earnings (loss)
and comprehensive
income (loss) for the
period (1,962) 2,776 (55,246) (8,062)
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Accumulated loss -
beginning of period (219,554) (144,532) (166,270) (133,694)
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Accumulated loss - end
of period (221,516) (141,756) (221,516) (141,756)
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Net earnings (loss)
per unit
-basic and diluted
from continuing
operations $(0.06) $0.11 $(1.45) $(0.18)
-basic and diluted
from discontinued
operations (0.00) (0.03) (0.23) (0.06)
-basic and diluted (0.06) 0.08 (1.68) (0.24)
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Petrowest Energy Services Trust
Consolidated Statements of Cash Flows
(Unaudited)
Three months ended Nine months ended
September 30 September 30
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(In thousands
of dollars) 2009 2008 2009 2008
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Cash provided by (used in)
Operating activities
Net earnings (loss)
from continuing
operations (1,877) 3,546 (47,658) (6,017)
Items not affecting cash
Amortization of
property and
equipment 5,361 6,330 15,644 19,096
Amortization of
intangible assets 904 1,106 2,861 3,527
Impairment of
property and
equipment 5,301 - 5,301 -
Impairment of
goodwill and
intangible assets - - 35,446 1,874
Unit-based
compensation expense 147 189 287 332
Units issued for
service - - 6 -
Future income tax
recovery (6,526) (1,621) (9,467) (2,437)
(Gain) loss on
disposal of property
and equipment (175) 37 (156) 2,172
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3,135 9,587 2,264 18,547
Changes in non-cash
working capital
Accounts receivable (4,948) (14,533) 11,038 (15,397)
Prepaid expenses
and other (1,306) (144) (1,667) 584
Inventory 406 (1,007) 69 258
Accounts payable and
accrued liabilities 3,962 876 (3,175) (7,130)
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1,249 (5,221) 8,529 (3,138)
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Financing activities
Unitholder
distributions - - - (953)
Repayment of capital
lease obligations (172) (162) (491) (500)
Proceeds from
revolving term bank
loan - - - 5,000
Repayment of
revolving term bank
loan - - (15,550) -
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(172) (162) (16,041) 3,547
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Investing activities
Purchase of property
and equipment (629) (2,700) (5,164) (9,683)
Proceeds on property
and equipment disposals 322 (8) 406 2,722
Purchase price
adjustment - - - (25)
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(307) (2,708) (4,758) (6,986)
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Net change in cash from
continuing operations 770 (8,091) (12,270) (6,577)
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Cash flow from
discontinued operations
Operating activities 465 2,535 581 746
Financing activities - (3) (10) (8)
Investing activities - 122 5,794 (801)
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Net change in cash
from discontinued
operations 465 2,654 6,365 (63)
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Increase (decrease) in
cash and cash
equivalents 1,235 (5,437) (5,905) (6,640)
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Cash and cash
equivalents (bank
overdraft), beginning
of period (4,792) (988) 2,348 215
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Cash and cash
equivalents (bank
overdraft), end of
period (3,557) (6,425) (3,557) (6,425)
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Supplementary cash
flow information
Interest paid 1,264 1,592 3,890 5,091
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Non cash transactions
Property and equipment
financed by capital
leases - 294 - 887
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For further information: please contact Ralph Hesje, President and CEO, or Lloyd A. Wiggins, Chief Financial Officer, at (403) 237-0881 or [email protected]
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