CALGARY, Nov. 13, 2014 /CNW/ - Northern Frontier Corp. (TSXV: FFF) ("Northern Frontier" or the "Corporation") announces its third quarter 2014 financial results.
"We are pleased with our third quarter results. Increasing activity from our low experienced in the second quarter and the inclusion of Central Water & Equipment Services Ltd. ("Central Water") to our service offering has materially strengthened Northern Frontier. In the third quarter, we generated $21.4 million in revenue and $6.6 million in EBITDA from the combined businesses. The results demonstrate that the acquisition of Central Water as a core component of our Logistics division benefits our strategy well", commented Chris Yellowega, President and Chief Executive Officer.
For the three months ended September 30, 2014 ("Q3 2014"), management completed a number of steps in its strategy to build an integrated industrial energy services business. During Q3 2014 Northern Frontier:
- restructured its balance sheet through raising $21.3 million in gross equity proceeds and replacing its existing credit facilities with $77.6 million of senior credit facilities of which $46.6 million was outstanding at September 30, 2014;
- completed the acquisition of Central Water for aggregate consideration of $33.4 million (including contingent consideration);
- generated $21.4 million in pro forma revenue; and
- realized pro forma EBITDA of $6.6 million.
Pro forma financial information
Northern Frontier acquired all of the issued and outstanding shares of Central Water on August 28, 2014. Actual financial results of the Corporation only reflect the activities of Central Water subsequent to August 28, 2014. Assuming Northern Frontier acquired Central Water at the beginning of the fiscal period, the pro forma consolidated financial results would have been as follows:
|(in 000's CAD, except as noted)|| 3 months
Sep 30, 2014
| 9 months
Sep 30, 2014
| Trailing 12
Sep 30, 2014
|Revenue||$ 21,420||$ 55,045||$ 77,521|
|as a % of revenue||39%||30%||31%|
|as a % of revenue||31%||21%||23%|
|(1)||EBITDA (earnings before finance costs, taxes, depreciation and amortization, gain/loss on disposal of property and equipment, share-based compensation and other specified costs) is not a recognized measure under IFRS. Refer to "Non-GAAP Measures".|
|(2)||EBITDA does not include $500 per annum in management compensation costs that the Corporation will incur on a go-forward basis for the former owners of Central Water.|
Select financial information
Northern Frontier did not have active operations until September 27, 2013 when it acquired the business referred to as the Corporation's Civil operating segment. Furthermore, Central Water, was acquired in the current quarter. The following results only reflect the activities of the acquired businesses subsequent to their respective acquisition dates.
|3 months ended||9 months ended (1)|
|(in 000's CAD, except as noted)||Sep 30, 2014||Sep 30, 2013||Sep 30, 2014||Sep 30, 2013|
|as a % of revenue||28%||25%||24%||25%|
|as a % of revenue||20%||(17%)||16%||(45%)|
|Net loss and comprehensive loss||(2,583)||(397)||(4,745)||(1,564)|
|per share - basic and diluted||$||(0.16)||$||(0.35)||$||(0.37)||$||(1.59)|
| Cash generated by (used in) operations
(before non-cash working capital)
|Capital management: (3)|
|Funded debt to EBITDA||2.46|
|Fixed charge coverage ratio (4)||2.55|
|Distribution as a % of distributable cash flow||6.7%|
|Weighted average common shares outstanding - basic||15,702,228||1,138,111||12,722,621||984,479|
|Weighted average common shares outstanding - diluted||15,702,228||1,138,111||12,722,621||984,479|
|(in 000's CAD, except as noted)||Sep 30, 2014||Dec 31, 2013|
|Working Capital (5)||$ 8,021||$ 5,149|
|Funded debt (6)||47,183||32,723|
|Common shares outstanding||23,215,622||11,160,609|
|Common share purchase warrants outstanding||17,049,042||5,115,639|
|(1)||For the 2013 period the Corporation had a 10 month fiscal period commencing on December 1, 2012.|
|(2)||EBITDA is not a recognized measure under IFRS. Refer to "Non-GAAP Measures".|
|(3)||The definition of these measures are in accordance with the lending agreements and are calculated based on the lenders' interpretation, which may not be equal to individual financial statement amounts.|
|(4)||Fixed coverage ratio is defined as EBITDA less cash taxes, unfunded capital expenditures and distributions to required principal and interest payments on funded debt.|
|(5)||Working Capital (current assets excluding cash and cash equivalents less current liabilities excluding current portion of loans and borrowings and obligations under finance lease) is not a recognized measure under IFRS. Refer to "Non-GAAP Measures".|
|(6)||Funded debt (loans and borrowings (before unamortized debt issue costs) and obligations under finance lease less cash and cash equivalents) is not a recognized measure under IFRS. Refer to "Non-GAAP Measures".|
Northern Frontier's unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2014 and three and ten months ended September 30, 2013 and management's discussion and analysis ("MD&A") for the three and nine months ended September 30, 2014 have been filed with the Canadian securities regulatory authorities and may be accessed under the Corporation's profile on SEDAR at www.sedar.com.
Management will hold a conference call on Friday, November 14, 2014, at 9:30 a.m. Calgary / 11:30 a.m. Toronto time. The call will feature remarks by Chris Yellowega, President and CEO and Monty Balderston, Executive Vice President and CFO regarding the financial results.
Conference dial-in instructions are as follows:
| Calgary: (587) 880-2171
Toronto: (416) 764-8688
North America: 1-888-390-0546
Conference ID: 54294273
A replay of the call will be available 24 hours after the event until 11:59 p.m. EST on November 21, 2014. To access the archived conference call, please dial 416-764-8677 or 1-888-390-0541 and enter passcode 294273.
About Northern Frontier Corp.
Northern Frontier's strategic objective is to create a large industrial and environmental services business through a buy and build growth strategy. Currently, the Corporation provides civil construction and excavation services to the industrial industry, primarily in the in situ Oilsands region south of Fort McMurray, Alberta and bulk water and fluids transfer logistic services in western Canada.
The Corporation's common shares and common share purchase warrants are listed on the TSX Venture Exchange under the trading symbol "FFF" and "FFF.WT", respectively.
This news release includes certain statements that constitute forward-looking statements under applicable securities legislation. All statements other than statements of historical fact are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", or the negative of these terms or other comparable terminology. These forward-looking statements include, among other things, statements in respect of:
- expectations of future financial performance of the Corporation; and
- the diversification of the Corporation's operations.
These statements are only predictions and are based upon current expectations, estimates, projections and assumptions, which the Corporation believes are reasonable but which may prove to be incorrect and therefore such forward-looking statements should not be unduly relied upon. In making such forward-looking statements, assumptions have been made regarding, among other things, industry activity, the state of financial markets, business conditions, continued availability of capital and financing, future oil and natural gas prices and the ability of the Corporation to obtain necessary regulatory approvals. Although the Corporation believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.
By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. Investors are cautioned that forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. The Corporation has no obligation to update any forward-looking statements set out in this news release, except as required by applicable law.
Selected financial information for the three and nine months ended September 30, 2014 is set out above and includes the following measures that are not recognized under International Financial Reporting Standards ("IFRS") and are non-generally accepted accounting principles ("non-GAAP") measures: EBITDA, Working Capital and Funded Debt. This information should be read in conjunction with the consolidated financial statements for the three and nine months ended September 30, 2014 and the Corporation's MD&A for the three and nine months ended September 30, 2014 available under the Corporation's profile on SEDAR at www.sedar.com. Further information regarding these non-GAAP measures is contained in the Corporation's MD&A.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Northern Frontier Corp.
For further information:
Chris Yellowega - President and Chief Executive Officer
- or -
Monty Balderston - Executive Vice President and Chief Financial Officer
Northern Frontier Corp.
400, 435 - 4th Avenue SW
Calgary, AB T2P 3A8