Major Drilling Group International Inc T.MDI

q3; first time in 10 years

[mark5698]

Attention Business/Financial Editors: Major Drilling Reports Record Third Quarter Profits Revenue up 54%, Earnings from continuing operations of $0.25 per share MONCTON, NB, March 4 /CNW/ - Major Drilling Group International Inc. (TSX: MDI) today reported results for its third quarter of fiscal year 2007, ended January 31, 2007. Financial Highlights << ------------------------------------------------------------------------- $ millions 12 months 12 months (except to to earnings per January January share) Q3-07 Q3-06 YTD-07 YTD-06 31, 2007 31, 2006 ----- ----- ------ ------ --------- --------- ------------------------------------------------------------------------- Revenue $90.1 $58.4 $286.4 $227.5 $375.3 $303.4 ------------------------------------------------------------------------- Gross profit 25.2 12.7 89.6 64.5 115.5 87.2 As percentage of sales 28.0% 21.8% 31.3% 28.3% 30.8% 28.7% ------------------------------------------------------------------------- Earnings (loss) from continuing ops 5.7 (1.0) 28.7 15.9 38.0 24.3 ------------------------------------------------------------------------- Earnings (loss) per share from continuing ops 0.25 (0.05) 1.24 0.70 1.65 1.07 ------------------------------------------------------------------------- Cash flow from continuing ops ((*)) 14.9 5.5 50.5 32.2 65.1 43.0 ------------------------------------------------------------------------- ((*)) before changes in non-cash working capital items - Revenue increased over 54 percent in the third quarter at $90.1 million, compared to $58.4 million recorded in the same period last year. This represents the highest level of third quarter revenues in the Company's history. - Gross margins for the quarter were 28.0 percent, compared to 21.8 percent for the corresponding period last year. Gross profit for the quarter was $25.2 million compared to $12.7 million for the prior year quarter. - Record third quarter earnings from continuing operations at $5.7 million or $0.25 per share, up from a loss of $1.0 million or $0.05 per share for the prior year quarter. - Net earnings for the quarter, after loss on discontinued operations, were $5.0 million or $0.22 per share compared to a net loss, after gain on discontinued operations, of $0.7 million or $0.03 per share for the prior year quarter. - Increase of 171 percent in cash from operations, before changes in non-cash working capital items, at $14.9 million for the quarter, compared to $5.5 million for the same quarter last year. "The third quarter is typically our weakest while exploration companies shut down operations, often for extended periods, over the holidays, and the Company has historically shown a loss in the third quarter. This year for the first time in ten years, the Company posted a profit in its third quarter, at $5.7 million on continuing operations, a record for this period. We also had our best revenue month ever in November," said Francis McGuire, President and CEO of Major Drilling. "As discussed in our press release dated January 22, 2007, shorter than expected shutdowns, generally improved pricing, and an increased number of rigs in the field, contributed to these strong results," said Mr. McGuire. "Drilling programs that would typically end during November were extended well into December. Also, January was exceptionally strong with early startups in most of our operations. Finally, rigs that were delivered late at the end of the second quarter made a contribution this quarter. All of this combined to produce not only record revenues for the third quarter, but also the Company's third largest overall quarterly revenue in its history, trailing only the first and second quarters of fiscal 2007." "During the quarter, we announced the purchase of the operations of the Longstaff group, which carries on drilling operations in South Africa, Botswana and Namibia. As discussed on December 1, 2006, these operations were primarily conducted on a single shift basis, and we intend to gradually increase utilization of these rigs. The Company is already making good progress on that front with an expansion of the labour force since the acquisition was announced," Mr. McGuire observed. "Pricing in these countries has tended to lag trends in other parts of the world but demand is increasing significantly. As the months go by, we expect pricing and utilization to continue to improve." "We continued to see an overall increase in demand for the Company's services during the quarter, creating a favorable pricing environment for the upcoming year. Nickel, copper, gold, silver, uranium and zinc prices remain well above economical thresholds for exploration," commented Mr. McGuire. "Given this environment and the Company's favorable financial position, we expanded our capital expenditures program this quarter, spending $14.5 million, bringing in 11 new rigs. With these additional rigs, the African acquisition, and increased pricing, the Company's positive momentum is expected to continue into the fourth quarter and beyond." Third quarter ended January 31, 2007 Total revenue for the third quarter was $90.1 million, up 54.3 percent from the $58.4 million recorded for the prior year period. Year-over-year revenue and profit comparisons were not affected by the variations of the Canadian dollar against both the U.S. and Australian dollars. Revenues from Canada-U.S. drilling operations were up $12.0 million or 65.6 percent to $30.3 million for the quarter compared to $18.3 million for the same period last year. In Canada, improved winter conditions, as compared to last year, allowed early startups for most of the Company's contracts. Last year, warm weather conditions slowed the development of the winter roads required to gain access to many project sites, which caused delays or cancellation of a certain number of projects. In the U.S., the Company had up to five rigs working in the energy sector during the quarter with good pricing and good performance. In South and Central America, revenue for the quarter was $29.6 million, up 91.0 percent from $15.5 million recorded in the prior year quarter. This strong year-over-year quarterly growth was driven primarily by very strong demand in Mexico, Chile and Argentina. Also, operations in Venezuela made a significant contribution to the region's growth. Australasian/African drilling operations reported revenues of $30.2 million, up some 22.3 percent from $24.7 million reported in the same period last year. This growth was led by Tanzania, where revenues almost doubled compared to the prior year quarter, as well as by revenue from the new African acquisition. Revenue grew moderately in Indonesia and was relatively flat in Mongolia and Australia. The overall gross margin percentage for the quarter was 28.0 percent, up from 21.8 percent for the same period last year. Gross margin percentages improved year-over-year in all three regions due to generally improved pricing and much shorter shutdowns over the holidays. Margins were still somewhat impacted by mobilizations, demobilizations and increased repairs during this period. General and administrative costs were $8.8 million for the quarter, compared to $7.3 million for the prior year period. The increase was primarily due to additions to management to accommodate growth and the administrative costs relating to the African acquisition. Other expenses were $2.0 million for the quarter compared to $0.9 million for the same period last year, due to higher incentive compensation expenses given the Company's improved profitability in the current year and increased provision for bad debt, muted by a gain on sale of investments. Foreign exchange gain was nil for the quarter compared to a loss of $0.2 million for the prior year period. Short-term interest revenue was $0.3 million for the quarter compared to an expense of $0.1 million last year, while interest on long-term debt was $0.7 million compared to $0.6 million for the prior year quarter. Amortization expense increased to $5.2 million for the quarter compared to $4.5 million for the same quarter last year, as a result of increased investment in equipment. The Company's tax expense was $3.2 million for the quarter, reflecting the Company's profitability compared to nil for the same period last year as the Company still had non-tax effected Canadian losses. Earnings from continuing operations for the quarter were $5.7 million or $0.25 per share ($0.24 per share diluted) compared to a loss of $1.0 million or $0.05 per share ($0.05 per share diluted) in the prior year period. Loss from discontinued operations was $0.7 million or $0.03 per share compared to a gain of $0.4 million or $0.02 per share for the same period last year. Discontinued operations include the sale of the manufacturing division and the termination of operations in China. The loss from discontinued operations in the third quarter of 2007 reflects adjustments to the tax provision from the sale of the manufacturing division and ongoing costs as the Company was closing its Chinese operations and redeploying rigs to other operations. Gain from discontinued operations for the third quarter of 2006 represents operating results from the discontinued operations that have been reclassified from continuing operations. Resulting net earnings were $5.0 million or $0.22 per share ($0.21 per share diluted) compared to a loss of $0.7 million or $0.03 per share ($0.03 per share diluted) for the same period last year. On a rolling 12-month basis to January 31, 2007, revenues from continuing operations increased over 23.7 percent to $375.3 million compared to $303.4 million for the prior year period. Earnings from continuing operations, on the same rolling 12-month basis, increased by 56.4 percent to $38.0 million from $24.3 million for the corresponding period last year. Year to date ended January 31, 2007 Revenues for the nine-month period ending January 31, 2007 increased 25.9 percent to $286.4 million from $227.5 million for the corresponding period last year. More than half of this increase in revenues is related to Latin America. Gross margins for the nine-month period were 31.3 percent compared to 28.3 percent last year due mainly to an improving pricing environment. With the increase in revenues and improving gross margins, gross profit for the nine-month period increased by 38.9 percent to $89.6 million compared to $64.5 million for the prior year period. General and administrative expenses increased to $23.6 million compared to $20.9 million for the same period last year. The increase is primarily due to additions to management to accommodate growth and salary increases across the operations. Other expenses were $7.1 million for the nine-month period compared to $5.3 million for the same period last year due, in part, to an increase in incentive provisions as a result of improved profitability and increased provision for bad debt, muted by a gain on sale of investments. Foreign exchange loss was $0.4 million for the nine-month period compared to $0.8 million in the prior year period. Short-term interest revenue was $0.3 million for the nine-month period compared to an expense of $0.6 million last year, while interest on long-term debt was $1.9 million compared to $2.1 million for the same period last year. Amortization expense increased to $14.6 million for the nine-month period, compared to $12.9 million for the same period last year, as a result of increased investment in equipment. The provision for income tax for the nine-month period was $13.6 million compared to $5.9 million for the prior year period reflecting the increase in pre-tax earnings. Earnings from continuing operations for the nine-month period were $28.7 million or $1.24 per share ($1.22 per share diluted) compared to $15.9 million or $0.70 per share ($0.69 per share diluted) for the same period last year. Gain from discontinued operations was $12.2 million or $0.53 per share compared to a gain of $1.0 million or $0.05 per share for the same period last year. Discontinued operations include the sale of the manufacturing division and the termination of operations in China. Resulting net earnings were $41.0 million or $1.77 per share ($1.74 per share diluted) compared to $17.0 million or $0.75 per share ($0.73 per share diluted) for the same period last year. Some of the statements contained in this press release may be forward-looking statements, such as estimates and statements that describe or are with respect to the future price of minerals and metals, the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition to exist or occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements by reason of factors such as, but not limited to, the factors set out in the discussion starting on pages 20 to 23 of the 2006 Annual Report entitled "General Risks and Uncertainties", as augmented by the section entitled "General Risks and Uncertainties" in the discussion of the Company's second and third quarter MD&A, each as filed with the Canadian Securities Commission (available on SEDAR at www.sedar.com). All such factors should be considered carefully when making decisions with respect to the Company. The Company does not undertake to update any forward-looking statements, including those statements that are incorporated by reference herein, whether written or oral, that may be made from time to time by or on its behalf, except in accordance with applicable securities laws. Based in Moncton, New Brunswick, Major Drilling Group International Inc. is one of the world's largest metals and minerals contract drilling service companies. To support its customers' mining operations and mineral exploration activities, Major Drilling maintains operations in Canada, the United States, Mexico, South and Central America, Australia, Indonesia, Africa and Mongolia. Financial statements are attached. Major Drilling will provide a simultaneous web cast of its quarterly conference call on Monday, March 5, 2007 at 9:00 AM (EST). To access the web cast please go to the Major Drilling website at www.majordrilling.com and click the attached link, or go directly to the CNW Group website at www.newswire.ca for directions. Participants will require Windows MediaPlayer, which can be downloaded prior to accessing the call. Please note that this is listen only mode. Major Drilling Group International Inc. Consolidated Statements of Operations (in thousands of Canadian dollars, except per share information) (unaudited) Nine months ended Three months ended January 31 January 31 2007 2006 2007 2006 ---------- ---------- ---------- ---------- (restated (restated - note 4) - note 4) TOTAL REVENUE $ 286,388 $ 227,521 $ 90,092 $ 58,448 DIRECT COSTS 196,838 163,043 64,870 45,725 ---------- ---------- ---------- ---------- GROSS PROFIT 89,550 64,478 25,222 12,723 ---------- ---------- ---------- ---------- 31.3% 28.3% 28.0% 21.8% OPERATING EXPENSES General and administrative 23,616 20,887 8,756 7,322 Other expenses 7,076 5,308 1,956 941 Foreign exchange loss (gain) 366 802 (47) 237 Interest (revenue) expense (340) 567 (294) 96 Interest expense on long-term debt 1,931 2,147 684 648 Amortization 14,584 12,939 5,209 4,480 ---------- ---------- ---------- ---------- 47,233 42,650 16,264 13,724 ---------- ---------- ---------- ---------- EARNINGS (LOSS) BEFORE INCOME TAX AND DISCONTINUED OPERATIONS 42,317 21,828 8,958 (1,001) ---------- ---------- ---------- ---------- INCOME TAX - PROVISION (RECOVERY) Current 7,472 3,774 (578) (1,773) Future 6,099 2,108 3,799 1,808 ---------- ---------- ---------- ---------- 13,571 5,882 3,221 35 ---------- ---------- ---------- ---------- EARNINGS (LOSS) FROM CONTINUING OPERATIONS 28,746 15,946 5,737 (1,036) GAIN (LOSS) FROM DISCONTINUED OPERATIONS (note 4) 12,248 1,007 (735) 351 ---------- ---------- ---------- ---------- NET EARNINGS (LOSS) $ 40,994 $ 16,953 $ 5,002 $ (685) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- EARNINGS (LOSS) PER ------------------- SHARE FROM CONTINUING --------------------- OPERATIONS ---------- Basic (*) $ 1.24 $ 0.70 $ 0.25 $ (0.05) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Diluted (xx) $ 1.22 $ 0.69 $ 0.24 $ (0.05) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- EARNINGS (LOSS) PER SHARE ------------------------- Basic (*) $ 1.77 $ 0.75 $ 0.22 $ (0.03) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Diluted (xx) $ 1.74 $ 0.73 $ 0.21 $ (0.03) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- (*) Based on 23,098,106 and 22,701,935 daily weighted average shares outstanding for the fiscal year to date 2007 and 2006, respectively, and on 23,127,430 and 22,830,021 daily weighted average shares for the quarter ended January 31, 2007 and 2006, respectively. The total number of shares outstanding on January 31, 2007 was 23,161,567. (xx) Based on 23,575,166 and 23,108,919 daily weighted average shares outstanding for the fiscal year to date 2007 and 2006, respectively, and on 23,645,789 daily weighted average shares for the quarter ended January 31, 2007. For the third quarter ended 2006, the effect of stock options potentially exercisable on loss per share was anti- dilutive; therefore, basic and diluted loss per share are the same. Major Drilling Group International Inc. Consolidated Statements of Retained Earnings (in thousands of Canadian dollars) (unaudited) Nine months ended January 31 2007 2006 ---------- ---------- RETAINED EARNINGS, BEGINNING OF THE PERIOD $ 49,635 $ 20,993 Net earnings 40,994 16,953 ---------- ---------- RETAINED EARNINGS, END OF THE PERIOD $ 90,629 $ 37,946 ---------- ---------- ---------- ---------- Major Drilling Group International Inc. Consolidated Statements of Cash Flows (in thousands of Canadian dollars) (unaudited) Nine months ended Three months ended January 31 January 31 2007 2006 2007 2006 ---------- ---------- ---------- ---------- (restated (restated - note 4) - note 4) OPERATING ACTIVITIES Earnings (loss) from continuing operations $ 28,746 $ 15,946 $ 5,737 $ (1,036) Operating items not involving cash Amortization 14,584 12,939 5,209 4,480 Loss on disposal of assets 355 256 58 70 Future income tax 6,099 2,108 3,799 1,808 Stock-based compensation 663 967 131 194 ---------- ---------- ---------- ---------- 50,447 32,216 14,934 5,516 Changes in non-cash operating working capital items (2,252) 5,543 1,660 5,096 ---------- ---------- ---------- ---------- 48,195 37,759 16,594 10,612 (Loss) earnings from discontinued operations, adjusted for non-cash items (2,706) 1,007 (212) 351 Changes in non-cash operating working capital items from discontinued operations 3,644 (4,627) (84) (3,921) ---------- ---------- ---------- ---------- Cash flow from operating activities 49,133 34,139 16,298 7,042 ---------- ---------- ---------- ---------- FINANCING ACTIVITIES Repayment of long-term debt (11,508) (11,517) (4,727) (4,761) Additional long-term debt 459 2,052 - - (Repayment of) increase in demand loans (16,721) (12,051) (280) 3,642 Issuance of common shares 913 2,247 531 1,388 ---------- ---------- ---------- ---------- Cash flow from (used in) financing activities (26,857) (19,269) (4,476) 269 ---------- ---------- ---------- ---------- INVESTING ACTIVITIES Net proceeds from sale of discontinued operations 28,755 - - - Business acquisitions (note 3) (13,058) - (13,058) - Acquisition of capital assets, net of direct financing (24,329) (19,564) (9,250) (8,711) Proceeds from disposal of capital assets 2,588 2,542 876 937 Discontinued operations 1,693 661 1,677 (133) ---------- ---------- ---------- ---------- Cash flow used in investing activities (4,351) (16,361) (19,755) (7,907) ---------- ---------- ---------- ---------- OTHER ACTIVITIES Foreign exchange translation adjustment (1,314) 1,101 (123) 508 ---------- ---------- ---------- ---------- INCREASE (DECREASE) IN CASH 16,611 (390) (8,056) (88) CASH POSITION, BEGINNING OF THE PERIOD 11,987 6,523 36,654 6,221 ---------- ---------- ---------- ---------- CASH POSITION, END OF THE PERIOD $ 28,598 $ 6,133 $ 28,598 $ 6,133 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Major Drilling Group International Inc. Consolidated Balance Sheets As at January 31, 2007 and April 30, 2006 (in thousands of Canadian dollars) (unaudited) ASSETS January April 2007 2006 ---------- ---------- (restated - note 4) CURRENT ASSETS Cash $ 28,598 $ 11,987 Accounts receivable 56,777 56,328 Income tax receivable 3,179 3,947 Inventories 50,779 45,054 Prepaid expenses 8,491 3,746 Future income tax assets 1,616 3,647 Assets from discontinued operations (note 4) 3,202 20,923 ---------- ---------- 152,642 145,632 CAPITAL ASSETS 158,408 117,887 FUTURE INCOME TAX ASSETS 997 3,810 OTHER ASSETS 1,281 1,049 ASSETS FROM DISCONTINUED OPERATIONS (note 4) - 1,898 ---------- ---------- $ 313,328 $ 270,276 ---------- ---------- ---------- ---------- LIABILITIES CURRENT LIABILITIES Demand loans $ - $ 16,721 Accounts payable and accrued charges 48,092 39,510 Income tax payable 1,264 2,953 Current portion of long-term debt 15,882 12,220 Liabilities from discontinued operations (note 4) 9,575 10,396 ---------- ---------- 74,813 81,800 LONG-TERM DEBT 22,078 22,651 FUTURE INCOME TAX LIABILITIES 7,291 6,354 DEFERRED GAIN 570 619 LIABILITIES FROM DISCONTINUED OPERATIONS (note 4) - 18 NON-CONTROLLING INTEREST FROM DISCONTINUED OPERATIONS (note 4) - 434 ---------- ---------- 104,752 111,876 ---------- ---------- SHAREHOLDERS' EQUITY Share capital 135,963 135,050 Contributed surplus 4,627 3,964 Retained earnings 90,629 49,635 Cumulative translation adjustments (22,643) (30,249) ---------- ---------- 208,576 158,400 ---------- ---------- $ 313,328 $ 270,276 ---------- ---------- ---------- ---------- Commitments (notes 5) MAJOR DRILLING GROUP INTERNATIONAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NINE MONTHS ENDED JANUARY 31, 2007 AND 2006 (in thousands of Canadian dollars) 1. BASIS OF PRESENTATION --------------------- These interim financial statements were prepared using accounting policies and methods consistent with those used in the preparation of the Company's audited financial statements for the year ended April 30, 2006. These interim financial statements conform in all respects to the requirements of Canadian generally accepted accounting principles for annual financial statements, with the exception of certain note disclosures. As a result, these interim financial statements should be read in conjunction with the Company's audited financial statements and notes for the year ended April 30, 2006 contained in the Company's 2006 annual report. 2. SEASONALITY OF OPERATIONS ------------------------- The geographic distribution of our growth is having an impact on our historical seasonal patterns. With the exception of the third quarter, the Company exhibits comparatively less seasonality in quarterly revenues than in the past since a relatively higher proportion of revenues is coming from regions with more temperate or tropical climates that are not impacted by winter weather conditions, and strong cyclical growth tends to mute normal seasonal patterns. Historically, the Company's operations tended to exhibit a seasonal pattern whereby its fourth quarter (February to April) was its strongest. The third quarter (November to January) is normally the Company's weakest quarter due to the shutdown of mining and exploration activities for extended periods over the holiday season, particularly in South and Central America. 3. BUSINESS ACQUISITIONS --------------------- Effective December 1, 2006, the Company acquired 55 conventional drill rigs, together with related support equipment, inventory, and contracts owned by the Longstaff group's drilling operations in southern Africa. These include the operations of Raldril (Pty) Limited in South Africa, RA Longstaff (Botswana) (Pty) Ltd in Botswana, and R.A. Longstaff Namibia (Pty) Limited in Namibia. The total purchase price including post closing adjustments was $15,369. Net assets acquired at fair market value at acquisition are as follows: Assets acquired Inventories $ 637 Capital assets 14,311 Other assets 421 ---------- Net assets $ 15,369 ---------- ---------- Consideration Cash $ 13,058 Accounts payable 2,311 ---------- $ 15,369 ---------- ---------- 4. DISCONTINUED OPERATIONS ----------------------- On June 7, 2006, the Company sold its manufacturing subsidiary ("UDR") for A$46.8 million (C$39.2 million). The consideration for the sale was A$43.3 million (C$36.2 million) cash and a holdback due in 18 months in the amount of A$3.5 million (C$3.0 million). The net gain before income taxes is C$22.3 million, being the proceeds of C$39.2 million less the book value of the assets of C$13.3 million and expenses relating to the sale of C$3.6 million. UDR previously constituted the Company's entire manufacturing segment. The Company made the strategic decision to focus its corporate resources on the mineral drilling business, where it competes as one of the world's largest contract drillers. The gain from discontinued operations of UDR is summarized as follows: 2007 YTD 2006 YTD 2007 Q3 2006 Q3 ---------- ---------- ---------- ---------- Revenue $ 4,291 $ 23,517 $ - $ 7,034 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Earnings (loss) before income tax 231 3,328 (49) 1,104 Gain from disposal of discontinued operations before income tax 22,262 - - - Income tax expense (6,989) (2,065) (415) (775) ---------- ---------- ---------- ---------- Gain (loss) from discontinued operations $ 15,504 $ 1,263 $ (464) $ 329 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- The Company made the strategic decision to close its operations in China in July, 2006. The Company opened a branch in China with the goal of quickly developing a large pool of Chinese drillers. Having shown little progress to date in building a local driller pool in China, the Company decided to close the operation. Chinese operations were previously reported within the Australasian and African segment. The loss from discontinued operations of the branch in China is summarized as follows: 2007 YTD 2006 YTD 2007 Q3 2006 Q3 ---------- ---------- ---------- ---------- Revenue $ 820 $ 1,031 $ - $ 420 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- (Loss) earnings (2,466) (256) (262) 22 Loss on disposition including write-down of assets (790) - (9) - (Loss) gain from discontinued operations $ (3,256) $ (256) $ (271) $ 22 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- The assets and liabilities of discontinued operations of UDR and China are summarized as follows: January April UDR China 2007 UDR China 2006 ------- ------- ------- ------- ------- -------- Current Assets Accounts receivable $ - $ - $ - $ 6,048 $ 1,167 $ 7,215 Other receivable 3,202 - 3,202 - - - Inventories - - - 13,587 - 13,587 Other assets - - - 113 8 121 ------- ------- ------- ------- ------- -------- 3,202 - 3,202 19,748 1,175 20,923 ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------- -------- Long-Term Assets Capital assets - - - 1,167 731 1,898 ------- ------- ------- ------- ------- -------- - - - 1,167 731 1,898 ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------- -------- Current Liabilities Accounts payable $ 3,855 $ 83 $ 3,938 $ 9,162 $ 329 $ 9,491 Income tax payable 5,637 - 5,637 406 11 417 ------- ------- ------- ------- ------- -------- 9,492 83 9,575 9,568 340 9,908 ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------- -------- Long-Term Liabilities - - - 18 - 18 ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------- -------- Non-Controlling Interest - - - 434 - 434 ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------- -------- The comparative figures have been restated to reflect the discontinuation of these components. 5. COMMITMENTS ----------- The Company, as part of the sale of its manufacturing division, UDR, entered into a Strategic Cooperation and Supply Agreement with Sandvik AB. Pursuant to this Agreement and subject to certain carry-over rights, the Company is required to make minimum purchases from Sandvik of certain products and services totaling at least A$10.5 million during the first year of the Agreement, A$9.2 million during the second year, and A$7.9 million during the third year. The third year commitment will be increased by A$1.0 million should certain products be available. Additionally, the minimum purchase amounts are subject to downward adjustments if certain products are not available, and/or if there are significant decreases in annual worldwide exploration expenditures. The Company also has various commitments, primarily for rental of premises, with arms-length parties as follows: 2007 - $339, 2008 - $833, 2009 - $540, 2010 - $424, 2011 - $426, thereafter - $392. 6. SEGMENTED INFORMATION --------------------- 2007 YTD 2006 YTD 2007 Q3 2006 Q3 ---------- ---------- ---------- ---------- (restated (restated - note 4) - note 4) Revenue Canada - U.S. $ 104,181 $ 85,521 $ 30,292 $ 18,325 South and Central America 86,275 55,366 29,647 15,460 Australasia and Africa 95,932 86,634 30,153 24,663 ---------- ---------- ---------- ---------- $ 286,388 $ 227,521 $ 90,092 $ 58,448 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Earnings (loss) from continuing operations Canada - U.S. $ 19,756 $ 12,901 $ 3,727 $ (286) South and Central America 19,432 4,973 6,782 163 Australasia and Africa 14,277 12,981 890 1,233 ---------- ---------- ---------- ---------- 53,465 30,855 11,399 1,110 Eliminations (905) (321) (316) (126) ---------- ---------- ---------- ---------- 52,560 30,534 11,083 984 Interest expense, net 1,591 2,714 390 744 General corporate expenses 8,652 5,992 1,735 1,241 Income taxes 13,571 5,882 3,221 35 ---------- ---------- ---------- ---------- Earnings (loss) from continuing operations 28,746 15,946 5,737 (1,036) Gain (loss) from discontinued operations 12,248 1,007 (735) 351 ---------- ---------- ---------- ---------- Net earnings (loss) $ 40,994 $ 16,953 $ 5,002 $ (685) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- >> For further information: Denis Larocque, Chief Financial Officer, [phone], Fax: [phone], [e-mail] MAJOR DRILLING GROUP INTERNATIONAL INC. - More on this organization Quotes & Charts News Releases (30) Photo Archive Webcast Company Earnings MDI.(TSX) -------------------------------------------------------------------------------- © 2005 CNW Group Ltd. q