TD Lowers Target to $14 From $16Secure Energy Services Inc. (SES-T) C$7.46 Q4 EBITDAS in Line on Solid Market Share, Strong Cost Management Event Secure released its Q4/15 results, with EBITDAS that was in line with our expectations (though slightly ahead when adjusted for one-time costs above our forecast of ~$2.0 million), as well as an updated outlook. Exhibit 1: Q4/15 Results Summary Q4/15A TD Estimate % Consensus % Beat / Miss Revenue ($MM) $290.0 $418.3 -30.7% $363.0 -20.1% Miss EBITDAS ($MM) $27.5 $28.0 -1.6% $29.4 -6.5% In Line/Miss Source: Company reports, TD Securities Inc. Impact: MIXED; The headline number (EBITDAS) was in line with expectations, though one-time costs weighed on results. Revenue was below our expectation on lower PRD volumes, though operating margins were ahead of our forecasts across all segments. The company booked $4.3 million in severance and restructuring costs, and updated its capital spending forecast for 2016 down to $50 million (below our previous estimate of $85 million). We have made minor changes to our forecasts and growth assumptions, which lowers our sum-of-the-parts target price to $14.00 (from $16.00), and we maintain our ACTION LIST BUY rating. Key Metric: EBITDAS ($million) Reported: $27.5 TD: $28.0 Cons: $29.4 Positives Negatives Stronger-than-forecast margins Lower PRD revenue in Q4 Source: Company reports, TD Securities Inc. TD Investment Conclusion Secures facility-based PRD segment provides relatively stable cash flows and strong returns on investment over many years, and the companys focus on the most active areas of the WCSB should ensure multiple growth options in the years ahead. The companys DS and OS groups provide exposure to the drilling and civil earth works areas of the industry, respectively. The net result is strong cash flow generation and multiple lucrative reinvestment options.