Q2 Out SECOND QUARTER SELECTED FINANCIAL AND OPERATIONAL HIGHLIGHTS:
- Revenue decreased 5% to $26.7 million as compared to $28.0 million for the same period in 2018;
- Revenue for Industrial Matting in Canada was $10.1 million, down 3% and in the United States ("U.S.") was $6.2 million, up 33% compared with the prior quarter;
- EBITDA(1) increased 20% to $5.8 million as compared to $4.8 million for the same period in 2018. EBITDA increased in part due to a $1.5 million improvement in Industrial Matting EBITDA. This was partially offset by a decline in Equipment Rentals EBITDA of $0.4 million;
- Net loss for the second quarter was $(1.7) million compared to net income of $3.9 million for the same period in 2018;
- Capital additions totaled $10.6 million and was deployed to grow and maintain the Company's Industrial Matting fleet to meet the expected demand in Canada and the U.S.;
- Grew the Industrial Matting fleet by 7% to 126,660 mats in the quarter;
- Reduced funded debt(2) by 47% to $7.5 million at June 30, 2019, compared to $14.0 million at December 31, 2018. Funded debt(2) to covenant EBITDA(3) ratio was 0.3 : 1.0 at June 30, 2019;
- Purchased and canceled 81,126 common shares under the current normal course issuer bid ("NCIB"); and
- Subsequent to period end, the Board approved a $9.0 million increase in the 2019 capital program, bringing total approved capital to $35.0 million for the year.
| Notes: |
| (1) | | Earnings before interest, taxes, depreciation and amortization ("EBITDA") is not a recognized measure under IFRS, and, accordingly, Strad's use of such a term may not be comparable to similarly defined measures presented by other entities; see "Non-IFRS and Additional IFRS Measures and Reconciliations". |
| (2) | | Funded debt includes bank indebtedness plus long-term debt less cash. |
| (3) | | Covenant EBITDA, as defined in the Company's credit facility agreement, is based on trailing twelve month EBITDA plus share based payments, plus additional one-time charges, less right of use asset amortization, less interest expense associated with leases. |
"Our second quarter results demonstrated the opportunity for our Industrial Matting division. Our U.S. revenue increased 33% quarter over quarter and 38% on a year to date basis, signaling the significant opportunity we see in the U.S. market. In Canada, we were awarded three matting projects of meaningful size which are expected to begin later in the third quarter and continue throughout the rest of 2019," said Andy Pernal, President and CEO of Strad. "In the first six months of 2019, we advanced our goal to grow our matting fleet to 180,000 units by 2021 by deploying $16.9 million to maintain and increase our fleet with $5.9 million focused directly on our U.S. fleet. To date, the Board of Directors have approved $35.0 million capital program for 2019."
"The second quarter continued to highlight our Industrial Matting business with an 8% increase in revenue over the prior year. In the quarter, we benefited from the increased duration of the North Montney Mainline project, increased activity in the U.S., and the adoption of IFRS 16 resulting in a 31% increase in EBITDA for the Industrial Matting division. This increase was offset by a 29% reduction in Canadian revenue from Equipment Rentals, which impacted our profitability for the quarter," said Michael Donovan, CFO of Strad. "With our available cash flow from the quarter we invested in our matting fleet, made payments on our long-term debt, and bought back shares through our NCIB."