CALGARY, Alberta, Nov. 03, 2021 (GLOBE NEWSWIRE) --
Financial Results
For the three-month period ended September 30, 2021, PHX Energy Services Corp. (the “Corporation” or “PHX Energy”) generated strong third quarter revenue from continuing operations as demand for the Corporation’s premium technologies continued to strengthen and the industry activity continued to recover. PHX Energy recognized revenue of $93.3 million (2020 - $37 million) and PHX Energy’s consolidated activity levels for the third quarter increased by 133 percent to 5,753 days (2020 - 2,467 days). For the three-month period September 30, 2021, earnings from continuing operations were $4.2 million in the 2021-quarter (2020 - $1.6 million) and adjusted EBITDA from continuing operations was $14.1 million (2020 - $6.8 million) (see “Non-GAAP Measures”). The 2021 adjusted EBITDA is double the adjusted EBITDA in the 2020-quarter, and the Corporation achieved this level of adjusted EBITDA despite higher cash-settled share-based payments that amounted to $3.4 million (2020 - $0.9 million). Adjusted EBITDA from continuing operations, excluding the impact of cash-settled share-based payments, would be $17.5 million in the 2021 three-month period (2020 - $7.7 million). Cash-settled share-based payments rose primarily due to increases in the Corporation’s share price. Adjusted EBITDA in the third quarter of 2020 also included $1.3 million in government grants and a bad debt recovery of $0.9 million.
The Corporation’s US segment reported its second highest third quarter revenue in the Corporation’s history which represented 79 percent (2020 – 82 percent) of its third quarter consolidated revenue. The Corporation’s US revenue increased 144 percent quarter-over-quarter, with the US division generating $74 million in the 2021-quarter as compared to $30.3 million in the 2020-quarter. In comparison, the US rig count during the third quarter of 2021 increased by 100 percent to 475 average rigs running per day as compared to the 238 rigs per day in the third quarter of 2020 (Source: Baker Hughes). The improvement in the US division’s activity and revenue was mainly attributable to ongoing demand for the Corporation’s premium technologies and high-quality services and this allowed the division to protect the market share gains it had made in prior quarters as industry activity grew.
In Canada, the industry and PHX Energy’s activity levels also improved significantly quarter-over-quarter, with both seeing quadruple the number of wells drilled. The Corporation drilled 254 wells in the third quarter of 2021 (2020 – 63), a 303 percent increase, and the industry drilled 1,358 wells in the third quarter of 2021 (2020 – 335), a 305 percent improvement (Source: Daily Oil Bulletin). The Canadian division’s revenue growth was consistent with the aforementioned activity growth and during the third quarter of 2021 the Canadian segment’s revenue was $19.3 million (2020 - $6.7 million).
The Corporation continued to maintain a strong balance sheet position and reported a cash balance of $24.9 million with no bank loans outstanding as at September 30, 2021. As a result of earnings growth, for the three-month period ended September 30, 2021, the Corporation’s free cash flow from continuing operations increased to $8.7 million as compared to $2.4 million in the corresponding 2020-quarter (see “Non-GAAP Measures”).
Dividends
In light of the Corporation’s balance sheet strength and improving adjusted EBITDA margins and net earnings, in August of 2021 the Board approved an increase to the Corporation’s quarterly dividend from $0.025 per common share to $0.05 per common share effective for the dividend payable on October 15, 2021.
On September 15, 2021, PHX Energy declared a cash dividend of $0.05 per common share and $2.5 million was paid on October 15, 2021 to shareholders of record at the close of business on September 30, 2021.
Responding to COVID-19
Despite oil prices recovering to pre-pandemic levels, the Corporation continued to monitor, evaluate and adjust its business costs in-line with drilling activity in North America and will continue to implement changes as required. In addition, the Corporation will continue to review various government assistance programs available for businesses in North America. For the three-month period ended September 30, 2021 the Corporation recognized government grants of $0.1 million (2020 - $1.3 million) in the Canadian division.
PHX Energy has and will continue to diligently preserve a solid financial position and retain financial flexibility through substantial liquidity on its credit facilities. As at September 30, 2021, the Corporation has working capital of $54.9 million and approximately CAD $65 million and USD $15 million available from its credit facilities. Additional information regarding the risks, uncertainties and impact on the Corporation’s business can be found throughout this press release, including under the headings “Capital Spending”, “Operating Costs and Expenses”, “Critical Accounting Estimates” and “Outlook”.
https://www.globenewswire.com/news-release/2021/11/03/2326990/0/en/PHX-Energy-Announces-Strong-Third-Quarter-Results-and-Increased-2021-Capital-Expenditure-Program.html