Dawson said that the strength in the business is returning, the situation is improving every day and the improvement in Q2 versus Q1 was very clear. Some folks were disappointed and sold yesterday because they compared Q2 2013 with Q2 2012.
He said that comparing Q2 2013 to Q2 2012 is a WRONG comparison because Q2 2012 was a very good quarter for TID. The investors should compare Q2 2013 with Q1 2013 to see the big improvement.
Moreover according to the CC:
1) EBITDA: I urge all to listen to the CC to confirm that EBITDA (and net income) in Q2 2013 were impacted negatively by 3 ONE TIME costs that total $4,6 million.
2) UT will be ~75% in Q3 and substantially higher than 75% in Q4.
3) Big CapEx is behind us. CapEx in Q3 will drop down to 5-7 million from 11 million in Q2.
4) There are NOT ANY RIGS coming OFF CONTRACT in Q3, Q4.
5) G&A expenses will drop below 10 million effective Q3.
HOUSTON will close and the tax structure of the PARIS office (it produces the African costs) will be replaced with a new system to become more efficient. The benefits on the G&A line will show up effective Q3 2013.
6) From HRT case, ONLY 10 million (mobilization fees from the site to Manaus) are recorded in the books. The cancellation fees (~20 million) are NOT in the books, so it will be A GIFT for the balance sheet which has not been taken into account.
7) CEO/CFO said: TID has the opportunity to take 6 different initiatives to improve its debt structure. There is NO GUN on the head. The payment in Q4 2013 is small.
The 45 million payment is in the mid- 2014 but they can get an extension, if necessary.
8) A/R are all collectible. NO PROBLEM with any of them. CYA (Ecuador) starts its payments in late Q3 2013.
9) They have demand for ADDITIONAL RIGS from Colombia and Ecuador. However, TID prefer to not expand currently but live within its means.
10) BRAZIL: 1 rig for sure and probably 2 rigs will start working in Q3 2013.
Q3 2013 report notes that there is 1 rig because this rig has a LOI.
Moreover, the HELI-RIGS will most likely work in Q4 2013.