MATRRIX announces second quarter 2013 results

CALGARY, Aug. 27, 2013 /CNW/ - MATRRIX Energy Technologies Inc. ("MATRRIX" or the "Corporation") (TSX-V: MXX) announces financial results for the second quarter 2013.

HIGHLIGHTS OF MATRRIX SECOND QUARTER 2013 (COMPARED WITH SECOND QUARTER 2012)

• Achieved revenue in Q2 of $3,415,087 up 192% from $1,169,954.
• Gross margin percentage of 8%, down from 14% primarily resulting from USA fixed startup costs and higher Canadian operating costs.
• EBITDA of ($1,133,857) down 103% from ($558,111) primarily resulting from USA fixed startup costs and higher Canadian operating costs.
• The Corporation maintained a strong balance sheet with $5,647,073 of cash and cash equivalents at June 30, 2013 and working capital of $8,759,581.
• The Corporation's concurrent job capacity was 23 directional and horizontal drilling systems ("Systems") during the quarter with 19 systems in Canada and 4 systems in the USA.
• Deployment of the first System to the field in the USA occurred in late April 2013 with a second System expected to be deployed in early September 2013.
• MATRRIX expects capital expenditures of approximately $2,800,000 during the remainder of 2013 for additional horizontal and directional drilling related equipment with approximately $1,500,000 having been incurred to the end of the quarter in 2013.

HIGHLIGHTS OF MATRRIX FIRST HALF OF 2013 (COMPARED WITH FIRST HALF 2012)

• Achieved record revenue in the first half of 2013 of $9,552,657 up 45% from $6,598,724.
• Gross margin percentage of 24% down from 26% primarily resulting from USA fixed startup costs and higher Canadian operating costs in Q2.
• EBITDA of ($442,098) down 251% from $292,309 primarily resulting from USA startup costs.

FINANCIAL SUMMARY HIGHLIGHTS

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At the date of this press release, MATRRIX had a total of 23 directional and horizontal systems available for deployment in the Western Canadian Sedimentary Basin ("WCSB") and the USA. The customer base in Canada has expanded through Q2 with customers having a mix of oil and/or liquids rich focused capital programs.  Customers remain cautious on their capital spending; however, there is customer optimism of increased spending levels in the second half of 2013 and into 2014.  Additionally, with potentially large field developments as a result of the proposed west coast LNG terminals, there may be increased incremental investment into the WCSB in 2014 and beyond. MATRRIX is focused on continuing to build customer relationships and increasing its customer base with operators active in areas with oil and/or liquids rich opportunities, and strong capital expenditure programs, with MATRRIX preparing for readily available resources to fund incremental growth in 2014 and beyond.

MATRRIX has commenced expansion of its directional and horizontal drilling business into the USA to complement its USA performance drilling operations.  MATRRIX established a USA base in Oklahoma City, and now employs USA based operating and sales staff out of that facility.  With 4 Systems in the USA, the focus for the second half of 2013 is to increase utilization and establish the MATRRIX brand. The Corporation continued its performance drilling operations in Texas and looks to expand directional operations in this region as well.

President Richard Ryan stated, "The second quarter of 2013 marks the end of our second full year of operation. MATRRIX staff have done an excellent job in building the MATRRIX brand in Canada, with continued increases in activity and revenue despite a flat, competitive environment. Our Canadian Client list continues to grow, along with our activity levels, and our systems, processes, and delivery mechanisms continue to evolve to keep pace with increased activity. On the back of positive Canadian momentum, we are working hard to establish MATRRIX in the USA market, and are very encouraged with our operational results on the first wells drilled for Clients in this strategically important area of the North American market. We look forward to leveraging our Canadian momentum into further increases in activity and market share through the latter half of 2013 and into 2014, and building the MATRRIX name in the USA to broaden our delivery systems to cover Client needs in the entire North American market."

The Corporation's financial statements and management's discussion and analysis for the three and six months ended June 30, 2013 will be available on SEDAR at www.sedar.com.

NON-GAAP MEASURES

This press release contains references to EBITDA and gross margin. These financial measure are not a measure that has any standardized meaning prescribed by IFRS and is therefore referred to as a non-GAAP measure. The non-GAAP measures used by the Corporation may not be comparable to similar measures used by other companies.

(i) EBITDA is defined as "income (loss) before interest, taxes, business acquisition transaction costs, reverse takeover adjustments, depreciation, stock based compensation expense, gains on disposal of property and equipment and foreign exchange." Management believes that in addition to net and total comprehensive income (loss), EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Corporation's principal business activities prior to consideration of how these activities are financed, how the results are taxed in various jurisdictions, or how the results are effected by the accounting standards associated with the Corporation's stock based compensation plan.

(ii) Gross margin is defined as "gross profit from services revenue before stock based compensation and depreciation". Gross margin is a measure that provides shareholders and potential investors additional information regarding the Corporation's cash generating operating performance. Management utilizes this measure to assess the Corporation's operating performance.

MATRRIX is engaged in the acquisition and supply of horizontal and directional drilling technologies for the oil and gas industry in Canada and the USA.

FORWARD-LOOKING INFORMATION

This press release contains certain statements or disclosures relating to MATRRIX that are based on the expectations of MATRRIX as well as assumptions made by and information currently available to MATRRIX which may constitute forward-looking information under applicable securities laws. In particular, this press release contains forward-looking information related to: customer capital spending; expectations and assumptions regarding increased spending levels in the second half of 2013 and into 2014;  potentially large field developments as a result of the proposed west coast LNG terminals leading to incremental investment into the WCSB in 2014 and beyond; the Corporation's ability to continue to build customer relationships and increasing its customer base with operators active in areas with oil and/or liquids rich opportunities and strong capital expenditure programs; the Corporation's ability to identify and procure readily available resources to fund incremental growth in 2014 and beyond; the Corporation's ability to execute its planned expansion in the USA and the Corporations' ability to leverage current momentum into further increases in activity and market share through the latter half of 2013 and into 2014 in Canada. Such forward-looking information involves material assumptions and known and unknown risks and uncertainties, certain of which are beyond MATRRIX's control.  Many factors could cause the performance or achievement by MATRRIX to be materially different from any future results, performance or achievements that may be expressed or implied by such forward looking information. MATRRIX's documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. MATRRIX disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: MATRRIX Energy Technologies Inc.