CALGARY, ALBERTA--(Marketwired - April 7, 2014) -
NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA
Canadian Oilfield Solutions Corp. (the "Corporation") (TSX VENTURE:OTS) has released its financial results for the year ended December 31, 2013 and provides the following Operations and Corporate update.
OPERATIONS UPDATE
ARTIFICIAL LIFT
The Corporation signed an exclusive distribution agreement in late 2013 for the Linear Electric Submersible Motor being developed by Han's Motor Company in China. Subsequently, we have secured interest from a Canadian partner to perform a five well pilot test, and have engaged a service company for discussions on deployment of the technology by the end of summer 2014.
In 2013, our submersible pump sales continued to experience solid growth, posting improved year-over-year revenues due to successful market share growth in Wyoming. Management expects continued organic growth from this division as it continues to demonstrate high quality of service and products.
Our submersible electric motor sales added modest revenue growth in 2013, and we expect significantly higher sales volumes as we enter our second year providing sales into the mining (dewatering), agriculture, and municipal water industries. The Corporation has key relationships with major manufacturers of ESP motors, and distributes its own brand of motors in addition to internationally known brands. Motor sales are typically made to domestic and international submersible pump companies that service the water industries.
The diversification into the water industries is expected to help offset the traditionally weak second quarter sales experienced in much of the oil and gas sector. In 2014 management will focus on expanding its sales into Canada through existing relationships within the pump supply sector.
CONSTRUCTION
We experienced delays in southern Mexico as our client worked through regulatory and environmental approvals for its projects, and construction only began picking up late in the second quarter of 2013. Since that time, we have provided continuous services that have resulted in us exiting 2013 with two projects running concurrently - which achieves one of our major goals of having multiple operations. Although the results over 2013 were not as anticipated, the market suggests that there is an increasing inventory of projects in which to engage and local management is encouraged heading into 2014.
PIPE SALES & INSTALLATION
Budget reallocations by the Mexican national oil company Pemex caused pipe projects to be cancelled throughout 2013. We do not expect these delays to continue. Pemex has begun discussing upcoming projects and there are indications of a return of budgets for both new pipelines and for line remediation. The pipeline infrastructure within Mexico has experienced tremendous corrosion issues and the FlexSteel™ flexible pipe products that we sell into Mexico are ideal for remediating the problems. Management will provide updates on the pipe market in Mexico as they become available.
CORPORATE
The Corporation announced a significant debt financing of $5 million in December 2013, which was fully subscribed including the overallotment as of March 3, 2014. In addition, the senior management team was strengthened in May 2013 with the addition of a new Chief Financial Officer, Scott Hamilton, who is a Chartered Accountant.
| RESULTS OF OPERATIONS |
|
| Selected Financial Information |
|
| (in 000's of USD $ unless otherwise stated) |
|
| |
|
| For the year ended December 31, |
2013 |
|
2012 |
|
| Revenue |
$ |
5,673 |
|
$ |
10,059 |
|
| Cost of sales |
|
(3,577 |
) |
|
(7,262 |
) |
| Gross Profit |
|
2,096 |
|
|
2,797 |
|
| Selling and administrative expense |
|
(3,176 |
) |
|
(2,233 |
) |
| Net finance (expense) income |
|
(341 |
) |
|
27 |
|
| |
|
(3,517 |
) |
|
(2,206 |
) |
| Earnings (loss) before income taxes |
|
(1,421 |
) |
|
591 |
|
| Income tax expense |
|
(445 |
) |
|
(263 |
) |
| Net earnings (loss) for the period |
|
(1,866 |
) |
|
328 |
|
| Net earnings (loss) per share - basic |
$ |
(0.02 |
) |
$ |
0.00 |
|
| |
|
|
|
|
|
|
| As at December 31, |
|
2013 |
|
|
2012 |
|
| Assets |
|
|
|
|
|
|
| |
Current assets |
$ |
11,691 |
|
$ |
14,255 |
|
| |
Long-term assets |
|
3,500 |
|
|
1,022 |
|
| |
|
15,191 |
|
|
15,277 |
|
| Liabilities |
|
|
|
|
|
|
| |
Current liabilities |
|
7,1116 |
|
|
2,599 |
|
| |
Long-term liabilities |
|
156 |
|
|
3,328 |
|
| |
|
7,272 |
|
|
5,927 |
|
| Working capital ratio |
|
1.64 |
|
|
5.48 |
|
| Debt (long-term and debentures) to equity ratio |
|
35 |
% |
|
27 |
% |
| |
|
|
|
|
|
|
The Corporation's full December 31, 2013 audited financial statements and corresponding management's discussion and analysis have been filed on the SEDAR website at www.sedar.com.
Headquartered in Calgary, Alberta, Canadian Oilfield Solutions Corp. provides an array of specialized products and services that are used in the energy, mining, and industrial & agricultural water industries.
This document contains information that constitutes forward-looking information under applicable securities legislation. All statements, other than those of historical fact, which address activities, events, outcomes, results or developments that the Corporation anticipates or expects may or will occur in the future (in whole or in part) should be considered forward-looking information. In some cases, forward-looking information can be identified by terms such as "forecast", "future", "may", "expect", "anticipate", "believe", "potential", "enable", "plan", "continue", "contemplate", or other comparable terminology. In particular, this document contains statements regarding sales volumes and future operations of the Corporation.
Forward-looking information is based on current expectations, estimates, projections and assumptions, which the Corporation believes are reasonable but which may prove to be incorrect and therefore such forward-looking information should not be unduly relied upon. The forward-looking information in this document is based upon on various assumptions, including assumptions that the Corporation's contracts will be completed in accordance with their terms and according to schedule and that the projects will not be unduly delayed due to weather or underground conditions at the project sites as well as assumptions regarding industry activity: the general stability of the economic and political environment; the effect of market conditions on demand for the Corporation's products and services; the ability to obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability to operate its business in a safe, efficient and effective manner; the performance and characteristics of various business segments; the effect of current plans; the timing and costs of capital expenditures; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Corporation operates; and the ability of the Corporation to successfully market its products and services.
Further, there is a multitude of risks that may cause the Corporation's actual results to differ materially from those contemplated (whether expressly or by implication) in the forward-looking information in this document. These risks include, without limitation, risks of counterparties breaching contracts; construction risks; economic risks; the risk that revenues may not be received in the timeframe that is projected in this document; uncertainty regarding underground conditions; financing risks; solvency risks; tax risks; legislative and regulatory developments; customers' completion of expected work programs; fluctuating prices for crude oil and natural gas; changes in drilling activity; general global economic, political and business conditions; weather conditions; regulatory changes; the successful exploitation and integration of technology; customer acceptance of technology; success in obtaining issued patents; the potential development of competing technologies by market competitors; availability of products, qualified personnel, manufacturing capacity and raw materials, and the Corporation's successful performance under contracts. Readers are cautioned that the above list of factors is not exhaustive. Other factors which could cause actual results, performance or achievements of the Corporation to differ materially from those contemplated (whether expressly or by implication) in the forward-looking statements or other forward-looking information are disclosed in the Corporation's publicly filed disclosure documents.
The Corporation is not obligated to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws. Because of these risks, uncertainties and assumptions, prospective investors should not place undue reliance on these forward-looking statements. The foregoing statements expressly qualify any forward-looking information stated in this document.
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.