Horizon North Logistics Inc. Provides Operational Update and Announces Initial 2015 Capital Budget

TSX Symbol: HNL

CALGARY, Dec. 22, 2014 /CNW/ - Horizon North Logistics Inc. ("Horizon" or "the Corporation") today provided an operational update including its earnings outlook for Q4 2014 and for the full year of 2015, outlining a conservative capital spending program for 2015 and a commitment to maintain its dividend. 

Horizon expects that its results for Q4 2014 will be in line with its previously provided guidance, generating EBITDAS levels similar to Q3 2014 results.  Horizon anticipates a challenging operating environment for 2015 and has updated its earnings and cash flow expectations accordingly.  Based on contracts currently in place, anticipated contract renewals and other highly probable activity, Horizon anticipates that EBITDAS levels for 2015 will be similar to 2014 results. 

Horizon's Board of Directors recently approved an initial capital budget for 2015 of $25 million focused primarily on maintenance capital expenditures.  Capital expenditures related to potential growth opportunities will be evaluated on a case by case basis to ensure they meet the Corporation's investment criteria.  

Based on its earnings expectations for 2015 and a conservative capital program, Horizon expects its leverage position and financial flexibility to improve exiting 2014 and throughout 2015.  As a result, Horizon is confident that it will be able to maintain its current quarterly dividend, subject to review and evaluation by its Board of Directors on a quarterly basis. 

"Given the challenging environment anticipated for 2015, management will be focused on controlling costs, improving project execution and on capital discipline.  This focus will allow us to maintain our core operating capabilities, improve our balance sheet position and manage through the cycle" noted Rod Graham, President and Chief Executive Officer. 

Mr. Graham added, "Although not included in our 2015 expectations, Horizon is well positioned to take advantage of development opportunities in British Columbia related to potential LNG projects by virtue of our strategic land positions in close proximity to proposed project sites.  As well, there are opportunities to utilize Horizon's in-house manufacturing capabilities located in Kamloops, British Columbia and Grande Prairie, Alberta which we believe to be a competitive advantage." 

About Horizon

Horizon is a remote resource development service company that provides workforce accommodation solutions, camp management and catering services, and road and access matting solutions.  Horizon provides these services in support of oil sands development, oil and gas exploration, mining and infrastructure projects throughout Canada's western provinces and northern territories where local infrastructure does not meet project requirements. 

Corporate Information

Additional information related to the Corporation, including the Corporation's annual information form, press releases, financial statements and MD&A are available on SEDAR at www.sedar.com

Cautionary Statement

This press release contains certain statements or disclosures relating to Horizon that are based on the expectations of its management as well as assumptions made by and information currently available to Horizon which may constitute forward-looking statements or information ("forward-looking statements") under applicable securities laws.  All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that Horizon anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-looking statements.  In some cases, forward-looking statements can be identified by terms such as "forecast", "future", "may", "will", "expect", "anticipate", "believe", "potential", "enable", "plan", "continue", "contemplate", "pro-forma", or other comparable terminology. 

In particular, forward-looking statements in this press release include, but are not limited to, statements concerning Horizon's EBITDAS levels for Q4 2014 and in 2015, Horizon's capital budget and its focus for 2015, its evaluation of capital expenditures, the expectation that Horizon's leverage position and financial flexibility will improve exiting 2014 and throughout 2015, Horizon's ability to maintain its dividend, management's focus for 2015 and opportunities to utilize Horizon's in-house manufacturing capabilities. 

Certain information set out herein is "financial outlook" within the meaning of applicable securities laws.  The purpose of this financial outlook is to provide readers with disclosure regarding Horizon's reasonable expectations as to the anticipated results of its business activities for Q4 2014 and in 2015.  Readers are cautioned that this financial outlook may not be appropriate for other purposes.

EBITDAS (Earnings before interest and finance costs, income tax expense, depreciation, amortization, (gain) loss on disposal of property, plant and equipment, and stock based compensation) is not a recognized measure under generally accepted accounting principles ("GAAP"). Management believes that in addition total profit and comprehensive income, EBITDAS is a useful supplemental measure as it provides an indication of the Corporation's ability to generate cash flow in order to fund working capital, service debt, pay current income taxes, pay dividends, and fund capital programs. Readers should be cautioned, however, that EBITDAS should not be construed as an alternative to total profit (loss) and total comprehensive income (loss) determined in accordance with GAAP as an indicator of the Corporation's performance. Horizon's method of calculating EBITDAS may differ from other entities and accordingly, EBITDAS may not be comparable to measures used by other entities.

Although Horizon believes that the expectations and assumptions, including expectations and assumptions regarding activity levels, on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Horizon cannot give any assurance that that they will prove to be correct.  Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Many factors could cause the performance or achievements of Horizon to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements.  These include, but are not limited to general economic, market and business conditions.  Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information regarding some of these risks, expectations or assumptions and other factors that could affect Horizon's operations and financial results may be found in Horizon's Annual Information Form for the year ended December 31, 2013 and Horizon's Management's Discussion and Analysis prepared for the year ended December 31, 2013 and other documents which may be accessed through the SEDAR website and found on the Corporation's profile at www.sedar.com. The reader is cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements contained in this press release are made as of the date hereof and the Corporation undertakes no obligations to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

SOURCE Horizon North Logistics Inc.