OKOTOKS, Alberta, Dec. 13, 2017 (GLOBE NEWSWIRE) -- Mullen Group Ltd. (TSX:MTL) ("Mullen
Group", "We", "Our" and/or the "Corporation") announced today the
business plan for 2018 has been approved by the Board of Directors (the "Board"). The annual process
encompassed an extensive review of a wide range of issues including: the current state of the North American economy and more
specifically, expectations for the Canadian economy; the impact of the recent recovery in oil prices offset by the recent weakness
in AECO natural gas prices and the expected impact that these commodity prices will have on drilling activity in western Canada;
the balance sheet of Mullen Group; and expected cash flows. Based upon this review, the Board approved a capital budget of
$40.0 million for 2018, exclusive of corporate acquisitions, with $30.0 million allocated towards the Trucking/Logistics
segment primarily to replace trucks, trailers and specialized equipment to support the operations of these Business Units. In
addition, $10.0 million will be allocated to support the initial phase of our replacement cycle within the Oilfield Services
segment after several years of under-investing in this segment. The Board will continue to monitor both of the sectors of the
economy we serve and will adjust the capital budget as new opportunities arise.
Highlights of 2018 Business Plan
Trucking/Logistics Segment
We expect the Trucking/Logistics segment to account for approximately 67.0 percent of Mullen Group's 2018
revenue, exclusive of any acquisitions made in 2018. Generally speaking, this segment's results are closely correlated to
Canada's GDP growth. Our expectation for 2018 is that we can achieve moderate growth as a result of the annualization of our
recent acquisitions as well as the continued expansion in the overall economy. While the current trucking/logistics market
remains extremely competitive, our view is that these pressures will ease throughout 2018 as demand for freight services grows.
The tightening of U.S. trucking capacity, as a result of continued economic expansion accompanied by the impact of the
mandatory electronic log regulations, is setting the stage for a rebalancing of pricing for freight services in 2018. The
Canadian economy is expected to continue to expand moderately year over year. In addition, any further growth in the U.S.
economy could provide additional demand for Canada's exports, thereby positively affecting the demand for freight services.
This, along with improving prospects for the Alberta economy, which until recently has been the major drag on the overall economy,
should provide us with opportunities in 2018.
Oilfield Services Segment
We expect the Oilfield Services segment to account for approximately 33.0 percent of Mullen Group's 2018
revenue. The oil and gas industry and drilling activity in particular is closely tied to commodity pricing. Crude oil
prices have recently improved to levels that provide producers with an incentive to reinvest in the industry. The weakness in
the value of the Canadian dollar as compared to the U.S. dollar has also further provided Canadian producers with improved
netbacks. However, the price of natural gas has recently trended downwards. This, combined with LNG project delays and
cancellations, has constrained the demand for oilfield services. Recent industry reports indicate that capital being
allocated to drilling activity in western Canada will remain relatively flat on a year over year basis. This will provide our
11 Business Units leveraged to drilling activity with a stable operating environment but with limited growth potential.
In terms of new capital projects, including oil sands related development and the prospects of certain large
diameter pipeline projects, there are signs of optimism. Several projects such as Keystone XL and Trans Mountain have a very
good chance of proceeding in 2018. While the approval of each of these projects are positive developments, we cannot predict
the timing of them and as such we will maintain a cautious approach. On balance, we expect our Oilfield Services segment will
generate slightly improved results in 2018.
Moveitonline – Online Logistics Marketplace
We continued to develop and make progress on the build out of Moveitonline, our proprietary online logistics
marketplace. The Moveitonline load matching operating platform connects shippers, carriers and the trucking industry,
providing price discovery and service capabilities within one system. In 2017, we made great strides in developing
Moveitonline by releasing a new version of the system and by onboarding approximately 160 carriers with over 12,000 active trucks
in the system. The Moveitonline application also provides Mullen Group with new growth opportunities in third party
logistics, which remains the fastest growing part of the freight/logistics business today.
"As we put closure to 2017 we will end the year with working capital of $200.0 million, including over $135.0
million of cash. Long-term debt, including the $70.0 million note due in June 2018, will be $535.0 million. So we will
enter 2018 in good shape from a balance sheet perspective and what I would call a pretty stable outlook for both sectors of the
economy we are focused on – namely the overall Canadian economy, the principal driver of our Trucking/Logistics segment, and the
oil and gas industry. Given this back drop we believe that 2018 will be sequentially better than 2017. If the economy
stays on its current trajectory; oil prices stay around current levels; and we get a little good news on the natural gas front;
then we believe we could achieve gross revenue in excess of $1.2 billion and OIBDA in the $190.0 to $200.0 million range – this
assumes no growth in the oilfield services sector", commented Mr. Murray K. Mullen, Chairman of the Board and Chief Executive
Officer.
2018 Priorities
In order to meet our 2018 goals, we have established the following five priorities:
1) CONTINUE TO PURSUE ACQUISITIONS – acquisitions remain an important element of our growth plans and we fully
expect that we can use our strong well-structured balance sheet to capitalize on the right opportunities.
2) INCREASE OUR CAPITAL EXPENDITURE TO OUR BUSINESS UNITS TO NEUTRAL WEIGHTING – to provide our existing
Business Units with new equipment to remain competitive in their respective markets.
3) ACCELERATE OUR INVESTMENT IN TECHNOLOGY – to empower our employees with updated equipment including field
smart technology and mobile apps to enhance employee engagement and productivity.
4) EXPAND OUR BMC PROGRAM – using a combination of classroom and online training, we can achieve lower turnover
and improved productivity with our employees.
5) INVEST IN MOVEITONLINE – continue to develop our proprietary online marketplace to enhance our users'
experience.
DIVIDEND – 2018
Mullen Group is also pleased to announce that the Board has approved a 67.0 percent increase in the annual
dividend to shareholders from $0.36 per share to $0.60 per share. Such dividend will continue to be paid on a monthly basis,
subject to Board approval.
"Over the course of the last couple of years we have had our fair share of challenges. Business suffered
as we adapted to the collapse in the oil and gas industry. Employees lost jobs, experienced reductions in their take home pay
and shareholders have lost value in their shares as well as a reduction in the dividend. Today, however, I am pleased to
report that the business fundamentals are strong, employment levels are back to pre-2015 levels, most employees are seeing a
recovery in their total pay and we have delevered the balance sheet. In recognition of the turnaround in these fundamentals,
the Board has approved a very healthy increase in the annual dividend to our shareholders", commented Mr. Mullen.
Advisories:
This news release includes certain statements regarding Mullen Group's future plans and operations,
including the 2018 Business Plan and Dividend Policy, and contains forward-looking statements that we believe allow readers to
better understand our business and prospects. The use of any of the words "expect", "anticipate", "continue", "estimate",
"objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "strategy" and similar expressions are
intended to identify forward-looking information or statements. More particularly and without limitation, this news release
contains forward-looking statements and information concerning the 2018 Business Plan, Dividend Policy, capital budget, operating
income before depreciation and amortization, and anticipated revenues.
With respect to the forward-looking statements and information concerning the 2018 Business Plan and
Dividend Policy, Mullen Group has provided such in reliance on certain assumptions that it believes are reasonable at this time,
including but not limited to the allocation of 2018 capital budget, impact of general economic conditions, volatility of commodity
prices and activity in the oil and gas industry in western Canada. Accordingly, readers should not place undue reliance on
the forward-looking statements and information contained in this news release. Readers are cautioned that the assumptions
used in the preparation of such forward-looking information and statements, although considered reasonable at the time of
preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Our
actual results, performance, or achievement could differ materially from those expressed in, or implied by, these forward-looking
statements. We can give no assurance that any of the events anticipated will transpire or occur, or if any of them do, what
benefits we will derive from them.
Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on
other factors that could affect the operations or financial results of Mullen Group, are included in reports on file with
applicable securities regulatory authorities, including but not limited to Mullen Group's annual information form dated
February 8, 2017, under "Principal Risks and Uncertainties" and in Mullen Group's other filings available at
www.sedar.com.
Mullen Group is a company that owns a network of independently operated businesses. The Corporation is
recognized as one of the leading suppliers of trucking and logistics services in Canada and provides a wide range of specialized
transportation and related services to the oil and gas industry in western Canada - two sectors of the economy in which Mullen
Group has strong business relationships and industry leadership. The corporate office provides the capital and financial
expertise, legal support, technology and systems support, shared services and strategic planning to its independent
businesses.
Mullen Group is a publicly traded corporation listed on the Toronto Stock Exchange under the symbol
"MTL". Additional information is available on our website at www.mullen-group.com or on SEDAR at
www.sedar.com.
For further information, please contact:
Mr. Murray K. Mullen - Chairman of the Board, Chief Executive Officer and President
Mr. P. Stephen Clark - Chief Financial Officer
Mr. Richard J. Maloney - Senior Vice President
121A - 31 Southridge Drive
Okotoks, Alberta, Canada T1S 2N3
Telephone: 403-995-5200
Fax: 403-995-5296
