NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES ("U.S.")
The news release contains “forward-looking information and statements” within the meaning of applicable
securities laws. For full disclosure of the forward-looking information and statements and the risks to which they are subject, see
the “Cautionary Statement Regarding Forward-Looking Information and Statements” later in this news release.
CALGARY, Alberta, March 01, 2018 (GLOBE NEWSWIRE) -- Strad Energy Services Ltd., (“Strad” or
the “Company”), a North American-focused, energy services company, today announced its financial results for the
year-ended December 31, 2017. All amounts are stated in Canadian dollars unless otherwise noted.
SELECTED FINANCIAL AND OPERATIONAL HIGHLIGHTS:
- Fourth quarter revenue increased 1% to $27.5 million compared to $27.3 million for the same period in 2016. Revenue for the
year-ended December 31, 2017, increased 62% to $117.6 million compared to $72.4 million for the same period in 2016;
- Fourth quarter adjusted EBITDA(1) of $5.2 million increased 8% compared to $4.8 million for the same period in
2016. Adjusted EBITDA for the year-ended December 31, 2017, increased 455% to $24.7 million compared to $4.4 million for the same
period in 2016;
- Fourth quarter loss increased to $(3.4) million compared to $(3.1) million for the same period in 2016. The loss for the year
ended December 31, 2017, decreased to $(7.3) million compared to $(16.8) million for the same period in 2016;
- Fourth quarter loss per share remained at $(0.06) as compared to the same period in 2016. For the year-ended December 31,
2017, loss per share was $(0.12) compared to $(0.41) for the same period in 2016;
- Funded debt(2) decreased to $9.8 million for the year-ended December 31, 2017, as compared to $29.0 million in the
same period of 2016. Funded debt(2) to covenant EBITDA(3) ratio was 0.4 to 1.0 at December 31, 2017; and
- Capital additions totaled $5.2 million during the fourth quarter of 2017 and $22.1 million for the year-ended December 31,
2017.
Notes:
(1) Earnings before interest, taxes, depreciation and amortization and other adjustments (“adjusted EBITDA”) is
not a recognized measure under IFRS, and, accordingly, Strad's use of such a term may not be comparable to similarly defined
measures presented by other entities; see “Non-IFRS Measures Reconciliations”.
(2) Funded debt includes bank indebtedness plus long-term debt plus current and long-term obligations under finance
lease less cash.
(3) Covenant EBITDA, as defined in the Company's credit facility agreement, is based on trailing twelve months
adjusted EBITDA plus share based payments, plus additional one-time charges.
"Our financial results for the fourth quarter came in as expected,” said Andy Pernal, President and Chief
Executive Officer. “For another consecutive quarter we reported improved financial results from our U.S. Operations as the U.S.
business continues to contribute to our bottom line in a meaningful way. Our relatively fixed cost structure, improved customer
pricing, particularly in the Canadian matting business, and increased surface equipment utilization resulted in a significant
increase in adjusted EBITDA year-over-year.”
“In 2017, our significantly improved financial results and free cash flow generation allowed us to reduce funded
debt to $9.8 million at December 31, 2017, from $29.0 million in 2016,” said Michael Donovan, Chief Financial Officer of Strad.
“Our strong balance sheet and free cash flow, position us well to evaluate and pursue acquisitions or other growth opportunities as
they arise in 2018.”
| |
| YEAR-END FINANCIAL HIGHLIGHTS |
| |
| ($000's, except per share amounts) |
Three months ended December 31, |
|
Year-ended December 31, |
| |
2017 |
|
2016 |
|
% Chg. |
|
2017 |
|
2016 |
|
% Chg. |
|
2015 |
| |
|
|
|
|
|
|
|
|
|
|
| Revenue |
27,522 |
|
27,263 |
|
1% |
|
117,599 |
|
72,378 |
|
62% |
|
111,548 |
| Adjusted EBITDA (1) |
5,169 |
|
4,782 |
|
8% |
|
24,674 |
|
4,444 |
|
455% |
|
17,432 |
| Adjusted EBITDA as a % of revenue |
19% |
|
18% |
|
|
|
21% |
|
6% |
|
|
16% |
| Per share ($), basic |
0.09 |
|
0.10 |
|
(10)% |
|
0.42 |
|
0.11 |
|
282% |
|
0.47 |
| Per share ($), diluted |
0.09 |
|
0.10 |
|
(10)% |
|
0.42 |
|
0.11 |
|
282% |
|
0.47 |
| Net loss |
(3,364) |
|
(3,105) |
|
8% |
|
(7,276) |
|
(16,803) |
|
nm |
|
(30,361) |
| Per share ($), basic |
(0.06) |
|
(0.06) |
|
|
|
(0.12) |
|
(0.41) |
|
|
|
(0.82) |
| Per share ($), diluted |
(0.06) |
|
(0.06) |
|
|
|
(0.12) |
|
(0.41) |
|
|
|
(0.82) |
| Funds from operations (2) |
6,648 |
|
5,476 |
|
21% |
|
29,648 |
|
8,310 |
|
257% |
|
23,014 |
| Per share ($), basic |
0.11 |
|
0.11 |
|
nm |
|
0.51 |
|
0.20 |
|
155% |
|
0.62 |
| Per share ($), diluted |
0.11 |
|
0.11 |
|
nm |
|
0.50 |
|
0.20 |
|
150% |
|
0.62 |
| |
|
|
|
|
|
|
|
|
| Capital expenditures (3) |
5,157 |
|
884 |
|
483% |
|
22,124 |
|
4,755 |
|
365% |
|
9,606 |
| |
|
|
|
|
|
|
|
|
| Total assets |
174,821 |
|
185,321 |
|
(6)% |
|
174,821 |
|
185,321 |
|
(6)% |
|
169,206 |
| Long-term debt |
10,776 |
|
26,501 |
|
(59)% |
|
10,776 |
|
26,501 |
|
(59)% |
|
15,500 |
| Total long-term liabilities |
22,616 |
|
37,023 |
|
(39)% |
|
22,616 |
|
37,023 |
|
(39)% |
|
22,264 |
| Common shares - end of period ('000's) |
59,906 |
|
48,379 |
|
|
|
59,906 |
|
48,379 |
|
|
37,280 |
| Weighted average commons shares ('000's) |
|
|
|
|
|
|
|
|
| Basic |
59,674 |
|
47,984 |
|
|
|
58,665 |
|
40,626 |
|
|
36,916 |
| Diluted |
60,014 |
|
47,984 |
|
|
|
59,048 |
|
40,626 |
|
|
36,916 |
Notes:
- Earnings before interest, taxes, depreciation and amortization and other adjustments (“adjusted EBITDA”) is not a
recognized measure under IFRS, and, accordingly, Strad's use of such a term may not be comparable to similarly defined measures
presented by other entities; see “Non-IFRS Measures Reconciliations”.
- Funds from operations is cash flow from operating activities excluding changes in non-cash working capital. Funds from
operations is not a recognized measure under IFRS; see “Non-IFRS Measures Reconciliations”.
- Includes assets acquired under finance lease and purchases of intangible assets.
| |
| |
| FINANCIAL POSITION AND RATIOS |
| |
| |
As at December 31, |
| ($000's except ratios) |
2017 |
|
2016 |
| |
|
|
|
| Working capital(1) |
19,617 |
|
15,636 |
| Funded debt(2) |
9,768 |
|
29,025 |
| Total assets |
174,821 |
|
185,321 |
| |
|
|
|
| Funded debt to EBITDA(3) |
0.4 : 1.0 |
|
3.2 : 1.0 |
Notes:
- Working capital is calculated as current assets less current liabilities.
- Funded debt includes bank indebtedness plus long-term debt plus current and long-term obligations under finance
lease.
- EBITDA is based on trailing twelve months adjusted EBITDA plus share based payments, plus severance and transaction
costs.
FOURTH QUARTER RESULTS
Strad reported an increase in revenue and adjusted EBITDA of 1% and 8%, respectively during the three months
ended December 31, 2017, compared to the same period in 2016. Strad’s fourth quarter results were driven by increased drilling
activity in the WCSB and Strad’s U.S. operating regions, in addition to increased customer pricing. Higher drilling activity during
the quarter resulted in improved utilization of the Canadian surface equipment fleet and both the U.S. matting and surface
equipment fleets resulting in increased revenue year-over-year. Adjusted EBITDA margin percentage increased to 19% compared to 18%
in the prior year, due to increased revenue and a relatively fixed cost structure.
Revenue generated from Strad’s energy infrastructure customer vertical decreased to $7.0 million during the
fourth quarter of 2017 compared to $11.3 million in 2016. The decrease in energy infrastructure revenue is a result of lower
Product Sales of $1.2 million for the three months ended December 31, 2017, as compared to $3.6 million in the same period of 2016,
due to one time sales that occurred during the fourth quarter of 2016 that did not re-occur in 2017. Additionally, energy
infrastructure projects concluded earlier in the fourth quarter of 2017 as compared to the same period of 2016. The energy
infrastructure customer vertical continued to be primarily driven by matting in Canada. For the year-ended December 31, 2017,
energy infrastructure revenue totaled $37.2 million as compared to $33.9 million, during the same period in 2016.
Strad’s Canadian Operations reported an increase in revenue and adjusted EBITDA of 2% and 20%, respectively,
during the three months ended December 31, 2017, compared to the same period in 2016. Increased revenue was a result of higher
drilling activity, which drove increased surface equipment utilization and continued improved customer pricing during the fourth
quarter 2017. Additionally, surface equipment utilization increased by 17% as compared to the fourth quarter of 2016, which
contributed to the increase in revenue for the fourth quarter of 2017.
For the three months ended December 31, 2017, Strad's U.S. Operations reported an increase in revenue and
adjusted EBITDA of 69% and 1,200% as compared to the same period in 2016. Rig counts in the Bakken, Rockies and Marcellus
regions increased year-over-year by 48%, 75%, and 43%, respectively, resulting in increased drilling activity and utilization for
the fourth quarter of 2017 as compared to the same period in 2016. Revenue for the fourth quarter of 2017 was also impacted by
improved customer pricing as compared to the same period in 2016. Fourth quarter adjusted EBITDA increased to $1.8 million, as
compared to $0.1 million in the same period of 2016, as a result of a lower cost structure in the U.S. due to our focus on reducing
overhead costs and discretionary spending.
Strad's Product Sales reported a decline in revenue of 61%, as a result of lower in-house manufactured products,
third party sales, and rental fleet sales which decreased to $0.1 million, $nil, and $2.0 million respectively, during the three
months ending December 31, 2017, as compared to $0.3 million, $1.2 million and $3.9 million during the same period in 2016.
During the fourth quarter of 2017, capital expenditures were $4.5 million in Canada and $0.5 million in the U.S.
These were related primarily to wood matting additions in Canada and the U.S. to support Strad's energy infrastructure customer
vertical.
| |
| RESULTS OF OPERATIONS |
| |
| Canadian Operations |
|
|
|
|
|
|
|
| |
Three months ended December
31,
|
|
Year-ended December 31, |
| ($000's) |
2017 |
|
2016 |
|
% chg. |
|
2017 |
|
2016 |
|
% chg. |
| |
|
|
|
|
|
|
|
| Revenue |
17,453 |
|
17,136 |
|
2% |
|
80,973 |
|
44,275 |
|
83% |
| Operating expenses |
11,823 |
|
12,527 |
|
(6)% |
|
52,030 |
|
32,084 |
|
62% |
| Selling, general and administration |
1,461 |
|
1,178 |
|
24% |
|
6,261 |
|
4,953 |
|
26% |
| Share based payments |
85 |
|
35 |
|
|
|
290 |
|
103 |
|
|
| Net income (loss) |
(1,054) |
|
(419) |
|
nm |
|
4,795 |
|
1,532 |
|
213% |
| Adjusted EBITDA(1) |
4,083 |
|
3,396 |
|
20% |
|
22,390 |
|
7,135 |
|
214% |
| Adjusted EBITDA as a % of revenue |
23% |
|
20% |
|
|
|
28% |
|
16% |
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Capital expenditures(2) |
4,514 |
|
716 |
|
530% |
|
18,686 |
|
3,188 |
|
486% |
| Gross capital assets(3) |
163,926 |
|
151,172 |
|
8% |
|
163,926 |
|
151,172 |
|
8% |
| Total assets |
110,786 |
|
111,260 |
|
nm |
|
110,786 |
|
111,260 |
|
nm |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Equipment Fleet: |
|
|
|
|
|
|
|
| Surface equipment(4) |
4,200 |
|
4,100 |
|
2% |
|
4,200 |
|
4,100 |
|
2% |
| Utilization %(5) |
27% |
|
23% |
|
|
|
31% |
|
19% |
|
|
| Matting(4) |
67,000 |
|
57,000 |
|
18% |
|
67,000 |
|
57,000 |
|
18% |
| Utilization %(5) |
30% |
|
65% |
|
|
|
47% |
|
50% |
|
|
Notes:
- Earnings before interest, taxes, depreciation and amortization and other adjustments (“adjusted EBITDA”) is not a
recognized measure under IFRS, and, accordingly, Strad's use of such a term may not be comparable to similarly defined measures
presented by other entities; see “Non-IFRS Measures Reconciliations”.
- Includes assets acquired under finance lease and purchases of intangible assets.
- Gross capital assets are total property, plant and equipment before impairment and depreciation expense.
- Surface equipment and matting fleet balances are as at December 31, 2017 and 2016.
- Equipment utilization includes surface and matting equipment on rent only and is calculated using gross asset
value.
Revenue for the three months ended December 31, 2017, of $17.5 million increased 2% compared to $17.1 million
for the same period in 2016. Increased revenue during the quarter was primarily a result of increased pricing in both the matting
and surface equipment product lines as well as higher rig counts, which increased by 25%, as compared to the fourth quarter of
2016. Further impacting the fourth quarter results was an increase of 17% in utilization in the surface equipment product line as
compared to the prior year.
During the fourth quarter, revenue from energy infrastructure projects was $5.5 million or 31% of total revenue
for Canadian Operations as compared to $7.1 million or 42% of total Canadian Operations revenue in the fourth quarter of 2016. The
overall decrease in revenue during the fourth quarter of 2017 is primarily due to the earlier conclusion of summer and fall energy
infrastructure projects as compared to the same period in 2016.
During the fourth quarter, Strad’s matting fleet increased to approximately 67,000 mats at December 31, 2017,
compared to approximately 57,000 mats as at December 31, 2016, due to capital expenditures throughout the year. Fourth quarter
matting utilization decreased to 30% compared to 65% in the same period of 2016 due to the earlier conclusion of summer and fall
matting projects, in addition to fewer mats being deployed with energy infrastructure customers, as compared to the same period in
2016.
Adjusted EBITDA for the three months ended December 31, 2017, of $4.1 million, increased 20% compared to $3.4
million for the same period in 2016. Adjusted EBITDA as a percentage of revenue, for the three months ended December 31, 2017,
increased to 23% compared to 20% for the same period in 2016. The increase in adjusted EBITDA is driven primarily by the increase
in revenue during the fourth quarter of 2017 and a relatively fixed cost structure.
Revenue for the year-ended December 31, 2017, of $81.0 million increased 83% compared to $44.3 million for the
same period in 2016. Increased drilling activity, improved customer pricing, and energy infrastructure projects were the primary
drivers of increased revenue year-over-year.
During the year-ended December 31, 2017, revenue from energy infrastructure projects was approximately $29.6
million or 37% of total revenue for Canadian Operations as compared to $22.5 million or 51% of total Canadian Operations revenue in
the same period of 2016. Increased pricing and an earlier start to the matting season for energy infrastructure projects are the
primary drivers of increased revenue year-over-year.
Adjusted EBITDA for the year-ended December 31, 2017, of $22.4 million, increased 214% compared to $7.1 million
for the same period in 2016. Adjusted EBITDA as a percentage of revenue, for the year-ended December 31, 2017, increased to 28%
compared to 16% for the same period in 2016.
Operating expenses for the three months ended December 31, 2017, of $11.8 million decreased 6% compared to $12.5
million for the same period in 2016. The decrease in operating expenses for the fourth quarter of 2017, as compared to the fourth
quarter of 2016, is due to the decrease in matting related service work.
Operating expenses for the year-ended December 31, 2017, of $52.0 million increased 62% compared to $32.1
million for the same period in 2016. The increase in operating expenses during the year-ended December 31, 2017, is a result of
increased activity levels and fleet size, as well as an increase in third party expenses, as compared to the same period in 2016.
The increase in overall expenses is consistent with the increase in drilling activity and energy infrastructure projects that have
occurred during 2017.
SG&A for the three months and year-ended December 31, 2017, of $1.5 million and $6.3 million, respectively,
increased 24% and 26% compared to $1.2 million and $5.0 million for the same period in 2016. SG&A costs increased over the
three months and year-ended December 31, 2017, as a result of increased head count for 2017, resulting in increased costs related
to salaries and benefits.
| |
|
|
|
|
|
|
|
| U.S. Operations |
|
|
|
|
|
|
|
| |
Three months ended December 31, |
|
Year-ended December 31, |
| ($000's) |
2017 |
|
2016 |
|
% chg. |
|
2017 |
|
2016 |
|
% chg. |
| |
|
|
|
|
|
|
|
| Revenue |
7,937 |
|
4,704 |
|
69% |
|
27,031 |
|
14,955 |
|
81% |
| Operating expenses |
5,321 |
|
3,574 |
|
49% |
|
18,964 |
|
12,422 |
|
53% |
| Selling, general and administration |
775 |
|
991 |
|
(22)% |
|
3,525 |
|
4,346 |
|
(19)% |
| Share based payments |
23 |
|
(1) |
|
|
|
69 |
|
33 |
|
|
| Net loss |
(1,592) |
|
(3,296) |
|
nm |
|
(9,831) |
|
(16,403) |
|
nm |
| Adjusted EBITDA(1) |
1,820 |
|
140 |
|
1,200% |
|
4,475 |
|
(1,846) |
|
nm |
| Adjusted EBITDA as a % of revenue |
23% |
|
3% |
|
|
|
17% |
|
(12)% |
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Capital expenditures(2) |
514 |
|
168 |
|
206% |
|
3,208 |
|
1,382 |
|
132% |
| Gross capital assets(3) |
130,714 |
|
142,295 |
|
(8)% |
|
130,714 |
|
142,295 |
|
(8)% |
| Total assets |
63,825 |
|
70,848 |
|
(10)% |
|
63,825 |
|
70,848 |
|
(10)% |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Equipment Fleet: |
|
|
|
|
|
|
|
| Surface equipment(4) |
2,000 |
|
2,000 |
|
nm |
|
2,000 |
|
2,000 |
|
nm |
| Utilization %(5) |
30% |
|
22% |
|
|
|
27% |
|
18% |
|
|
| Matting(4) |
18,300 |
|
14,400 |
|
27% |
|
18,300 |
|
14,400 |
|
27% |
| Utilization %(5) |
36% |
|
15% |
|
|
|
31% |
|
15% |
|
|
Notes:
- Earnings before interest, taxes, depreciation and amortization and other adjustments (“adjusted EBITDA”) is not a
recognized measure under IFRS, and, accordingly, Strad's use of such a term may not be comparable to similarly defined measures
presented by other entities; see “Non-IFRS Measures Reconciliations”.
- Includes assets acquired under finance lease and purchases of intangible assets.
- Gross capital assets are total property, plant and equipment before impairment and depreciation expense.
- Equipment utilization includes surface and matting equipment on rent only and is calculated using gross asset
value.
- Equipment utilization includes surface and matting equipment on rent only and is calculated using gross asset
value.
Revenue for the three months ended December 31, 2017, increased 69% to $7.9 million from $4.7 million for the
same period in 2016. The increase in revenue is due to a combination of higher surface equipment and matting utilization rates and
higher customer pricing resulting from increased drilling activity when compared to the same period in 2016. Average rig counts in
the Bakken, Rockies and Marcellus regions increased by 48%, 75%, and 43%, respectively, during the fourth quarter of 2017 compared
to the same period in 2016.
During the fourth quarter, revenue from energy infrastructure projects was $0.3 million or 4% of total revenue
for U.S. Operations, compared to $0.6 million or 13% in the same period of 2016. The decrease in revenue from energy infrastructure
projects is due to fewer projects in 2017 compared to the same period in 2016.
The U.S. matting fleet increased to 18,300 mats as at December 31, 2017, compared to 14,400 mats as at December
31, 2016. The addition of mats during 2017 was to support the increase in U.S. matting customers. The U.S. surface equipment fleet
remained the same at 2,000 pieces at December 31, 2017, compared to December 31, 2016.
Adjusted EBITDA for the three months ended December 31, 2017, increased to $1.8 million compared to $0.1 million
for the same period in 2016. Adjusted EBITDA as a percentage of revenue, for the three months ended December 31, 2017, was 23%
compared to 3% for the same period in 2016. The significant increase in both adjusted EBITDA and adjusted EBITDA as a percentage of
revenue is primarily due to increased drilling activity levels which resulted in higher utilization and improved customer pricing
in the fourth quarter of 2017 compared to the same period of 2016.
Revenue for the year-ended December 31, 2017, increased 81% to $27.0 million from $15.0 million for the same
period in 2016. The increase in revenue for the year-ended December 31, 2017, can be attributed to higher surface equipment and
matting utilization rates due to increased drilling activity levels across all of our U.S. operating regions and higher customer
pricing as compared to the same period in 2016. In addition, energy infrastructure revenue increased to $2.3 million or 9% during
the year-ended December 31, 2017, compared to $1.8 million or 12% in the same period of 2016.
Adjusted EBITDA for the year-ended December 31, 2017, increased to $4.5 million compared to $(1.8) million for
the same period in 2016. Adjusted EBITDA as a percentage of revenue, for the year-ended December 31, 2017, was 17% compared to
(12)% for the same period in 2016. The increase in both adjusted EBITDA and adjusted EBITDA as a percentage of revenue is primarily
due to the increase in revenue during 2017 and a reduced fixed cost structure.
Operating expenses for the three months ended December 31, 2017, of $5.3 million, increased 49% as
compared to $3.6 million for the same period in 2016. The increase in operating expenses during the three months ended December 31,
2017, is a result of increased activity levels due to the increase in average rig counts.
Operating expenses for the year-ended December 31, 2017, of $19.0 million, increased 53%, as compared to $12.4
million for the same period in 2016. The increase in operating expenses during the year-ended December 31, 2017 is a result of
increased activity levels.
SG&A costs for the three months and year-ended December 31, 2017, of $0.8 million and $3.5 million decreased
22% and 19% respectively compared to $1.0 million and $4.3 million for the same period in 2016. The change in SG&A expenses is
due to cost reductions implemented by management including staff reductions and reductions in discretionary spending.
| |
| Product Sales |
| |
| |
Three months ended December 31, |
|
Year-ended December 31, |
| ($000's) |
2017
|
|
2016
|
|
%
chg. |
|
2017
|
|
2016
|
|
%
chg. |
| |
|
|
|
|
|
|
|
| Revenue |
2,132 |
|
5,423 |
|
(61)% |
|
9,595 |
|
13,148 |
|
(27)% |
| Operating expenses |
1,917 |
|
2,852 |
|
(33)% |
|
7,664 |
|
9,553 |
|
(20)% |
| Selling, general and administration |
110 |
|
15 |
|
633% |
|
261 |
|
59 |
|
342% |
| Net loss |
(618) |
|
(342) |
|
nm |
|
(1,309) |
|
(1,048) |
|
25% |
| Adjusted EBITDA(1) |
102 |
|
2,556 |
|
(96)% |
|
1,671 |
|
3,536 |
|
(53)% |
| Adjusted EBITDA as a % of revenue |
5% |
|
47% |
|
|
|
17% |
|
27% |
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Capital expenditures(2) |
— |
|
— |
|
|
|
25 |
|
— |
|
|
| Total assets |
976 |
|
2,332 |
|
nm |
|
976 |
|
2,332 |
|
nm |
Notes:
- Earnings before interest, taxes, depreciation and amortization and other adjustments (“adjusted EBITDA”) is not a
recognized measure under IFRS, and, accordingly, Strad's use of such a term may not be comparable to similarly defined measures
presented by other entities; see “Non-IFRS Measures Reconciliations”.
- Includes assets acquired under finance lease and purchases of intangible assets.
Product Sales are comprised of in-house manufactured products sold to external customers, third party equipment
sales to existing customers, and sales of equipment from Strad’s existing fleet to customers.
Revenue for the three months ended December 31, 2017, decreased 61% to $2.1 million from $5.4 million for the
same period in 2016, resulting from lower rental fleet sales, in-house manufactured products, and third party sales. During the
three months ended December 31, 2017, Product Sales consisted of $2.0 million of rental fleet sales, $0.1 million of in-house
manufactured products, and $nil of third party equipment sales compared to $3.9 million, $0.3 million and $1.2 million,
respectively, during the same period in 2016. In the fourth quarter of 2017, management made the decision to no longer manufacture
in-house products.
During the fourth quarter, revenue from energy infrastructure projects was $1.2 million or 57% of total revenue
compared to $3.6 million or 67% of total revenue in the same period of 2016. The decrease in revenue year-over-year is due to
one-time sales during the fourth quarter of 2016 that did not re-occur in 2017. Product Sales vary from quarter to quarter and are
dependent on project timing and customer demands.
Total assets for Product Sales decreased to $1.0 million at December 31, 2017, as compared to $2.3 million
during the same period in 2016 as the Company wound down its rig mat manufacturing operations during the fourth quarter of
2017.
Adjusted EBITDA for the three months ended December 31, 2017, decreased to $0.1 million from $2.6 million for
the same period in 2016. Adjusted EBITDA as a percentage of revenue, for the three months ended December 31, 2017, was 5% compared
to 47% for the same period in 2016. The decrease in adjusted EBITDA is due to the decreased sales for the three months ended
December 31, 2017.
Revenue for the year-ended December 31, 2017, decreased 27% to $9.6 million from $13.1 million for the same
period in 2016, resulting primarily from lower in-house manufactured equipment sales year over year. During the year-ended December
31, 2017, Product Sales consisted of $7.5 million of rental fleet sales, $1.5 million of in-house manufactured products, and $0.6
million of third party equipment sales compared to $6.2 million, $1.8 million and $5.2 million, respectively, during the same
period in 2016.
During the year-ended December 31, 2017, revenue from energy infrastructure projects was $5.3 million or 55% of
total revenue compared to $9.7 million or 74% of total revenue in the same period of 2016. Revenue decreased year-over-year due to
additional matting sales to energy infrastructure customers in the fourth quarter of 2016.
Adjusted EBITDA for the year-ended December 31, 2017, decreased to $1.7 million from $3.5 million for the same
period in 2016. Adjusted EBITDA as a percentage of revenue, for the year-ended December 31, 2017, was 17% compared to 27% for the
same period in 2016.
Operating expenses for the three months and year-ended December 31, 2017, of $1.9 million and $7.7 million
decreased 33% and 20% compared to $2.9 million and $9.6 million for the same period in 2016. Operating expenses vary with
individual transactions and business activity levels.
OUTLOOK
Fiscal 2017 demonstrated continuing improvement in the North American oil and gas sector as increased oil prices
and overall customer sentiment resulted in a marked improvement in our year-over-year revenue and adjusted EBITDA results. Our
relatively fixed cost structure, improved customer pricing, particularly in the Canadian matting business, and increased surface
equipment utilization resulted in a significant increase in adjusted EBITDA year-over-year.
For the fifth consecutive quarter, we reported improved financial results from our U.S. Operations, driven
primarily by improved average rig counts in our operating regions and modest pricing increases. The investment climate in the
U.S. continues to improve and oil and gas prices do not suffer from the same price differentials as the Canadian market. As U.S.
crude prices have recovered to levels not seen since December 2014, we expect 2017 closing activity levels to continue into the
first half of 2018 and believe the U.S. business will continue to contribute to our bottom line in a meaningful
way.
Contributing to our improved Canadian results for the year were increased average rig counts in the WCSB, higher
surface equipment utilization, and improved customer pricing. During 2017, surface equipment pricing continued to improve and
matting prices recovered to 2014 levels. In Canada, we have limited visibility of expected drilling activity levels in 2018 due to
weak AECO natural gas prices and Western Canadian Select ("WCS") prices. Capital budgets from major gas players
have been reduced while they await normalization of supply and demand. The WCS differential to West Texas Intermediate
("WTI") differential remains substantial as increasing production is met with constrained take-away capacity and
restricted market access. Our approach to operating in what is expected to be a challenging environment will focus on maximizing
the utilization of our matting and surface equipment fleets with energy infrastructure customers, while continuing to focus on
managing costs.
As expected, matting utilization declined during the fourth quarter as large-scale energy infrastructure
construction projects wound down and the ground began to freeze. In the fourth quarter, we continued to invest in our matting fleet
as part of our focus on growth in the energy infrastructure customer vertical and for what we expect to be continued strong demand
in 2018.
Revenue from the energy infrastructure customer vertical contributed $37.2 million or 32% to total revenue, an
increase of $3.3 million from 2016. Our diversification strategy to reduce reliance on drilling activity continues to prove
successful, maintaining matting fleet utilization rates during cyclical low drilling periods. We expect roughly one third of our
revenue to continue to be generated through this vertical in 2018.
In 2017, we deployed $22.1 million of the approved $26.0 million capital budget of which $18.2 million was
directed towards the Canadian wood matting fleet. For 2018, our $8.0 million capital program is expected to comprise of maintenance
spending including $5.0 million allocated to replacement matting, $1.5 million in information technology upgrades, and $1.5 million
of other maintenance capital. As with 2017, we expect to continue to evaluate the size of the capital program as opportunities
arise. The capital program is expected to be financed entirely through operating cash flow.
Balance sheet preservation and cost containment will continue to be top priorities in 2018. In 2017, we achieved
a 62% increase in revenue with only a marginal increase in Selling, general and administrative costs ("SG&A")
expense net of 2016 acquisition costs. Leveraging technology to maintain our relatively fixed cost structure will remain a key
focus in 2018. Our strong balance sheet and free cash flow allow us the flexibility to evaluate and pursue acquisitions or organic
growth opportunities as they arise.
| |
| LIQUIDITY AND CAPITAL RESOURCES |
| |
| ($000's) |
December 31,
2017
|
|
December 31,
2016 |
| |
|
|
| Current assets |
31,899 |
|
31,852 |
| Current liabilities |
12,282 |
|
16,216 |
| Working capital(1) |
19,617 |
|
15,636 |
| |
|
|
| Banking facilities |
|
|
| Operating facility |
— |
|
1,478 |
| Syndicated revolving facility |
10,776 |
|
26,501 |
| Total facility borrowings |
10,776 |
|
27,979 |
| |
|
|
| Total credit facilities(2) |
48,500 |
|
48,500 |
| Unused credit capacity |
37,724 |
|
20,521 |
Notes:
- Working capital is calculated as current assets less current liabilities.
- Facilities are subject to certain limitations on accounts receivable, inventory, and net book value of fixed assets and
are secured by a general security agreement over all of the Company's assets. As at December 31, 2017, Strad had access to $48.5
million of credit facilities.
As at December 31, 2017, working capital was $19.6 million compared to $15.6 million at December 31, 2016. The
change in current assets is a result of a 6% increase in accounts receivable to $26.0 million for the fourth quarter of 2017
compared to $24.5 million for the fourth quarter of 2016. The increase in accounts receivable is due to an increase in Matting and
Surface Equipment related revenue. During the fourth quarter of 2017, the Company reclassified the long-term other asset to
short-term, resulting in an increase in current assets of $1.3 million. In addition, the Company had cash and cash equivalents at
December 31, 2017, as opposed to a net debt position at December 31, 2016, which resulted in a reclassification to cash and a
further increase in current assets. Inventory decreased by 53% to $1.8 million at December 31, 2017, from $3.9 million at December
31, 2016. The decrease in inventory is partially due to management's decision to no longer manufacture in-house products, resulting
in a provision of $225 thousand for raw materials related to in-house manufacturing. The remaining reduction in inventory is a
result of the sale of inventory due to the normal course of business. Prepaid expenses decreased 36% to $0.7 million at December
31, 2017, from $1.1 million at December 31, 2016. The decrease in prepaids relates to the normal course of business.
The change in current liabilities is a result of a 14% decrease in accounts payable and accrued liabilities to
$11.9 million at December 31, 2017, compared to $13.9 million at year end. The decrease in accounts payable as compared to the 2016
year end is primarily due to the timing of payments made for the fourth quarter of 2017.
Funds from operations for the three months ended December 31, 2017, increased to $6.6 million compared to $5.5
million for the three months ended December 31, 2016. Capital expenditures totaled $5.2 million for the three months ended December
31, 2017. Strad's total facility borrowing decreased by $17.2 million for the fourth quarter ended December 31, 2017, compared to
the fourth quarter of 2016. Management monitors funds from operations and the timing of capital additions to ensure adequate
capital resources are available to fund Strad’s capital program.
As at December 31, 2017, the Company’s syndicated banking facility consists of an operating facility with a
maximum principal amount of $7.0 million CAD and $5.0 million USD, and a $36.5 million CAD syndicated revolving facility, both of
which are subject to certain limitations on accounts receivable, inventory, and net book value of fixed assets and are secured by a
general security agreement over all of the Company’s assets. As at December 31, 2017, the Company had access to the maximum credit
facilities. The syndicated banking facility was extended and amended during the fourth quarter of 2017 and will mature on September
29, 2020. These amendments include a return to pre-covenant relief period maximum ratio of Funded Debt to covenant EBITDA of 3.0:1
and a minimum ratio of Interest Expense to covenant EBITDA of 3.0:1. The syndicated banking facility bears interest at bank prime
plus a variable rate, which is dependent on the Company’s funded debt to covenant EBITDA ratio.
Based on the Company's funded debt to covenant EBITDA ratio, the interest rate on the syndicated credit facility
is bank prime plus 0.5% on prime rate advances and at the prevailing rate plus a stamping fee of 1.50% on bankers' acceptances. For
the three months ended December 31, 2017, the overall effective rates on the operating facility and revolving facility were 5.62%
and 4.12%, respectively. As of December 31, 2017, $nil was drawn on the operating facility and $10.8 million was drawn on the
revolving facility. Required payments on the revolving facility are interest only.
As at December 31, 2017, the Company was in compliance with all of the financial covenants under its credit
facilities.
The relevant definitions related to the financial debt covenant ratio terms as set forth in the Company's
syndicated banking facility are as follows:
- Funded debt includes bank indebtedness plus long-term debt plus current and long-term obligations under finance lease, less
cash.
- Covenant EBITDA is based on trailing twelve months adjusted EBITDA plus share based payments, plus additional one-time
charges.
- Interest expense ratio is calculated as the ratio of trailing twelve months adjusted EBITDA plus share based payments to
trailing twelve months interest expense on loans and borrowings.
The above noted definitions are not recognized under IFRS and are provided strictly for the purposes of the
financial covenant calculation.
| Financial Debt Covenants |
As at December 31,
2017
|
|
As at December 31,
2016 |
| Funded debt to EBITDA ratio (not to exceed 3.0:1) |
|
|
| Funded debt |
9,768 |
|
29,025 |
| Covenant EBITDA |
25,339 |
|
9,119 |
| Ratio |
0.4 |
|
3.2 |
| |
|
|
| EBITDA to interest coverage ratio (no less than 3.0:1) |
|
|
| Covenant EBITDA |
25,339 |
|
9,119 |
| Interest expense |
1,225 |
|
1,557 |
| Ratio |
20.7 |
|
5.9 |
| |
NON-IFRS MEASURES AND RECONCILIATIONS
Certain supplementary measures in this Press Release do not have any standardized meaning as prescribed under
IFRS and, therefore, are considered non-IFRS measures. These measures are described and presented in order to provide shareholders
and potential investors with additional information regarding the Company’s financial results, liquidity and its ability to
generate funds to finance its operations. These measures are identified and presented, where appropriate, together with
reconciliations to the equivalent IFRS measure. However, they should not be construed as alternative measures to IFRS measures, and
they may not be consistent with calculations of other companies. These measures are further explained below.
Earnings before interest, taxes, depreciation and amortization and other adjustments (“adjusted EBITDA”) is not
a recognized measure under IFRS. Management believes that in addition to net income (loss), adjusted EBITDA is a useful
supplemental measure as it provides an indication of the results generated by the Company’s principal business activities prior to
consideration of how those activities are financed or how the results are taxed. Adjusted EBITDA is calculated as net income (loss)
plus interest, finance fees, taxes, depreciation and amortization, loss on disposal of property, plant and equipment, loss on
foreign exchange, less gain on foreign exchange and gain on disposal of property, plant and equipment. Segmented adjusted EBITDA is
based upon the same calculation for defined business segments, which are comprised of Canadian Operations, U.S. Operations and
Product Sales. The Company’s method of calculating adjusted EBITDA may differ from that of other organizations and, accordingly,
its adjusted EBITDA may not be comparable to that of other companies.
Funds from operations are cash flow from operating activities excluding changes in non-cash working capital.
Funds from operations is a non-IFRS measure commonly used in the energy industry to assist in measuring a company's ability to
finance its capital programs, debt repayments and other financial obligations. Funds from operations is not intended to represent
net cash generated from operating activities or other measures of financial performance in accordance with IFRS. It is a
supplemental measure to gauge performance of the Company before non-cash items. Working capital is calculated as current assets
minus current liabilities. Working capital, cash forecasting, and banking facilities are used by Management to ensure funds are
available to finance growth opportunities.
Funded debt is calculated as bank indebtedness plus long-term debt plus current and long-term portion of finance
lease obligations less cash from syndicate institutions.
| |
| Reconciliation of Funds from Operations |
| |
| ($000's) |
|
|
|
|
| |
Three months ended December
31,
|
|
Year-ended December 31, |
| |
2017
|
|
2016
|
|
2017
|
|
2016 |
| |
|
|
|
|
| Net cash generated from operating activities |
19,082 |
|
1,947 |
|
29,877 |
|
8,756 |
| Less: |
|
|
|
|
| Changes in non-cash working capital |
12,434 |
|
(3,529) |
|
229
|
|
446 |
| Funds from Operations |
6,648 |
|
5,476 |
|
29,648 |
|
8,310 |
| |
| Reconciliation of adjusted EBITDA |
| |
| ($'000's) |
|
|
|
|
| |
Three months ended December
31,
|
|
Year-ended December 31, |
| |
2017
|
|
2016
|
|
2017
|
|
2016 |
| |
|
|
|
|
| Net loss: |
(3,364) |
|
(3,105) |
|
(7,276) |
|
(16,803) |
| Add (deduct): |
|
|
|
|
| Depreciation and amortization |
8,918 |
|
7,610 |
|
30,232 |
|
22,205 |
| Loss (gain) on disposal of PP&E |
16 |
|
(105) |
|
(218) |
|
(601) |
| Income tax (recovery) expense |
(653) |
|
(199) |
|
484 |
|
(1,378) |
| Financing fees |
89 |
|
43 |
|
293 |
|
181 |
| Interest expense |
69 |
|
415 |
|
1,225 |
|
1,134 |
| Loss (gain) loss on foreign exchange |
94 |
|
123 |
|
(66) |
|
(294) |
| Tax (recovery) expense |
— |
|
— |
|
— |
|
— |
| Adjusted EBITDA |
5,169 |
|
4,782 |
|
24,674 |
|
4,444 |
| Reconciliation of quarterly non-IFRS measures |
|
|
|
|
| ($'000's) |
|
|
|
|
| |
Three months ended |
| |
Dec 31, 2017
|
|
Sep 30, 2017
|
|
Jun 30, 2017
|
|
Mar 31, 2017 |
| |
|
|
|
|
| Net income (loss): |
(3,364) |
|
598 |
|
(2,163) |
|
(2,347) |
| Add (deduct): |
|
|
|
|
| Depreciation and amortization |
8,918 |
|
7,359 |
|
7,572 |
|
6,383 |
| Loss (gain) on disposal of PP&E |
16 |
|
(6) |
|
(150) |
|
(78) |
| Income tax (recovery) expense |
(653) |
|
1,123 |
|
(102) |
|
116 |
| Financing fees |
89 |
|
58 |
|
73 |
|
73 |
| Interest expense |
69 |
|
301 |
|
419 |
|
436 |
| Loss (gain) loss on foreign exchange |
94 |
|
(15) |
|
(58) |
|
(87) |
| Current tax (recovery) expense |
— |
|
— |
|
— |
|
— |
| Adjusted EBITDA |
5,169 |
|
9,418 |
|
5,591 |
|
4,496 |
| |
Three months ended |
| |
Dec 31, 2016
|
|
Sep 30, 2016
|
|
Jun 30, 2016
|
|
Mar 31, 2016 |
| |
|
|
|
|
| Net loss: |
(3,105) |
|
(3,746) |
|
(6,958) |
|
(2,994) |
| Add (deduct): |
|
|
|
|
| Depreciation and amortization |
7,610 |
|
4,930 |
|
4,516 |
|
5,149 |
| Gain on disposal of PP&E |
(105) |
|
(35) |
|
(268) |
|
(193) |
| Income tax (recovery) expense |
(199) |
|
(281) |
|
520 |
|
(1,418) |
| Financing fees |
43 |
|
44 |
|
47 |
|
47 |
| Interest expense |
415 |
|
318 |
|
157 |
|
244 |
| Loss (gain) on foreign exchange |
123 |
|
17 |
|
3 |
|
(437) |
| Current tax expense (recovery) |
— |
|
— |
|
— |
|
— |
| Adjusted EBITDA |
4,782 |
|
1,247 |
|
(1,983) |
|
398 |
| Reconciliation of funded debt |
|
|
| ($'000's) |
|
|
| |
Three months ended
December 31, 2017
|
|
Year-ended December
31, 2017 |
| Bank indebtedness (cash) at syndicate banks |
(1,626) |
|
1,478 |
| Long term debt |
10,776 |
|
26,501 |
| Current and long term obligations under finance lease |
618 |
|
1,046 |
| Funded Debt |
9,768 |
|
29,025 |
| |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS
Certain statements and information contained in this press release constitute forward-looking information and
statements within the meaning of applicable securities laws. The use of any of the words “expect”, “plan”, “continue”, “estimate”,
“anticipate”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe”, “may”, “predict”, or “will” and similar
expressions are intended to identify forward-looking information or statements. More particularly, this press release contains
forward-looking statements concerning future capital expenditures of the Company, including its 2018 capital budget, planned
allocations of capital expenditures, and funding thereof, by way of cash flow, anticipated cash flow, debt, anticipated demand for
the Company’s products and services in 2018 and anticipated revenue allocations amongst our service offerings, drilling activity in
North America, pricing of the Company’s products and services and expectations for 2018 and potential for improved profitability,
and the potential for growth and expansion of certain components of the Company's business, including further additions to our
matting fleet, anticipated benefits from cost reductions and timing thereof, manufacturing capacity to meet anticipated demand for
the Company’s products, and expected exploration and production industry activity including the effects of industry trends on
demand for the Company's products. These statements relate to future events or to the Company’s future financial performance and
involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, levels of activity,
performance or achievements to be materially different from future results, levels of activity, performance or achievements
expressed or implied by such forward-looking statements.
Various assumptions were used in drawing the conclusions or making the projections contained in the
forward-looking statements throughout this press release. The forward-looking information and statements included in this press
release are not guarantees of future performance and should not be unduly relied upon. Forward-looking statements are based on
current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results
to differ materially from those anticipated and described in the forward-looking statements. Such information and statements
involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from
those anticipated in such forward-looking information or statements. In addition to other material factors, expectations and
assumptions which may be identified in this press release and other continuous disclosure documents of the Company referenced
herein, assumptions have been made in respect of such forward-looking statements and information regarding, among other things: the
Company will continue to conduct its operations in a manner consistent with past operations; the general continuance of current
industry conditions; anticipated financial performance, business prospects, impact of competition, strategies, the general
stability of the economic and political environment in which the Company operates; exchange and interest rates; tax laws; the
sufficiency of budgeted capital expenditures in carrying out planned activities; the availability and cost of labour and services
and the adequacy of cash flow; debt and ability to obtain financing on acceptable terms to fund its planned expenditures, which are
subject to change based on commodity prices; market conditions and future oil and natural gas prices; and potential timing delays.
Although Management considers these material factors, expectations and assumptions to be reasonable based on information currently
available to it, no assurance can be given that they will prove to be correct.
Readers are cautioned that the foregoing lists of factors are not exhaustive. Additional information on these
and other factors that could affect the Company's operations and financial results are included in reports on file with the
Canadian Securities Regulatory Authorities and may be accessed through the SEDAR website (www.sedar.com) or at the Company's
website. The forward-looking statements and information contained in this press release are expressly qualified by this cautionary
statement. The Company does not undertake any obligation to publicly update or revise any forward looking statements or
information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities
laws.
This press release shall not constitute an offer to sell, nor the solicitation of an offer to buy, any
securities in the United States, nor shall there be any sale of securities mentioned in this press release in any state in the
United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the
securities laws of any such state.
FOURTH QUARTER EARNINGS CONFERENCE CALL
Strad Energy Services Ltd. has scheduled a conference call to begin promptly
at 8:00 a.m. MT (10:00 a.m. ET) on Friday, March 2, 2018.
The conference call dial in number is 1-844-388-0561, followed by Conference ID code 3057038
The conference call will also be accessible via webcast at www.stradenergy.com
A replay of the call will be available approximately one hour after the conference call ends until Friday, March
9th,
2018, at 1:00 p.m. ET. To access the replay, call 1-855-859-2056, followed by pass code 3057038.
| |
Strad Energy Services Ltd.
Consolidated Statement of Financial Position
As at December 31, 2017 and 2016 |
| |
| (in thousands of Canadian dollars) |
As at December 31,
2017
|
|
As at December 31, 2016 |
| |
$
|
|
$ |
| Assets |
|
|
| Current assets |
|
|
| Cash |
1,859 |
|
369 |
| Trade receivables |
26,038 |
|
24,460 |
| Inventories |
1,818 |
|
3,890 |
| Prepaids and deposits |
707 |
|
1,111 |
| Other assets |
1,289 |
|
— |
| Income taxes receivable |
188 |
|
2,022 |
| |
31,899 |
|
31,852 |
| Non-current assets |
|
|
| Property, plant and equipment |
141,917 |
|
150,622 |
| Intangible assets |
556 |
|
665 |
| Other assets |
— |
|
2,023 |
| Income tax receivable |
278 |
|
— |
| Deferred income tax assets |
171 |
|
159 |
| |
174,821 |
|
185,321 |
| |
|
|
| Liabilities |
|
|
| Current liabilities |
|
|
| Bank indebtedness |
— |
|
1,478 |
| Accounts payable and accrued liabilities |
11,937 |
|
13,893 |
| Deferred revenue |
— |
|
— |
| Income taxes payable |
— |
|
— |
| Current portion of obligations under finance lease |
345 |
|
845 |
| |
12,282 |
|
16,216 |
| Non-current liabilities |
|
|
| Long-term debt |
10,776 |
|
26,501 |
| Obligations under finance lease |
273 |
|
201 |
| Deferred income tax liabilities |
11,567 |
|
10,321 |
| Total liabilities |
34,898 |
|
53,239 |
| |
|
|
| Equity |
|
|
| Share capital |
154,763 |
|
135,935 |
| Contributed surplus |
12,736 |
|
12,243 |
| Accumulated other comprehensive income |
22,635 |
|
26,963 |
| Deficit |
(50,211) |
|
(43,059) |
| |
174,821 |
|
185,321 |
| |
| |
| |
Strad Energy Services
Ltd.
Consolidated Statement of Loss and Comprehensive Loss
For the years-ended December 31, 2017 and 2016 |
| |
| |
2017 |
|
2016 |
| |
$
|
|
$ |
| Revenue |
117,599 |
|
72,378 |
| Expenses |
|
|
| Operating expenses |
78,658 |
|
54,059 |
| Depreciation |
29,447 |
|
21,796 |
| Amortization of intangible assets |
169 |
|
314 |
| Amortization of long term assets |
616 |
|
95 |
| Selling, general and administration |
13,774 |
|
13,644 |
| Share-based payments |
493 |
|
231 |
| Gain on disposal of property, plant and equipment |
(218) |
|
(601) |
| Foreign exchange gain |
(66) |
|
(294) |
| Finance fees |
293 |
|
181 |
| Interest expense |
1,225 |
|
1,134 |
| Loss before income tax |
(6,792) |
|
(18,181) |
| Income tax expense (recovery) |
484 |
|
(1,378) |
| Loss for the period |
(7,276) |
|
(16,803) |
| |
|
|
| Other comprehensive loss |
|
|
| Items that may be reclassified subsequently to net loss |
|
|
| Cumulative translation adjustment |
(4,328) |
|
(3,190) |
| Total comprehensive loss |
(11,604) |
|
(19,993) |
| |
|
|
| |
|
|
| Loss per share: |
|
|
| Basic |
($0.12) |
|
($0.41) |
| Diluted |
($0.12) |
|
($0.41) |
| |
| |
| |
Strad Energy Services
Ltd.
Consolidated Statement of Cash Flow
For the years ended December 31, 2017 and 2016 |
| |
| (in thousands of Canadian dollars) |
|
|
| |
2017
|
|
2016 |
| |
$
|
|
$ |
| Cash flow provided by (used in) |
|
|
| Operating activities |
|
|
| Net loss for the period |
(7,276) |
|
(16,803) |
| Adjustments for items not affecting cash: |
|
|
| Depreciation and amortization |
30,232 |
|
22,205 |
| Deferred income tax expense (recovery) |
161 |
|
(172) |
| Share-based payments |
493 |
|
231 |
| Interest expense and finance fees |
1,518 |
|
1,315 |
| Unrealized foreign exchange gain |
(280) |
|
(418) |
| Gain on disposal of property, plant and equipment |
(218) |
|
(601) |
| Book value of used fleet sales in operating activities |
5,018 |
|
2,553 |
| Changes in items of non-cash working capital |
229 |
|
446 |
| Net cash generated from operating
activities |
29,877 |
|
8,756 |
| |
|
|
| Investing activities |
|
|
| Purchase of property, plant and equipment |
(22,124) |
|
(4,570) |
| Proceeds from sale of property, plant and equipment |
1,011 |
|
1,990 |
| Purchase of intangible assets |
(65) |
|
(185) |
| Cash paid on business acquisition |
(2,750) |
|
— |
| Cash assumed on business acquisition |
322 |
|
196 |
| Changes in items of non-cash working capital |
214 |
|
195 |
| Net cash used in investing activities |
(23,392) |
|
(2,374) |
| |
|
|
| Financing activities |
|
|
| Proceeds on issuance of long-term debt |
5,307 |
|
21,000 |
| Repayment of long-term debt |
(21,032) |
|
(9,999) |
| Repayment of long-term debt assumed in business acquisition |
— |
|
(12,995) |
| Repayment of finance lease obligations (net) |
(958) |
|
(761) |
| Settlement of shareholder loan |
304 |
|
(2) |
| Issuance of common shares |
15,000 |
|
— |
| Share issue costs |
(1,025) |
|
— |
| Normal course issuer bid |
(167) |
|
— |
| Interest expense and finance fees |
(1,518) |
|
(1,315) |
| Changes in items of non-cash working capital |
(73) |
|
(68) |
| Net cash used in financing
activities |
(4,162) |
|
(4,140) |
| Effect of exchange rate changes on cash and cash
equivalents |
645 |
|
(477) |
| Increase in cash and cash equivalents |
2,968 |
|
1,765 |
| |
|
|
| Cash and cash equivalents (including bank
indebtedness) - beginning of year |
(1,109) |
|
(2,874) |
| Cash and cash equivalents (including bank
indebtedness) - end of period |
1,859 |
|
(1,109) |
| |
|
|
| Cash paid for income tax |
690 |
|
— |
| Cash paid for interest |
1,273 |
|
977 |
| |
| |
ABOUT STRAD ENERGY SERVICES LTD.
Strad is a North American energy services company that provides rental equipment and matting solutions to the
oil and gas and energy infrastructure sectors. Strad focuses on providing complete customer solutions in Canada and the
United States.
Strad is headquartered in Calgary, Alberta, Canada. Strad is listed on the Toronto Stock Exchange under the
trading symbol “SDY”.
For more information, please contact:
Strad Energy Services Ltd.
Andy Pernal
President and Chief Executive Officer
(403) 775-9202
Fax: (403) 232-6901
email: apernal@stradenergy.com
Strad Energy Services Ltd.
Michael Donovan
Chief Financial Officer
(403) 775-9221
Fax: (403) 232-6901
email: mdonovan@stradenergy.com
www.stradenergy.com
