CALGARY, ALBERTA--(Marketwire - April 27, 2011) -
THIS PRESS RELEASE IS NOT TO BE DISTRIBUTED TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.
Phoenix Oilfield Hauling Inc. (TSX VENTURE:PHN) ("Phoenix" or the "Company") announces its financial and operating results for the year ended December 31, 2010.
Highlights from Q4 and 2010 include:
- Quarterly revenue of $14.9 million for Q4 increased by 48% over Q3 revenue of $10.0 million
- Quarterly EBITDA of $2.0 million for Q4 increased by 156% over Q3 EBITDA of $0.8 million
- Quarterly revenue and EBITDA levels were the Company's highest since Q1 2009
- Activity levels for the Company increased in several markets, particularly in its US operating areas
- Throughout 2010 the Company continued to strategically redeploy some of its assets to certain markets in an ongoing effort to right-size equipment requirements in key locations and optimize long term utilization levels
- Annual revenue of $39.8 million for 2010 increased by 17% over revenue of $33.9 million for 2009
- Annual EBITDA of $2.2 million for 2010 increased by 239% over EBITDA of $0.7 million for 2009
- During 2010 SG&A was $5.9 million, a 14% reduction from the $6.8 million in 2009
- Paid down debt by $14.6 million during 2010, including settlement of $11.6 million with common shares
In commenting on the results Christopher W. Challis President and CEO stated, "I am pleased to recognize the efforts of all our employees which led to the successful completion of a very tough year for the Company.
The results that the Company has delivered through 2010 were the direct result of the Phoenix management team making a focused effort to control costs in a challenging pricing environment in all our Canadian markets, and the continued positive contributions from our US subsidiary Rodan Transport (USA) Ltd.
The Company is encouraged by the noticeable increase in drilling activity levels in all its market areas that we anticipate will continue to be buoyed by high commodity pricing for oil and large natural gas deposits in the Shale plays throughout the US."
Canadian wells drilled during Q4 2010 increased by 53 percent to 4,078 wells compared to Q4 2009. For 2010 the number of wells drilled increased by 45 percent to 12,145 wells (CAODC). The US and Canada had almost the same percentage increase in number of wells drilled in 2010 with both markets showing strong signs of recovery.
During the fourth quarter 2010, revenue increased 108% year over year to $14.9 million as operations in newly established market areas started to mature. Operating costs as a percentage of revenue remained the same, but the Company started to see signs of pricing recovery which typically lags drilling activity increases in some selected markets and should continue to see signs of improvement as supply for services tighten. Fourth quarter EBITDA was 13% of revenue. The Company realized a net loss of $160 compared to Q4 2009 loss of $3,512.
In 2010 annual revenue increased 17% compared to 2009 due to strategic redeployment into Canadian oil based markets and into additional US markets earlier in the year where drilling activity has increased. Operating expenses saw little change as a percentage of revenue, as increased revenue and activity were negatively impacted by start up costs in our two new markets in Pennsylvania and Manitoba.
The Petroleum Services Association of Canada (PSAC) is forecasting a 5.6 per cent increase in drilling activity to 12,950 wells in 2011and that oil prices will remain at levels necessary to encourage drilling in areas such as Saskatchewan, Manitoba and northeast Alberta.
According to the Baker Hughes Inc. US rig count at the end of 2010 there were 1,694 active rigs, which was up 42% year over year from 1,189 at the end of 2009.
Financial Summary
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(In thousands of dollars,
except per share data) Year ended December 31,
2010 2009
----------------------------------------------------------------------------
Revenue $ 39,823 $ 33,924
Operating expenses 30,154 25,392
Operating expenses, % of revenue 75.7% 74.8%
Selling, general and administrative expenses 5,863 6,826
Foreign exchange (gain) loss 201 547
Loss on disposal of equipment 1,373 501
EBITDA(1) 2,232 658
EBITDA, % of revenue 5.6% 1.9%
Loss (4,957) (11,232)
Loss per share - basic (0.03) (0.17)
Loss per share - diluted (0.03) (0.17)
Funds flow from operations $ (718) $ 3,262
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(In thousands of dollars) December 31, December 31,
2010 2009
----------------------------------------------------------------------------
Total assets $ 38,507 $ 40,547
Long-term financial liabilities 406 11,620
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) EBITDA is not a recognized measure under GAAP and consequently does not
have a standard prescribed meaning. EBITDA is equal to net loss adjusted
to exclude amortization expense, depreciation expense, interest expense,
impairment charges related to goodwill, intangible assets and equipment
and income taxes. EBITDA includes stock-based compensation expense.
EBITDA is commonly used by investors and financial analysts in the
oilfield services industry as a supplementary non-GAAP financial measure
in order to evaluate a company's operating performance. Phoenix's method
of calculating EBITDA may differ from other companies, and accordingly,
it may not be comparable to a similarly described measure used by
another company.
EBITDA is calculated by the Company as follows:
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(In thousands of dollars) Year ended December 31,
2010 2009
----------------------------------------------------------------------------
Loss $(4,957) $ (11,232)
Add (Deduct):
Depreciation 4,412 5,781
Interest on long-term debt 2,039 4,435
Other interest 377 292
Amortization of intangible assets 166 206
Impairment of equipment - 1,168
Income taxes 195 8
-------------------------
EBITDA(1) $ 2,232 $ 658
----------------------------------------------------------------------------
----------------------------------------------------------------------------
The Company's consolidated financial statements and Management's Discussion and Analysis are available on the SEDAR website at www.sedar.com.
Director and Officer Changes
Phoenix announces the resignation of Leo Provencher as a Director of the Company which was accepted, in order to devote more time to his other business interests. The Board of Directors extends its appreciation and best wishes to Mr. Provencher.
Phoenix also announces the appointment of Vic Fitch as Interim Chief Financial Officer effective April 29. Mr. Fitch brings 24 years of experience to the role and holds a CGA designation and an MBA degree. Over the last 14 years he has performed senior financial roles for several oilfield services companies, including serving as a CFO.
Reader Advisory
This news release may contain certain forward-looking statements, which include assumptions with respect to (i) future operations; (ii) future economic conditions; (iii) future capital expenditures; and (iv) cash flow. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such risks and uncertainties include, without limitation, risks associated with loss of markets, volatility of commodity prices, fluctuations in foreign exchange or interest rates ,environmental risks, competition from other companies, ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, the lack of availability of qualified personnel or management, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Corporation will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All forward-looking statements contained in this press release are expressly qualified in their entirety by these cautionary statements.
The forward-looking statements contained in this news release are made as at the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Neither 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.
Contact Information:
Chris Challis
President and CEO
(403) 262-9151 Ext. 224
cchallis@phoenixhauling.com