Flint Energy Services Ltd. announces third quarter earnings
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Mon, 09 Nov 2009 21:02:44 GMT |
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(TSX: FES)
CALGARY, Nov. 9 /PRNewswire-FirstCall/ - Flint Energy Services Ltd. (Flint, the Company) reported its net earnings for the three months ended September 30, 2009 were $9.7 million or $0.21 per common share, compared to a loss of $163.2 million or $3.41 per common share in the comparative quarter. For the nine months ended September 30, 2009 net earnings were $32.0 million or $0.70 per common share, compared to a loss of $132.9 million or $2.78 per common share. The third quarter of 2008 included an impairment charge of goodwill and intangible assets of $179.9 million, net of taxes of $10.5 million. Adjusted third quarter 2008 earnings were $16.7 million or $0.35 per fully diluted common share.
Consolidated revenue for the three months ended September 30, 2009 was $459.7 million, down $126.1 million (21.5 percent), compared to $585.8 million for the same period of 2008. Decreased revenues from the Production Services segment, particularly in the United States, and the Oilfield Services segment contributed to the overall reduction during the third quarter. Canadian operations generated $386.8 million in revenues, down $66.0 million (14.6 percent) during the quarter, while the United States revenues were $72.9 million, down $60.1 million (45.2 percent) as a result of reduced natural gas field activity. United States operations accounted for 15.9 percent of revenues for the quarter compared to 22.7 percent in the third quarter of last year. Revenue for the nine months ended September 30, 2009 was $1,414.1 million, down $219.0 million (13.4 percent) compared to the nine months ended September 30, 2008.
Facility Infrastructure revenue of $156.4 million was down $10.7 million from $167.1 million in the third quarter last year as a result of reduced oil sands capital spending in 2009, while Maintenance Services revenues of $75.5 million were essentially flat compared to the same period last year.
Company EBITDA for the third quarter was $35.5 million compared with $54.4 million in the third quarter of 2008. EBITDA as a percentage of revenue was 7.7 percent, down from 9.3 percent in the third quarter of 2008. The decrease in EBITDA, as a percentage of revenue, was a result of the decline in drilling and field work and an increase in competitive pressures, particularly in the United States, that eroded gross margins.
General and administrative (G&A) expenses for the three months ended September 30, 2009 decreased $12.9 million to $29.1 million, compared to $42.0 million in 2008 and as a percentage of revenue, G&A expenses improved 0.9 percent to 6.3 percent. G&A expenses declined as a result of the Company implementing many cost control measures across operations, including salary reductions.
Facility Infrastructure EBITDA margins improved to 13.6 percent from 9.7 percent due to changes in project mix and improved application of management systems. Maintenance Services EBITDA margins dropped to 4.0 percent from 5.7 percent last year due to one-time, non-reimbursable contract losses incurred in one of Flint's northern joint venture operations. Production Services EBITDA margins contracted to 4.3 percent from 9.6 percent due to the reduced drilling activity and increased competitive pressures experienced in the third quarter. Oilfield Services EBITDA margins of 7.5 percent were down from 11.1 percent last year as a result of lower activity, price erosion, and reduced equipment utilization.
Income taxes for the quarter were $5.3 million ($4.5 million future) at an effective tax rate of 35.3 percent with cash taxes received of $7.7 million.
The Company's cash holdings were $108.8 million and the operating credit lines were undrawn at the end of September 2009.
Capital expenditures in the third quarter were $6.8 million net of disposals, down from $16.6 million, net of disposals last year.
W. J. (Bill) Lingard, President and CEO of Flint stated, "We were pleased with the operating results of the Company during the third quarter, especially in light of the drastically reduced drilling activity and capital spending in all of our markets. Good cost controls and discipline across the Company have helped us improve our cash position and balance sheet. We continue to focus on capturing new opportunities and maintaining our capacity for the eventual upturn in the North American energy market."
Selected financial information for each reportable business segments is as follows:
-------------------------------------------------------------------------
(in thousands Facility Mainte-
of Canadian Production Infra- Oilfield nance
dollars) Services structure Services Services Total
-------------------------------------------------------------------------
Three months
ended
September 30,
2009
Revenue $ 182,496 $ 156,388 $ 45,338 $ 75,471 $ 459,693
EBITDA 7,860 21,254 3,384 2,985 35,483
EBITDA % 4.3% 13.6% 7.5% 4.0% 7.7%
Amortization
on property,
plant and
equipment,
and
intangible
assets 6,052 2,968 4,995 1,696 15,711
Capital
expenditures 3,379 2,910 875 2,512 9,676
-------------------------------------------------------------------------
Three months
ended
September 30,
2008
(restated)
Revenue $ 268,969 $ 167,099 $ 73,757 $ 75,929 $ 585,754
EBITDA 25,792 16,144 8,167 4,330 54,433
EBITDA % 9.6% 9.7% 11.1% 5.7% 9.3%
Amortization
on property,
plant and
equipment,
and
intangible
assets 7,740 3,354 7,126 355 18,575
Capital
expenditures 10,666 3,211 5,412 1,339 20,628
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Complete copies of the Company's Q3 2009 Management Discussion and Analysis (MD&A), Interim Financial Statements and the Notes to Financial Statements are available on SEDAR at www.sedar.com. Additional information related to the Company is available on SEDAR, including a copy of the latest Annual Information Form. Electronic copies of the company's quarterly and annual reports and other public filings may also be obtained by visiting www.flintenergy.com.
A conference call with Flint management is scheduled for 11:00 AM Eastern Time on Tuesday, November 10, 2009. Information on how to participate in the call or listen to the live or archived playback of the call is available on Flint's website www.flintenergy.com.
Flint Energy Services Ltd. is a market leader providing an expanding range of integrated products and services for the oil and gas industry including: production services; field construction; oilfield transportation; process equipment design and manufacturing; and tubular management services. Flint provides this unique breadth of products and services through over 60 strategic locations in the oil and gas producing areas of western North America, from Inuvik in the Northwest Territories to Mission, Texas on the Mexican border. Flint is a preferred provider of infrastructure construction management, module fabrication, maintenance services for upgrading, and production facilities in Alberta's oil sands sector. http://www.flintenergy.com
FORWARD LOOKING STATEMENTS
Certain statements in this news release are "forward-looking statements", which reflect current expectations of the management of Flint regarding future events or Flint's future performance. All statements other than statements of historical fact contained in this news release may be forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in the forward-looking statements. Flint believes that the expectations reflected in such forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. The forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements are made as of the date of this news release and Flint assumes no obligation to update or revise them to reflect new events or circumstances, except as expressly required by applicable securities law. Further information regarding risks and uncertainties relating to Flint and its securities can be found in the disclosure documents filed by Flint with the securities regulatory authorities, available at www.sedar.com.
SOURCE Flint Energy Services Ltd.
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