CALGARY, Alberta, Aug. 29, 2017 (GLOBE NEWSWIRE) -- New West Energy Services Inc. (TSX-V:NWE), an oil and gas and environmental services company focused on Western Canada, today announced its financial results for the fourth quarter and fiscal year ended April 30, 2017.
HIGHLIGHTS
- NWE continued with its busiest winter season since 2013/2014.
Fourth Quarter
- Revenue in the fourth quarter was $4.9 million, representing an increase of 77% from the same period a year prior, driven largely by a 98% increase in revenue from the Vacuum Truck and Fluid Transportation Services division and a 26% increase in revenue from the Environmental Services division. This increase was primarily due to greater drilling and completions activity in Western Canada (average drilling rig utilization in Western Canada for the quarter was 31% compared to 15% for the same period a year prior) resulting in higher equipment utilizations and environmental operating days.
- Gross margin was 23%, representing a decrease of 4 percentage points from the same period last year. This decrease was primarily due to increased costs associated with the use of third party contractors to fulfill excess equipment service demand, higher than normal equipment costs due to adding acquired units into service and higher labour costs.
- Normalized EBITDAC for the quarter was $361,331, compared to negative $165,313 from the same period a year prior, representing an increase of $526,644.
Fiscal Year
- Revenue in the fiscal year was $11,927,912 and remained flat from the same period the year prior. This was due largely to the continued downturn in the oil and gas industry, predominately in the first half of the year, and NWE’s corresponding lower equipment utilization and environmental services operating days.
- Gross margin was 23%, representing a decrease of 3 percentage points from the same period last year. This decrease was primarily due to depressed revenues in the first half of the fiscal year and increased costs associated with the use of third party contractors to fulfill excess equipment service demand, higher than normal equipment costs due to adding acquired units into service and higher labour costs.
- Normalized EBITDAC was a negative $258,263 compared to negative $189,546 from the same period last year, representing a decrease of $68,717.
Gerry E. Kerkhoff, President and Chief Executive Officer of NWE, stated, “New West has shown significant increases in revenue since the commencement of the last winter season. Our vacuum truck and fluid transportation services division has seen greater equipment utilization, including the deployment of additional equipment that we acquired in March of 2017 for $4.8 million, and our environmental services division has seen top line growth as the sector continues to improve.”
Mr. Kerkhoff concluded, “With the increase in our available operating capital and larger fleet size, we have diversified into the completions and production sectors and have expanded our client base while increasingly taking on larger projects with correspondingly higher revenues. With the oil and gas sector showing increasing signs of recovery, we are optimistic for New West’s continued growth.”
| For the three months ended April 30, | |||||||||||||||||
| 2017 | 2016 | ||||||||||||||||
| Vacuum Truck & Fluid Transportation Services | Environmental Services | Corporate | Total | Vacuum Truck & Fluid Transportation Services | Environmental Services | Corporate | Total | ||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||
| Revenue | 3,837,133 | 1,039,455 | - | 4,876,588 | 1,934,375 | 824,513 | - | 2,758,888 | |||||||||
| Direct costs | 3,034,928 | 727,687 | - | 3,762,615 | 1,445,693 | 556,125 | - | 2,001,818 | |||||||||
| Gross margin | 802,205 | 311,768 | - | 1,113,973 | 488,682 | 268,388 | - | 757,070 | |||||||||
| G & A expenses | 283,796 | 361,276 | 107,570 | 752,642 | 415,917 | 391,230 | 115,236 | 922,383 | |||||||||
| Share base pmts | - | - | 276,740 | 276,740 | - | - | - | - | |||||||||
| Finance charges | 199,146 | 13,861 | 39,348 | 252,355 | 86,512 | 1,420 | 315 | 88,247 | |||||||||
| Amortization | 407,641 | - | - | 407,641 | 317,188 | - | - | 317,188 | |||||||||
| Net loss before tax | (88,378 | ) | (63,369 | ) | (423,658 | ) | (575,405 | ) | (330,935 | ) | (124,262 | ) | (115,551 | ) | (570,748 | ) | |
| Total assets | 14,569,579 | 1,094,911 | 149,016 | 15,813,506 | 8,431,719 | 648,863 | 212,677 | 9,293,259 | |||||||||
| EBITDAC* | 518,409 | (49,508 | ) | (107,570 | ) | 361,331 | 72,765 | (122,842 | ) | (115,236 | ) | (165,313 | ) | ||||
| For the years ended April 30, | |||||||||||||||||
| 2017 | 2016 | ||||||||||||||||
| Vacuum Truck & Fluid Transportation Services | Environmental Services | Corporate | Total | Vacuum Truck & Fluid Transportation Services | Environmental Services | Corporate | Total | ||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||
| Revenue | 8,328,756 | 3,599,156 | - | 11,927,912 | 7,461,361 | 4,635,356 | - | 12,096,717 | |||||||||
| Direct costs | 6,784,346 | 2,451,885 | - | 9,236,231 | 5,772,434 | 3,135,272 | - | 8,907,706 | |||||||||
| Gross margin | 1,544,410 | 1,147,271 | - | 2,691,681 | 1,688,927 | 1,500,084 | - | 3,189,011 | |||||||||
| G & A expenses | 1,139,606 | 1,378,828 | 431,510 | 2,949,944 | 1,408,553 | 1,664,171 | 305,833 | 3,378,557 | |||||||||
| Share base pmts | - | - | 276,740 | 276,740 | - | - | - | - | |||||||||
| Finance charges | 342,809 | 17,091 | 76,173 | 436,073 | 254,624 | 4,748 | 609 | 259,981 | |||||||||
| Amortization | 1,364,747 | - | - | 1,364,747 | 1,325,788 | - | - | 1,325,788 | |||||||||
| Net loss before tax | (1,302,752 | ) | (248,648 | ) | (784,423 | ) | (2,335,823 | ) | (1,300,038 | ) | (168,835 | ) | (306,442 | ) | (1,775,315 | ) | |
| Total assets | 14,569,579 | 1,094,911 | 149,016 | 15,813,506 | 8,431,719 | 648,863 | 212,677 | 9,293,259 | |||||||||
| EBITDAC* | 404,804 | (231,557 | ) | (431,510 | ) | (258,263 | ) | 280,374 | (164,087 | ) | (305,833 | ) | (189,546 | ) | |||
* Normalized EBITDAC is earnings from continuing operations before interest, taxes, depreciation, amortization and share-based payments and is a measure of NWE’s operating profitability. The calculation is further adjusted to normalize EBITDAC by removing any non-reoccurring transactions that are not in the normal course of operations.
Contact:
Gerry E. Kerkhoff
New West Energy Services Inc.
President & Chief Executive Officer
Phone - 403.984.9798 or 1.888.977.2327 (BEAR)
Fax - 403.984.9799
Email - gkerkhoff@newwestenergyservices.com
Neither the 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.
Cautionary Note Regarding Forward-Looking Information
Certain statements in this news release may constitute “forward-looking information” within the meaning of applicable securities laws that involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information and financial outlook. Forward-looking information is identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “would”, and similar terms and phrases, including references to assumptions. Such information may involve, but is not limited to, comments with respect to strategies, expectations, planned operations or future actions. Forward-looking information in this news release includes, without limitation, statements with respect to: the use of proceeds of its loans; the use of the acquired equipment; planned changes in NWE’s business and revenues; the competitive environment in which NWE operates; and the assessment of future plans and operations. Actual events or results may differ materially. The forward-looking information in this news release is based on assumptions which includes, but is not limited to: NWE realizing the expected benefits of its loans and acquired equipment; the general state of the economy and the oil and gas industry not worsening; NWE not losing any key personnel; NWE sustaining or increasing their level of revenues and EBITDAC NWE growing its businesses long term and managing its growth; NWE complying with existing regulations and not becoming subject to more stringent regulations; and, NWE’s insurance being sufficient to cover losses that may occur as a result of its operations. The forward-looking information in this news release is subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information. The factors which could cause results to differ from current expectations include, but are not limited to: failure to realize the expected benefits of its loans and acquired equipment; potential undisclosed liens associated with the acquired equipment; NWE’s results being dependent upon the general state of the economy and the oil and gas industry; NWE being dependent on key personnel, the loss of which could harm its business; NWE may not be able to sustain or increase their revenues or EBITDAC; NWE may be unable to grow its business long term or to manage any growth; NWE may be unable to integrate the acquired equipment into its business; competition in NWE’s markets may lead to reduced revenues and EBITDAC; NWE may fail to comply with existing regulations or become subject to more stringent regulations; NWE’s insurance may be insufficient to cover losses that may occur as a result of NWE’s operations; the market price of NWE’s common shares will fluctuate; and, there is a possibility of dilution of existing holders of NWE’s common shares due to future financings or acquisitions. Although NWE has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements in this news release, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Also, many of the factors are beyond the control of NWE. Accordingly, readers should not place undue reliance on the forward-looking information in this news release. The forward-looking information is made as of the date of this news release, and NWE does not assume any obligation to publicly update or revise such forward-looking information to reflect new information, subsequent or otherwise, except as may be required by applicable law. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement.