Calfrac Announces Third Quarter Results
HIGHLIGHTS
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Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 Change 2009 2008 Change
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(000s, except ($) ($) (%) ($) ($) (%)
per share and
unit data)
(unaudited)
Financial
Revenue 133,261 151,650 (12) 418,376 391,933 7
Operating
income(1) 16,499 27,812 (41) 47,978 56,281 (15)
Net income
(loss) 2,842 11,203 (75) (6,400) 10,003 (164)
Per share
- basic 0.08 0.30 (73) (0.17) 0.27 (163)
Per share
- diluted 0.08 0.30 (73) (0.17) 0.27 (163)
Funds
provided by
operations(2) 12,199 27,128 (55) 35,040 55,909 (37)
Per share
- basic 0.32 0.72 (56) 0.93 1.48 (37)
Per share
- diluted 0.32 0.72 (56) 0.93 1.48 (37)
EBITDA(3) 15,112 26,983 (44) 45,397 57,216 (21)
Per share
- basic 0.40 0.71 (44) 1.20 1.52 (21)
Per share
- diluted 0.40 0.71 (44) 1.20 1.52 (21)
Working capital
(end of
period) 103,331 104,700 (1) 103,331 104,700 (1)
Shareholders'
equity (end
of period) 378,972 378,890 - 378,972 378,890 -
Weighted
average common
shares
outstanding
(No.)
Basic 37,742 37,843 - 37,742 37,653 -
Diluted 37,742 37,853 - 37,742 37,681 -
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Operating (end
of period)
Pumping
horsepower
(000s) 371 287 29
Coiled tubing
units (No.) 18 18 -
Cementing
units (No.) 21 18 17
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(1) Operating income is defined as net income (loss) plus depreciation,
interest, equity share of net income from long-term investments,
foreign exchange gains or losses, gains or losses on disposal of
capital assets, income taxes and non-controlling interest. Management
believes that operating income is a useful supplemental measure as it
provides an indication of the financial results generated by
Calfrac's business segments prior to consideration of how these
segments are financed or how they are taxed. Operating income is a
measure that does not have any standardized meaning under generally
accepted accounting principles ("GAAP") and, accordingly, may not be
comparable to similar measures used by other companies.
(2) Funds provided by operations is defined as cash provided by operating
activities before the net change in non-cash operating assets and
liabilities. Funds provided by operations is a measure that provides
shareholders and potential investors with additional information
regarding the Company's liquidity and its ability to generate funds
to finance its operations. Management utilizes this measure to assess
the Company's ability to finance operating activities and capital
expenditures. Funds provided by operations is a measure that does not
have any standardized meaning prescribed under GAAP and, accordingly,
may not be comparable to similar measures used by other companies.
(3) EBITDA is defined as net income (loss) before interest, taxes,
depreciation, amortization and non-controlling interest. EBITDA is
presented because it is frequently used by securities analysts and
others for evaluating companies and their ability to service debt.
EBITDA is a measure that does not have any standardized meaning
prescribed under GAAP and, accordingly, may not be comparable to
similar measures used by other companies.
PRESIDENT'S MESSAGE
I am pleased to present Calfrac's operating and financial highlights for the three and nine months ended
- acquired the fracturing assets of a U.S. competitor, Pure Energy
Services Ltd. ("Pure"), for a total purchase price of approximately
$44.5 million, including transaction costs;
- entered into a definitive agreement to acquire Century Oilfield
Services Inc. ("Century") for $90.0 million plus the assumption of
approximately $30.0 million in indebtedness and other liabilities on
an aggregate net basis;
- negotiated an increase to the Company's credit facilities to $170.0
million, which includes a $35.0 million incremental facility
available upon closing of the Century acquisition, with a syndicate
of Canadian financial institutions;
- commenced cementing operations in the Chicontepec region of Mexico;
and
- experienced strong levels of fracturing and coiled tubing activity in
Western Siberia.
Financial Highlights
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For the three months ended September 30, 2009, the Company recorded:
- revenue of $133.3 million, a decrease of 12 percent from the third
quarter of 2008;
- operating income of $16.5 million versus $27.8 million in the
comparable period in 2008;
- net income of $2.8 million or $0.08 per share, including a foreign
exchange loss before income taxes of $1.8 million, compared to $11.2
million or $0.30 per share in the same period in 2008; and
- a $5.5 million or $0.15 per share future income tax recovery arising
from a reversal of the increase in the deferred credit balance that
was recorded in the first half of the year as the Company has
adjusted its estimated tax position for the full year in Canada.
For the nine months ended September 30, 2009, the Company's results
included:
- revenue of $418.4 million, an increase of 7 percent from the
comparable period of 2008;
- a net loss of $6.4 million or $0.17 per share, including a foreign
exchange loss of $3.9 million, compared to net income of $10.0
million or $0.27 per share in the same period in 2008;
- funds provided by operations of $35.0 million or $0.93 per share
versus $55.9 million or $1.48 per share in the same quarter of 2008;
and
- working capital of $103.3 million and $72.9 million of unutilized
credit facilities at the end of the period.
Overall, Calfrac continues to benefit from its solid presence in several key North American unconventional resource plays, where drilling activity remains relatively strong and revenue per job is high, as well as the positive momentum achieved in its international markets.
Operational Highlights
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During the third quarter, fracturing and coiled tubing activity in western
In August, Calfrac acquired the fracturing assets of a U.S. competitor for approximately
In Western Siberia, strong fracturing and coiled tubing activity levels resulted in strong financial performance from this geographic segment. However, Calfrac's reported Canadian dollar financial results were negatively impacted by an 18 percent decline in the value of the Russian rouble from the third quarter of 2008. The Company is currently preparing tenders for the 2010 annual contract bid process and is optimistic about Calfrac's prospects for the upcoming year.
The Company's fracturing activity in the Chicontepec region increased significantly from the second quarter of 2009 due to the deployment of a second fracturing spread and the impact of a full quarter of operations offsetting a decline in fracturing activity in the Burgos field. The Company also deployed six cementing units from
During the third quarter, activity in the Company's cementing operations in
Corporate
On
Also during the third quarter, Calfrac purchased the fracturing assets of a U.S. competitor, Pure Energy Services Ltd. for total consideration of approximately
During the third quarter, and in conjunction with the two acquisitions discussed above, the Company negotiated an increase to its credit facilities from
Outlook and Business Prospects
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The global economic slowdown has reduced the demand for oil and natural gas which has led to a significant decline in drilling activity in
Fracturing and coiled tubing activity levels in
In the
Calfrac recently deployed a sixth coiled tubing unit into Western Siberia and it is expected to be operational late in the fourth quarter of 2009. The annual contract tender process is currently underway in
The Company commenced fracturing operations in Poza Rica,
The Company has negotiated with its lenders to increase its credit facilities by
Overall, demand for pressure pumping services in
On behalf of the Board of Directors,
Douglas R. Ramsay
President & Chief Executive Officer
November 4, 2009
2009 Overview
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In the third quarter of 2009, the Company:
- generated revenue of $133.3 million versus $151.7 million in the
third quarter of 2008;
- reported net income of $2.8 million or $0.08 per share, including a
$5.5 million future income tax recovery arising from a reversal of
the increase in the deferred credit balance that was recorded in the
first half of the year as the Company has adjusted its estimated tax
position for the full year in Canada, compared to $11.2 million or
$0.30 per share in the comparable 2008 period;
- announced the acquisition of Century Oilfield Services Inc. for $90.0
million plus the assumption of approximately $30.0 million in
indebtedness and other liabilities on an aggregate net basis, the
closing of which is to occur in mid-November 2009;
- acquired the fracturing assets of a U.S. competitor, Pure Energy
Services Ltd., for a total purchase price of approximately $44.5
million;
- negotiated an increase to the Company's credit facilities to $170.0
million, including a $35.0 million incremental facility available
upon the closing of the Century acquisition for a period of
approximately six months thereafter subject to extension at the
lender's discretion, with a syndicate of Canadian financial
institutions; and
- recorded a foreign exchange loss of $1.8 million versus $0.7 million
in the comparable period of 2008.
For the nine months ended September 30, 2009 the Company:
- increased revenue by 7 percent to $418.4 million from $391.9 million
in the comparative period in 2008;
- reported a net loss of $6.4 million or $0.17 per share compared to
net income of $10.0 million or $0.27 per share in the comparable 2008
period;
- incurred capital expenditures of $83.9 million, including the
acquisition of Pure's fracturing assets, primarily to bolster the
Company's fracturing equipment fleet;
- combined Calfrac's Mexico and Argentina operations under an
experienced management team to form a new Latin America division;
- initiated cost reduction measures in Canada and the United States
through workforce planning which resulted in restructuring costs of
approximately $1.5 million during the first nine months of 2009; and
- incurred a foreign exchange loss of $3.9 million versus a foreign
exchange gain of $0.8 million in the comparable period of 2008.
Financial Overview - Three Months Ended September 30, 2009 Versus 2008
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Canada
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Three Months Ended September 30, 2009 2008 Change
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(000s, except operational information) ($) ($) (%)
(unaudited)
Revenue 45,463 75,294 (40)
Expenses
Operating 37,221 55,542 (33)
Selling, General and
Administrative (SG&A) 2,152 3,064 (30)
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39,373 58,606 (33)
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Operating income(1) 6,090 16,688 (64)
Operating income (%) 13.4% 22.2% (40)
Fracturing revenue per job ($) 83,910 68,966 22
Number of fracturing jobs 496 915 (46)
Coiled tubing revenue per job ($) 14,784 11,384 30
Number of coiled tubing jobs 260 738 (65)
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(1) Refer to "Non-GAAP Measures" on page 15 for further information.
Revenue
Revenue from Calfrac's Canadian operations during the third quarter of 2009 was
Operating Expenses
Operating expenses in
SG&A Expenses
SG&A expenses for Calfrac's Canadian operations during the third quarter of 2009 decreased from the corresponding period in 2008 by 30 percent to
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Three Months Ended September 30, 2009 2008 Change
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(000s, except operational and
exchange rate information) ($) ($) (%)
(unaudited)
Revenue 52,524 54,568 (4)
Expenses
Operating 45,257 38,985 16
SG&A 1,585 2,184 (27)
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46,842 41,169 14
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Operating income(1) 5,682 13,399 (58)
Operating income (%) 10.8% 24.6% (56)
Fracturing revenue per job ($) 56,313 59,197 (5)
Number of fracturing jobs 883 859 3
Cementing revenue per job ($) 18,786 13,869 35
Number of cementing jobs 149 268 (44)
Cdn$/US$ average exchange rate(2) 1.0976 1.0416 5
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(1) Refer to "Non-GAAP Measures" on page 15 for further information.
(2) Source: Bank of Canada.
Revenue
Revenue from Calfrac's
Operating Expenses
Operating expenses in the
SG&A Expenses
SG&A expenses in the
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Three Months Ended September 30, 2009 2008 Change
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(000s, except operational and
exchange rate information) ($) ($) (%)
(unaudited)
Revenue 17,774 15,197 17
Expenses
Operating 10,735 10,561 2
SG&A 888 1,061 (16)
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11,623 11,622 -
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Operating income(1) 6,151 3,575 72
Operating income (%) 34.6% 23.5% 47
Fracturing revenue per job ($) 74,572 123,721 (40)
Number of fracturing jobs 147 64 130
Coiled tubing revenue per job ($) 45,112 59,665 (24)
Number of coiled tubing jobs 151 122 24
Cdn$/rouble average exchange rate(2) 0.0350 0.0429 (18)
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(1) Refer to "Non-GAAP Measures" on page 15 for further information.
(2) Source: Bank of Canada.
Revenue
During the third quarter of 2009, the Company's revenue from Russian operations increased by 17 percent to
Operating Expenses
Operating expenses in
SG&A Expenses
SG&A expenses in
Latin America
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Three Months Ended September 30, 2009 2008 Change
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(000s, except operational and
exchange rate information) ($) ($) (%)
(unaudited)
Revenue 17,500 6,591 166
Expenses
Operating 14,328 7,454 92
SG&A 617 252 145
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14,945 7,706 94
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Operating income (loss)(1) 2,555 (1,115) 329
Operating income (loss) (%) 14.6% -16.9% 186
Cdn$/Mexican peso average
exchange rate(2) 0.0828 0.1009 (18)
Cdn$/Argentine peso average
exchange rate(2) 0.2846 0.3376 (16)
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(1) Refer to "Non-GAAP Measures" on page 15 for further information.
(2) Source: Bank of Canada.
Revenue
Calfrac's Latin America operations generated total revenue of
Operating Expenses
Operating expenses in Latin America for the three months ended
SG&A Expenses
SG&A expenses in Latin America increased to
on in the comparable quarter of 2008 primarily due to the Company's expanded scale of operations in
Corporate
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Three Months Ended September 30, 2009 2008 Change
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(000s) ($) ($) (%)
(unaudited)
Expenses
Operating 488 686 (29)
SG&A 3,491 4,049 (14)
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3,979 4,735 (16)
Operating loss(1) (3,979) (4,735) 16
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(1) Refer to "Non-GAAP Measures" on page 15 for further information.
Operating Expenses
Operating expenses primarily relate to manufacturing and R&D personnel located in the Corporate headquarters who directly support the Company's global field operations. The 29 percent decrease in Corporate operating expenses from the third quarter of 2008 is mainly due to lower compensation expenses as a result of a decrease in the number of personnel supporting the Company's operations and the impact of cost-saving initiatives implemented during the second quarter of 2009.
SG&A Expenses
For the three months ended
Interest and Depreciation Expenses
The Company's net interest expense of
For the three months ended
Foreign Exchange Losses or Gains
The Company incurred a foreign exchange loss of
Income Tax Expenses
The Company recorded an income tax recovery of
Summary of Quarterly Results
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Three Months Ended Dec. 31, Mar. 31, June 30, Sept. 30,
2007 2008 2008 2008
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(000s, except per share ($) ($) ($) ($)
and unit data)
(unaudited)
Financial
Revenue 114,450 145,627 94,657 151,650
Operating income (loss)(1) 19,872 29,477 (1,008) 27,812
Net income (loss) 3,653 14,269 (15,469) 11,203
Per share - basic 0.10 0.38 (0.41) 0.30
Per share - diluted 0.10 0.38 (0.41) 0.30
Funds provided by
operations(1) 19,582 28,790 (9) 27,128
Per share - basic 0.53 0.77 - 0.72
Per share - diluted 0.53 0.77 - 0.72
EBITDA(1) 18,790 31,047 (813) 26,983
Per share - basic 0.51 0.83 (0.02) 0.71
Per share - diluted 0.51 0.83 (0.02) 0.71
Capital expenditures 12,101 14,820 19,341 18,414
Working capital (end
of period) 92,156 111,989 94,056 104,700
Shareholders' equity
(end of period) 350,915 377,056 364,068 378,890
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Operating (end of period)
Pumping horsepower (000s) N/A 232 255 287
Coiled tubing units (No.) 18 18 18 18
Cementing units (No.) 16 17 17 18
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Three Months Ended Dec. 31, Mar. 31, June 30, Sept. 30,
2008 2009 2009 2009
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(000s, except per share ($) ($) ($) ($)
and unit data)
(unaudited)
Financial
Revenue 172,430 180,388 104,727 133,261
Operating income (loss)(1) 25,658 27,427 4,052 16,499
Net income (loss) 7,861 5,528 (14,770) 2,842
Per share - basic 0.21 0.15 (0.39) 0.08
Per share - diluted 0.21 0.15 (0.39) 0.08
Funds provided by
operations(1) 24,838 22,713 128 12,199
Per share - basic 0.66 0.60 - 0.32
Per share - diluted 0.66 0.60 - 0.32
EBITDA(1) 26,740 25,945 4,340 15,112
Per share - basic 0.71 0.69 0.11 0.40
Per share - diluted 0.71 0.69 0.11 0.40
Capital expenditures 32,233 15,857 9,862 58,212
Working capital (end
of period) 100,575 129,532 111,864 103,331
Shareholders' equity
(end of period) 393,476 402,537 380,515 378,972
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Operating (end of period)
Pumping horsepower (000s) 287 303 319 371
Coiled tubing units (No.) 18 18 18 18
Cementing units (No.) 18 20 20 21
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(1) Refer to "Non-GAAP Measures" on page 15 for further information.
N/A - Not Available
Financial Overview - Nine Months Ended September 30, 2009 Versus 2008
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Canada
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Nine Months Ended September 30, 2009 2008 Change
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(000s, except operational information) ($) ($) (%)
(unaudited)
Revenue 157,067 190,610 (18)
Expenses
Operating 135,870 154,458 (12)
SG&A 7,090 7,672 (8)
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142,960 162,130 (12)
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Operating income(1) 14,107 28,480 (50)
Operating income (%) 9.0% 14.9% (40)
Fracturing revenue per job ($) 90,515 62,276 45
Number of fracturing jobs 1,504 2,530 (41)
Coiled tubing revenue per job ($) 18,226 9,711 88
Number of coiled tubing jobs 952 2,049 (54)
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(1) Refer to "Non-GAAP Measures" on page 15 for further information.
Revenue
Revenue from Calfrac's Canadian operations during the first nine months of 2009 decreased by 18 percent to
Operating Expenses
Operating expenses in
SG&A Expenses
SG&A expenses for Calfrac's Canadian operations were
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Nine Months Ended September 30, 2009 2008 Change
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(000s, except operational and
exchange rate information) ($) ($) (%)
(unaudited)
Revenue 164,020 137,210 20
Expenses
Operating 136,212 96,222 42
SG&A 5,319 5,957 (11)
--------------------------------
141,531 102,179 39
--------------------------------
Operating income(1) 22,489 35,031 (36)
Operating income (%) 13.7% 25.5% (46)
Fracturing revenue per job ($) 76,899 60,834 26
Number of fracturing jobs 1,973 2,139 (8)
Cementing revenue per job ($) 19,998 13,296 50
Number of cementing jobs 615 533 15
Cdn$/US$ average exchange rate(2) 1.1694 1.0180 15
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(1) Refer to "Non-GAAP Measures" on page 15 for further information.
(2) Source: Bank of Canada.
Revenue
Revenue from Calfrac's
Operating Expenses
Operating expenses in the
SG&A Expenses
SG&A expenses in the
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Nine Months Ended September 30, 2009 2008 Change
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(000s, except operational and
exchange rate information) ($) ($) (%)
(unaudited)
Revenue 51,932 45,131 15
Expenses
Operating 33,364 34,037 (2)
SG&A 2,648 2,780 (5)
--------------------------------
36,012 36,817 (2)
--------------------------------
Operating income(1) 15,920 8,314 91
Operating income (%) 30.7% 18.4% 67
Fracturing revenue per job ($) 75,430 133,541 (44)
Number of fracturing jobs 438 185 137
Coiled tubing revenue per job ($) 45,418 62,086 (27)
Number of coiled tubing jobs 416 329 26
Cdn$/rouble average exchange rate(2) 0.0360 0.0424 (15)
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(1) Refer to "Non-GAAP Measures" on page 15 for further information.
(2) Source: Bank of Canada.
Revenue
During the first nine months of 2009, the Company's revenue from Russian operations increased by 15 percent to
Operating Expenses
Operating expenses in
SG&A Expenses
SG&A expenses in
Latin America
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Nine Months Ended September 30, 2009 2008 Change
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(000s, except operational and
exchange rate information) ($) ($) (%)
(unaudited)
Revenue 45,357 18,982 139
Expenses
Operating 35,658 20,860 71
SG&A 1,685 594 184
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37,343 21,454 74
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Operating income (loss)(1) 8,014 (2,472) 424
Operating income (loss) (%) 17.7% -13.0% 236
Cdn$/Mexican peso average
exchange rate(2) 0.0857 0.0969 (12)
Cdn$/Argentine peso average
exchange rate(2) 0.3124 0.3237 (3)
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(1) Refer to "Non-GAAP Measures" on page 15 for further information.
(2) Source: Bank of Canada.
Revenue
Calfrac's Latin America operations generated total revenue of
Operating Expenses
Operating expenses in Latin America for the nine months ended
SG&A Expenses
SG&A expenses in Latin America increased by
Corporate
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Nine Months Ended September 30, 2009 2008 Change
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(000s) ($) ($) (%)
(unaudited)
Expenses
Operating 1,898 1,774 7
SG&A 10,654 11,298 (6)
--------------------------------
12,552 13,072 (4)
Operating loss(1) (12,552) (13,072) 4
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(1) Refer to "Non-GAAP Measures" on page 15 for further information.
Operating Expenses
Operating expenses primarily relate to manufacturing and R&D personnel located in the Corporate headquarters who directly support the Company's global field operations. The 7 percent increase in Corporate operating expenses from the first nine months of 2008 is mainly due to an increase in the number of personnel directly supporting the Company's broader scale of operations.
SG&A Expenses
For the nine months ended
Interest and Depreciation Expenses
The Company's net interest expense of
For the nine months ended
Foreign Exchange Losses or Gains
The Company incurred a foreign exchange loss of
Income Tax Expenses
The Company recorded income tax recovery of
Liquidity and Capital Resources
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Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
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2009 2008 2009 2008
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(000s) ($) ($) ($) ($)
(unaudited)
Cash provided by (used in):
Operating activities (11,721) (1,830) 25,290 27,124
Financing activities 32,483 216 45,596 6,991
Investing activities (56,080) (20,012) (89,066) (53,899)
Effect of exchange rate
changes on cash and
cash equivalents (4,184) 1,851 (7,690) 3,421
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Decrease in cash and cash
equivalents (39,502) (19,775) (25,870) (16,363)
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Operating Activities
The Company's cash flow from operating activities for the nine months ended
Financing Activities
Net cash provided by financing activities for the first nine months of 2009 was
In
On
At
The Company pays semi-annual dividends to shareholders of
Investing Activities
For the first nine months of 2009, Calfrac's net cash used for investing activities was
On
On
Additionally, net cash used for investing activities was impacted by the net change in non-cash working capital from the purchase of capital assets.
The effect of changes in foreign exchange rates on the Company's cash and cash equivalents during the first nine months of 2009 was a loss of
With its strong working capital position, credit facilities and anticipated funds provided by operations, the Company expects to have adequate resources to fund its financial obligations and planned capital expenditures for 2009 and beyond.
Proposed Acquisition
On
Outstanding Share Data
The Company is authorized to issue an unlimited number of common shares. Employees have been granted options to purchase common shares under the Company's shareholder-approved stock option plan. The number of shares reserved for issuance under the stock option plan is equal to 10 percent of the Company's issued and outstanding common shares. As at
Advisories
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Forward-Looking Statements
In order to provide Calfrac shareholders and potential investors with information regarding the Company and its subsidiaries, including management's assessment of Calfrac's plans and future operations, certain statements contained in this press release, including statements that contain words such as "anticipates", "can", "may", "expect", "believe", "intend", "forecast", "will", or similar words suggesting future outcomes, are forward-looking statements. Forward-looking statements in this document include, but are not limited to, statements with respect to future capital expenditures, future financial resources, future oil and natural gas well activity, outcome of specific events, trends in the oil and natural gas industry and the Company's growth prospects including, without limitation, its international growth strategy and prospects. These statements are derived from certain assumptions and analyses made by the Company based on its experience and interpretation of historical trends, current conditions, expected future developments and other factors that it believes are appropriate in the circumstances, including assumptions related to commodity pricing, North American drilling activity and the expectation that access to capital will continue to be restricted for many of Calfrac's customers. Forward-looking statements are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from the Company's expectations. The most significant risk factors to Calfrac relate to prevailing economic conditions; commodity prices; sourcing, pricing and availability of raw materials, component parts, equipment, suppliers, facilities and skilled personnel; dependence on major customers; uncertainties in weather and temperature affecting the duration of the service periods and the activities that can be completed; and regional competition. Readers are cautioned that the foregoing list of risks and uncertainties is not exhaustive. Further information about these risks and uncertainties may be found under "Business Risks" below.
Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and there can be no assurance that actual results or developments anticipated by the Company will be realized, or that they will have the expected consequences or effects on the Company or its business or operations. The Company assumes no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise, except as required pursuant to applicable securities laws.
Business Risks
The business of Calfrac is subject to certain risks and uncertainties. Prior to making any investment decision regarding Calfrac, investors should carefully consider, among other things, the risk factors set forth in the Company's most recently filed Annual Information Form and incorporated by reference herein.
The Annual Information Form is available through the Internet on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR), which can be accessed at www.sedar.com. Copies of the Annual Information Form may also be obtained on request without charge from Calfrac at 411 - 8th Avenue S.W.,
Non-GAAP Measures
Certain measures in this press release do not have any standardized meaning as prescribed under Canadian GAAP and are therefore considered non-GAAP measures. These measures include operating income, funds provided by operations and EBITDA. These measures may not be comparable to similar measures presented by other entities. These measures have been described and presented in this press release 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. Management's use of these measures has been disclosed further in this press release as these measures are discussed and presented.
Additional Information
Further information regarding Calfrac Well Services Ltd., including the most recently filed Annual Information Form, can be accessed on the Company's website at www.calfrac.com or under the Company's public filings found at www.sedar.com.
Third Quarter Conference Call
Calfrac will be conducting a conference call for interested analysts, brokers, investors and news media representatives to review its 2009 third quarter results at
CONSOLIDATED BALANCE SHEETS
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As at September December
30, 2009 31, 2008
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(000s) (unaudited) ($) ($)
ASSETS
Current assets
Cash and cash equivalents 10,622 36,492
Accounts receivable 118,647 120,048
Income taxes recoverable 1,810 6,681
Inventory 37,545 41,123
Prepaid expenses and deposits 7,033 5,813
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175,657 210,157
Capital assets 473,656 459,874
Goodwill 10,523 10,523
Future income taxes 18,384 11,218
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678,220 691,772
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities 69,020 94,582
Bank loan - 15,000
Current portion of long-term debt (note 5) 3,306 -
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72,326 109,582
Long-term debt (note 5) 200,168 159,899
Other long-term liabilities 1,282 1,368
Future income taxes 22,212 24,815
Deferred credit 3,105 2,588
Non-controlling interest 155 44
-------------------------------------------------------------------------
299,248 298,296
-------------------------------------------------------------------------
Shareholders' equity
Capital stock (note 6) 168,813 168,813
Contributed surplus (note 7) 9,914 7,297
Retained earnings 203,365 211,652
Accumulated other comprehensive income (loss) (3,120) 5,714
-------------------------------------------------------------------------
378,972 393,476
-------------------------------------------------------------------------
678,220 691,772
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Contingencies (note 10)
See accompanying notes to the consolidated financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2009 2008 2009 2008
-------------------------------------------------------------------------
(000s, except per share data) ($) ($) ($) ($)
(unaudited)
Revenue 133,261 151,650 418,376 391,933
-------------------------------------------------------------------------
Expenses
Operating 108,028 113,229 343,001 307,349
Selling, general and
administrative 8,734 10,609 27,397 28,303
Depreciation 15,448 12,773 45,563 36,868
Interest, net 3,763 2,692 10,951 8,072
Equity share of income from
long-term investments - - - (122)
Foreign exchange losses
(gains) 1,807 704 3,902 (805)
Loss (gain) on disposal of
capital assets (420) 125 (1,321) (8)
-------------------------------------------------------------------------
137,360 140,132 429,493 379,657
-------------------------------------------------------------------------
Income (loss) before income
taxes and non-controlling
interest (4,099) 11,518 (11,117) 12,276
-------------------------------------------------------------------------
Income taxes
Current (227) (1,426) 1,234 (3,848)
Future (6,745) 1,769 (6,062) 6,243
-------------------------------------------------------------------------
(6,972) 343 (4,828) 2,395
-------------------------------------------------------------------------
Income (loss) before
non-controlling interest 2,873 11,175 (6,289) 9,881
Non-controlling interest 31 (28) 111 (122)
-------------------------------------------------------------------------
Net income (loss) for the
period 2,842 11,203 (6,400) 10,003
Retained earnings, beginning
of period 200,523 194,947 211,652 198,039
Dividends - - (1,887) (1,892)
-------------------------------------------------------------------------
Retained earnings, end
of period 203,365 206,150 203,365 206,150
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Income (loss) per share
Basic 0.08 0.30 (0.17) 0.27
Diluted 0.08 0.30 (0.17) 0.27
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND ACCUMULATED
OTHER COMPREHENSIVE INCOME
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2009 2008 2009 2008
-------------------------------------------------------------------------
(000s) (unaudited) ($) ($) ($) ($)
Net income (loss) for
the period 2,842 11,203 (6,400) 10,003
Other comprehensive
income (loss)
Change in foreign currency
translation adjustment (5,260) 2,276 (8,834) 3,563
-------------------------------------------------------------------------
Comprehensive income (loss) (2,418) 13,479 (15,234) 13,566
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Accumulated other
comprehensive income (loss),
beginning of period 2,140 (4,917) 5,714 (6,204)
Other comprehensive income
(loss) for the period (5,260) 2,276 (8,834) 3,563
-------------------------------------------------------------------------
Accumulated other
comprehensive income (loss),
end of period (3,120) (2,641) (3,120) (2,641)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2009 2008 2009 2008
-------------------------------------------------------------------------
(000s) (unaudited) ($) ($) ($) ($)
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net income (loss) for the
period 2,842 11,203 (6,400) 10,003
Items not involving cash
Depreciation 15,448 12,773 45,563 36,868
Amortization of debt
issue costs 168 159 532 464
Stock-based compensation 875 1,127 2,617 2,583
Equity share of income
from long-term investments - - - (122)
Loss (gain) on disposal
of capital assets (420) 125 (1,321) (8)
Future income taxes (6,745) 1,769 (6,062) 6,243
Non-controlling interest 31 (28) 111 (122)
-------------------------------------------------------------------------
12,199 27,128 35,040 55,909
Net change in non-cash
operating assets and
liabilities (23,920) (28,958) (9,750) (28,785)
-------------------------------------------------------------------------
(11,721) (1,830) 25,290 27,124
-------------------------------------------------------------------------
FINANCING ACTIVITIES
Bank loan proceeds - - 5,000 -
Issuance of long-term
debt 42,541 - 62,541 -
Bank loan repayments (10,000) - (20,000) -
Long-term debt repayments (58) - (58) -
Net proceeds on issuance
of common shares - 216 - 8,883
Dividends - - (1,887) (1,892)
-------------------------------------------------------------------------
32,483 216 45,596 6,991
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of capital
assets (note 4) (58,212) (18,414) (83,931) (52,574)
Proceeds on disposal of
capital assets 959 28 2,133 285
Acquisitions, net of
cash acquired - - - (6,117)
Long-term investments
and other - 83 - 326
Net change in non-cash
working capital from
purchase of capital assets 1,173 (1,709) (7,268) 4,181
-------------------------------------------------------------------------
(56,080) (20,012) (89,066) (53,899)
-------------------------------------------------------------------------
Effect of exchange rate
changes on cash and cash
equivalents (4,184) 1,851 (7,690) 3,421
-------------------------------------------------------------------------
Increase (decrease) in
cash position (39,502) (19,775) (25,870) (16,363)
Cash and cash equivalents,
beginning of period 50,124 42,516 36,492 39,104
-------------------------------------------------------------------------
Cash and cash equivalents,
end of period 10,622 22,741 10,622 22,741
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------------------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
(figures in text and tables are in 000s except share data and certain
other exceptions as indicated) (unaudited)
1. BASIS OF PRESENTATION
The interim financial statements of Calfrac Well Services Ltd. (the
"Company") do not conform in all respects to the requirements of
generally accepted accounting principles (GAAP) for annual financial
statements. The interim financial statements should be read in
conjunction with the most recent annual financial statements.
2. SEASONALITY OF OPERATIONS
The Company's Canadian business is seasonal in nature. The lowest
activity levels are typically experienced during the second quarter
of the year when road weight restrictions are in place and access to
wellsites in Canada is reduced.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) The interim financial statements follow the same accounting
policies and methods of application as the most recent annual
financial statements, except for the adoption of the Canadian
Institute of Chartered Accountants (CICA) Handbook Section 3064
Goodwill and Intangible Assets. Section 3064 replaces the
previous Section 3062 and establishes standards for the
recognition, measurement, presentation and disclosure of
intangible assets and goodwill subsequent to its initial
recognition. The adoption of Section 3064 has not had an impact
on the Company's consolidated financial statements, as the
provisions relating to goodwill are unchanged from the previous
standard and the Company has no recognizable intangible assets.
(b) In 2006, the CICA Accounting Standards Board (AcSB) adopted a
strategic plan for the direction of accounting standards in
Canada. As part of that plan, the AcSB confirmed in February 2008
that International Financial Reporting Standards (IFRS) will
replace Canadian GAAP in 2011 for profit-oriented Canadian
publicly accountable enterprises. As the Company will be required
to report its results in accordance with IFRS starting in 2011,
the Company has developed its project plan which includes the
following key elements:
- determine appropriate changes to accounting policies and
required amendments to financial disclosures;
- identify and implement changes in associated processes and
information systems;
- comply with internal control requirements; and
- educate and train internal and external stakeholders.
The Company is currently analysing accounting policy alternatives
and identifying implementation options for the areas that have
been identified as having the greatest potential impact to the
Company's financial statements or the greatest risk in terms of
complexity to implement. The areas identified to date include
capital assets, impairment and foreign currency translation.
4. ASSET ACQUISITION
On August 14, 2009, the Company purchased the fracturing assets of a
competitor for $44,513 including related transaction costs. The
Company acquired $42,252 of capital assets including fracturing
equipment and certain real property, as well as $2,261 of the
vendor's parts and materials inventory. The purchase price was
satisfied through payment of $41,071 in cash and the assumption of
long-term debt in the amount of $3,442.
5. LONG-TERM DEBT
---------------------------------------------------------------------
As at September December
30, 2009 31, 2008
---------------------------------------------------------------------
(000s) ($) ($)
US$135,000 senior unsecured notes, due
February 15, 2015 bearing interest at 7.75%,
payable semi-annually 144,545 164,430
Less: unamortized debt issue costs (3,496) (4,531)
---------------------------------------------------------------------
141,049 159,899
$125,000 extendible revolving term loan facility
currently bearing interest at the Canadian prime
rate plus 1%, secured by the Canadian and U.S.
assets of the Company 59,099 -
US$3,107 mortgage bearing interest at U.S. prime
less 1%, repayable $35 per month principal and
interest, secured by certain real property 3,326 -
---------------------------------------------------------------------
203,474 159,899
Less: current portion of long-term debt (3,306) -
---------------------------------------------------------------------
200,168 159,899
---------------------------------------------------------------------
---------------------------------------------------------------------
The fair value of the senior unsecured notes based on the closing
price at September 30, 2009 was $140,035 (December 31, 2008 -
$77,282).
The interest rate on the term revolving facility is based upon the
parameters of certain bank covenants, and range from prime plus 1% to
prime plus 1.75%. The facility is repayable in 8 equal quarterly
principal instalments of $2,955 commencing September 30, 2010 plus a
final payment of $35,459 on September 28, 2012, assuming the facility
is not extended. The term and commencement of principal repayments
under the facility may be extended by one year on each anniversary at
the request of the Company and acceptance by the lenders. The Company
also has the ability to prepay principal without penalty.
6. CAPITAL STOCK
Authorized capital stock consists of an unlimited number of common
shares.
---------------------------------------------------------------------
Continuity of Common
Shares (year-to-date) 2009 2008
---------------------------------------------------------------------
Shares Amount Shares Amount
---------------------------------------------------------------------
(No.) ($000s) (No.) ($000s)
Balance, January 1 37,741,561 168,813 37,201,872 155,254
Issued upon exercise
of stock options - - 492,311 11,379
Issued on acquisitions - - 150,160 2,640
Purchased under Normal
Course Issuer Bid - - - -
---------------------------------------------------------------------
Balance, September 30 37,741,561 168,813 37,844,343 169,273
---------------------------------------------------------------------
---------------------------------------------------------------------
The weighted average number of common shares outstanding for the nine
months ended September 30, 2009 was 37,741,561 basic and 37,741,561
diluted (nine months ended September 30, 2008 - 37,653,459 basic and
37,681,393 diluted). The difference between basic and diluted shares
for the nine months ended September 30, 2008 was attributable to the
dilutive effect of stock options issued by the Company and shares
held in trust. All of the outstanding options disclosed in note 8
could be potentially dilutive in the future; however they were not
included in the calculation of diluted shares for the nine months
ended September 30, 2009, as they would have an anti-dilutive effect.
7. CONTRIBUTED SURPLUS
---------------------------------------------------------------------
Continuity of Contributed Surplus
(year-to-date) 2009 2008
---------------------------------------------------------------------
(000s) ($) ($)
Balance, January 1 7,297 6,025
Stock options expensed 2,617 2,583
Stock options exercised - (2,496)
---------------------------------------------------------------------
Balance, September 30 9,914 6,112
---------------------------------------------------------------------
---------------------------------------------------------------------
8. STOCK OPTIONS
---------------------------------------------------------------------
Continuity of Stock Options
(year-to-date) 2009 2008
---------------------------------------------------------------------
Average Average
Exercise Exercise
Options Price Options Price
---------------------------------------------------------------------
(No.) ($) (No.) ($)
Balance, January 1 2,043,344 21.69 1,224,223 22.90
Granted during the
period 852,500 8.45 1,328,000 19.91
Exercised for common
shares - - (492,311) 18.04
Forfeited (191,049) 19.86 (74,269) 23.81
Expired (164,400) 32.59 - -
---------------------------------------------------------------------
Balance, September 30 2,540,395 16.68 1,985,643 22.07
---------------------------------------------------------------------
---------------------------------------------------------------------
Stock options vest equally over three or four years and expire three-
and-one-half or five years from the date of grant. The exercise price
of outstanding options ranges from $8.35 to $29.79 with a weighted
average remaining life of 3.30 years. When stock options are
exercised the proceeds, together with the amount of compensation
expense previously recorded in contributed surplus, are added to
capital stock.
9. CAPITAL STRUCTURE
The Company's capital structure is comprised of shareholders' equity
and long-term debt. The Company's objectives in managing capital are
(i) to maintain flexibility so as to preserve the Company's access to
capital markets and its ability to meet its financial obligations,
and (ii) to finance growth, including potential acquisitions.
The Company manages its capital structure and makes adjustments in
light of changing market conditions and new opportunities, while
remaining cognizant of the cyclical nature of the oilfield services
sector. To maintain or adjust its capital structure, the Company may
revise its capital spending, adjust dividends paid to shareholders,
issue new shares or new debt or repay existing debt.
The Company monitors its capital structure and financing requirements
using, amongst other parameters, the ratio of long-term debt to cash
flow. Cash flow for this purpose is defined as cash provided by
operating activities before the net change in non-cash operating
assets and liabilities as reflected in the consolidated statement of
cash flows. The ratio of long-term debt to cash flow does not have
any standardized meaning prescribed under GAAP and may not be
comparable to similar measures used by other companies.
At September 30, 2009, the long-term debt to cash flow ratio was
3.40:1 (December 31, 2008 - 1.98:1) calculated on a 12-month trailing
basis as follows:
---------------------------------------------------------------------
As at September December
30, 2009 31, 2008
---------------------------------------------------------------------
(000s) ($) ($)
Long-term debt (net of unamortized debt
issue costs) (note 5) 203,474 159,899
Cash flow 59,878 80,747
---------------------------------------------------------------------
Long-term debt to cash flow ratio 3.40 1.98
---------------------------------------------------------------------
---------------------------------------------------------------------
The Company is subject to certain financial covenants relating to
working capital, leverage and the generation of cash flow in respect
of its operating and revolving credit facilities. These covenants are
monitored on a monthly basis. The Company is in compliance with all
such covenants.
The Company's capital management objectives, evaluation measures and
targets have remained unchanged over the periods presented.
10. CONTINGENCIES
Greek Operations
As a result of the acquisition and amalgamation with Denison Energy
Inc. ("Denison") in 2004, the Company assumed certain legal
obligations relating to Denison's Greek operations.
In 1998, North Aegean Petroleum Company E.P.E. ("NAPC"), a Greek
subsidiary of a consortium in which Denison participated (and which
is now a majority-owned subsidiary of the Company), terminated
employees in Greece as a result of the cessation of its oil and gas
operations in that country. Several groups of former employees have
filed claims against NAPC and the consortium alleging that their
termination was invalid and that their severance pay was improperly
determined.
In 1999, the largest group of plaintiffs received a ruling from the
Athens Court of First Instance that their termination was invalid and
that salaries in arrears amounting to approximately
$10,672 ((euro)6,846 euros) plus interest was due to the former
employees. This decision was appealed to the Athens Court of Appeal,
which allowed the appeal in 2001 and annulled the above-mentioned
decision of the Athens Court of First Instance. The said group of
former employees filed an appeal with the Supreme Court of Greece,
which was heard on May 29, 2007. The Supreme Court of Greece allowed
the appeal and sent the matter back to the Athens Court of Appeal for
the consideration of the quantum of awardable salaries in arrears. On
June 3, 2008, the Athens Court of Appeal rejected NAPC's appeal of
the Supreme Court of Greece's decision, and reinstated the award of
the Athens Court of First Instance, which decision has been further
appealed to the Supreme Court of Greece, and on November 3, 2009 was
postponed until March 16, 2010. Counsel to NAPC has obtained a
judicial order entitling NAPC to obtain certain employment
information in respect of the plaintiffs which is required in order
to assess the extent to which the plaintiffs have mitigated any
damages which may otherwise be payable. NAPC intends to vigorously
defend the appeal decision before the Supreme Court of Greece both in
relation to the merits of the plaintiffs' case as well as in respect
of the quantum of any damages which may be awarded. In the event that
an adverse ruling is issued by the Supreme Court of Greece, NAPC and
the Company intend to assess available rights of appeal to any other
levels of court in any jurisdiction where such an appeal is
warranted.
Several other smaller groups of former employees have filed similar
cases in various courts in Greece. One of these cases was heard by
the Athens Court of First Instance on January 18, 2007. By judgment
rendered November 23, 2007, the plaintiff's allegations were
partially accepted, and the plaintiff was awarded compensation for
additional work of approximately $55 ((euro)35 euros), plus interest.
The appeal of this decision was heard on June 2, 2009, at which time
an additional claim by the plaintiff seeking damages of
$348 ((euro)223 euros), plus interest, was also heard. A decision in
respect of the hearing has been rendered which accepted NAPC's appeal
and rejected the additional claim of the plaintiff. Another one of
the lawsuits seeking salaries in arrears of
$200 ((euro)128 euros), plus interest, was heard by the Supreme Court
of Greece on November 6, 2007, at which date the appeal of the
plaintiffs was denied for technical reasons due to improper service.
A rehearing of this appeal scheduled for September 22, 2009 was
postponed until September 21, 2010. The remaining action, which is
seeking salaries in arrears of approximately $684 ((euro)439 euros)
plus interest, was scheduled to be heard before the Athens Court of
First Instance on October 1, 2009, but was adjourned as a result of
the recently held Greek elections. No date has been set for the
adjourned hearing.
The direction and financial consequences of the potential decisions
in these actions cannot be determined at this time and, consequently,
no provision has been recorded in these financial statements.
11. COMPARATIVES
Certain comparatives have been reclassified to conform with the
financial statement presentation adopted in the current period.
12. SEGMENTED INFORMATION
The Company's activities are conducted in four geographic segments:
Canada, Russia, the United States and Latin America. All activities
are related to fracturing, coiled tubing, cementing and well
stimulation services for the oil and natural gas industry.
---------------------------------------------------------------------
United
Canada Russia States
---------------------------------------------------------------------
(000s) ($) ($) ($)
---------------------------------------------------------------------
Three Months Ended September 30, 2009
Revenue 45,463 17,774 52,524
Operating income (loss)(1) 6,090 6,151 5,682
Segmented assets 279,055 102,802 249,103
Capital expenditures 11,317 1,699 44,099
Goodwill 7,236 979 2,308
---------------------------------------------------------------------
---------------------------------------------------------------------
Three Months Ended September 30, 2008
Revenue 75,294 15,197 54,568
Operating income (loss)(1) 16,688 3,575 13,399
Segmented assets 272,741 107,577 217,492
Capital expenditures 6,133 861 10,961
Goodwill 7,236 979 2,308
---------------------------------------------------------------------
---------------------------------------------------------------------
Nine Months Ended September 30, 2009
Revenue 157,067 51,932 164,020
Operating income (loss)(1) 14,107 15,920 22,489
Segmented assets 279,055 102,802 249,103
Capital expenditures 23,709 3,135 54,890
Goodwill 7,236 979 2,308
---------------------------------------------------------------------
---------------------------------------------------------------------
Nine Months Ended September 30, 2008
Revenue 190,610 45,131 137,210
Operating income (loss)(1) 28,480 8,314 35,031
Segmented assets 272,741 107,577 217,492
Capital expenditures 17,243 1,747 30,305
Goodwill 7,236 979 2,308
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
Latin Consol-
America Corporate idated
---------------------------------------------------------------------
(000s) ($) ($) ($)
---------------------------------------------------------------------
Three Months Ended September 30, 2009
Revenue 17,500 - 133,261
Operating income (loss)(1) 2,555 (3,979) 16,499
Segmented assets 47,260 - 678,220
Capital expenditures 1,097 - 58,212
Goodwill - - 10,523
---------------------------------------------------------------------
---------------------------------------------------------------------
Three Months Ended September 30, 2008
Revenue 6,591 - 151,650
Operating income (loss)(1) (1,115) (4,735) 27,812
Segmented assets 20,980 - 618,790
Capital expenditures 459 - 18,414
Goodwill - - 10,523
---------------------------------------------------------------------
---------------------------------------------------------------------
Nine Months Ended September 30, 2009
Revenue 45,357 - 418,376
Operating income (loss)(1) 8,014 (12,552) 47,978
Segmented assets 47,260 - 678,220
Capital expenditures 2,197 - 83,931
Goodwill - - 10,523
---------------------------------------------------------------------
---------------------------------------------------------------------
Nine Months Ended September 30, 2008
Revenue 18,982 - 391,933
Operating income (loss)(1) (2,472) (13,072) 56,281
Segmented assets 20,980 - 618,790
Capital expenditures 3,279 - 52,574
Goodwill - - 10,523
---------------------------------------------------------------------
---------------------------------------------------------------------
(1) Operating income (loss) is defined as net income (loss) plus
depreciation, interest, equity share of net income from long-term
investments, foreign exchange gains or losses, gains or losses on
disposal of capital assets, income taxes and non-controlling
interest.
The following table sets forth consolidated revenue by service line:
---------------------------------------------------------------------
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2009 2008 2009 2008
---------------------------------------------------------------------
(000s) ($) ($) ($) ($)
Fracturing 115,262 125,766 353,050 323,173
Coiled tubing 10,656 15,680 36,245 40,324
Cementing 4,151 8,105 19,754 21,250
Other 3,192 2,099 9,327 7,186
---------------------------------------------------------------------
133,261 151,650 418,376 391,933
---------------------------------------------------------------------
---------------------------------------------------------------------
13. PROPOSED ACQUISITION
On September 20, 2009, the Company and Century entered into a
definitive agreement pursuant to which the Company will acquire all
of the issued and outstanding common shares of Century, a privately
held fracturing services company operating in Western Canada. Under
the terms of the agreement, the purchase price of $90.0 million will
consist of approximately $13.5 million of cash plus up to 5,144,695
common shares of the Company, with an agreed value of $76.5 million.
For accounting purposes, the shares issuable in the transaction have
a fair value of approximately $82.2 million based on the weighted
average price of the Company's shares for the 3 trading days
preceding and the 3 trading days following the date of the agreement.
Including estimated transaction costs, the total consideration will
be approximately $99.5 million for accounting purposes. If approved
by the shareholders of Century, the acquisition is expected to close
on or after November 10, 2009.
%SEDAR: 00002062E
For further information: Douglas R. Ramsay, President and Chief Executive Officer, Telephone: (403) 266-6000, Fax: (403) 266-7381; Laura A. Cillis, Senior Vice President, Finance and Chief Financial Officer, Telephone: (403) 266-6000, Fax: (403) 266-7381; Tom J. Medvedic, Senior Vice President, Corporate Development, Telephone: (403) 266-6000, Fax: (403) 266-7381
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