Horizon North Logistics Inc. Announces Record Results For the Quarter Ended March 31, 2012

TSX Symbol: HNL

CALGARY, May 2, 2012 /CNW/ - Horizon North Logistics Inc. ("Horizon" or the "Corporation") reported its financial and operating results for the three months ended March 31, 2012 and 2011.

First Quarter Highlights

• Record quarterly consolidated Revenues, EBITDAS and Earnings per share; and a significant increase in each as compared to Q1 2011;
• Camps & Catering segment revenues increased by 30% as compared to Q1 2011 driven mainly by expanded camp rental and catering operations;
• Continued investment and focus on the Alberta oil sands region with 64% of first quarter revenues generated from oil sands related projects and customers; and
• Continued capital investment, exiting the quarter with 6,461 rentable beds and 13,132 rental mats.

First Quarter Financial Summary

						Three months ended March 31
(000's except per share amounts)						2012					2011					% Change
Revenue						$	128,597				$	103,159				25%
EBITDAS^(1)							34,445					22,805				51%
EBITDAS as a % of revenue							27%					22%
Operating earnings							26,080					15,541				68%
Total comprehensive income						$	18,792				$	10,912				72%
Earnings per share    - basic						$	0.18				$	0.10				80%
- diluted						$	0.17				$	0.10				70%
Total assets						$	390,866				$	308,741				27%
Long-term loans and borrowings							68,700					33,831				103%
Funds from operations^(1)							27,423					17,167				60%
Capital spending							34,177					25,824				32%
Debt to total capitalization ratio^(^1)							0.23:1					0.21:1

(1)     See financial measures definitions on the last page of the press release for details.

Overview and Outlook

Horizon reported record revenues and EBITDAS in the three months ended March 31, 2012.  Oil sands development activities continue to be the main driver of Horizon's business, with 64% of first quarter revenues driven from these activities.

Capital spending in 2011 was focused on camp and catering fleet expansion in the Fort McMurray Alberta oil sands area, and 2012 first quarter results show the effect of this equipment being deployed and utilized combined with continued investment in 2012.  Horizon's manufacturing facilities were highly utilized during the quarter, with continued execution of several large, oil sands based sales projects and investment in the camp and catering rental fleet.

Horizon's matting division continues to see strong demand, both for mat sales and rental matting and the ancillary services that support both sales and rental operations.  Warmer weather and soft ground conditions and an early spring break up drove improved mat rental utilization during the quarter.

Capital Program

Horizon's capital budget for 2012 has been increased to $120 million, with approximately $15 million allocated to maintenance capital.  Of the $105 million of expansion capital, $85 million has been committed to projects expected to add 1,800 beds to the camp and catering rental fleet, primarily in the Alberta oil sands region through the latter half of the year.  It is anticipated that the remaining $20 million will be allocated to new projects generated from continued, strong bidding activity.

Dividend Payment

Horizon North Logistic Inc. announced today that its Board of Directors has declared a dividend for the second quarter of 2012 at $0.05 per share. The dividend is payable to shareholders of record at the close of business on June 30, 2012 to be paid on July 13, 2012. The dividends are eligible dividends for Canadian tax purposes.

Liquidity and Capital Resources

Strong and increasing activity levels through 2011 and 2012 should allow Horizon to fund its capital program primarily through operating cash flows and expanded credit facilities.  During the quarter, Horizon increased its credit facilities to $120 million from $80 million.

First Quarter Financial Results
			Three months ended March 31, 2012
(000's)			Camps & Catering			Matting			Marine Services			Corporate			Inter-segment Eliminations			Total
Revenue		$	112,186		$	18,338		$	741		$	-		$	(2,668)		$	128,597
Expenses
Direct costs			78,160			13,855			394			1			(2,400)			90,010
Selling & administrative			1,013			111			-			3,018			-			4,142
EBITDAS			33,013			4,372			347			(3,019)			(268)			34,445
EBITDAS as a % of revenue			29%			24%			47%			-			-			27%
Share based payments			33			11			1			45			-			90
Depreciation & amortization			6,321			1,757			111			114			(23)			8,280
Impairment loss			-			-			-			-			-			-
Loss on disposal of property, plant and equipment			(5)			-			-			-			-			(5)
Operating earnings (loss)		$	26,664		$	2,604		$	235		$	(3,178)		$	(245)		$	26,080
Finance costs																		694
Gain on equity investments																		(46)
Income tax expense																		6,571
Other comprehensive loss																		69
Total comprehensive income																	$	18,792
Earnings per share - basic																	$	0.18
- diluted																	$	0.17

		Three months ended March 31, 2011
(000's)		Camps & Catering			Matting			Marine Services			Corporate			Inter-segment Eliminations			Total
Revenue	$	86,123		$	17,841		$	832		$	-		$	(1,637)		$	103,159
Expenses
Direct costs		64,718			13,468			459			-			(1,584)			77,061
Selling & administrative		874			99			-			2,320			-			3,293
EBITDAS		20,531			4,274			373			(2,320)			(53)			22,805
EBITDAS as a % of revenue		24%			24%			45%			-			-			22%
Share based payments		84			10			1			61			-			156
Depreciation & amortization		5,411			1,310			107			84			(16)			6,896
Loss on disposal of property, plant and equipment		84			128			-			-			-			212
Operating earnings (loss)	$	14,952		$	2,826		$	265		$	(2,465)		$	(37)		$	15,541
Finance costs																	613
Loss on equity investments																	21
Income tax expense																	3,995
Total comprehensive income																$	10,912
Earnings per share - basic & diluted																$	0.10

Camps & Catering

Effective January 1, 2012 presentation and grouping of Camps & Catering revenues has been realigned to better represent the businesses within the Camp & Catering segment; 2011 comparatives have been similarly revised to ensure meaningful comparatives.

• Camp and catering operations revenue includes the following components: camp rental, catering and housekeeping, ancillary equipment rental and service; the service component includes transportation, set-up and de-mobilization related to these operations.
• Manufacturing sales and service revenue includes the following components: sales of newly manufactured camps and equipment and service; the service component includes transportation and installation related to these operations.
• Space rental and service revenue includes the following components: rental revenue, used equipment sales and service; the service component includes the transportation, set-up and de-mobilization related to these operations.

				Three months ended March 31
(000's except bed rental days and catering only days)					2012				2011			% change
Camp and catering operations revenue				$	75,002			$	46,482			61%
Manufacturing sales and service revenue					33,315				37,950			(12%)
Space rental and service revenues					3,869				1,691			129%
Total revenue				$	112,186			$	86,123			30%
EBITDAS				$	33,013			$	20,531			61%
Operating earnings				$	26,664			$	14,952			78%
Bed rental days^(1)					337,174				209,555			40%
Catering only days^(2)					72,519				58,945			23%

(1)     One bed rental day equals the rental of one bed and the provision of related catering and housekeeping services for one day.
(2)     One catering only day equals the provision of catering and housekeeping services with no related bed rental for one day.

Revenues from the Camps & Catering segment were $112.2 million for the three months ended March 31, 2012 compared to $86.1 million for the three months ended March 31, 2011, an increase of $26.1 million or 30%. EBITDAS for the three months ended March 31, 2012 were $33.0 million or 29% of revenue compared to $20.5 million or 24% of revenue for the three months ended March 31, 2011, an increase of $12.5 million or 61%.

The three months ended March 31, 2012 saw record revenue and EBIDTAS for the Camps & Catering segment. The strong performance was due to significant portions of Horizon's operations being focused on oil sands activity, which continues to grow at a robust pace. For the three months ended March 31, 2012, 64% of the Camps & Catering segment's revenues were derived from oil sands related activity as compared to 57% in the same period of 2011. Much of the revenue growth was a result of Horizon executing it's 2011 capital expansion plan, with the Camp & Catering equipment constructed in 2011 on the ground and operating throughout the three months ended March 31, 2012. Horizon exited the first quarter of 2012 with 6,461 rentable beds as compared to 4,938 for the same period of 2011. Despite the early spring break up, revenue remained very strong indicating a low degree of seasonality in Horizon's businesses.

Camp and catering operations revenue

Revenues are derived from the following main business areas: large camp operations, drill camp operations, catering only operations, and the associated service work with each operation. Service work includes the transportation, setup and de-mobilization of the camp and catering operations. Revenues from camp and catering operations were $75.0 million for the three months ended March 31, 2012 compared to $46.5 million for the three months ended March 31, 2011, an increase of $28.5 million or 61%.

The table below outlines the key performance metrics used by management to measure performance in the large camp and drill camp operations.

				Three months ended March 31
(000's for revenue only)				2012											2011
					Large camp				Drill camp				Total			Large camp				Drill camp				Total
Revenue				$	52,780			$	8,155			$	60,935		$	33,288			$	3,192			$	36,480
Bed rental days					293,738				43,436				337,174			190,295				19,260				209,555
Revenue per bed rental day				$	180			$	188			$	181		$	175			$	166			$	174
Number of rentable beds at period end					4,761				950				5,711			3,188				1,000				4,188
Average rentable beds available^(1)					4,643				950				5,593			3,035				1,018				4,053
Utilization^(2)					70%				50%				66%			70%				21%				57%

(1)     Average rentable beds available beds is equal to total average beds in the fleet over the period less beds required for staff.
(2)     Utilization equals the total number of bed rental days divided by average rentable beds available times days in the quarter.

Revenues from large camp operations for the three months ended March 31, 2012 increased by $19.5 million or 59% as compared to the same period in 2011. The growth of revenues from large camps over the comparative period was a result of the continued strong industry conditions and high activity levels in the oil sands and oil and gas sectors which drove both high volumes and stronger revenue per bed rental day. The higher demand from oil sands operators is reflected in 293,738 bed rental days for the quarter ended March 31, 2012 as compared to 190,295 in the same period in 2011, an increase of 84,183 or 40%. Rentable beds at the end of the three months ended March 31, 2012 were 4,761 as compared to 3,188 for the same period in 2011, reflecting the ongoing investment in the rental fleet. The higher demand and current strong market conditions helped revenue per bed rental day increase by $5.

Revenues from drill camp operations for the three months ended March 31, 2012 increased by $5.0 million or 155% as compared to the same period of 2011. The Canadian Association of Oilwell Drilling Contractors (CAODC) reported rig utilization unchanged in the comparative periods at 68%, however in the three months ended March 31, 2012 more rigs required camps due to their remote locations. In addition to the higher volumes, revenue per bed rental day increased by $22 per day. The increase in rate is due to strong current market conditions and additional equipment and services requested by the customer once the camp is operational.

The table below outlines the key performance metrics used by management to measure performance in the catering only operations.

	Three months ended March 31
(000's for revenue only)		2012		2011
Catering only revenue	$	7,543	$	5,783
Catering only days^(1)		72,519		58,945
Revenue per catering only day	$	104	$	98

(1)     One catering only day equals the provision of catering and housekeeping services with no related bed rental for one day.

Revenues from the provision of catering and housekeeping only services, with no associated bed rentals, increased by $1.8 million compared to the same period in 2011. The increase was mainly a result of higher volumes with 72,519 catering only days, an increase of 13,574 days above the same period of 2011. The increased volume was driven by higher activity levels in catering only for customer owned drill camps.

The table below outlines the service revenue generated from the camp and catering operation.

	Three months ended March 31
(000's)		2012		2011
Camp and catering operations service related revenue	$	6,524	$	4,219

Revenues from camp and catering operations services are revenues related to the transportation, setup and de-mobilization of camps. Revenue increased $2.3 million as compared to the same period of 2011 primarily due to the early spring break up this year. Service crews were busy de-mobilizing camps and putting camps in standby mode earlier than anticipated.

Manufacturing sales and service revenue

Manufacturing sales and service revenue includes new manufacturing operations and the transportation and installation associated with new manufacturing. Revenues for the three months ended March 31, 2012 were $33.3 million as compared to $38.0 million for the same period in 2011, a decrease of $4.7 million or 12%. The decrease was a result of production in the three months ended March 31, 2012 being more focused on filling internal fleet demand. The allocation of production capacity is reviewed by management on an ongoing basis. The service activity, which includes the transportation and installation components of the sale, remained relatively consistent, focused primarily on two significant oil sands related camp projects.

Space rental and service revenue

Space rental and service revenue for the three months ended March 31, 2012 was $3.9 million as compared to $1.7 million for the same period in 2011, an increase of $2.2 million or 129%. The increase came from used equipment sales with one significant sale in the three months ended March 31, 2012 as compared to the same period of 2011. The rental fleet performance was consistent in the comparative periods with utilization at 88% and rental rates essentially unchanged.

Direct costs

Direct costs for the three months ended March 31, 2012 were $78.2 million or 70% of revenue as compared to $64.7 million or 75% of revenue for the same period of 2011. Direct costs are closely related to business volumes. The increase in overall direct costs was primarily a result of the higher activity levels in the comparative periods. As a percentage of revenue, direct costs declined by 5% compared to the same period of 2011. The 5% decrease was attributable to relatively stable fixed costs over a larger revenue base and to stronger pricing, a result of strong market conditions in the oil sands and the oil and gas sectors.

Matting

Matting revenue is comprised of matting and equipment rental revenue, mat sales revenue, installation, transportation, service, and other revenue as follows:

						Three months ended March 31
(000's except mat rental days and numbers of mats)							2012				2011			% change
Access mat rental revenue^(1)						$	2,138			$	609			252%
Other mat and rental equipment revenue^(2)							671				624			8%
Total mat and equipment rental revenue						$	2,809			$	1,233			128%
Mat sales revenue							6,569				10,588			(38%)
Installation, transportation, service, and other revenue							8,960				6,020			49%
Total revenue						$	18,338			$	17,841			3%
EBITDAS						$	4,372			$	4,274			2%
Operating earnings						$	2,604			$	2,826			(8%)
Access mat rental days^(3)							744,344				250,587			197%
Average access mats in rental fleet							10,967				7,232			51%
Access mats in rental fleet at quarter end							13,132				6,973			88%
Mats sold:
New mats							7,407				12,385			(40%)
Used Mats							1,899				2,382			(20%)
Total mats sold							9,306				14,767			(37%)

(1)	Access mat rental revenue includes revenues generated from the rental of traditional oak and oak edged mats.
(2)	Other mat rental equipment revenue includes the rental of rig mats, quad mats, other ancillary equipment such as well site accommodation units, and light towers.
(3)	One mat rental day equals the rental of one access mat for one day.

Revenues from the Matting segment for the three months ended March 31, 2012 were $18.3 million as compared to $17.8 million for the same period of 2011, an increase of $0.5 million or 3%. EBITDAS for the three months ended March 31, 2011 were $4.4 million or 24% of revenue as compared to $4.3 million or 24% of revenue for the same period of 2011, an increase of $0.1 million or 2%.

Mat and equipment rental revenue

Total mat and equipment rental revenues for the three months ended March 31, 2012 were $2.8 million as compared to $1.2 million for the same period of 2011, an increase of $1.6 million or 128%. The higher access mat rental revenue was primarily driven by the increased volume of mat rental days and higher revenues per mat rental day. In the three months ended March 31, 2012 continued warm weather in the Fort McMurray, Alberta area caused operators to rent additional mats in order to continue operating in the soft ground conditions resulting in significantly increased mat rental days. The increased volume drove utilization to 75% in the three months ended March 31, 2012 as compared to 38% in the same period in 2011.  Stronger market conditions also helped boost access mat rental rates with revenue per rental day of $2.87 in the three months ended March 31, 2011 as compared to $2.43 in the same period 2011. Horizon exited the first quarter of 2012 with 13,132 access mats in the rental fleet as compared to 6,973 at the end of the first quarter of 2011.

Mat sales revenue

Revenues from mat sales for the three months ended March 31, 2012 decreased by $4.0 million or 38% as compared to the same period of 2011. The first quarter of 2011 had several large mat orders which did not occur in the first quarter of 2012. Revenue per mat sold for three months ended March 31, 2012 was $706, down from $717 in the same period of 2011 which is a result of the mix of mats sold. The decrease is a result of the mix of mats sold with fewer new mats and more used mats sold in the three months ended March 31, 2012 as compared to the same period of 2011. New mat sales have a higher selling price than used mats.

Installation, transportation, service, and other revenue

Installation, transportation, service, and other revenues are driven primarily from the level of activity in the mat rental and mat sale businesses and are charged for separately from rentals and sales. Revenues for the three months ended March 31, 2012 were higher by $2.9 million or 49% as compared to the same period in 2011. The increase is mainly due to the higher volume of rentals throughout the quarter.

Direct costs

Direct costs for the three months ended March 31, 2012 were $13.9 million or 76% of revenue as compared to $13.5 million or 75% of revenue for the same period of 2011. Direct costs are driven by the level of business activity, with the revenue unchanged in the comparative quarters direct costs have remained essentially the same. Direct costs as a percentage of revenue increased by 1% for the three months ended March 31, 2012 as compared the same period of 2011.

Marine Services

Marine Services revenue is comprised of barge camp revenue and rental and other revenue as follows:

						Three months ended March 31
(000's)									2012						2011			% change
Barge camp revenue						$			727			$			680			7%
Rental and other revenue									14						152			(91%)
Total revenue						$			741			$			832			(11%)
EBITDAS						$			347			$			373			(7%)
Operating earnings						$			235			$			265			(11%)

Revenues from the Marine Services segment for the three months ended March 31, 2012 were $0.7 million as compared to $0.8 million in the same period of 2011, a decrease of $0.1 million or 12%. The decrease was primarily due to lower levels of activity in the three months ended March 31, 2012 as compared to the same period of 2011.

EBITDAS for the three months ended March 31, 2011 was $0.3 million or 48% of revenue as compared to $0.4 million or 45% of revenue for the same period of 2011. The decrease in EBITDAS was due to the overall lower activity.

Corporate

Corporate costs are the costs of the head office which include the President and Chief Executive Officer, Chief Financial Officer, Vice President of Health, Safety, and Environment, Vice President of Aboriginal Relations, Corporate Secretary, corporate accounting staff, and associated costs of supporting a public company. Corporate costs for the three months ended March 31, 2012 were $3.0 million as compared to $2.3 million in the same period in 2011. This increase of $0.7 million includes the increased cost to support the higher level of business activity and costs associated with increasing and extending the Corporation's credit agreement. Corporate costs as a percentage of total revenue were 2.3% for the three months ended March 31, 2012 compared to 2.2% in same period of 2011.

Other Items

Depreciation and amortization

Depreciation and amortization costs for the three months ended March 31, 2012 were $8.3 million as compared to $6.9 million in the same period of 2011. The increase was mainly from depreciation which increased from $4.8 million to $6.2 million or 29% as a result of net capital additions of $101.8 million in depreciable assets during 2011. Amortization of intangibles remained relatively unchanged in the comparative periods at $2.0 million.

Financing costs

Financing costs on loans and borrowings for the three months ended March 31, 2012 were $0.7 million as compared to $0.6 million in the same period of 2011. The increase of $0.1 million was a result of a higher weighted average debt held. For the three months ended March 31, 2012 the weighted average debt was $60.2 million compared to $41.4 million in the same period of 2011.

Income taxes

Income tax expense was $6.6 million, an effective tax rate of 25.8%, for the three months ended March 31, 2012 as compared to a tax expense of $4.0 million, an effective rate of 26.8% for the same period of 2011. The effective tax rate decreased due to a 1.0% decrease in federal tax rates from 2012 to 2011 as well as the change in estimated timing of realization of temporary differences.

Selling and administrative

Selling and administrative expense was $6.2 million for the three months ended March 31, 2012 as compared to $5.4 million in the same period of 2011. The increase is reflective of the higher levels of business activity in 2012 as compared to 2011. However, as a percentage of revenue selling and administrative expense declined to 4.8% of revenue in 2012 as compared to 5.2% in 2011.

Condensed consolidated statement of financial position (Unaudited)
(000's)									March 31, 2012				December 31, 2011
Assets
Current assets:
Trade and other receivables							$		93,072			$	83,484
Inventories									16,010				15,334
Prepayments									3,377				3,981
									112,459				102,799
Non-current assets:
Property, plant and equipment									254,966				228,793
Intangible assets									16,181				18,232
Goodwill									2,136				2,136
Investments in equity accounted investees									575				529
Deferred tax assets									1,770				1,837
Other assets									2,779				2,811
									278,407				254,338
							$		390,866			$	357,137
Liabilities and Shareholders' Equity
Current liabilities:
Trade and other payables							$		44,861			$	41,833
Deferred revenue									12,526				13,601
Income taxes payable									4,720				4,380
Current portion of loans and borrowings									1,213				1,281
									63,320				61,095
Non-current liabilities:
Asset retirement provisions									1,319				1,283
Loans and borrowings									68,700				55,234
Deferred tax liabilities									25,200				23,456
									158,539				141,068
Shareholders' equity:
Share capital									177,216				173,438
Contributed surplus									9,496				10,421
Accumulated other comprehensive income									89				158
Retained earnings									45,527				32,052
									232,328				216,069
							$		390,867			$	357,137

Condensed consolidated statement of comprehensive income (Unaudited) Three months ended March 31, 2012 and 2011
						Three months ended March 31
(000's)							2012				2011
Revenue						$	128,597			$	103,159
Operating expenses:
Direct costs							90,010				77,061
Depreciation							6,229				4,836
Amortization of intangible assets							44				41
Share based compensation							45				95
(Gain) loss on disposal of property, plant and             equipment							(5)				212
Direct operating expenses							96,323				82,245
Gross profit							32,274				20,914
Selling & administrative expenses:
Selling & administrative expenses							4,142				3,293
Amortization of intangible assets							2,007				2,019
Share based compensation							45				61
Selling & administrative expenses							6,194				5,373
Operating earnings							26,080				15,541
Finance costs							694				613
Share of (gain) loss of equity accounted investees							(46)				21
Profit before tax							25,432				14,907
Current tax expense							4,760				4,688
Deferred tax expense (recovery)							1,811				(693)
Income tax expense							6,571				3,995
Total profit							18,861				10,912
Other comprehensive income:
Translation of foreign operations							69				-
Other comprehensive income, net of income tax							69				-
Total comprehensive income						$	18,792			$	10,912
Earnings per share:
Basic						$	0.18			$	0.10
Diluted						$	0.17			$	0.10

Condensed consolidated statement of changes in equity
(000's)					Share Capital			Contributed Surplus			Accumulated Other Comprehensive Income				Retained Earnings (Deficit)				Total
Balance at December 31, 2010				$	245,353		$	11,446		$	-			$	(78,000)			$	178,799
Total profit					-			-			-				10,912				10,912
Share based compensation					-			156			-				-				156
Share options exercised					1,800			(498)			-				-				1,302
Dividends paid ($0.04 per share)					-			-			-				(4,215)				(4,215)
Balance at March 31, 2011					247,153			11,104			-				(71,303)				186,954
Total profit					-			-			-				33,910				33,910
Share based compensation					-			442			-				-				442
Share options exercised					4,285			(1,125)			-				-				3,160
Reduction of capital					(78,000)			-			-				78,000				-
Translation of foreign operations					-			-			158				-				158
Dividends paid ($0.04 per share)					-			-			-				(4,285)				(4,285)
Dividends declared ($0.04 per share)					-			-			-				(4,270)				(4,270)
Balance at December 31, 2011					173,438			10,421			158				32,052				216,069
Total profit					-			-			-				18,861				18,861
Share based compensation					-			90			-				-				90
Share options exercised					3,778			(1,015)			-				-				2,763
Translation of foreign operations					-			-			(69)				-				(69)
Dividends declared ($0.05 per share)					-			-			-				(5,386)				(5,386)
Balance at March 31, 2012				$	177,216		$	9,496		$	89			$	45,527			$	232,328

Condensed consolidated statement of cash flows Three months ended March 31, 2012 and 2011
									March 31,						March 31,
(000's)									2012						2011
Cash provided by (used in):
Operating activities:
Profit for the period						$			18,861			$			10,912
Adjustments for:
Depreciation									6,229						4,836
Amortization of intangible assets									2,051						2,060
Share based compensation									90						156
Amortization of other assets									32						28
(Gain) loss on equity investments									(46)						21
Loss (gain) on sale of property, plant and equipment									216						(846)
Unrealized foreign exchange									(10)						-
Finance costs									694						613
Income tax expense									6,571						3,995
									34,688						21,775
Income taxes paid									(4,421)						(2,460)
Interest paid									(504)						(414)
Changes in non-cash working capital items									(8,850)						(1,997)
									20,913						16,904
Investing activities:
Purchase of property, plant and equipment									(34,177)						(25,824)
Proceeds on sale of property, plant and equipment									1,518						2,138
									(32,659)						(23,686)
Financing activities:
Repayment of bank indebtedness									-						(229)
Shares issued									2,763						1,302
Proceeds from loans and borrowings									13,254						7,135
Payment of dividends									(4,270)						-
									11,747						8,208
Increase in cash position									-						-
Cash, beginning of period									-						-
Cash, end of period						$			-			$			-

Financial Measures Definitions

EBITDAS

EBITDAS (Earnings before interest, taxes, depreciation, amortization, gain/loss on equity investments, gain/loss on disposal of property, plant and equipment, share of income/loss from equity accounted investees and share based compensation) is not a recognized measure under IFRS.  Management believes that in addition to total profit and total comprehensive income, EBITDAS is a useful supplemental measure as it provides an indication of the Corporation's ability to generate cash flow in order to fund working capital, service debt, pay current income taxes and fund capital programs, and it is regularly provided to and reviewed by the Chief Operating Decision Maker and operating earnings provides an indication of the results generated by the Corporation's principal business activities prior to consideration of how those activities are financed or taxed.  Horizon's method of calculating EBITDAS may differ from other entities and accordingly, may not be comparable to measures used by other entities. EBITDAS should not be construed as alternatives to total profit and comprehensive income determined in accordance with IFRS as an indicator of the Corporation's performance.

Funds from operations

Funds from operations is not a recognized measure under IFRS.  Management believes that in addition to cash flow from operations, funds from operations is a useful supplemental measure as it provides an indication of the cash flow generated by the Corporation's principal business activities prior to consideration of changes in working capital. Investors should be cautioned, however, that funds from operations should not be construed as an alternative to cash flow from operations determined in accordance with IFRS as an indicator of the Corporation's performance.  Horizon's method of calculating funds from operations may differ from other entities and accordingly, funds from operations may not be comparable to measures used by other entities.  Funds from operations is equal to cash flow from operations before changes in non-cash working capital items related to operations, interest and income taxes paid, financing costs, and income tax expense.

Debt to total capitalization

Debt to total capitalization is calculated as the ratio of debt to total capitalization. Debt is defined as the sum of current and long-term portions of loans and borrowings. Total capitalization is calculated as the sum of debt and shareholders' equity.

Caution Regarding Forward-Looking Information and Statements

Certain statements contained in this Press Release constitutes forward-looking statements or information.  These statements relate to future events or future performance of Horizon. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "plan" "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "should", "believe" and similar expressions are intended to identify forward-looking statements.

In particular, such forward looking statements include: under the heading "Quarterly Summary of Results" the statements that "Horizon's strong performance is expected to continue in 2012 based on increasing customer demand driven by levels of project investment and Horizon's continuing capital investment in expanding its fleet;" and under the heading "Overview and Outlook" the statements that "It is anticipated that the remaining $20 million will be allocated to new projects generated from continued, strong bidding activity."

The foregoing statements are based on the assumption that the demand for Horizon's products and services will remain strong through 2012 and that Horizon will continue to experience sufficient returns on its expansion capital.

There are a number of risks which could impact these generally high levels of activity which could negatively impact the Corporation's business.  As such, many factors could cause the performance or achievements of the Corporation to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements.

Corporate Information

Additional information related to the Corporation, including the Corporation's annual information form, financial statements, and MD&A is available on SEDAR at www.sedar.com. Unless otherwise indicated, the consolidated financial statements have been prepared in accordance with IFRS and the reporting currency is in Canadian dollars.

 

 

 

Bob German, President and Chief Executive Officer, or Scott Matson, Vice President Finance and Chief Financial Officer, 1600, 505 - 3^rd Street S.W., Calgary, Alberta T2P 3E6, Telephone: [phone],  Fax: [phone]; website: www.horizonnorth.ca