Horizon North Logistics Inc. Announces Results For the Quarter Ended March 31, 2013
TSX Symbol: HNL
CALGARY, April 30, 2013 /CNW/ - Horizon North Logistics Inc. ("Horizon" or the "Corporation") reported its financial and operating results for the three months ended March 31, 2013 and 2012.
First Quarter Highlights
- Consolidated Revenues and EBITDAS increased 9% and 6% respectively compared to Q1 2012;
- The Camp & Catering segment revenues increased 12% as compared to Q1 2012;
- 69% of first quarter revenues were generated mainly from SAGD oil sands related projects and customers and;
- Continued capital investment, exiting the quarter with 8,926 rentable beds and 13,899 rental mats.
First Quarter Financial Summary
| Three months ended March 31 | ||||||
| (000's except per share amounts) | 2013 | 2012 | % Change | |||
| Revenue | $ | 139,959 | $ | 128,597 | 9% | |
| EBITDAS(1) | 36,633 | 34,445 | 6% | |||
| EBITDAS as a % of revenue | 26% | 27% | (4%) | |||
| Operating earnings(1) | 23,209 | 26,080 | (11%) | |||
| Total comprehensive income | 16,384 | 18,792 | (13%) | |||
| Earnings per share | - basic | 0.15 | 0.18 | (17%) | ||
| - diluted | 0.15 | 0.17 | (12%) | |||
| Total assets | $ | 512,406 | $ | 390,866 | 31% | |
| Long-term loans and borrowings | 135,751 | 68,700 | 98% | |||
| Funds from operations(2) | 29,146 | 27,423 | 6% | |||
| Capital spending | 21,252 | 34,177 | (38%) | |||
| Debt to total capitalization ratio(3) | 0.32 | 0.23 | 39% | |||
| Dividends declared | $ | 6,807 | $ | 5,386 | 26% | |
| Dividends declared per share | $ | 0.0625 | $ | 0.05 | 25% | |
| (1) | See financial measures definitions on the last page of the press release for details. |
Overview
The first quarter of 2013 proved to be another strong quarter for Horizon, with both revenue and EBITDAS increasing in comparison to the same period of 2012 and consecutively over the fourth quarter of 2012. Operating earnings and net income and earnings per share decreased as compared to the first quarter of 2012 primarily due to the increase in depreciation year over year. The increase in depreciation was a result of the 2012 capital program which included a significant amount of camp set-up. In January, a major oil sands customer announced a significant reduction in their bed requirements for 2013. Horizon was successful in filling a substantial portion of this capacity with other customers, demonstrating the ongoing demand for beds and accommodation services in the area. Camp manufacturing had a very strong quarter with production and installation activities in full swing on a large project in the Alberta oil sands region.
Outlook
Horizon expects moderate growth for the remainder of the year with the first quarter results supporting this view. Oil sands development activities, driven primarily by SAGD projects, continue to be the main driver of Horizon's growth. Oil sands activity accounted for 69% of Horizon's consolidated revenues for the first quarter. With the ongoing focus of our customer base into SAGD oil sands projects and diversification in to LNG development, Horizon expects demand for accommodation services to remain strong.
Capital spending for 2013 will remain at $80 million, focused primarily on adding 1,000 beds to the camp and catering operations throughout the year. Of the expected 1,000 beds, 36% are under contract to be deployed in the second quarter, primarily in the oil sands region of Alberta on SAGD projects.
Dividend payment
Horizon North Logistic Inc. announced today that its Board of Directors has declared a dividend for the second quarter of 2013 at $0.0625 per share. The dividend is payable to shareholders of record at the close of business on June 30, 2013 to be paid on July 12, 2013. The dividends are eligible dividends for Canadian tax purposes.
First Quarter Financial Results
| Three months ended March 31, 2013 | ||||||||||||
| (000's) | Camps & Catering |
Matting | Corporate | Inter-segment Eliminations |
Total | |||||||
| Revenue | $ | 125,917 | $ | 16,232 | $ | - | $ | (2,190) | $ | 139,959 | ||
| Expenses | ||||||||||||
| Direct costs | 88,610 | 12,070 | 1 | (2,167) | 98,514 | |||||||
| Selling & administrative | 1,455 | 176 | 3,181 | - | 4,812 | |||||||
| EBITDAS | 35,852 | 3,986 | (3,182) | (23) | 36,633 | |||||||
| EBITDAS as a % of revenue | 28% | 25% | - | 1% | 26% | |||||||
| Share based payments | 358 | 51 | 277 | - | 686 | |||||||
| Depreciation & amortization | 10,769 | 2,041 | 136 | (51) | 12,895 | |||||||
| Gain on disposal of property, plant and equipment | (137) | (20) | - | - | (157) | |||||||
| Operating earnings (loss) | $ | 24,862 | $ | 1,914 | $ | (3,595) | $ | 28 | $ | 23,209 | ||
| Finance costs | 1,115 | |||||||||||
| Share of equity accounted investees | - | |||||||||||
| Income tax expense | 5,585 | |||||||||||
| Other comprehensive income | 125 | |||||||||||
| Total comprehensive income | $ | 16,384 | ||||||||||
| Earnings per share | - basic | $ | 0.15 | |||||||||
| - diluted | $ | 0.15 | ||||||||||
| Three months ended March 31, 2012 | ||||||||||||
| (000's) | Camps & Catering |
Matting | Corporate | Inter-segment Eliminations |
Total | |||||||
| Revenue | $ | 112,927 | $ | 18,338 | $ | - | $ | (2,668) | $ | 128,597 | ||
| Expenses | ||||||||||||
| Direct costs | 78,554 | 13,855 | 1 | (2,400) | 90,010 | |||||||
| Selling & administrative | 1,013 | 111 | 3,018 | - | 4,142 | |||||||
| EBITDAS | 33,360 | 4,372 | (3,019) | (268) | 34,445 | |||||||
| EBITDAS as a % of revenue | 30% | 24% | - | 10% | 27% | |||||||
| Share based payments | 34 | 11 | 45 | - | 90 | |||||||
| Depreciation & amortization | 6,432 | 1,757 | 114 | (23) | 8,280 | |||||||
| Gain on disposal of property, plant and equipment | (5) | - | - | - | (5) | |||||||
| Operating earnings (loss) | $ | 26,899 | $ | 2,604 | $ | (3,178) | $ | (245) | $ | 26,080 | ||
| Finance costs | 694 | |||||||||||
| Share of equity accounted investees | (46) | |||||||||||
| Income tax expense | 6,571 | |||||||||||
| Other comprehensive income | 69 | |||||||||||
| Total comprehensive income | $ | 18,792 | ||||||||||
| Earnings per share | - basic | $ | 0.18 | |||||||||
| - diluted | $ | 0.17 | ||||||||||
Camps & Catering
Camps & Catering revenue is comprised of camp rental and catering operations revenue, manufacturing and space unit sales revenue and space rental and service revenue.
| Three months ended March 31 | ||||||
| (000's except bed rental days and catering only days) | 2013 | 2012 | % change | |||
| Camp rental and catering operations revenue | $ | 81,206 | $ | 75,743 | 7% | |
| Manufacturing sales revenue | 42,273 | 33,315 | 27% | |||
| Space rental revenues | 2,438 | 3,869 | (37%) | |||
| Total revenue | $ | 125,917 | $ | 112,927 | 12% | |
| EBITDAS | $ | 35,852 | $ | 33,360 | 7% | |
| Operating earnings | $ | 24,862 | $ | 26,899 | (8%) | |
| Bed rental days(1) | 485,821 | 337,174 | 44% | |||
| Catering only days(2) | 56,651 | 72,519 | (22%) | |||
| (1) | One bed rental day represents; the provision of one bed for one day under a combined rental and catering manday rate; or the provision of one bed for one day under an equipment rental rate for dedicated camp equipment. |
| (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 $125.9 million for the three months ended March 31, 2013 as compared to $112.9 million for the three months ended March 31, 2012, an increase of $13.0 million or 12%. EBITDAS for the three months ended March 31, 2013 were $35.9 million or 28% of revenue compared to $33.0 million or 30% of revenue for the three months ended March 31, 2012, an increase of $2.5 million or 7%.
Horizon's growth in the Camps & Catering segment for the comparative quarters was primarily driven from being significantly weighted to Alberta oil sands activity. During the first quarter of 2013, the majority of manufacturing sales and service activity was focused on the manufacture and installation of a large project in the oil sands region and the camp and catering operations operated an additional 2,465 fleet beds with the majority located in the Alberta oil sands area on SAGD projects.
Camp rental and catering operations revenue
Revenues are derived from the following main business areas: large camp operations, drill camp operations, catering only operations, barge camp rental, ancillary equipment rental and the associated service work within each operation. Service work includes the transportation, setup and de-mobilization of the camp and catering projects. Revenues from camp rental and catering operations were $81.2 million for the three months ended March 31, 2013 compared to $75.7 million for the three months ended March 31, 2012, an increase of $5.5 million or 7%.
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) | 2013 | 2012 | |||||
| Large camp |
Drill camp |
Total | Large camp |
Drill camp |
Total | ||
| Revenue | $59,375 | $9,646 | $69,021 | $53,521 | $8,155 | $61,676 | |
| Bed rental days(1) | 431,261 | 54,560 | 485,821 | 293,738 | 43,436 | 337,174 | |
| Revenue per bed rental day | $138 | $177 | $142 | $182 | $188 | $183 | |
| Number of rentable beds at period end | 7,310 | 866 | 8,176 | 4,761 | 950 | 5,711 | |
| Average rentable beds available(2) | 7,194 | 871 | 8,065 | 4,643 | 950 | 5,593 | |
| Utilization(3) | 67% | 70% | 67% | 70% | 50% | 66% | |
| (1) | One bed rental day represents; the provision of one bed for one day under a combined rental and catering manday rate; or the provision of one bed for one day under an equipment rental rate for dedicated camp equipment. |
| (2) | Average rentable beds available is equal to total average beds in the fleet over the period less beds required for staff. |
| (3) | 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, 2013 increased by $5.9 million or 11% compared to the same period in 2012, primarily as a result of a larger fleet.
Revenue per manday and utilization decreased in the three months ended March 31, 2013 as compared to the same period of 2012, as a result of two factors. The first factor was a reduction in demand from a significant oil sands customer who decreased their bed rental day requirements by 27% as compared to the first quarter of 2012, with revenue per manday on these beds decreasing by 9% as result of new contract terms. The second factor was the effect of split rate contracts put in place throughout 2012 and early 2013, which had the anticipated effect of decreasing revenue per manday by 29% but increasing utilization by 22% over the comparative quarter. Although the metrics above are impacted by this contract structure, there is no fundamental effect on the contract economics.
Revenues from drill camp operations for the three months ended March 31, 2013 increased by $1.5 million or 18% compared to the same period of 2012. The increase was a result of a higher activity levels with more camps on rent as compared to the same quarter in 2012. The higher volume was partially offset by a decrease in the revenue per bed rental day which was mainly a result of fewer customer requested add on services. Of note, in the first quarter of 2013 Horizon deployed several drill camps on construction type projects increasing the utilization of the equipment.
The tables below outline the key performance metrics used by management to measure performance in the catering only and equipment rental operations.
| Three months ended March 31 | ||||
| (000's for revenue only) | 2013 | 2012 | ||
| Catering only revenue | $ | 5,654 | $ | 7,543 |
| Catering only days(1) | 56,651 | 72,519 | ||
| Revenue per catering only day | $100 | $104 | ||
| (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, decreased $1.9 million or 25% for the three months ended March 31, 2013 as compared to same period of 2012. The lower volumes were mainly a result of the close out of a significant catering only job in October of 2012 at a mining operation in the north. The lower rate was mainly the result of change in contract mix as compared to the same period of 2012.
The table below outlines the service revenue generated from the camp and catering operations:
| Three months ended March 31 | ||||
| (000's) | 2013 | 2012 | ||
| Camp and catering operations service related revenue | $ | 6,531 | $ | 6,524 |
Service revenues in the camp & catering operations are related to the transportation, setup and de-mobilization of camps. Revenue was consistent in the comparative quarters mainly due to the nature of the specific service projects undertaken in the comparative quarters.
Manufacturing sales
Manufacturing sales revenues include the manufacture of camps sold to third parties and the transportation and installation associated with those sales. Revenues for the three months ended March 31, 2013 were $42.3 million as compared to $33.3 million for the same period in 2012, an increase of $9.0 million or 27%. The increase in revenues was primarily a result of additional manufacturing capacity added to meet contractual commitments. Actual direct manufacturing hours were 205,776 hours for the three months ended March 31, 2013 as compared to 134,803 in the same period of 2012, an increase of 70,973 hours or 53%. The increased capacity was achieved by the addition of production staff throughout 2012. In the first quarter of 2013, 60% of direct hours were allocated to external sales contracts compared to 67% in the same period of 2012.
Space rental revenues
Space rental revenues for the three months ended March 31, 2013 were $2.4 million as compared to $3.9 million for the same period in 2012, a decrease of $1.5 million or 38%. The first quarter of 2012 included a significant used rental equipment sale which was not repeated in the first quarter of 2013. Rental revenue increased by $0.4 million in the comparative quarters based mainly on the mix of contracts in place in the three months ended March 31, 2013 as compared to the same period of 2012. Fleet utilization was relatively consistent at 87% for the comparative periods.
Direct costs
Direct costs for the three months ended March 31, 2013 were $88.6 million or 70% of revenue as compared to $78.6 million or 70% of revenue for the same period of 2012. Direct costs are closely related to business volumes and the increased direct costs are primarily a result of the higher activity levels in the comparative periods. As a percentage of revenue, direct costs remained unchanged in the comparative periods.
Matting
Matting revenue is comprised of mat 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) | 2013 | 2012 | % change | ||||
| Access mat rental revenue(1) | $ | 1,686 | $ | 2,138 | (21%) | ||
| Other mat and rental equipment revenue(2) | 1,156 | 671 | 72% | ||||
| Total mat and rental equipment revenue | $ | 2,842 | $ | 2,809 | 1% | ||
| Mat sales revenue | 4,922 | 6,569 | (25%) | ||||
| Installation, transportation, service, and other revenue | 8,468 | 8,960 | (5%) | ||||
| Total revenue | $ | 16,232 | $ | 18,338 | (11%) | ||
| EBITDAS | $ | 3,986 | $ | 4,372 | (9%) | ||
| EBITDAS as a % of revenue | 25% | 24% | 4% | ||||
| Operating earnings | $ | 1,914 | $ | 2,604 | (26%) | ||
| Access mat rental days - owned mats(3) | 629,793 | 577,142 | 9% | ||||
| Access mat rental days - third party mats(4) | 58,948 | 167,202 | (65%) | ||||
| Total access mat rental days | 688,741 | 744,344 | (7%) | ||||
| Average owned access mats in rental fleet(5) | 13,838 | 10,967 | 26% | ||||
| Average sub rental access mats in rental fleet(6) | 655 | 1,837 | (64%) | ||||
| Access mats in rental fleet at quarter end(7) | 13,899 | 13,132 | 6% | ||||
| Mats sold: | |||||||
| New mats | 5,459 | 7,407 | (26%) | ||||
| Used Mats | 1,377 | 1,899 | (27%) | ||||
| Total mats sold | 6,836 | 9,306 | (27%) | ||||
| (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 owned access mat for one day. |
| (4) | One mat rental day equals the rental of one third party sub rented access mat for one day. |
| (5) | Average access mat rental fleet numbers reflect only owned access mats. |
| (6) | Average sub rental access mats is the average number of non-owned access mats in the rental fleet. These mats are rented from third parties on a short term basis. |
| (7) | Access mats in rental fleet at quarter end represents the number of owned access mats in the Matting fleet on March 31, 2013. |
Revenues from the Matting segment for the three months ended March 31, 2013 were $16.2 million as compared to $18.3 million for the same period of 2012, a decrease of $2.1 million or 11%. EBITDAS for the three months ended March 31, 2013 were $4.0 million or 25% of revenue as compared to $4.4 million or 24% of revenue for the same period of 2012, a decrease of $0.4 million or 9%.
Mat and equipment rental revenue
Access mat rental revenues for the three months ended March 31, 2013 were $1.7 million, down $0.5 million or 21%. The decrease was combination of lower activity and revenue per mat rental day. Mat rental days in the first quarter of 2013 were 55,603 or 7% below the same quarter of 2012, mainly a result of a later spring breakup in 2013 as compared to 2012. The owned access mat fleet was 51% utilized in the first quarter of 2013 as compared to 58% in the comparative quarter of 2012. The remainder of the revenue decrease was due to lower revenue per mat rental day, a result of the different mix of contracts in place in the comparative quarters.
The lower revenue from access mat rental was offset by rental revenue from other equipment rentals which consisted mainly of wellsite office rentals.
Mat sales revenue
Revenues from mat sales for the three months ended March 31, 2013 were $4.9 million, down $1.7 million or 25% as compared to the same period of 2012. The decrease in revenue is mainly reflective of the timing of customer projects, with a large sale occurring in the first quarter of 2012 which was not repeated in the first quarter of 2013. The mix of new and used access mat sales stayed consistent in the comparative quarters with new mat sales representing 80% of total mat sales, the revenue per mat increased by $14 as a result of slightly stronger used mat pricing.
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, 2013 were $8.5 million as compared to $9.0 million the same period in 2012, a decrease of $0.5 million or 5%. The decrease was mainly reflective of the lower volume of rentals and mat sales in the three months ended March 31, 2013, as compared to the same period of 2012.
Direct costs
Direct costs for the three months ended March 31, 2013 were $12.1 million or 74% of revenue as compared to $13.9 million or 76% of revenue for the same period of 2012. Direct costs are driven by the level of business activity, with the decrease in revenue, as compared to the same period of 2012, direct costs have decreased accordingly. Direct costs as a percentage of revenue decreased by 2% for the three months ended March 31, 2013 as compared the same period of 2012. The decrease is primarily a result of lower costs in the rental operation due to decreased usage of sub rented mats in comparison to the same period of 2012.
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, information technology, and associated costs of supporting a public company. Corporate costs for the three months ended March 31, 2013 were $3.2 million as compared to $3.0 million in the same period in 2012. This increase of $0.2 million reflects the increased cost to support the higher level of business activity. Corporate costs, as a percentage of total revenue, decreased slightly to 2.2% in the first quarter of 2013 from 2.3% in the same period of 2012.
Other Items
Depreciation and amortization
| Three months ended March 31 | ||||||
| (000's) | 2013 | 2012 | % change | |||
| Depreciation | $ | 10,844 | $ | 6,229 | 74% | |
| Amortization | 2,051 | 2,051 | -% | |||
| Total depreciation and amortization | $ | 12,895 | $ | 8,280 | 56% | |
Depreciation and amortization costs for the three months ended March 31, 2013 were $12.9 million as compared to $8.3 million in the same period of 2012, an increase of $4.6 million or 56%. The increased depreciation was a result of camp asset additions which include camp setup and installation costs which are depreciated over the term of the contract. Depreciation for the camp setup and installation was $2.8 million higher in the first quarter of 2013 as compared to the same period of 2012.
Financing costs
Financing costs include interest on loans and borrowings and accretion on notes payable. For the three months ended March 31, 2013 financing costs were $1.1 million as compared to $0.7 million in the same period of 2012, an increase of $0.4 million as a result of a higher interest expense on loans and borrowings. The increased interest expense was due to a larger weighted average debt of $122.0 million for the three months ended March 31, 2013 as compared to $60.3 million in the same period of 2012. The effective interest rate on the loans and borrowing decreased to 3.6% from 4.6% in the comparative quarters due to lower rates in the renewed credit facility and a higher proportion of debt being held as bankers acceptance in the comparative quarters.
Income taxes
Income tax expense was $5.6 million, an effective tax rate of 25%, for the three months ended March 31, 2013 as compared to a tax expense of $6.6 million, an effective rate of 26% for the same period of 2012. The decrease of 1% was primarily a result of change in timing of temporary differences.
Selling and administrative
Selling and administrative expense was $4.8 million for the three months ended March 31, 2013 as compared to $4.1 million in the same period of 2012. The increase is reflective of the higher levels of business activity in the first quarter of 2013 as compared to the same period of 2012. As a percentage of revenue, selling and administrative expense increased to 3.4% in 2013 as compared to 3.2% in 2012.
Condensed consolidated statement of financial position (Unaudited)
| (000's) | March 31, 2013 |
December 31, 2012 |
|||
| Assets | |||||
| Current assets: | |||||
| Trade and other receivables | 141,213 | 133,195 | |||
| Inventories | 13,885 | 13,321 | |||
| Prepayments | 1,653 | 2,506 | |||
| Income taxes receivable | 1,042 | 146 | |||
| 157,793 | 149,168 | ||||
| Non-current assets: | |||||
| Property, plant and equipment | 339,892 | 330,205 | |||
| Intangible assets | 7,977 | 10,028 | |||
| Goodwill | 2,136 | 2,136 | |||
| Deferred tax assets | 1,957 | 1,772 | |||
| Other assets | 2,651 | 2,684 | |||
| 354,613 | 346,825 | ||||
| $ | 512,406 | $ | 495,993 | ||
| Liabilities and Shareholders' Equity | |||||
| Current liabilities: | |||||
| Trade and other payables | 56,481 | 59,511 | |||
| Deferred revenue | 1,121 | 588 | |||
| Income taxes payable | 1,226 | 12,661 | |||
| Current portion of loans and borrowings | 1,380 | 1,416 | |||
| 60,208 | 74,176 | ||||
| Non-current liabilities: | |||||
| Asset retirement obligations | 1,379 | 1,364 | |||
| Loans and borrowings | 135,751 | 116,872 | |||
| Deferred tax liabilities | 30,249 | 29,318 | |||
| 227,587 | 221,730 | ||||
| Shareholders' equity: | |||||
| Share capital | 180,450 | 179,999 | |||
| Contributed surplus | 11,311 | 10,783 | |||
| Accumulated other comprehensive income | 83 | 208 | |||
| Retained earnings | 92,975 | 83,273 | |||
| 284,819 | 274,263 | ||||
| $ | 512,406 | $ | 495,993 | ||
Condensed consolidated statement of comprehensive income (Unaudited)
Three months ended March 31, 2013 and 2012
| Three months ended March 31 | ||||||
| (000's) | 2013 | 2012 | ||||
| Revenue | $ | 139,959 | $ | 128,597 | ||
| Operating expenses: | ||||||
| Direct costs | 98,514 | 90,010 | ||||
| Depreciation | 10,844 | 6,229 | ||||
| Amortization of intangible assets | 11 | 44 | ||||
| Share based compensation | 409 | 45 | ||||
| Gain on disposal of property, plant and equipment | (157) | (5) | ||||
| Direct operating expenses | 109,621 | 96,323 | ||||
| Gross profit | 30,338 | 32,274 | ||||
| Selling & administrative expenses: | ||||||
| Selling & administrative expenses | 4,812 | 4,142 | ||||
| Amortization of intangible assets | 2,040 | 2,007 | ||||
| Share based compensation | 277 | 45 | ||||
| Selling & administrative expenses | 7,129 | 6,194 | ||||
| Operating earnings | 23,209 | 26,080 | ||||
| Finance costs | 1,115 | 694 | ||||
| Share of gain of equity accounted investees | - | (46) | ||||
| Profit before tax | 22,094 | 25,432 | ||||
| Current tax expense | 4,839 | 4,760 | ||||
| Deferred tax (recovery) expense | 746 | 1,811 | ||||
| Income tax expense | 5,585 | 6,571 | ||||
| Total profit | 16,509 | 18,861 | ||||
| Other comprehensive income: | ||||||
| Translation of foreign operations | 125 | 69 | ||||
| Other comprehensive income, net of income tax | 125 | 69 | ||||
| Total comprehensive income | $ | 16,384 | $ | 18,792 | ||
| Earnings per share: | ||||||
| Basic | $ | 0.15 | $ | 0.18 | ||
| Diluted | $ | 0.15 | $ | 0.17 | ||
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, 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 and paid ($0.05 per share) | - | - | - | (5,386) | (5,386) | |||||
| Balance at March 31, 2012 | 177,216 | 9,496 | 89 | 45,527 | 232,328 | |||||
| Total profit | - | - | - | 54,022 | 54,022 | |||||
| Share based compensation | - | 2,061 | - | - | 2,061 | |||||
| Share options exercised | 2,783 | (774) | - | - | 2,009 | |||||
| Translation of foreign operations | - | - | 119 | - | 119 | |||||
| Dividends declared and paid ($0.10 per share) | - | - | - | (10,837) | (10,837) | |||||
| Dividends declared ($0.05 per share) | - | - | - | (5,439) | (5,439) | |||||
| Balance at December 31, 2012 | 179,999 | 10,783 | 208 | 83,273 | 274,263 | |||||
| Total profit | - | - | - | 16,509 | 16,509 | |||||
| Share based compensation | - | 686 | - | - | 686 | |||||
| Share options exercised | 451 | (158) | - | - | 293 | |||||
| Translation of foreign operations | - | - | (125) | - | (125) | |||||
| Dividends declared ($0.0625 per share) | - | - | - | (6,807) | (6,807) | |||||
| Balance at March 31, 2013 | $ | 180,450 | $ | 11,311 | $ | 83 | $ | 92,975 | $ | 284,819 |
Condensed consolidated statement of cash flows
Three months ended March 31, 2013 and 2012
| March 31, | March 31, | |||||
| (000's) | 2013 | 2012 | ||||
| Cash provided by (used in): | ||||||
| Operating activities: | ||||||
| Profit for the period | $ | 16,509 | $ | 18,861 | ||
| Adjustments for: | ||||||
| Depreciation | 10,844 | 6,229 | ||||
| Amortization of intangible assets | 2,051 | 2,051 | ||||
| Share based compensation | 686 | 90 | ||||
| Amortization of other assets | 33 | 32 | ||||
| Loss (gain) on equity investments | - | (46) | ||||
| (Gain) loss on sale of property, plant and equipment | (902) | 216 | ||||
| Unrealized foreign exchange | (75) | (10) | ||||
| Finance costs | 1,115 | 694 | ||||
| Income tax expense | 5,585 | 6,571 | ||||
| 35,846 | 34,688 | |||||
| Income taxes paid | (17,170) | (4,421) | ||||
| Interest paid | (925) | (504) | ||||
| Changes in non-cash working capital items | (10,308) | (7,735) | ||||
| 7,443 | 22,028 | |||||
| Investing activities: | ||||||
| Purchase of property, plant and equipment | (21,252) | (34,177) | ||||
| Proceeds on sale of property, plant and equipment | 1,573 | 1,518 | ||||
| (19,679) | (32,659) | |||||
| Financing activities: | ||||||
| Shares issued | 293 | 2,763 | ||||
| Proceeds from loans and borrowings | 18,750 | 13,254 | ||||
| Payment of dividends | (5,439) | (4,270) | ||||
| 13,604 | 11,747 | |||||
| Change in non-cash working capital items | (1,368) | (1,116) | ||||
| 12,236 | 10,631 | |||||
| Change 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 "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.
SOURCE: Horizon North Logistics Inc.
Bob German, President and Chief Executive Officer, or Scott Matson, Vice President Finance and Chief Financial Officer, 1600, 505 - 3rd Street S.W., Calgary, Alberta T2P 3E6, Telephone: (403) 517-4654, Fax: (403) 517- 4678; website: www.horizonnorth.ca
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