TSX Symbol: HYD
NISKU, AB, April 1, 2013 /CNW/ - Hyduke Energy Services Inc. (TSX: HYD), announced operating results for the three and twelve months ended December 31, 2012. Hyduke's Financial Statements and Management's Discussion and Analysis have been filed with regulators and are available at www.hyduke.com and at www.sedar.com.
Highlights include the following:
- Revenue for the current year of $108.2 million is up $23.7 million or 28% over the prior year.
- Revenue from international markets of $48.4 million represents 45% of current year revenues.
- Gross profit for the current year of $12.7 million is up $1.2 million or 10% over the prior year.
- Successful completion of two, turn-key drilling rig packages for an international customer.
- Expansion into Houston, Texas, USA.
- Refinancing of long-term assets generating net proceeds of $8 million for working capital.
- Liquidity remains strong with current ratio at 2.67 to 1.00.
- Debt to equity ratio remains strong at 0.27 to 1.00.
- Subsequent to year-end, Hyduke has commenced a restructuring of the company that includes changes to the Board of Directors, changes to the Executive Management and changes to our business operations. These changes are undertaken with the objective of strengthening our strategic focus at the Board level and to strengthen the decision making at our operational level.
A summary of Fiscal 2012 results is as follows:
Selected Statement of Comprehensive Income Information | Year Ended | |
($000's, except per share data) | December 31, 2012 |
December 31, 2011 |
Revenues | 108,242 | 84,517 |
International revenue | 48,395 | 18,977 |
Gross profit | 12,653 | 11,458 |
Gross profit (%) | 11.7% | 13.6% |
EBITDAS | 3,648 | 4,096 |
Profit | 795 | 1,709 |
Profit per share-basic ($) | 0.03 | 0.07 |
Profit per share-diluted ($) | 0.03 | 0.07 |
Steady Canadian activity combined with continued success internationally have resulted in an increase in current year revenue of 28% over the prior year. The Company's international business development efforts were successful again with $48.4 million in revenues being generated outside of Canada.
While an overall increase in gross margin was a result of increased revenue, a reduction in gross margin percentage was a result of cost overruns on three turn-key drilling rig packages. Hyduke has initiated changes in the management team and improvements to the project management process as a result.
Profit of $0.8 million has decreased from the prior year and was negatively impacted by one-time costs associated with an attempted acquisition of Hyduke by a third party and expansion into Houston, Texas.
Selected Financial Position Information | As At | ||
($000's, except ratios) | December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
Total assets | 58,155 | 55,529 | 44,368 |
Total current assets | 43,066 | 40,720 | 29,332 |
Total liabilities | 26,246 | 24,476 | 15,113 |
Total current liabilities | 16,111 | 21,915 | 12,717 |
Total cash (bank indebtedness), net | 643 | 4,824 | (1,631) |
Total interest bearing debt | 8,669 | 1,149 | 1,550 |
Total equity | 31,909 | 31,053 | 29,255 |
Current ratio (current assets divided by current liabilities) |
2.67 to 1.00 | 1.86 to 1.00 | 2.31 to 1.00 |
Debt to equity ratio (interest bearing debt divided by shareholders' equity) |
0.27 to 1.00 | 0.04 to 1.00 | 0.05 to 1.00 |
Total assets of $58.5 million as at December 31, 2012 represents an increase of $2.6 million from the prior year.
Total liabilities of $26.2 million as at December 31, 2012 represents an increase of $1.8 million from the prior year.
The Company continues to maintain a strong current ratio at 2.67 to 1.00 and a debt to equity ratio of 0.27 to 1.00.
OUTLOOK
Hyduke has commenced a restructuring of the company that includes changes to the Board of Directors, changes to the Executive Management and changes to our business operations. These changes are undertaken with the objective of strengthening our strategic focus at the Board level and to strengthen the decision making at our operational level. Some of the more significant strategic initiatives are as follows:
- Canadian Market Development - 2013 will be a year in which we focus on strengthening existing relationships with our core Canadian customers and be more pro-active in developing new relationships with customers we want to do more business with. While expectations for 2013 are modest, expect to see more sales resources deployed into servicing the Canadian market and an increase in Hyduke's Canadian market share.
- International Market Development - Hyduke continues to achieve success in the international market. Our Canadian know-how and quality is valued in other markets and the Hyduke team is doing a good job in developing an extensive international network of potential customers. We expect to see significant projects coming in to Hyduke from international customers in 2013.
- Develop Houston Operations - our new facility in Houston is a key component to our United States and International market development. It also gives us access to much lower labor and plant costs than we currently experience in Alberta. Expect to see significant revenues coming out of the Houston area as well as an increasing amount of work performed in Houston for our international projects.
- Improved margins in Manufacturing - 2013 will see a significant change in how we manage our large turn-key projects. Frankly speaking, we need to improve our delivery and our margins on our larger jobs. We have been achieving great strides with our pilot lean manufacturing initiative in our Edmonton facility during the latter half of 2012. Expect to see these initiatives rolled through our entire organization in 2013.
- Focus on Distribution and Supply and Inspection and Certification Businesses - our distribution and inspection businesses are steady, reliable and well run businesses. These businesses also have great potential internationally as we continue to export these services into other countries. Expect to see in 2013 increased focus on growing our distribution and inspection businesses.
- Investor Relations - Over the last 4 years, our stock price has suffered due to lack of interest in our sector, our small size and our mediocre financial performance. However, we have been achieving some excellent milestones (sales growth, expansion to Houston, strengthened management team) that the investment community is not giving us credit for. Expect to see in 2013 a stronger, more pro-active investor relations program with the objective of unlocking the value that exists in Hyduke as measured by share price.
Energy drives our world. In order to explore and develop hydrocarbon energy resources, the industry needs more equipment and more advanced equipment. Hyduke is well positioned to meet this increasing need. Canada's very challenging industry conditions and our very high level of equipment know-how put Hyduke in an excellent position to provide high-quality and innovative equipment to the energy industry worldwide. The changes Hyduke is undertaking in 2013 will result in increased sales, improved financial performance and unlocked shareholder value.
Forward Looking Statements
This report contains certain forward-looking statements under the heading "Outlook" and elsewhere concerning future events or the Company's operations, anticipated financial performance, business prospects and strategies of Hyduke. Forward-looking information typically contains statements with words such as "anticipate", "believe", "estimate", "expect", "plan", "intend" or similar words suggesting future outcomes or outlooks on, without limitation, estimates of business activity, supply and demand for the Company's products, the estimated amounts and timing of capital expenditures, anticipated future debt levels, or other expectations, beliefs, plans, objectives, assumptions or statements about future events or performance. Readers are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties both general and specific that may cause actual future results to differ materially from those contemplated and contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. These factors may affect anticipated earnings or assets and include, but are not limited to: industry activity levels, market liquidity, customer credit risk, competition, oil and gas prices, product liability, fixed price contracts, development of new products, uninsured and underinsured losses, access to additional financing, source of supply of raw material and third party components, availability of key personnel, agreements and contracts, government regulations, foreign exchange exposure, interest rate risk, international scope of operations, environmental health and safety regulations and Hyduke's anticipation of and success in managing the risks implied by the foregoing. The Company cautions that the foregoing list of important factors is not exhaustive. The Company believes that the expectations reflected in the forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this report should not be unduly relied upon. The forward-looking statements in this report speak only as of the date of this report. Hyduke undertakes no obligation to update publicly or otherwise revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required pursuant to applicable securities legislation.
About Hyduke
Hyduke is an integrated oilfield services company with over thirty years experience in the manufacture, repair and distribution of oilfield equipment and supplies in Canada and worldwide. Hyduke specializes in providing customized, integrated solutions to the drilling and well service industries including:
- Turn-Key Equipment - drilling rig and service rig packages including in-house design, engineering and drafting, major component procurement and overall project management;
- Life Cycle Management - inspection, certification, service, repair and supply services throughout the operating life of the drilling or well service rig; and
- Single Source Supply - providing new capital equipment, repair and maintenance on existing capital equipment and supply of operating consumables.
The Company operates its businesses through a number of subsidiaries operating in four segments:
Manufacturing: The Manufacturing segment includes the design, manufacture, refurbishment and repair of land-based drilling rigs, well service and workover rigs, drilling support equipment, well service and workover support equipment and the distribution, service and repair of truck-mounted equipment.
Distribution: The Distribution segment includes the procurement and distribution of spare parts, equipment components, operating supplies and pneumatic controls to the drilling and well service industries.
Other Services: The Other Services segment includes the inspection and certification of drilling rig and well service equipment, the design, manufacture and distribution of cased hole and overburden drilling downhole tools, custom and production machining services, industrial sandblasting and painting, and corporate head office expenses.
Corporate Services: The Corporate Services segment includes costs for management and administration, sales and marketing, accounting and finance and engineering and drafting services provided to all Hyduke operating segments.
The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this News Release.
SOURCE: Hyduke Energy Services Inc.
Gordon R. McCormack, CA
President and Chief Executive Officer
(780) 955-0355
Veronica Dutchak, CA
Chief Financial Officer
(780) 955-0355
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