Petrowest Corporation Announces First Quarter 2015 Financial Results

CALGARY, May 12, 2015 /CNW/ -  Petrowest Corporation ("Petrowest") (TSX:PRW) announced today its consolidated financial results for the three month period ended March 31, 2015.

Rick Quigley, Chief Executive Officer, stated that "The first quarter of 2015 was more challenging than expected. Reduced customer activity in the oil and gas industry had a significant effect on our operations, particularly the Constuction division. Also affecting the quarter was the road bans coming on much earlier than has been the case historically, which affected our Transportation and Environmental divisions. However, the positive consequence to the early road bans is that they will be coming off earlier in the second quarter than is typical. While we have continued to keep operating and discretionary capital costs to a minimum, the Civil division made necessary investments in repairs and maintenance during the quarter as they ramp up to full capacity for the remainder of the season. This division continues to have a solid backlog. We are actively bidding on numerous projects in the Construction division and are starting to see significant opportunities in this division. In the past few weeks, we have had some successes with contract awards in the infrastructure and energy sector totalling approximately $12 million. Mr. Quigley further stated that, "we remain well positioned in the current market environment due to our geographic and industry diversification. The Civil division and certain parts of the Transportation division are not as sensitive to the price of oil. Further, we are actively engaged in securing projects related to both the Site C hydro-electric project and future LNG related activities."

FIRST QUARTER 2015 FINANCIAL HIGHLIGHTS

• Reported revenue of $38.2 million, a decrease of $22.9 million compared to the same quarter in 2014.
• Reported Adjusted EBITDA loss of $1.3 million compared to an Adjusted EBITDA earned of $11.0 million for the same quarter in 2014.
• Reported Adjusted EBITDA margin of (3.3)% compared to 18.1% for the same quarter in 2014.
• On January 23, 2015, the Company entered into a three year syndicated credit agreement ("Syndicated Credit Facility"). The Syndicated Credit Facility includes a $50.0 million revolving reducing term loan and a $40.0 million revolving credit facility. The Syndicated Credit Facility also has an accordion feature which may increase availability under either the term loan or the revolving credit facility by a maximum of $30.0 million, subject to borrowing base availability.
• As at March 31, 2015, the Company was not in compliance with certain financial covenants in the Syndicated Credit Facility; however, waivers of such non-compliance were subsequently received effective for the first and second quarters of 2015.
• A recent appraisal report valued the active equipment fleet of the Company between $131 million and $153 million.

FINANCIAL RESULTS

				Three months ended March 31,
($000's)				2015	2014
Revenue				38,218	61,060
Operating expense				37,985	48,123
Gross margin				233	12,937
General and administrative				1,490	1,884
Adjusted EBITDA				(1,257)	11,053
Amortization of property and equipment				7,396	4,991
Amortization of intangible assets				170	199
Share-based compensation				483	308
Loss (gain) on disposal of property and equipment				36	(47)
Foreign exchange gain				(82)	-
Operating (loss) profit				(9,260)	5,602
Net finance expense				1,249	1,067
Net income (loss) and comprehensive income (loss) before income tax				(10,509)	4,535
Deferred income tax (recovery) expense				(2,666)	1,009
Net and comprehensive (loss) income				(7,843)	3,526
Total assets				172,232	142,701
Total long-term liabilities				16,250	51,474
Funds (used in) from Operations				(2,294)	10,125

OFFICER PROMOTION

Petrowest also announced that Mel Bereta has been appointed Vice President, Finance. Formerly the Treasurer of the Company, Mr. Bereta has been promoted in recognition of the significant contributions he has made to Petrowest's Finance Group since joining the Company in September 2013.

SELECTED FINANCIAL INFORMATION AND NON-IFRS MEASURES

Selected financial information for the three month periods ended March 31, 2015 and 2014 is set out above and includes the following non-IFRS financial measures: Gross margin, Gross margin percentage, Adjusted EBITDA, Adjusted EBITDA margin percentage and Funds (used in) from Operations. This information should be read in conjunction with the consolidated financial statements for the three month ended March 31, 2015 and the Company's Management, Discussion and Analysis ("MD&A"), available under the Company's profile on the SEDAR website at www.sedar.com. Further information respecting the non-IFRS financial measures is contained in the Company's MD&A.

FORWARD LOOKING INFORMATION

This news release contains forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are identified by their use of terms and  phrases such as "anticipate",  "achievable",  "believe", "expect",  "estimate",  "plan",  "intend",  "project",  "may",  "should",  "could",  "predict",  "will",  or similar words suggesting future outcomes or language suggesting an outlook. Forward-looking statements and information are based on Petrowest's current beliefs as well as assumptions made by and information currently available to Petrowest concerning anticipated business performance. Although management of Petrowest considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward-looking statements are subject to many external variables that are beyond Petrowest's control, such as fluctuating prices for crude oil and natural gas, changes in drilling activity, and general local and global economic, political, business and weather conditions. If any of these or other uncertainties materialize, the actual results of Petrowest may vary materially from those expected.

ABOUT PETROWEST

Petrowest is an Alberta corporation involved in pre-drilling and post-completion energy services as well as industrial and civil infrastructure projects, gravel crushing and hauling for non-energy sector customers. Petrowest's primary operations are based in the Grande Prairie area of northern Alberta and in northeastern British Columbia.

SOURCE Petrowest Corporation

please contact Richard Quigley, President and Chief Executive Officer, at [phone], or Lloyd Wiggins, Chief Financial Officer, at [phone], or [email protected]

Related Links

www.petro-west.com