Petrowest Corporation Announces Third Quarter 2014 Financial Results

CALGARY, Nov. 12, 2014 /CNW/ - Petrowest Corporation ("Petrowest") (TSX:PRW) announced today its consolidated financial results for the three and nine month periods ended September 30, 2014.

Rick Quigley, Chief Executive Officer, stated that "We are pleased with the third quarter financial results.  Both revenue and Adjusted EBITDA were strong as the Company continues to see increasing customer activity in the regions we operate in.  We are also encouraged by the fact that there is room for improvement in the results since there were $0.7 million in one time non-recurring business development costs and nearly ten days of activity which were interrupted in September due to an unseasonal snowfall.  In addition, the Company was very pleased to complete the acquisitions of Trans Carrier Ltd., Trans Carrier Rentals Ltd, and CJM Trucking Ltd. subsequent to the quarter.  We anticipate the acquisitions will provide a number of synergies, while increasing our service offerings, expanding our geographic presence and strengthening our team of experienced operators."  Mr. Quigley further stated that "we are very proud to be in one of the four consortiums qualified to bid to provide the main civil work on the Site C hydro-electric project, a proposed dam and hydroelectric generating station that is planned to be built on the Peace River in northeast British Columbia."

FINANCIAL HIGHLIGHTS

In the three months ended September 30, 2014 compared to the same period in 2013, the Company:

• Reported revenue of $89.7 million, an increase of $16.2 million compared to the same quarter in 2013,
• Reported Adjusted EBITDA of $13.5 million compared to $14.6 million for the same quarter in 2013,
• Reported Adjusted EBITDA margin of 15.0% compared to 19.8% for the same quarter in 2013,
• Completed the sale, on a "bought-deal" basis, of 18,400,000 class A common shares at a price of $1.25 per share, for aggregate gross proceeds of $23.0 million, and
• Completed an amendment on the revolving operating credit facility to increase the maximum facility amount to $40.0 million and to extend the maturity date to August 20, 2017.

In the nine months ended September 30, 2014 compared to the same period in 2013, the Company:

• Reported revenue of $206.2 million, an increase of $37.5 million compared to the same period in 2013,
• Reported Adjusted EBITDA of $27.6 million, an increase of $2.6 million compared to the same period in 2013,
• Reported Adjusted EBITDA margin of 13.4% compared to 14.8% in the same period in 2013,
• Acquired all of the issued and outstanding shares of Enviro-Mulch Land Clearing Solutions Ltd. on May 27, 2014, and
• Completed the construction of the final leg in the twinning of Highway 43 in Alberta, and
• Completed a significant amount of the crushing sub-contracts awarded on the expansion of the Highway 63 project. 
  

FINANCIAL RESULTS

		Threee months ended September 30,		Nine months ended September 30,
($000's)		2014	2013	2014	2013
Revenue		89,711	73,475	206,210	168,673
Operating expense		73,959	57,591	172,622	139,536
Gross margin		15,752	14,550	27,558	24,917
General and administrative		2,281	1,334	6,028	4,220
Adjusted EBITDA		13,471	14,550	27,560	24,917
Amortization of property and equipment		5,400	5,250	15,234	15,156
Amortization of intangible assets		148	96	436	356
Share-based compensation		333	234	978	665
Loss (gain) on disposal of property and equipment		184	(165)	40	(329)
Foreign exchange loss		-	-	-	642
Operating profit		7,406	9,135	10,872	8,427
Net finance expense		1,306	1,883	3,444	9,959
Loss on fair value of financial instruments		-	2	-	6
Net income (loss) and comprehensive income (loss) before income tax		6,100	7,252	7,428	(1,538)
Deferred income tax expense		1,495	760	1,534	357
Net and comprehensive income (loss)		4,605	6,492	5,894	(1,181)
Total assets		176,753	147,180	176,753	147,180
Total long-term liabilities		42,009	69,176	42,009	69,176
Funds from Operations		12,309	12,785	24,540	18,652

SELECTED FINANCIAL INFORMATION AND NON-IFRS MEASURES

Selected financial information for the three and nine month periods ended September 30, 2014 and 2013 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 from Operations. This information should be read in conjunction with the consolidated financial statements for the three and nine months ended September 30, 2014 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

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