CALGARY, May 24, 2018 /CNW/ - MATRRIX Energy Technologies
Inc. ("MATRRIX" or the "Corporation") (TSX-V: MXX) announces
financial results for the three month period ended March 31, 2018. The following should be read in
conjunction with the Corporation's unaudited interim consolidated
financial statements and notes thereto for the three month period
ended March 31, 2018 and related
management's discussion and analysis, which are available on SEDAR
at www.sedar.com.
For the three month period ended March
31, 2018, the Corporation's consolidated operating and
financial results continued their positive momentum from Q4 2017 as
a result of building on improving commodity prices and the
Corporation's strategic priority to enter into the land based
contract drilling rig space in Western Canada.
(All monetary amounts contained herein are expressed in
thousands of Canadian dollars, except for per share amounts)
FIRST QUARTER 2018 SUMMARY (Compared with prior year's
first quarter)
- Revenue of $7,475, up 382% from
$1,549
- Net income of $200, improved 129%
from a net loss of $693
- Adjusted EBITDA of $1,152, up
from an Adjusted EBITDA loss of $55
- First quarter capital expenditures of $313
- Working capital of $18,753 with
zero debt
FINANCIAL HIGHLIGHTS
|
|
Three months
ended
|
|
|
March 31,
|
|
|
|
|
|
(000's CAD
$)
|
|
2018
|
2017
|
%
Change
|
Revenue
|
|
7,475
|
1,549
|
382%
|
EBITDA
(i)
|
|
1,049
|
(59)
|
nm
|
EBITDA per
share
|
|
|
|
|
|
Basic
|
|
0.01
|
(0.00)
|
nm
|
|
Diluted
|
|
0.01
|
(0.00)
|
nm
|
Adjusted EBITDA
(ii)
|
|
1,152
|
(55)
|
nm
|
Adjusted EBITDA per
share
|
|
|
|
|
|
Basic
|
|
0.01
|
(0.00)
|
nm
|
|
Diluted
|
|
0.01
|
(0.00)
|
nm
|
Net income
(loss)
|
|
200
|
(693)
|
129%
|
Net income (loss) per
share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.00
|
(0.02)
|
nm
|
|
Diluted
|
|
0.00
|
(0.02)
|
nm
|
Funds flow from
operations (iii)
|
|
817
|
(49)
|
nm
|
Gross Margin
(iv)
|
|
2,288
|
603
|
279%
|
Capital
expenditures
|
|
313
|
-
|
nm
|
Weighted Average
common shares outstanding
|
|
128,472
|
32,185
|
299%
|
Weighted Average
diluted common shares outstanding
|
|
129,508
|
32,185
|
302%
|
nm - calculation is
not meaningful
|
|
|
|
|
Revenue
Consolidated revenue for the three month period ended
March 31, 2018 was $7,475, up 382% from $1,549 as compared to the 2017 corresponding
period. Consolidated revenue for the three month period ended
March 31, 2018 was comprised of
$5,488 related the land based
contract drilling rig segment and $1,987 related to the horizontal and directional
drilling segment.
Adjusted EBITDA
Consolidated Adjusted EBITDA for the three month period ended
March 31, 2018 was $1,152, as compared to an Adjusted EBITDA loss of
$55 for the 2017 corresponding
period. Consolidated Adjusted EBITDA for the three month period
ended March 31, 2018 was comprised of
$1,523 related the land based
contract drilling rig segment and an Adjusted EBITDA loss of
$371 related to the horizontal and
directional drilling segment.
Net Income
Consolidated net income for the three month period ended
March 31, 2018 was $200, as compared to a net loss of $693 for the 2017 corresponding period.
Consolidated net income was partially offset by an increase in
non-recurring restructuring charges of $330 for the three month period ended
March 31, 2018.
Capital Expenditures
Capital expenditures for the three month period ended
March 31, 2018 was $313, as compared to $nil for the corresponding
2018 period. The Q1 2018 capital expenditures were related to the
purchase of drilling rig equipment. As of the date of this press
release, the Corporation has committed $1,902 for rig upgrades and $179 for equipment upgrades related to the
horizontal and directional drilling segment.
OUTLOOK
Although prices for commodities continue to trend upward in
2018, the activity in the Western Canadian Sedimentary Basin
remains challenged and the Corporation is anticipating slow to
moderate growth in the second half of 2018 as compared to 2017
activity levels.
With the recent acquisition of D2 Drilling Inc. and the land
based contract drilling rig assets from Red Dog Drilling Inc., the
Corporation continues its strategic plan of purchasing best in
class assets and we will continue to look for investments that will
provide a high rate of return for MATRRIX's shareholders.
The Corporation also continues to seek increased market share
with the horizontal and directional drilling segment. The
Corporation continues to build momentum with its current customer
base with its proprietary software platform
D2ROXTM (pronounced DEE-ROCKS). This software
platform allows the Corporation and its oil and gas clients to
drive safe, predictable, repeatable, cost effective drilling
operations at the rig site, for the Corporation's existing
horizontal and directional drilling operation and its drilling rig
business.
NON-GAAP MEASURES
This press release contains references to (i) EBITDA; (ii)
Adjusted EBITDA; (iii) funds flow; and (iv) gross margin. These
financial measures are not measures that have any standardized
meaning prescribed by International Financial Reporting Standards
("IFRS") and are therefore referred to as non-GAAP measures. The
non-GAAP measures used by the Corporation may not be comparable to
similar measures used by other companies.
(i)
|
EBITDA is not a
measure recognized under IFRS and does not have a standardized
meanings prescribed by IFRS. EBITDA is defined as "income (loss)
before interest expense, income taxes, depreciation and
amortization." Management believes that EBITDA provides useful
information to investors as it provides an indication of results
generated from the Corporation's operating activities prior to
financing, taxation and non-recurring/non-cash impairment charges
occurring outside the normal course of business.
|
|
Three months
ended
|
|
March 31,
|
(000's CAD
$)
|
2018
|
2017
|
%
Change
|
Net income
(loss)
|
200
|
(693)
|
129%
|
|
Depreciation
|
784
|
634
|
24%
|
|
Interest on
Convertible Debenture
|
65
|
-
|
nm
|
EBITDA
|
1,049
|
(59)
|
nm
|
nm - not
meaningful
|
|
|
|
(ii)
|
Adjusted EBITDA is
defined as "income (loss) before interest income, interest expense,
taxes, business acquisition transaction costs, depreciation and
amortization, shared based compensation expense, gains on disposal
of property and equipment, impairment expenses, interest and other
income, foreign exchange, non-recurring restructuring charges and
accretion of debentures." Management believes that in addition to
net and total comprehensive income (loss), Adjusted EBITDA is a
useful supplemental measure as it provides an indication of the
results generated by the Corporation's principal business
activities prior to consideration of how these activities are
financed, how assets are depreciated, amortized and impaired, the
impact of foreign exchange, or how the results are affected by the
accounting standards associated with the Corporation's stock based
compensation plan.
|
|
Three months
ended
|
|
March 31,
|
(000's CAD
$)
|
2018
|
2017
|
%
Change
|
EBITDA
|
1,049
|
(59)
|
nm
|
|
Gain from equipment
lost in hole
|
(635)
|
(30)
|
nm
|
|
Interest and other
income
|
(18)
|
(7)
|
151%
|
|
Share based
payments
|
81
|
32
|
153%
|
|
Transaction
costs
|
277
|
-
|
nm
|
|
Foreign exchange
(gain) loss
|
24
|
9
|
nm
|
|
Accretion of
debentures
|
44
|
-
|
nm
|
|
Non recurring
restructuring charges
|
330
|
-
|
nm
|
Adjusted
EBITDA
|
1,152
|
(55)
|
nm
|
nm - not
meaningful
|
|
|
|
(iii)
|
Funds flow from
operations is defined as "cash provided by operating activities
before the change in non-cash working capital". Funds flow from
operations is a measure that provides shareholders and potential
investors additional information regarding the Corporation's
liquidity and its ability to generate funds to finance its
operations. Management utilizes this measure to assess the
Corporation's ability to finance operating activities and capital
expenditures.
|
|
Three months
ended
|
|
March 31,
|
(000's CAD
$)
|
2018
|
2017
|
%
Change
|
Operating cash
flow
|
(334)
|
(545)
|
39%
|
Changes in non-cash
working capital
|
1,151
|
496
|
(132%)
|
Funds flow
|
817
|
(49)
|
nm
|
(iv)
|
Gross margin is
defined as "gross profit from services revenue before stock based
compensation and depreciation". Gross margin is a measure that
provides shareholders and potential investors additional
information regarding the Corporation's cash generating and
operating performance. Management utilizes this measure to assess
the Corporation's operating performance.
|
|
Three months
ended
|
|
March 31,
|
(000's CAD
$)
|
2018
|
2017
|
%
Change
|
Income (loss) from
operations
|
1,505
|
(20)
|
nm
|
Depreciation
|
783
|
623
|
79%
|
Gross
margin
|
2,288
|
603
|
279%
|
Gross margin
%
|
31%
|
39%
|
(21%)
|
nm - not
meaningful
|
|
|
|
FORWARD-LOOKING INFORMATION
Certain statements contained in this press release constitute
forward-looking statements or forward-looking information
(collectively, "forward-looking information"). Forward-looking
information relates to future events or the Corporation's future
performance. All information other than statements of historical
fact is forward-looking information. The use of any of the words
"anticipate", "plan", "contemplate", "continue", "estimate",
"expect", "intend", "propose", "might", "may", "will", "could",
"believe", "predict", and "forecast" are intended to identify
forward-looking information.
This press release contains forward-looking information
pertaining to, among other things: the slow to moderate growth
expected in the second half of 2018; the Corporation's strategic
plan; commodity prices; industry activity for overall rig activity
in 2018; capital spending; lower capital expenditures of the
industry; the expectations regarding seeking additional market
share with the horizontal and directional drilling segment;
competition; and the momentum created by its proprietary software
platform. This forward-looking information involves material
assumptions and known and unknown risks and uncertainties and other
factors, certain of which are beyond the Corporation's control,
that may cause actual results or events to differ materially from
those anticipated in such forward-looking information. This press
release, the Corporation's management's discussion and analysis for
the three month period ended March 31,
2018, the Corporation's annual information form and other
documents filed with securities regulatory authorities (accessible
through the SEDAR website www.sedar.com) describe the risks, the
material assumptions and other factors that could influence actual
results, which include, among other things, anticipated financial
performance; the implementation of the Corporation's growth
strategy; business prospects; conditions in general economic and
financial markets; the ability to get additional market share with
the directional drilling segment; industry conditions; current
commodity prices and royalty regimes; regulatory developments; the
impact of increasing competition; future exchange rates; the
availability and cost of labour and services; the sufficiency of
budgeted capital expenditures in carrying out planned activities;
timing and amount of capital expenditures; the ability of the
Corporation to renew existing contracts and enter into new
contracts; utilization and pricing of the Corporation's systems and
rigs; supply and demand for oil and natural gas services relating
to the drilling and ancillary services; effects of regulation by
governmental agencies; tax laws; future operating costs; and the
ability to obtain financing on acceptable terms, which are subject
to change based on commodity prices, market conditions and
potential timing delays. Although management of the Corporation
considers these assumptions to be reasonable based on information
currently available to it, such assumptions may prove to be
incorrect. Actual results, performance or achievements could
differ material from those expressed in, or implied by, this
forward-looking information and, accordingly, no assurance can be
given that any of the events anticipated by the forward-looking
information will transpire or occur, or if any of them do so, what
benefits the Corporation will derive therefrom.
Statements, including forward-looking information, are made as
of the date of this press release and the Corporation does not
undertake any obligation to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, except as may be required by applicable securities
laws. The forward-looking information contained in this press
release is expressly qualified by this cautionary statement.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE MATRRIX Energy Technologies Inc.