Stock Name: ISC
Amount: CAD 0.025
Announcement Date: 23/05/2012
Record Date: 04/07/2012
Dividend Detail:
CALGARY, May 23, 2012 /CNW/ - IROC Energy Services Corp. ("IROC" or the
"Corporation") (TSXV: "ISC") is pleased to present a summary of its
operating and financial results for the three months ended March 31,
2011. For a complete copy of IROC's interim financial statements and
management's discussion and analysis ("MD&A") please visit www.sedar.com.
Basis of Presentation
Throughout this news release amounts are presented on a continuing
operations basis to more accurately reflect the way in which IROC
intends to operate on a continuing basis.
Highlights for the three month quarter ended March 31, 2012:
Total revenue increased 33% to $32.5 million for the three months ended
March 31, 2012 as compared to $24.4 million in the first quarter of
2011.
Gross margin increased 37% to $14.4 million for the three months ended
March 31, 2012 as compared to $10.5 million in the first quarter of
2011.
EBITDAS increased 40% to $11.8 million for the three months ended March
31, 2012 as compared to $8.4 million in the first quarter of 2011.
Net income from continuing operations increased 47% to $6.8 million for
the three months ended March 31, 2012 as compared to $4.6 million in
the first quarter of 2011.
Operations
IROC's operations are reported in three segments; the Drilling and Production Services segment, the Rental Services segment and Corporate Services and Other.�� The following is a discussion of the reporting segments in which IROC
operates.
DRILLING AND PRODUCTION SERVICES
The Drilling and Production Services segment provides services to oil
and gas exploration, development and production companies with most of
our customers and operations being located in western Canada, in the
provinces of Alberta and Saskatchewan.
The Drilling and Production Services segment consists of two divisions:
Eagle Well Servicing ("Eagle") contracts service rigs to oil and gas
companies to perform various completion, workover and maintenance
services on oil and natural gas wells.�� Eagle has offices and equipment
in Red Deer and Grande Prairie in Alberta and Lloydminster and Estevan
in Saskatchewan with equipment being used in those geographic areas.
Helix Coil Services ("Helix") contracts coil tubing units to oil and gas
companies to perform various completion, workover and maintenance
services on oil and natural gas wells.�� Helix is based in Red Deer,
Alberta with equipment generally being used in Alberta and
Saskatchewan, Canada.
�� | �� | �� | �� | �� |
�� | Three months ended | |||
�� | March 31, 2012 | December 31, 2011 | September 30, 2011 | June 30, 2011 |
Eagle Well Servicing: | �� | �� | �� | �� |
����Number of service rigs (end of period) | 44 | 41 | 38 | 36 |
����Service rig utilization(1) | 74% | 69% | 69% | 42% |
�� | �� | �� | �� | �� |
Commodity prices: | �� | �� | �� | �� |
����NYMEX crude oil $US/bbl | 102.93 | 94.06 | 89.76 | 102.60 |
����AECO Monthly index natural gas $CAD/GJ | 2.39 | 3.29 | 3.53 | 3.54 |
�� | �� | �� | �� | �� |
�� | Three months ended | |||
�� | March 31, 2011 | December 31, 2010 | September 30, 2010 | June 30, 2010 |
Eagle Well Servicing: | �� | �� | �� | �� |
����Number of service rigs (end of period) | 36 | 35 | 35 | 35 |
����Service rig utilization(1) | 78% | 66% | 57% | 33% |
�� | �� | �� | �� | �� |
Commodity prices: | �� | �� | �� | �� |
����NYMEX crude oil $US/bbl | 94.08 | 85.17 | 76.20 | 78.03 |
����AECO Monthly index natural gas $CAD/GJ | 3.58 | 3.39 | 3.52 | 3.66 |
(1)���������� | IROC calculates utilization based on full utilization being 10 hours days, 365 days per year consistent with the CAODC standard. IROC commences calculation of utilization for a new rig on the first day it goes into the field for active service. |
As at March 31, 2012, Eagle had a fleet of 44 service rigs having added
three single service rigs into our fleet since the start of the year.��
Eagle's service rig fleet and equipment are among the newest in the
industry.�� All of Eagle's service rigs are internally guyed with no
requirement for external anchors.�� This reduces set up time and
corresponding costs when compared to anchored rigs.���� During the past
six months Eagle has deployed its first two slant rigs.�� Slant rig
designs are optimized for use in the heavy oil and SAGD markets and our
slant rigs have been well received by the customers who have put them
into service.�� These rigs tend to work on locations with multiple well
bores referred to in the industry as "pads" which can mean more hours
of operation due to shorter rig moves and less impact from spring
breakup conditions.�� Eagle's third slant rig is to be delivered by June
30, 2012.
Currently Eagle's service rig fleet consists of 45 rigs, all of which
are fully crewed and operated.�� In addition, 2 new service rigs are
currently being built, with expected delivery and deployment by July 1,
2012.�� This will give Eagle 47 service rigs in operation by July 1,
2012.�� One key challenge facing the energy services industry is
staffing, particularly of field personnel.�� Eagle has been and
continues to be able to fully crew its assets in this very tight labour
market across the service industry.
The trend toward increased oil-related activity continues to provide
benefit for the Corporation's service rig division. Current activity
levels are estimated to be approaching 80% levered to oil, with
completion, workover and abandonment activity all providing continued
strong demand for the Corporation's services in the foreseeable future.
Commodity prices are the main activity driver as the Corporation's
customers' exploration and development programs are directly impacted
by oil and natural gas prices.�� Oil and gas producers spend capital on
new wells and service operations when they are economic within the
context of current and forecasted commodity prices.�� Crude oil prices
have continued to be strong during the first four months of 2012.�� Year
over year, first quarter prices were stronger in 2012 than in 2011 with
NYMEX crude oil averaging $US 102.93/barrel in 2012 as compared to $US
94.08/barrel in 2011.�� For the first time in over two years Alberta
quarterly natural gas prices have moved outside the $3.00/GJ to
$4.00/GJ range, and not in a good way for our industry.�� This quarter's
$2.39/GJ average price is the lowest in over three years and has
created hardship for many of our natural gas weighted customers.�� In
Alberta, the AECO monthly index for May settled at $1.5586, marking the
lowest AECO index settlement since February 1998, a period of 14 years
and three months.�� At these price levels, natural gas development has
been focused on resource type development projects and liquids rich
reservoirs as much conventional shallow gas is not economic.
Service rig utilization for the first quarter was 74% in the current
year as compared to 78% in the prior year quarter.�� The first quarter
is typically our strongest quarter but can also be impacted somewhat by
weather.�� The seasonality of spring breakup occurred earlier this year
than last year which impacted the first quarter more in the current
year than in the prior year.�� Seasonality is a significant activity
driver for all of our businesses as certain areas are only accessible
by service rigs and other heavy equipment during winter when the ground
is frozen.�� Robust activity levels in 2012 continue to be driven by
horizontal drilling focussed largely on oil production.�� The complexity
of horizontal wells typically make completion operations more time
consuming and therefore impact utilization percentages.
Helix Coil Services began operations in July 2011 with the deployment of
two truck mounted coil tubing units, each with 2" capabilities placing
the equipment in the intermediate size range. In the fourth quarter of
2011 Helix added one trailer unit with 2" capabilities, along with
crane support equipment.�� Coil services are a new business area for
IROC and we continue to be very encouraged by the operating results of
this relatively new and small division.�� The Corporation has taken a
measured approach to the growth of this new business line, focussing on
developing both the internal business processes to support this
business and a customer base from which we can scale growth going
forward.
RENTAL SERVICES
The Rental Services segment consists of the Aero Rental Services
division.�� Aero provides rental equipment for surface pressure control
in drilling and workover operations and tubular handling equipment used
for the workover, re-entry and completion operations.�� Aero has an
office in Red Deer, Alberta with equipment being rented for use
primarily in Alberta.
�� | �� | �� | �� | �� |
�� | Three months ended | |||
$ 000's | March 31, 2012 | December 31, 2011 | September 30, 2011 | June 30, 2011 |
Aero Rental Services: | �� | �� | �� | �� |
����Gross margin | 3,409 | 2,653 | 2,533 | 826 |
����Book value of rental equipment (end of period) | 16,099 | 14,641 | 12,887 | 11,799 |
�� | �� | �� | �� | �� |
�� | Three months ended | |||
$ 000's | March 31, 2011 | December 31, 2010 | September 30, 2010 | June 30, 2010 |
Aero Rental Services: | �� | �� | �� | �� |
����Gross margin | 2,793 | 1,739 | 784 | 259 |
����Book value of rental equipment (end of period) | 11,249 | 10,121 | 8,802 | 7,477 |
Aero continues to have strong absolute margin growth on a year over year
basis with the first quarter posting the strongest performance in this
division's history.�� The trend of seasonality adjusted increases in
gross margin has been driven by three primary factors.�� Firstly, higher
oil prices have increased demand and utilization of certain types of
equipment; secondly, we have continued to increase the rental asset
base in each of the past eight quarters; and thirdly, the decreasing
percentage of fixed costs to total costs in the business as we utilize
the excess capacity which was once available in our shop location's
yard and buildings.
CORPORATE SERVICES AND OTHER
IROC's non-operating segment, Corporate Services and Other, captures
general and administrative expenses associated with supporting each of
the reporting segments operations noted above, plus costs associated
with being a public company.�� Also included in Corporate Services is
interest expense for debt servicing and income tax expense and other
amounts not relating to the two main operating segments.
Comparison of results from the three month period ended March 31, 2012
to the same period last year
REVENUE
�� | �� | �� | �� | �� |
�� | Three months ended | �� | ||
$ 000's | March 31, 2012 | March 31, 2011 | Change $ | Change % |
Revenue: | �� | �� | �� | �� |
����Drilling and Production Services | 26,965 | 19,678 | 7,287 | 37% |
����Rental Services | 5,853 | 4,819 | 1,034 | 21% |
����Inter-segment eliminations | (360) | (89) | (271) | 304% |
Total revenue | 32,458 | 24,408 | 8,050 | 33% |
Total revenues for the first quarter increased 33% over the prior year
quarter reflecting the growth in the Corporation's oil related drilling
and completion asset base while activity in both the current and prior
year was very strong due to demand for the Corporation's products and
services.
The increase in revenues for the Drilling and Production Services
segment in the current year quarter is due primarily to an increase in
the number of service rig hours with utilization being 74% based on an
average of 42.5 active rigs as compared to 78% based on 36 service rigs
in the comparative quarter of the prior year.�� Also contributing to the
increases on a year over year basis was increased pricing and the
additional revenue from our three new coil tubing units which were put
into service during the third and fourth quarters of 2011.
Helix began operations in July 2011.�� Currently, Helix has two truck
mounted units and one trailer unit, each with 2" capabilities placing
the equipment in the intermediate size range.�� Additionally, Helix owns
related crane and support equipment. Helix generated revenues of $3.3
million in the first quarter of 2012.
The increase in revenue for the Rental Services segment in the current
year quarter as compared to the prior year quarter is primarily due to
the increase in the amount of rentable equipment in the current year as
compared to the prior year.�� Over the past two years, Aero has more
than doubled the amount of rental equipment in its inventory.�� This
increase has provided a larger and more diverse range of rental
equipment.�� Additionally, as we grow our rental equipment assets,
proportionately less of our rental revenue is related to third party
equipment rentals, reducing operating expenses as we are not required
to incur third party rental fees.
Crude oil and natural gas prices are activity drivers for all of our
businesses as our customers make capital and operating expenditure
decisions based on their revenue streams generated by selling crude oil
and natural gas.�� NYMEX Crude oil prices in the current year quarter
were stronger, averaging $US 102.93/ barrel as compared to $US 94.08 /
barrel in the prior year quarter.�� In contrast, natural gas prices were
weaker averaging just $2.39 per GJ in the current year quarter as
compared to $3.58 per GJ in the prior year quarter.�� Subsequent to
quarter end, the AECO monthly index for May 2012 settled at $1.5586,
marking the lowest AECO index settlement since February 1998, a period
of 14 years and three months. Low natural gas prices have significantly
reduced natural gas focused activity by our customers.
OPERATING COSTS AND GROSS MARGIN
�� | �� | �� | �� | �� | �� | |
�� | Three months ended | �� | ||||
$ 000's | March 31, 2012 | March 31, 2011 | Change $ | Change % | ||
Operating costs: | �� | �� | �� | �� | ||
����Drilling and Production Services | 15,990 | 11,982 | 4,008 | 33% | ||
����Rental Services | 2,444 | 2,026 | 418 | 21% | ||
����Inter-segment eliminations | (360) | (89) | (271) | 304% | ||
Total operating costs | 18,074 | 13,919 | 4,155 | 30% | ||
�� | �� | �� | �� | �� | ||
Gross margin:(1) | �� | �� | �� | �� | ||
����Drilling and Production Services | 10,975 | 7,696 | 3,279 | 43% | ||
����Rental Services | 3,409 | 2,793 | 616 | 22% | ||
Total gross margin | 14,384 | 10,489 | 3,895 | 37% | ||
�� | �� | �� | �� | �� | ||
Gross margin %(1): | �� | �� | �� | �� | ||
����Drilling and Production Services | 41% | 39% | �� | 2% | ||
����Rental Services | 58% | 58% | �� | -% | ||
Total gross margin % | 44% | 43% | �� | 1% | ||
(1)See Non-GAAP Measures | �� | �� | �� | �� | ||
In the Drilling and Production Services segment, most operating costs
are variable in nature and increase or decrease with activity levels
such that much of the change in operating costs in the year over year
period is due to the increases in revenues in the current year period
as compared to the prior year period.�� The largest cost in this segment
is salaries and wages with most employees being hourly in nature and
paid only when they are working on service rigs.
Gross margin is calculated as revenue minus operating costs and provides
a measure of cash flow available to cover all of the other costs of the
business.�� Gross margin percentages are calculated as gross margin
divided by revenue and is used by management as a measure of relative
profitability.
EBITDAS
�� | �� | �� | �� | �� | �� | |
�� | Three months ended | �� | ||||
$ 000's except per share amounts | March 31, 2012 | March 31, 2011 | Change $ | Change % | ||
EBITDAS(1): | �� | �� | �� | �� | ||
����Drilling and Production Services | 9,743 | 6,803 | 2,940 | 43% | ||
����Rental Services | 3,029 | 2,476 | 553 | 22% | ||
����Corporate and other | (1,005) | (882) | (123) | 14% | ||
Total EBITDAS | 11,767 | 8,397 | 3,370 | 40% | ||
�� | �� | �� | �� | �� | ||
EBITDAS per common share(1) | �� | �� | �� | �� | ||
����- Basic | $�� 0.234 | $�� 0.197 | $�� 0.037 | 19% | ||
����- Diluted | $�� 0.229 | $�� 0.193 | $�� 0.036 | 19% | ||
(1) See Non-GAAP Measures
Earnings before interest, income taxes, depreciation, amortization, and
stock based compensation ("EBITDAS"), is used by the Corporation as a
measure of cash flow and liquidity.�� Positive EBITDAS provides cash
needed to grow our business through the purchase of new equipment or
business acquisitions, reduce outstanding bank debt, repurchase common
shares, or pay dividends to our shareholders.
GENERAL AND ADMINISTRATIVE EXPENSES
�� | �� | �� | �� | �� | �� | |
�� | Three months ended | �� | ||||
$ 000's | March 31, 2012 | March 31, 2011 | Change $ | Change % | ||
General and administrative | �� | �� | �� | �� | ||
����Drilling and Production Services | 1,232 | 892 | 340 | 38% | ||
����Rental Services | 380 | 318 | 62 | 19% | ||
����Corporate services and other | 1,005 | 882 | 123 | 14% | ||
Total general and administrative | 2,617 | 2,092 | 525 | 25% | ||
Increased year over year activity levels are the primary driver for the
increase in general and administrative costs.�� Year over year
percentage increases in revenue and EBITDAS, as highlighted in those
sections of this MD&A, were larger than the percentage increases in
general and administrative expenses.�� General and administrative
expenses are a combination of fixed and variable costs.�� A portion of
the increase in general and administrative expenses is related to the
increase in EBITDAS as some employees have a component of variable
compensation based on EBITDAS performance.
NET INCOME AND EARNINGS PER SHARE
�� | �� | �� | �� | �� |
�� | Three months ended | �� | ||
$ 000's except share and per share amounts | March 31, 2012 | March 31, 2011 | Change $ or number | Change % |
�� | �� | �� | �� | �� |
Net income from continuing operations�� | 6,750 | 4,602 | 2,148 | 47% |
�� | �� | �� | �� | �� |
Net income (loss) from discontinued operations | - | (239) | 239 | (100%) |
�� | �� | �� | �� | �� |
Net income and comprehensive income�� | 6,750 | 4,363 | 2,387 | 55% |
�� | �� | �� | �� | �� |
Earnings per share from continuing operations: | �� | �� | �� | �� |
����- Basic | $0.13 | $0.11 | $0.02 | 18% |
����- Diluted | $0.13 | $0.11 | $0.02 | 18% |
�� | �� | �� | �� | �� |
Weighted average common shares outstanding: | �� | �� | �� | �� |
����- Basic | 50,204,523 | 42,618,325 | 7,586,198 | 18% |
����- Diluted | 51,466,877 | 43,425,879 | 8,040,998 | 19% |
CAPITAL EXPENDITURES
IROC's capital expenditures were as follows:
�� | �� | �� | �� | �� | �� |
�� | �� | Three months ended | |||
$ 000's | �� | March 31, 2012 | March 31, 2011 | Change $ | Change % |
Capital expenditures: | �� | �� | �� | �� | �� |
����Drilling and Production Services | �� | 6,838 | 3,569 | 3,269 | 92% |
����Rental Services | �� | 1,937 | 1,525 | 412 | 27% |
����Corporate | �� | 39 | 21 | 18 | 86% |
����Discontinued operations | �� | - | 31 | (31) | (100%) |
Total capital expenditures | �� | 8,814 | 5,146 | 3,668 | 71% |
The Corporation's strategy to organically grow its capital asset base,
focused on our core businesses, has resulted in IROC having capital
assets, as a whole, in new or like new condition.�� Our service rigs
represent the largest percentage of the Corporation's overall net book
value of fixed assets and they are among the newest fleet of service
rigs in the industry.
The Corporation has budgeted $21 million for capital expenditures during
2012 consisting of the following:
$12.5-million -- for construction of five new service rigs in the Eagle
Well Servicing division (includes $4.8 million from assets which were
purchased in the fourth quarter of 2011);
$8-million -- for expansion of rental inventory assets in the Aero
Rental division;
$0.5-million -- for maintenance and infrastructure expenditures.
As at March 31, 2012, the Corporation estimates $13.6 million of the $21
million 2012 capital budget has been spent with $7.4 million remaining
to be spent.�� Management continuously evaluates opportunities to grow
the business and will adjust or increase the capital program if the
opportunities and conditions warrant.
Dividends and Outstanding Share Data
The following table summarizes outstanding share data and potentially
dilutive securities:
�� �� | ��������������������May 23, 2012 |
��Common shares | 50,294,663 |
��Stock options | 1,791,996 |
��Restricted share units | 424,838 |
The following table summarizes dividends declared or paid since December
31, 2011:
�� | �� | �� | �� |
Declaration Date | Record Date | ����Payment Date | Amount of Dividend per Common Share |
December 20, 2011 | January 9, 2012 | ����January 13, 2012 | ����������������$0.025 |
March 20, 2012 | April 6, 2012 | ����April 13, 2012 | ����������������$0.025 |
May 23, 2012 | July 6, 2012 | ����July 13, 2012 | ����������������$0.025 |
Outlook
IROC Energy Services Corp. had a record first quarter with quarterly
EBITDAS that were the strongest in the history of the Corporation.��
This also marked the 31st consecutive quarter of positive EBITDAS, underscoring the fundamental
strength of our core businesses and the ability of our assets to
generate positive operating cash flow.�� Our ability to address the
needs of our customers as they continue to expand their use of
horizontal drilling and multistage fracturing technologies remains the
focus of each of our operating divisions.�� Each of our divisions is
benefitting from the increased oil price and technology driven industry
conditions and we are experiencing an increasing demand for well
servicing rigs, coiled tubing units and the rental assets of our Rental
Services division.�� Notwithstanding the challenging natural gas price
environment, we expect continued support for all of the services we
offer throughout 2012 based on current oil price levels and the
continued expansion of horizontal drilling and multi stage fracturing
technologies into an increasing number of areas.
Our service rig division is expected to be the largest contributor of
revenues and profits in our company.�� Eagle averaged 37.3 rigs during
2011, starting the year with 36 rigs and ending with 41 rigs in the
field.�� Eagle averaged 42.5 service rigs during the first quarter with
44 rigs in service at quarter end and another 3 service rigs on track
to be in service by the start of the third quarter.�� For 2012 we plan
to average 45 rigs for calendar 2012 as compared to the 37.3 rigs in
2011, an increase of 7.7 rigs or 21%.�� We expect this to translate into
a similar magnitude of revenue, margin and EBITDAS growth for this
division for the full year 2012.
Eagle's new equipment specifically addresses the current needs of our
customers or targeted areas of operation and provides greater operating
efficiency with minimal downtime.�� We continue to build equipment that
is lighter and more adaptable to the various areas where we operate.��
This new and innovative equipment continues to attract both work and
competent personnel, enabling Eagle to achieve high equipment
utilization, a benefit to our employees and customers alike.
Our rental business continues to operate very well and the demand for
its products and services continues to increase as our customers
exploit oil opportunities in both the application of horizontal
technology, and the SAGD operating segments of the oil and gas business
in Western Canada.�� We continue to unlock the operating leverage
available to us in this division as we add more equipment with
increasing revenues and margins.���� As industry acceptance of the new
equipment and services remains strong, we anticipate being able to
continue to profitably add assets in this division and are on track to
meeting our budgeted $8 million in asset acquisitions for 2012, having
spent $1.9 million in the first quarter.�� Expansion of this business is
expected to continue through 2012.
The contribution from our new start-up coil tubing business continues to
be positive.�� We expect continued growth in this business as we add
additional auxiliary equipment.�� The coiled tubing operation is very
complementary to our other services and we expect it will provide a
significant contribution to our bottom line over the coming quarters
and years.
Given the continuing growth of our businesses, our ability to attract
and retain personnel in a very tight labour market is critical to all
of our businesses.�� We have been able to fully crew all of our service
rigs and coil tubing units through the first quarter and continue to be
able to do so.�� Our recent and planned growth continues to make IROC an
attractive employer and provides opportunities to our workforce for
career advancement.�� We continue to have a strong balance sheet, the
newest in equipment, and a talented group of employees that will allow
us to continue to grow and capitalize on opportunities as they present
themselves.
Declaration of Quarterly Dividend
The Board of Directors has declared a quarterly cash dividend of $0.025
per common share. The dividend will be payable July 13, 2012 to
shareholders of record at the close of business on July 6, 2012.
Conference Call and Webcast
IROC will conduct a conference call on Thursday, May 24, 2012 at 10:00
a.m. MST (12:00 p.m. EST).�� Thomas Alford, President and CEO, and Ryan
Michaluk, CFO, will both be presenting during the call.
To access the conference call, contact the conference call operator at
(888) 231-8191 (North America) or (647) 427-7450 (Toronto and outside
North America) approximately 10 minutes prior to the call and request
the "IROC Energy Services Corp. 2012 First Quarter Results Conference
Call".�� The call will be open to all analysts, investors and other
interested parties.
The conference call will also be available via webcast by visiting http://www.newswire.ca/en/webcast/detail/972421/1045149 from a web browser.
About IROC Energy Services Corporation
IROC Energy Services Corp. is an Alberta oilfield services company that,
through the IROC Energy Services Partnership, provides a diverse range
of products, services and equipment to the oil and gas industry that
are among the newest and most innovative in the WCSB.�� IROC Energy
Services Partnership operates under the business names of Eagle Well
Servicing, Aero Rental Services and Helix Coil Services.�� IROC combines
cutting-edge technology with depth of experience to deliver a product
and services offering in the following core areas: well servicing &
equipment, rental services and coil tubing services. For more
information on IROC Energy Services Corp., visit our website at www.iroccorp.com.
Cautionary Statement Regarding Forward Looking Information and
Statements
Certain information contained in this news release, including
information related to the completion and timing of the construction,
delivery and deployment of IROC's new service rigs and new coiled
tubing units, the expected demand for our services, the Corporation's
planned capital expenditures and growth opportunities, outlook for
future oil and gas prices, cyclical industry fundamentals, drilling,
completion, work over and abandonment activity levels, the
Corporation's ability to fund future obligations and capital
expenditures, and information or statements that contain words such as
"could", "should", "can", "anticipate", "expect", "believe", "will",
"may", "likely", "estimate", "predict", "potential", "continue",
"maintain", "retain", "grow", and similar expressions and statements
relating to matters that are not historical facts, constitute
"forward-looking information" within the meaning of applicable Canadian
securities legislation.�� This information or these statements are based
on certain assumptions and analysis made by the Corporation in light of
its experience and its perception of historical trends, current
conditions and expected future developments as well as other factors it
believes are appropriate in the circumstances. In particular, the
Corporation's expectation of uncertain demand and prices for oil and
natural gas and the resulting future industry activity, is premised on
the Corporation's understanding of customers' capital budgets and their
ability to access capital, the focus of its customers on deeper and
horizontal drilling opportunities in the current natural gas pricing
environment, and the continuing impact of the recent global financial
crisis and the current economic recovery all of which affects the
demand for oil and gas. Whether actual results, performance or
achievements will conform to the Corporation's expectations and
predictions is subject to a number of known and unknown risks and
uncertainties which could cause actual results to differ materially
from the Corporation's expectations.�� Such risks and uncertainties
include, but are not limited to: fluctuations in the price and demand
for oil and natural gas; fluctuations in the level of oil and natural
gas exploration and development activities; the lack of availability of
qualified personnel or management; fluctuations in the demand for well
servicing; the effects of weather conditions on operations and
facilities; the existence of competitive operating risks inherent in
well servicing; general economic, market or business conditions;
changes in laws or regulations, including taxation, environmental and
currency regulations; the other risk factors set forth under the
heading "Risks" in the annual MD&A for the year ended December 31, 2011
and other unforeseen conditions which could impact on the use of
services supplied by the Corporation.
Consequently, all of the forward-looking information and statements made
in this news release are qualified by this cautionary statement and
there can be no assurance that the actual results or developments
anticipated by the Corporation will be realized or, even if
substantially realized, that they will have the expected consequences
to or effects on the Corporation or its business or operations. Except
as may be required by law, the Corporation assumes no obligation to
update publicly any such forward-looking information and statements,
whether as a result of new information, future events, or otherwise.
This press release is not for dissemination in United States or to any
United States news services.�� The Common Shares of IROC have not and
will not be registered on the United States Securities Act of 1933, as amended (the "United States Securities Act") or any state securities laws and are not offered or sold in the
United States or to any US person except in certain transactions exempt
from the registration requirements of the United States Securities Act and applicable state securities laws.
Neither 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.
Non-GAAP Measures
The financial statements have been prepared in accordance with IFRS.��
Certain supplementary information and measures not recognized under
IFRS are provided where Management believes they assist the reader in
understanding IROC's results.�� These measures include:
EBITDAS and EBITDAS per share- EBITDAS is defined as earnings before
interest, taxes, depreciation and amortization, stock-based
compensation expense, foreign exchange gains and losses, goodwill
impairment, note receivable impairment, and gains or losses on disposal
of property and equipment.�� EBITDAS and EBITDAS per share are not
recognized measures under GAAP or IFRS.�� The Corporation believes that
EBITDAS is provided as a measure of operating performance without
reference to financing decisions, income tax impacts and non-cash
expenses, which are not controlled at the operating management level.��
Accordingly, the Corporation believes EBITDAS is a useful measure for
prospective investors in evaluating the financial performance of the
Corporation, and specifically, the ability of the Corporation to
service the interest on its indebtedness.�� Investors should be
cautioned that EBITDAS should not be construed as an alternative to net
income determined in accordance with IFRS as an indicator of the
Corporation's performance.�� IROC's method of calculating EBITDAS may
differ from those of other companies, and accordingly, EBITDAS may not
be directly comparable to measures used by other companies. EBITDAS %
is calculated as EBITDAS divided by revenue.
Gross margin is defined as revenue less operating expenses.�� Gross
margin % is defined as gross margin divided by revenue.�� The Company
believes that gross margin and gross margin % are useful measures which
provide an indicator of the Corporation's fundamental ability to make
money on the products and services it sells.�� The Corporation believes
the relationship between revenues and costs expressed by the gross
margin % is a useful measure when compared between different financial
periods as it demonstrates the trending relationship between revenues,
costs and margins.�� Gross margin and gross margin % are not recognized
measures of IFRS and do not have any standardized meaning prescribed by
IFRS.�� IROC's method of calculating gross margin and gross margin % may
differ from those of other companies, and accordingly, may not be
directly comparable to measures used by other companies.
The following is a reconciliation of EBITDAS and EBITDAS per share to
net income from continuing operations:
�� | �� | �� | �� | �� | �� |
�� | �� | Three months ended | |||
$ 000's except number of shares and per share amounts | �� | March 31, 2012 | December 31, 2011 | September 30, 2011 | June 30, 2011 |
Net income (loss) from continuing operations | �� | 6,750 | 4,778 | 4,330 | (331) |
�� | �� | �� | �� | �� | �� |
Depreciation and amortization | �� | 2,392 | 2,111 | 1,920 | 1,715 |
Loss (gain) on foreign exchange | �� | (6) | (1) | 23 | 8 |
Stock based compensation expense | �� | 145 | 167 | 169 | 115 |
Loss (gain) on disposal of equipment | �� | (20) | (8) | 7 | 7 |
Interest and financing costs | �� | 181 | 163 | 164 | 190 |
Note receivable recovery | �� | - | - | - | - |
Income taxes: | �� | �� | �� | �� | �� |
����Current | �� | 1,185 | - | - | - |
����Deferred | �� | 1,140 | 1,432 | 1,619 | (62) |
�� | �� | �� | �� | �� | �� |
EBITDAS - continuing operations | �� | 11,767 | 8,642 | 8,232 | 1,642 |
�� | �� | �� | �� | �� | �� |
EBITDAS per share - continuing operations | �� | �� | �� | �� | �� |
����Basic | �� | $0.23 | $0.18 | $0.16 | $0.03 |
����Diluted | �� | $0.23 | $0.18 | $0.16 | $0.03 |
�� | �� | �� | �� | �� | �� |
�� | �� | Three months ended | |||
$ 000's except number of shares and per share amounts | �� | March 31, 2011 | December 31, 2010 | September 30, 2010 | June 30, 2010 |
Net income (loss) from continuing operations | �� | 4,602 | 2,703 | 1,068 | (1,307) |
�� | �� | �� | �� | �� | �� |
Depreciation and amortization | �� | 1,650 | 1,857 | 1,755 | 1,553 |
Gain on foreign exchange | �� | - | - | (2) | (3) |
Stock based compensation expense | �� | 153 | 105 | 82 | 119 |
Loss (gain) on disposal of equipment | �� | (25) | (17) | (24) | 1 |
Interest and financing costs | �� | 286 | 305 | 304 | 275 |
Note receivable impairment | �� | - | - | (300) | - |
Income taxes: | �� | �� | �� | �� | �� |
����Current | �� | - | - | - | - |
����Deferred | �� | 1,731 | 367 | 414 | (308) |
�� | �� | �� | �� | �� | �� |
EBITDAS - continuing operations | �� | 8,397 | 5,320 | 3,297 | 330 |
�� | �� | �� | �� | �� | �� |
EBITDAS per share - continuing operations | �� | �� | �� | �� | �� |
����Basic | �� | $0.20 | $0.12 | $0.08 | $0.01 |
����Diluted | �� | $0.19 | $0.12 | $0.08 | $0.01 |
��
��
��
For further information:
IROC Energy Services Corp.
Mr. Thomas M. Alford, President and CEO,
or
Mr. Ryan A. Michaluk, Chief Financial Officer
Telephone:�� (403) 263-1110
Email:��investorrelations@iroccorp.com
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