“EBITDAS” and “Adjusted EBITDAS” are not standard measures under IFRS. Please refer to the Advisory regarding Non-Standard Measures at the end of this press release for a description of these items and limitations of their use.
“Activity levels in the second quarter reached record levels as we successfully completed 20 turnaround projects to build and maintain the integrity of our customers’ infrastructure. We onboarded over 2,000 employees to support these projects. We are proud of our employees who delivered these services in a safe and timely manner,” said
“Revenues in the second quarter grew to
HIGHLIGHTS
- Revenues for the three months ended
June 30, 2022 were$173.2 million , representing an increase of$76.6 million or 79.3% from Q2 2021 and an increase of$63 .3 million or 57.7% from Q1 2022. - Gross profit for the three months ended
June 30, 2022 was$15.7 million , representing an increase of$5.3 million or 50.4% from Q2 2021 and an increase of$6.0 million or 61.2% from Q1 2022. - Gross profit margin for the three months ended
June 30, 2022 was 9.1%, as compared to 10.8% in Q2 2021 and 8.9% in Q1 2022. - Adjusted EBITDAS for the three months ended
June 30, 2022 were$7.9 million , representing an increase of$3.5 million or 77.8% from Q2 2021 and an increase of$4.9 million or 163.1% from Q1 2022. - Adjusted EBITDAS margin for the three months ended
June 30, 2022 was 4.6%, same as Q2 2021 and an increase of 1.8% from Q1 2022. - Selling, general and administrative expenses for three months ended
June 30, 2022 were$9 .8 million, representing an increase of$3.2 million or 48.8% from Q2 2021 and an increase of$1.7 million or 21.7% from Q1 2022. The increase is largely due to our business recovering and stabilizing in 2022, therefore, certain elements of cost reductions in previous years have been reversed in order to support the increased volume of work in 2022. In addition, 2022 expenses are higher than 2021 due to ongoing investments being made to support the Company's enterprise systems and digital strategy to drive longer-term efficiencies and increase our cost competitiveness. - Liquidity, including cash and available credit facilities, was
$13.8 million atJune 30, 2022 , as compared to$33.7 million atDecember 31, 2021 . - New project awards and contract renewals were $110 million for the three months ended
June 30, 2022 and $17 million for the month ofJuly 2022 . A majority of that work is expected to be completed in the next 12 months.
Maintenance and Construction Services
Revenues for the three months ended
Wear Technology Overlay Services
Revenues for the three months ended
Environmental Services
We continue to enhance our professional services capabilities to service our growing customer base in this market segment. Our customers continue to allocate expenditures for the closure, reclamation and remediation of oil and gas wells, pipelines and facilities in
SECOND QUARTER 2022 FINANCIAL RESULTS
($ millions, except per share amounts) | Three months ended | Six months ended | ||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||
Revenue | ||||||||||||
Maintenance and Construction Services | 160.3 | 87.3 | 83.7 | % | 259.7 | 161.3 | 61.0 | % | ||||
Wear Technology Overlay Services | 14.3 | 9.8 | 46.0 | % | 26.6 | 18.3 | 45.1 | % | ||||
Eliminations(1) | (1.3 | ) | (0.4 | ) | 206.2 | % | (3.3 | ) | (0.8 | ) | 291.8 | % |
Total | 173.2 | 96.6 | 79.3 | % | 283.0 | 178.8 | 58.3 | % | ||||
Gross Profit | ||||||||||||
Maintenance and Construction Services | 13.6 | 7.6 | 79.7 | % | 21.0 | 13.5 | 55.7 | % | ||||
Wear Technology Overlay Services | 2.1 | 2.9 | (27.4 | )% | 4.5 | 5.0 | (11.0 | )% | ||||
Total | 15.7 | 10.4 | 50.4 | % | 25.4 | 18.5 | 37.6 | % | ||||
Gross Profit Margin (% of revenue) | ||||||||||||
Maintenance and Construction Services | 8.5 | % | 8.7 | % | (0.2 | )% | 8.1 | % | 8.4 | % | (0.3 | )% |
Wear Technology Overlay Services | 14.6 | % | 29.3 | % | (14.7 | )% | 16.8 | % | 27.3 | % | (10.6 | )% |
Total | 9.1 | % | 10.8 | % | (1.7 | )% | 9.0 | % | 10.3 | % | (1.4 | )% |
Selling, general and administrative expenses | 9.8 | 6.6 | 48.8 | % | 17.9 | 12.6 | 42.2 | % | ||||
% of revenue | 5.7 | % | 6.8 | % | (1.2 | )% | 6.3 | % | 7.0 | % | — | % |
Adjusted EBITDAS(2) | ||||||||||||
Maintenance and Construction Services | 13.5 | 7.8 | 72.9 | % | 20.7 | 13.6 | 52.2 | % | ||||
Wear Technology Overlay Services | 2.0 | 2.8 | (28.2 | )% | 4.3 | 4.9 | (11.5 | )% | ||||
Corporate | (7.6 | ) | (6.1 | ) | 23.4 | % | (14.1 | ) | (11.8 | ) | (19.5 | )% |
Total | 7.9 | 4.4 | 77.8 | % | 10.9 | 6.7 | 63.5 | % | ||||
% of revenue | 4.6 | % | 4.6 | % | — | % | 3.9 | % | 3.7 | % | 0.1 | % |
(Loss) income from continuing operations | (1.0 | ) | 0.5 | (297.2 | )% | (8.8 | ) | (7.1 | ) | 23.8 | % | |
Net (loss) income per share (dollars) from continuing operations (basic and diluted) | (0.01 | ) | 0.00 | (297.2 | )% | (0.08 | ) | (0.06 | ) | — | % |
(1) The eliminations column includes eliminations of inter-segment transactions. ClearStream accounts for inter-segment sales based on transaction price.
(2) "Adjusted EBITDAS” is not a standard measure under IFRS. Please refer to the Advisory regarding Non-Standard Measures at the end of this press release for a description of this measure and limitations of its use.
Revenues for the three and six months ended
Gross profit for the three and six months ended
Selling, general and administrative (“SG&A”) expenses for the three and six months ended
For the three and six months ended
Income from government subsidies includes the
Loss from continuing operations for the three and six months ended
LIQUIDITY AND CAPITAL RESOURCES
On
On
The Company anticipates that its liquidity (cash on hand and available credit facilities) and cash flow from operations will be sufficient to meet its short-term contractual obligations and maintain compliance with its financial covenants through
As at
The Series 1 preferred shares (having an aggregate value of
The Series 1 and Series 2 preferred shares have a 10% fixed cumulative preferential cash dividend payable when the Company has sufficient monies to be able to do so, including under the provisions of applicable law and contracts affecting the Company. The board of directors of the Company does not intend to declare or pay any cash dividends until such times as the Company's balance sheet and liquidity position supports the payment. As at
OUTLOOK
ClearStream's business model continues to prove its resilience as we are working closely with our customers to help them effectively manage their operations. Our organic growth strategy involves cross-selling our suite of more than 40 services that encompass the full asset lifecycle to generate efficiencies and cost reductions for our customers. We are also continually working to improve our service delivery to anticipate our customer’s requirements and proactively meet their needs.
Despite some recent weakness, the pricing for commodities in the end markets we serve continues to be strong. While our customers have been prioritizing debt repayment and returns to shareholders, they are starting to increase spending on both maintenance projects (to enhance operational reliability) and capital projects (to maintain/expand production capacity). We expect activity levels to remain strong in the second half of 2022.
The growth in our served markets continues to drive some near-term challenges, including inflationary pressure on labour, equipment and materials as well as supply chain disruptions. We are working closely with our customers and suppliers to manage these challenges. We are also enhancing our programs to attract, retain and develop our number one resource, our employees, as we strive to become the “employer of choice”.
Additional Information
Our unaudited condensed consolidated interim financial statements for the three and six months ended
About
With a legacy of excellence and experience stretching back more than 50 years, ClearStream provides solutions for the Energy and Industrial markets including: Oil & Gas, Petrochemical, Mining, Power, Agriculture, Forestry, Infrastructure and Water Treatment. With offices strategically located across
Chief Financial Officer | Chief Executive Officer | |
(587) 318-0997 | (587) 318-0997 | |
rwatt@clearstreamenergy.ca | bcard@clearstreamenergy.ca | |
Advisory regarding Forward-Looking Information
Certain information included in this Press Release may constitute “forward-looking information” within the meaning of Canadian securities laws. In some cases, forward-looking information can be identified by terminology such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue” or the negative of these terms or other similar expressions concerning matters that are not historical facts. This press release contains forward-looking information relating to: our business plans, strategies and objectives; that management of inflationary cost pressures and material shortages will be a key focus in the second half of the year; contract renewals and project awards, including the estimated value thereof and the timing of completing the associated work; that the demand for our AssetArmor™ products will increase as customers increase production levels; that customers will continue to allocate expenditures for the closure, reclamation and remediation of oil and gas wells, pipelines and facilities in
Forward-looking information involves significant risks and uncertainties. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking information including, but not limited to, the success of our response to the COVID-19 global pandemic, compliance with debt covenants, access to credit facilities and other sources of capital for working capital requirements and capital expenditure needs, availability of labour, dependence on key personnel, economic conditions, commodity prices, interest rates, regulatory change, weather and risks related to the integration of acquired businesses. These factors should not be considered exhaustive. Risks and uncertainties about ClearStream’s business are more fully discussed in ClearStream’s disclosure materials, including its annual information form and management’s discussion and analysis of the operating and financial results, filed with the securities regulatory authorities in
This forward-looking information is made as of the date of this press release, and ClearStream does not assume any obligation to update or revise it to reflect new events or circumstances except as required by law. Undue reliance should not be placed on forward-looking information. Forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes.
Advisory regarding Non-Standard Measures
The terms ‘‘EBITDAS’’ and “Adjusted EBITDAS” (collectively, the ‘‘Non-standard measures’’) are financial measures used in this press release that are not standard measures under IFRS. ClearStream’s method of calculating the Non-Standard Measures may differ from the methods used by other issuers. Therefore, ClearStream’s Non-Standard Measures, as presented may not be comparable to similar measures presented by other issuers.
EBITDAS refers to net earnings determined in accordance with IFRS, before depreciation and amortization, interest expense, income tax expense (recovery) and long-term incentive plan expenses. EBITDAS is used by management and the directors of ClearStream as well as many investors to determine the ability of an issuer to generate cash from operations. Management also uses EBITDAS to monitor the performance of ClearStream’s reportable segments and believes that in addition to net income or loss and cash provided by operating activities, EBITDAS is a useful supplemental measure from which to determine ClearStream’s ability to generate cash available for debt service, working capital, capital expenditures and income taxes. ClearStream has provided a reconciliation of income (loss) from continuing operations to EBITDAS in its management's discussion and analysis of the operating and financial results for the three and six months ended
Adjusted EBITDAS refers to EBITDAS excluding impairment of goodwill and intangible assets, restructuring expense, gain (loss) on sale of property, plant and equipment, loss of contingent consideration liability, one time incurred expenses, impairment of right-of-use assets and government subsidies. ClearStream has used Adjusted EBITDAS as the basis for the analysis of its past operating financial performance. Adjusted EBITDAS is a measure that management believes (i) is a useful supplemental measure from which to determine ClearStream’s ability to generate cash available for debt service, working capital, capital expenditures, and income taxes, and (ii) facilitates the comparability of the results of historical periods and the analysis of its operating financial performance which may be useful to investors. ClearStream has provided a reconciliation of income (loss) from continuing operations to Adjusted EBITDAS in its management's discussion and analysis of the operating and financial results for the three and six months ended
Investors are cautioned that the Non-Standard Measures are not alternatives to measures under IFRS and should not, on their own, be construed as an indicator of performance or cash flows, a measure of liquidity or as a measure of actual return on the shares. These Non-Standard Measures should only be used with reference to ClearStream’s consolidated interim and annual financial statements available on SEDAR at www.sedar.com or on ClearStream’s website at www.clearstreamenergy.ca.
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