CALGARY, ALBERTA--(Marketwired - Aug 28, 2014) - (TSX VENTURE:LEA) - Leader Energy Services Ltd. ("Leader" or the "Company") has released its financial and operating results for the three and six month periods ended June 30, 2014. Leader's second quarter condensed interim financial statements and MD&A will be filed to SEDAR on August 28, 2014. For further information please refer to these filings.

Performance Summary
(000's) (unaudited)
Quarter endedJune 30, 2014 June 30,
2013		 $ Change % Change
Revenue$2,511 $2,673 $(162 ) (6 )%
Operating Expenses3,244 3,137 107 3 %
(733) (464 ) (269 ) n/a
General and Administrative870 989 (119 ) (12 )%
Amortization989 1,002 (13 ) (1 )%
Finance cost878 829 49 6 %
Asset impairment2,419 - 2,419 n/a
Other23 1 22 n/a
Net loss$(5,912) $(3,285 ) $(2,627 ) n/a
Loss per share - Basic$(0.20) $(0.11 ) $(0.09 ) n/a
Loss per share - Diluted$(0.20) $(0.11 ) $(0.09 ) n/a
EBITDA*$(4,045) $(1,454 ) $(2,591 ) n/a
Adjusted EBITDA*$(1,617) $(1,427 ) $(190 ) n/a
6 months endedJune 30, 2014 June 30,
2013		 $ Change % Change
Revenue$11,021 $10,940 $81 1 %
Operating Expenses8,787 8,756 31 0 %
2,234 2,184 50 2 %
General and Administrative1,912 2,000 (88 ) (4 )%
Amortization2,010 1,993 17 1 %
Finance cost1,867 2,019 (152 ) (8 )%
Loss on settlement of loans and borrowings- 233 (233 ) n/a
Asset impairment2,419 - 2,419 n/a
Other43 60 (17 ) n/a
Net loss$(6,017) $(4,121 ) $(1,896 ) n/a
Loss per share - Basic$(0.20) $(0.14 ) $(0.06 ) n/a
Loss per share - Diluted$(0.20) $(0.14 ) $(0.06 ) n/a
EBITDA*$(2,140) $(109 ) $(2,031 ) n/a
Adjusted EBITDA*$296 $183 $113 n/a

EBITDA refers to net income before finance costs, taxes, depreciation, and amortization. As the Company has not recorded any provision for income taxes, taxes have been excluded from the reconciliation. Adjusted EBITDA is calculated as EBITDA before non-cash losses on the settlement of loans and borrowings, asset impairment and share based payments. EBITDA and Adjusted EBITDA are not measures that have a standardized meaning and accordingly may not be comparable to similar measures used by other companies. Management believes that EBITDA and Adjusted EBITDA are useful measures of cash flow generated from operations as they eliminate non-cash items, non-recurring items and the effects of finance costs and financial restructuring.

In the second quarter of 2014, the Company reported revenues from well stimulation services of $2.5 million as compared to $2.7 million reported in the second quarter of 2013. Like prior second quarters, the Company was affected by the typical seasonality in the oil and gas industry in western Canada. Activity started strong in the second quarter of 2014 as customers completed work delayed in March due to an early spring break-up. The Company was able to coordinate the completion of this work around road restrictions through the second week of April. Activity in the month of May was slow with the exception of an influx of stand-alone fluid pumping work from one customer. In the month of June, the Company started to see a rebound in activity.

For the six month period ended June 30, 2014, revenue increased slightly to $11.0 million as compared to the same period in 2013. The change in revenue is attributed to a $0.2 million increase in revenue in the first quarter partially offset by the decrease in the second quarter as discussed above. The Company continues to see demand for its services where the Company concentrates its operations in north-central Alberta and northeast British Columbia.

Asset Sale

The Company is in the process of arranging certain pieces of equipment for sale. The Company expects the sale process to be completed in the fourth quarter of 2014. Upon the conclusion of the asset sale, the Company will still offer 1 1/2" - 2 3/8" coiled tubing and related services.

Brooks Facility

In June 2014, the Company discontinued paying its lease on a vacant facility in Brooks, Alberta with no effect on Leader's current operations. As a result of not making this payment, the landlord issued a notice of default to the Company in June 2014 and subsequently terminated the lease in July 2014. By terminating the lease, the landlord has ended Leader's right to use the Brooks facility on a go forward basis. As a result, the Company has written off the value of the leased facility in the amount of $2.4 million.

In August 2014, the landlord issued a Statement of Claim against the Company in the amount of $7.0 million. Leader intends to file a Statement of Defence defending the claim by disputing the amount owing to the landlord. While the final amount owing under the claim is not determinable at this time, the Company has reclassified the entire obligation under finance lease related to this facility amounting to $2.9 million as a current liability. The difference between the $2.9 million recorded as a current liability and the Statement of Claim of $7.0 million is a contingent liability.

Liquidity and Capital Resources

In May 2014, the Company and its lender finalized an amendment to the Asset-Based Credit Facility to combine the $1.0 million demand non-revolving single advance loan due April 30, 2014 with the demand non-revolving single advance term loan. As a result of combining these loans together, the entire Asset-Based Credit Facility is due September 6, 2014 and the balance outstanding on the demand non-revolving single advance term loan is $11.4 million.

In addition to the demand non-revolving single advance loans, the Company has a $5.0 million demand revolving facility which forms part of the Asset-Based Credit Facility. The borrowing limit under this facility is based on funds available as determined in reference to accounts and inventory. At June 30, 2014, the Company had a $1.0 million borrowing limit with $1.7 million drawn under the facility. As a result, the Company was $0.7 million over advanced on this facility. On the date of issue, the Company is over advanced on its demand revolving facility by approximately $0.85 million. The Company is working with its lender on a six-month extension to its Asset-Based Credit Facility of which there is no certainty and on eliminating the over advance.

Outlook

Improving activity levels are anticipated for the remainder of 2014, supported by stable oil prices, rising natural gas prices and deeper, more complex wells being drilled. The Company continues to analyze its operating expenses. Cost reductions will be achieved through rightsizing initiatives including decreasing administrative personnel levels and lowering of salaries in certain departments. In addition, the Company is taking the initiative to sell underutilized assets and lower its debt levels. The effect will be higher utilization of remaining assets and lower interest costs, thereby improving cash flow for the Company. Management remains focused on revenue-generating and cost management initiatives, and continues to evaluate various alternatives to reduce its borrowing costs and overall debt levels.

Forward-looking information

This press release contains certain statements or disclosures relating to the Company that are based on the expectations of the Company as well as assumptions made by and information currently available to the Company which may constitute forward-looking information under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that the Company anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-looking information.

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 news release.