Highlights
- Highest annual revenue since 2013 at
$432 million . - Quarterly revenue of
$128.1 million , an increase of 44% from Q4 2020, driven primarily by increased gold drilling activity. - EBITDA(1) for the quarter was
$12.0 million , an increase of 64% compared to same period last year, despite impact of heavy start-up costs. - Net cash position(2) of
$6.9 million . - Completed the acquisition of
McKay Drilling PTY Ltd. onJune 1, 2021 , providing established leading position inAustralia market.
“Activity levels continue to improve as we reached our best quarterly and annual revenue since 2013. Most of the growth came from
“Availability of skilled labour continues to be challenging in busy markets. In
“Our financial position remains strong and our balance sheet flexible, with net cash of
“Following the end of the quarter, on
“Looking ahead to fiscal 2022, we continue to see a noticeable increase in inquiries from all categories of customers, and if their plans progress as advertised, we expect to see utilization rates continue to improve as crews become available. Although the shortage of experienced drill crews will put temporary pressure on labour costs and productivity, especially in our most active markets, we expect the wider industry shortages and higher utilization rates to continue to drive a more positive pricing environment and expedite margin recovery as the cycle progresses. Further, as pandemic restrictions ease in
“With gold’s average mine life falling to a low of nearly 10 years due to the lack of exploration over the last 6 years, industry experts expect reserve replacement to be a top priority for gold companies for years to come. As well, although we have not seen much of an increase in activity from base metal players, copper prices have recently hit historical highs, which should also translate into more exploration activity in the near future as mining companies seek to replenish depleting reserves. At the same time, we have seen governments across the world unleashing significant stimulus programs targeting renewable energy and electric vehicles, which will require a huge volume of copper, as well as battery metals.”
In millions of Canadian dollars (except earnings per share) | Q4 2021 | Q4 2020 | YTD 2021 | YTD 2020 | ||||||||||||
Revenue | $ | 128.1 | $ | 88.8 | $ | 432.1 | $ | 409.1 | ||||||||
Gross margin | 11.7 | % | 10.6 | % | 14.8 | % | 14.8 | % | ||||||||
Adjusted gross margin (1) | 18.4 | % | 21.5 | % | 23.4 | % | 24.0 | % | ||||||||
EBITDA (1) | 12.0 | 7.3 | 53.9 | 48.4 | ||||||||||||
As percentage of revenue | 9.3 | % | 8.2 | % | 12.5 | % | 11.8 | % | ||||||||
Net earnings (loss) | 2.3 | (74.3 | ) | 10.0 | (71.0 | ) | ||||||||||
Earnings (loss) per share | 0.03 | (0.92 | ) | 0.12 | (0.88 | ) |
(1) See “Non-IFRS Financial Measures”
(2) Net cash position (net of debt, excluding lease liabilities reported under IFRS16 Leases)
Fourth Quarter ended
Total revenue for the quarter was
Revenue for the quarter from
South and Central American revenue increased by 46.8% to
Asian and African revenue decreased by 16.9% to
Gross margin percentage for the quarter was 11.7%, compared to 10.6% for the same period last year. Depreciation expense totaling
General and administrative costs were
The income tax provision for the quarter was an expense of
Net Income was
Non-IFRS Financial Measures
The Company’s financial data has been prepared in accordance with IFRS, with the exception of certain financial measures detailed below. The Company believes these non-IFRS financial measures are key, for both management and investors, in evaluating performance at a consolidated level and are commonly reported and widely used by investors and lending institutions as indicators of a company’s operating performance and ability to incur and service debt, and as a valuation metric. These measures do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS.
Adjusted gross profit/margin - excludes depreciation expense:
(in $000s CAD) | Q4 2021 | Q4 2020 | YTD 2021 | YTD 2020 | |||||||||||
Total revenue | $ | 128,117 | $ | 88,784 | $ | 432,076 | $ | 409,144 | |||||||
Direct costs | 113,064 | 79,383 | 367,988 | 348,501 | |||||||||||
Less: depreciation | (8,570 | ) | (9,729 | ) | (37,051 | ) | (37,605 | ) | |||||||
Adjusted gross profit | 23,623 | 19,130 | 101,139 | 98,248 | |||||||||||
Adjusted gross margin | 18.4 | % | 21.5 | % | 23.4 | % | 24.0 | % |
EBITDA - earnings before interest, taxes, depreciation, amortization, impairment and restructuring charge:
(in $000s CAD) | Q4 2021 | Q4 2020 | YTD 2021 | YTD 2020 | |||||||||||
Net earnings (loss) | $ | 2,344 | $ | (74,307 | ) | $ | 10,034 | $ | (70,962 | ) | |||||
Finance costs | 207 | 392 | 1,168 | 1,108 | |||||||||||
Income tax provision | 289 | 10,114 | 3,552 | 15,408 | |||||||||||
Depreciation and amortization | 9,112 | 9,913 | 39,160 | 39,542 | |||||||||||
Impairment of goodwill | - | 58,743 | - | 58,743 | |||||||||||
Restructuring charge | - | 2,437 | - | 4,553 | |||||||||||
EBITDA | $ | 11,952 | $ | 7,292 | $ | 53,914 | $ | 48,392 |
Forward-Looking Statements
This news release includes certain information that may constitute “forward-looking information” under applicable Canadian securities legislation. All statements, other than statements of historical facts, included in this news release that address future events, developments, or performance that the Company expects to occur (including management’s expectations regarding the Company’s objectives, strategies, financial condition, results of operations, cash flows and businesses) are forward-looking statements. Forward-looking statements are typically identified by future or conditional verbs such as “outlook”, “believe”, “anticipate”, “estimate”, “project”, “expect”, “intend”, “plan”, and terms and expressions of similar import. All forward-looking information in this news release is qualified by this cautionary note.
Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the expectations and beliefs of management related to the factors set forth below. While these factors and assumptions are considered reasonable by the Company as at the date of this document in light of management’s experience and perception of current conditions and expected developments, these statements are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements and undue reliance should not be placed on such statements and information.
Such forward-looking statements are subject to a number of risks and uncertainties that include, but are not limited to: the level of activity in the mining industry and the demand for the Company’s services; the Canadian and international economic environments; the Company’s dependence on key customers; the integration of business acquisitions and the realization of the intended benefits of such acquisitions; the level of funding for the Company’s clients (particularly for junior mining companies); implications of the COVID-19 pandemic; competitive pressures; exposure to currency movements (which can affect the Company’s revenue in Canadian dollars); the geographic distribution of the Company’s operations; the impact of operational changes; changes in jurisdictions in which the Company operates (including changes in regulation); failure by counterparties to fulfill contractual obligations; as well as other risk factors described under “General Risks and Uncertainties” in the Company’s Annual Information Form for the year ended
Forward-looking statements made in this document are made as of the date of this document and the Company disclaims any intention and assumes no obligation to update any forward-looking statement, even if new information becomes available, as a result of future events, or for any other reasons, except as required by applicable securities laws.
About Major Drilling
Webcast/Conference Call Information
To participate in the conference call, please dial 416-340-2217, participant passcode 2065583# and ask for Major Drilling’s Fourth Quarter Results Conference Call. To ensure your participation, please call in approximately five minutes prior to the scheduled start of the call.
For those unable to participate, a taped rebroadcast will be available approximately one hour after the completion of the call until midnight,
For further information:
Tel: (506) 857-8636
Fax: (506) 857-9211
ir@majordrilling.com
Condensed Consolidated Statements of Operations | |||||||||||||||
(in thousands of Canadian dollars, except per share information) | |||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||
(unaudited) | |||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
TOTAL REVENUE | $ | 128,117 | $ | 88,784 | $ | 432,076 | $ | 409,144 | |||||||
DIRECT COSTS | 113,064 | 79,383 | 367,988 | 348,501 | |||||||||||
GROSS PROFIT | 15,053 | 9,401 | 64,088 | 60,643 | |||||||||||
OPERATING EXPENSES | |||||||||||||||
General and administrative | 12,547 | 11,080 | 47,083 | 48,042 | |||||||||||
Other expenses | 769 | 80 | 4,110 | 2,846 | |||||||||||
(Gain) loss on disposal of property, plant and equipment | 57 | 127 | (394 | ) | (44 | ) | |||||||||
Foreign exchange (gain) loss | (1,160 | ) | 735 | (1,465 | ) | 949 | |||||||||
Finance costs | 207 | 392 | 1,168 | 1,108 | |||||||||||
Impairment of goodwill | - | 58,743 | - | 58,743 | |||||||||||
Restructuring charge | - | 2,437 | - | 4,553 | |||||||||||
12,420 | 73,594 | 50,502 | 116,197 | ||||||||||||
EARNINGS (LOSS) BEFORE INCOME TAX | 2,633 | (64,193 | ) | 13,586 | (55,554 | ) | |||||||||
INCOME TAX PROVISION (RECOVERY) | |||||||||||||||
Current | (938 | ) | 758 | 3,822 | 5,617 | ||||||||||
Deferred | 1,227 | 9,356 | (270 | ) | 9,791 | ||||||||||
289 | 10,114 | 3,552 | 15,408 | ||||||||||||
NET EARNINGS (LOSS) | $ | 2,344 | $ | (74,307 | ) | $ | 10,034 | $ | (70,962 | ) | |||||
EARNINGS (LOSS) PER SHARE | |||||||||||||||
Basic | $ | 0.03 | $ | (0.92 | ) | $ | 0.12 | $ | (0.88 | ) | |||||
Diluted | $ | 0.03 | $ | (0.92 | ) | $ | 0.12 | $ | (0.88 | ) | |||||
Condensed Consolidated Statements of Comprehensive Earnings (Loss) | |||||||||||||||
(in thousands of Canadian dollars) | |||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||
(unaudited) | |||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
NET EARNINGS (LOSS) | $ | 2,344 | $ | (74,307 | ) | $ | 10,034 | $ | (70,962 | ) | |||||
OTHER COMPREHENSIVE EARNINGS (LOSS) | |||||||||||||||
Items that may be reclassified subsequently to profit or loss | |||||||||||||||
Unrealized gain (loss) on foreign currency translations | (8,816 | ) | 11,496 | (29,026 | ) | 2,857 | |||||||||
Unrealized gain (loss) on derivatives (net of tax) | (157 | ) | (917 | ) | 1,678 | (41 | ) | ||||||||
COMPREHENSIVE EARNINGS (LOSS) | $ | (6,629 | ) | $ | (63,728 | ) | $ | (17,314 | ) | $ | (68,146 | ) |
Condensed Consolidated Statements of Changes in Equity | |||||||||||||||||||||||
For the twelve months ended | |||||||||||||||||||||||
(in thousands of Canadian dollars) | |||||||||||||||||||||||
Retained | |||||||||||||||||||||||
earnings | Other | Share-based | Foreign currency | ||||||||||||||||||||
Share capital | (deficit) | reserves | payments reserve | translation reserve | Total | ||||||||||||||||||
BALANCE AS AT | $ | 241,264 | $ | 29,020 | $ | (570 | ) | $ | 14,503 | $ | 78,783 | $ | 363,000 | ||||||||||
Share issue | 1,925 | - | - | - | - | 1,925 | |||||||||||||||||
Share-based compensation | - | - | - | 267 | - | 267 | |||||||||||||||||
Stock options expired | - | 6,251 | - | (6,251 | ) | - | - | ||||||||||||||||
243,189 | 35,271 | (570 | ) | 8,519 | 78,783 | 365,192 | |||||||||||||||||
Comprehensive earnings: | |||||||||||||||||||||||
Net earnings | - | (70,962 | ) | - | - | - | (70,962 | ) | |||||||||||||||
Unrealized gain (loss) on foreign | |||||||||||||||||||||||
currency translations | - | - | - | - | 2,857 | 2,857 | |||||||||||||||||
Unrealized gain (loss) on derivatives | - | - | (41 | ) | - | - | (41 | ) | |||||||||||||||
Total comprehensive earnings (loss) | - | (70,962 | ) | (41 | ) | - | 2,857 | (68,146 | ) | ||||||||||||||
BALANCE AS AT | $ | 243,189 | $ | (35,691 | ) | $ | (611 | ) | $ | 8,519 | $ | 81,640 | $ | 297,046 | |||||||||
BALANCE AS AT | $ | 243,189 | $ | (35,691 | ) | $ | (611 | ) | $ | 8,519 | $ | 81,640 | $ | 297,046 | |||||||||
Exercise of stock options | 190 | - | - | (55 | ) | - | 135 | ||||||||||||||||
Share-based compensation | - | - | - | 296 | - | 296 | |||||||||||||||||
Stock options expired | - | 3,201 | - | (3,201 | ) | - | - | ||||||||||||||||
243,379 | (32,490 | ) | (611 | ) | 5,559 | 81,640 | 297,477 | ||||||||||||||||
Comprehensive earnings: | |||||||||||||||||||||||
Net earnings | - | 10,034 | - | - | - | 10,034 | |||||||||||||||||
Unrealized gain (loss) on foreign | |||||||||||||||||||||||
currency translations | - | - | - | - | (29,026 | ) | (29,026 | ) | |||||||||||||||
Unrealized gain (loss) on derivatives | - | - | 1,678 | - | - | 1,678 | |||||||||||||||||
Total comprehensive earnings (loss) | - | 10,034 | 1,678 | - | (29,026 | ) | (17,314 | ) | |||||||||||||||
BALANCE AS AT | $ | 243,379 | $ | (22,456 | ) | $ | 1,067 | $ | 5,559 | $ | 52,614 | $ | 280,163 |
Condensed Consolidated Statements of Cash Flows | |||||||||||||||
(in thousands of Canadian dollars) | |||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||
(unaudited) | |||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
OPERATING ACTIVITIES | |||||||||||||||
Earnings (loss) before income tax | $ | 2,633 | $ | (64,193 | ) | $ | 13,586 | $ | (55,554 | ) | |||||
Operating items not involving cash | |||||||||||||||
Depreciation and amortization | 9,112 | 9,913 | 39,160 | 39,542 | |||||||||||
(Gain) loss on disposal of property, plant and equipment | 57 | 127 | (394 | ) | (44 | ) | |||||||||
Share-based compensation | 74 | 73 | 296 | 267 | |||||||||||
Restructuring charge (non-cash portion) | - | 1,966 | - | 3,469 | |||||||||||
Impairment of goodwill | - | 58,743 | - | 58,743 | |||||||||||
Finance costs recognized in earnings (loss) before income tax | 207 | 392 | 1,168 | 1,108 | |||||||||||
12,083 | 7,021 | 53,816 | 47,531 | ||||||||||||
Changes in non-cash operating working capital items | (6,335 | ) | (4,351 | ) | (13,138 | ) | 1,692 | ||||||||
Finance costs paid | (207 | ) | (392 | ) | (1,168 | ) | (1,108 | ) | |||||||
Income taxes (paid) recovered | (1,364 | ) | 181 | (5,062 | ) | (6,004 | ) | ||||||||
Cash flow from (used in) operating activities | 4,177 | 2,459 | 34,448 | 42,111 | |||||||||||
FINANCING ACTIVITIES | |||||||||||||||
Repayment of lease liabilities | (395 | ) | (10 | ) | (1,362 | ) | (1,300 | ) | |||||||
Repayment of long-term debt | (252 | ) | (249 | ) | (36,004 | ) | (1,057 | ) | |||||||
Issuance of common shares due to exercise of stock options | 94 | - | 135 | - | |||||||||||
Proceeds from draw on long-term debt | - | 35,000 | - | 35,000 | |||||||||||
Cash flow from (used in) financing activities | (553 | ) | 34,741 | (37,231 | ) | 32,643 | |||||||||
INVESTING ACTIVITIES | |||||||||||||||
Business acquisitions (net of cash acquired) | - | - | - | (13,945 | ) | ||||||||||
Acquisition of property, plant and equipment | (10,690 | ) | (7,149 | ) | (31,303 | ) | (32,041 | ) | |||||||
Proceeds from disposal of property, plant and equipment | 892 | 456 | 1,925 | 1,256 | |||||||||||
Cash flow from (used in) investing activities | (9,798 | ) | (6,693 | ) | (29,378 | ) | (44,730 | ) | |||||||
Effect of exchange rate changes | (1,418 | ) | 1,188 | (3,913 | ) | 1,043 | |||||||||
INCREASE (DECREASE) IN CASH | (7,592 | ) | 31,695 | (36,074 | ) | 31,067 | |||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 29,951 | 26,738 | 58,433 | 27,366 | |||||||||||
CASH AND CASH EQUIVALENTS, END OF THE PERIOD | $ | 22,359 | $ | 58,433 | $ | 22,359 | $ | 58,433 |
Condensed Consolidated Balance Sheets | |||||||
As at | |||||||
(in thousands of Canadian dollars) | |||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 22,359 | $ | 58,433 | |||
Trade and other receivables | 102,571 | 71,641 | |||||
Income tax receivable | 5,973 | 4,350 | |||||
Inventories | 85,585 | 99,823 | |||||
Prepaid expenses | 6,710 | 4,497 | |||||
223,198 | 238,744 | ||||||
PROPERTY, PLANT AND EQUIPMENT | 144,382 | 165,103 | |||||
RIGHT-OF-USE ASSETS | 3,773 | 3,803 | |||||
DEFERRED INCOME TAX ASSETS | 8,903 | 9,613 | |||||
7,708 | 7,708 | ||||||
INTANGIBLE ASSETS | 568 | 946 | |||||
$ | 388,532 | $ | 425,917 | ||||
LIABILITIES | |||||||
CURRENT LIABILITIES | |||||||
Trade and other payables | $ | 73,083 | $ | 55,858 | |||
Income tax payable | 1,639 | 926 | |||||
Current portion of lease liabilities | 803 | 1,121 | |||||
Current portion of long-term debt | 356 | 1,024 | |||||
75,881 | 58,929 | ||||||
LEASE LIABILITIES | 2,943 | 2,701 | |||||
CONTINGENT CONSIDERATION | 1,907 | 1,807 | |||||
LONG-TERM DEBT | 15,106 | 50,333 | |||||
DEFERRED INCOME TAX LIABILITIES | 12,532 | 15,101 | |||||
108,369 | 128,871 | ||||||
SHAREHOLDERS' EQUITY | |||||||
Share capital | 243,379 | 243,189 | |||||
Retained earnings (deficit) | (22,456 | ) | (35,691 | ) | |||
Other reserves | 1,067 | (611 | ) | ||||
Share-based payments reserve | 5,559 | 8,519 | |||||
Foreign currency translation reserve | 52,614 | 81,640 | |||||
280,163 | 297,046 | ||||||
$ | 388,532 | $ | 425,917 | ||||
SELECTED FINANCIAL INFORMATION
FOR THE THREE AND TWELVE MONTHS ENDED
(in thousands of Canadian dollars)
SEGMENTED INFORMATION
The Company’s operations are divided into three geographic segments corresponding to its management structure:
Q4 2021 | Q4 2020 | YTD 2021 | YTD 2020 | ||||||||||||
(unaudited) | (unaudited) | ||||||||||||||
Revenue | |||||||||||||||
$ | 74,239 | $ | 41,058 | $ | 247,703 | $ | 205,551 | ||||||||
South and | 32,639 | 22,209 | 95,567 | 104,002 | |||||||||||
21,239 | 25,517 | 88,806 | 99,591 | ||||||||||||
$ | 128,117 | $ | 88,784 | $ | 432,076 | $ | 409,144 | ||||||||
Earnings (loss) from operations | |||||||||||||||
$ | 1,108 | $ | (2,329 | ) | $ | 10,654 | $ | 4,825 | |||||||
South and | 1,151 | (2,838 | ) | (1,623 | ) | (5,738 | ) | ||||||||
2,141 | 3,519 | 11,996 | 16,280 | ||||||||||||
4,400 | (1,648 | ) | 21,027 | 15,367 | |||||||||||
Impairment of goodwill | - | 58,743 | - | 58,743 | |||||||||||
Finance costs | 207 | 392 | 1,168 | 1,108 | |||||||||||
General corporate expenses** | 1,560 | 973 | 6,273 | 6,517 | |||||||||||
Restructuring charge | - | 2,437 | - | 4,553 | |||||||||||
Income tax | 289 | 10,114 | 3,552 | 15,408 | |||||||||||
2,056 | 72,659 | 10,993 | 86,329 | ||||||||||||
Net earnings (loss) | $ | 2,344 | $ | (74,307 | ) | $ | 10,034 | $ | (70,962 | ) | |||||
Depreciation and amortization | |||||||||||||||
$ | 4,511 | $ | 4,837 | $ | 19,824 | $ | 18,434 | ||||||||
South and | 2,724 | 3,301 | 12,089 | 14,226 | |||||||||||
1,780 | 1,833 | 6,935 | 6,744 | ||||||||||||
Unallocated and corporate assets | 97 | (58 | ) | 312 | 138 | ||||||||||
Total depreciation and amortization | $ | 9,112 | $ | 9,913 | $ | 39,160 | $ | 39,542 | |||||||
*
**General and corporate expenses include expenses for corporate offices, stock options and certain unallocated costs.
Source:
2021 GlobeNewswire, Inc., source