Overall Performance
PHX Energy realized adjusted EBITDA of
The US division’s revenue represented 72 percent of first quarter consolidated revenue and the division achieved its highest quarterly revenue since the fourth quarter of 2014. US revenue was
In
For the three-month period ended
As at
Responding to COVID-19
On
COVID-19 has had a significant impact on the global economy and has resulted in a substantial weakening of global oil prices. The Corporation anticipates material declines in revenues as drilling activity adjusts to historically low oil prices. This deterioration of the economic and industry conditions has materially impacted the first quarter financial results of the Corporation with a
The Corporation has remained diligent in protecting its balance sheet and retains financial flexibility with significant liquidity on its credit facilities with no material near-term debt maturities. As at
Capital Spending
For the three-month period ended
As at
In 2020, the Corporation expects to spend
Normal Course Issuer Bid
During the third quarter of 2019, the
For the three-month period ended
The Corporation's previous NCIB commenced on
Financial Highlights
(Stated in thousands of dollars except per share amounts, percentages and shares outstanding)
Three-month periods ended | ||||||||||
2020 | 2019 | % Change | ||||||||
Operating Results | (unaudited) | (unaudited) | ||||||||
Revenue | 103,020 | 92,121 | 12 | |||||||
Net loss | (3,321 | ) | (1,067 | ) | n.m. | |||||
Loss per share – diluted | (0.06 | ) | (0.02 | ) | n.m. | |||||
Adjusted EBITDA (1) | 18,686 | 11,431 | 63 | |||||||
Adjusted EBITDA per share – diluted (1) | 0.35 | 0.19 | 84 | |||||||
Adjusted EBITDA as a percentage of revenue (1) | 18% | 12% | ||||||||
Cash Flow | ||||||||||
Cash flows from operating activities | 11,130 | 9,699 | 15 | |||||||
Funds from operations (1) | 20,792 | 10,100 | 106 | |||||||
Funds from operations per share – diluted (1) | 0.39 | 0.17 | 129 | |||||||
Capital expenditures | 18,992 | 11,307 | 68 | |||||||
Free cash flow (1) | 16,767 | 5,950 | 182 | |||||||
Financial Position (unaudited) | ||||||||||
Working capital (1) | 79,838 | 68,393 | 17 | |||||||
Net Debt (1) | 16,399 | 14,710 | 11 | |||||||
Shareholders’ equity | 152,749 | 148,944 | 3 | |||||||
Common shares outstanding | 53,251,420 | 53,246,420 | - |
(1) Non-GAAP measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. Refer to non-GAAP measures section that follows the Outlook section of this press release.
n.m. – not meaningful
Non-GAAP Measures
PHX Energy uses throughout this press release certain measures to analyze operational and financial performance that do not have standardized meanings prescribed under Canadian generally accepted accounting principles (“GAAP”). These non-GAAP measures include adjusted EBITDA, adjusted EBITDA per share, debt to covenant EBITDA, funds from operations, funds from operations per share, free cash flow, net debt and working capital. Management believes that these measures provide supplemental financial information that is useful in the evaluation of the Corporation’s operations and are commonly used by other oil and natural gas service companies. Investors should be cautioned, however, that these measures should not be construed as alternatives to measures determined in accordance with GAAP as an indicator of PHX Energy’s performance. The Corporation’s method of calculating these measures may differ from that of other organizations, and accordingly, such measures may not be comparable. Please refer to the “Non-GAAP Measures” section following the Outlook section of this press release for applicable definitions and reconciliations.
Cautionary Statement Regarding Forward-Looking Information and Statements
This document contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "could", "should", "can", "believe", "plans", "intends", "strategy" and similar expressions are intended to identify forward-looking information or statements.
The forward-looking information and statements included in this document are not guarantees of future performance and should not be unduly relied upon. These statements and information involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements and information. The Corporation believes the expectations reflected in such forward-looking statements and information are reasonable, but no assurance can be given that these expectations will prove to be correct. Such forward-looking statements and information included in this document should not be unduly relied upon. These forward-looking statements and information speak only as of the date of this document
In particular, forward-looking information and statements contained in this document include, without limitation, the timeline for delivery of equipment on order, the projected capital expenditures budget for the 2020-year and how this budget will be allocated and funded, and the anticipated impact of COVID-19 on the Corporation’s operations, results and the Corporation’s planned responses thereto.
The above are stated under the headings: “Capital Spending”, “Responding to COVID-19” and “Cash Requirements for Capital Expenditures”. In addition, all information contained under the headings “Responding to COVID-19” and “Outlook” in this document contains forward-looking statements.
In addition to other material factors, expectations and assumptions which may be identified in this press release and other continuous disclosure documents of the Corporation referenced herein, assumptions have been made in respect of such forward-looking statements and information regarding, among other things: the Corporation will continue to conduct its operations in a manner consistent with past operations; the general continuance of current industry conditions; anticipated financial performance, business prospects, impact of competition, strategies, the general stability of the economic and political environment in which the Corporation operates; the continuing impact of COVID-19 on the global economy, specifically trade, manufacturing, supply chain and energy consumption, among other things and the resulting impact on the Corporation’s operations and future results which remain uncertain; exchange and interest rates; the continuance of existing (and in certain circumstances, the implementation of proposed) tax, royalty and regulatory regimes; the sufficiency of budgeted capital expenditures in carrying out planned activities; the availability and cost of labour and services and the adequacy of cash flow; debt and ability to obtain and maintain financing on acceptable terms to fund its ongoing operations and planned expenditures, which are subject to change based on commodity prices; market conditions and future oil and natural gas prices; and potential timing delays. Although Management considers these material factors, expectations, and assumptions to be reasonable based on information currently available to it, no assurance can be given that they will prove to be correct.
Readers are cautioned that the foregoing lists of factors are not exhaustive. Additional information on these and other factors that could affect the Corporation's operations and financial results are included in reports on file with the Canadian Securities Regulatory Authorities and may be accessed through the SEDAR website (www.sedar.com) or at the Corporation's website. The forward-looking statements and information contained in this press release are expressly qualified by this cautionary statement. The Corporation does not undertake any obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Revenue
(Stated in thousands of dollars)
Three-month periods ended | ||||||
2020 | 2019 | % Change | ||||
Revenue | 103,020 | 92,121 | 12 |
For the three-month period ended
Crude oil prices declined in the first quarter of 2020, with Western Texas Intermediate (“WTI”) averaging USD
Operating Costs and Expenses
(Stated in thousands of dollars except percentages)
Three-month periods ended | |||||||||||
2020 | 2019 | % Change | |||||||||
Direct costs | 83,354 | 78,790 | 6 | ||||||||
Gross profit as a percentage of revenue | 19% | 14% | |||||||||
Depreciation & amortization drilling and other equipment (included in direct costs) | 7,905 | 10,167 | (22 | ) | |||||||
Depreciation & amortization right-of-use asset (included in direct costs) | 930 | 867 | 7 | ||||||||
Gross profit as percentage of revenue excluding depreciation & amortization | 28% | 26% |
Direct costs are comprised of field and shop expenses, and include depreciation and amortization on the Corporation’s equipment and right-of-use assets. For the three-month period ended
For the three-month period ended
In the first quarter of 2020, gross profit as a percent of revenue excluding depreciation and amortization was 28 percent compared to 26 percent in the first quarter of 2019. Improved profitability in 2020 relative to the corresponding 2019-quarter is mainly due to Phoenix USA’s increased drilling activity and revenue per day. The Corporation continues to closely monitor expenses in relation to activity, which also aided in improved margins.
(Stated in thousands of dollars except percentages)
Three-month periods ended | |||||||
2020 | 2019 | % Change | |||||
Selling, general & administrative (“SG&A”) costs | 7,002 | 13,202 | (47 | ) | |||
Cash-settled share-based payments (included in SG&A costs) | (3,447 | ) | 2,935 | n.m. | |||
Equity-settled share-based payments (included in SG&A costs) | 63 | 184 | (66 | ) | |||
SG&A costs excluding equity and cash-settled share-based payments as a percentage of revenue | 10% | 11% |
n.m. – not meaningful
For the three-month period ended
Cash-settled share-based payments relate to the Corporation’s Retention Award Plan and are measured at fair value. For the three-month period ended
Equity-settled share-based payments relate to the amortization of the fair values of issued options by the Corporation using the Black-Scholes model. For the three-month period ended
(Stated in thousands of dollars)
Three-month periods ended | ||||||||
2020 | 2019 | % Change | ||||||
Research & development expense | 1,272 | 900 | 41 |
Research and development (“R&D”) expenditures for the three-month period ended
(Stated in thousands of dollars)
Three-month periods ended | |||||||||
2020 | 2019 | % Change | |||||||
Finance expense | 353 | 384 | (8 | ) | |||||
Finance expense lease liability | 543 | 646 | (16 | ) |
Finance expenses relate to interest charges on the Corporation’s long-term and short-term bank facilities. For the three-month period ended
Finance expense lease liability relates to interest expenses incurred on lease liabilities, and decreased by
(Stated in thousands of dollars)
Three-month periods ended | |||||||||||
2020 | 2019 | ||||||||||
Net gain on disposition of drilling equipment | (1,939 | ) | (1,280 | ) | |||||||
Foreign exchange losses | 129 | 265 | |||||||||
Provision for bad debts | 4,002 | 47 | |||||||||
Other expenses (income) | 2,192 | (968 | ) |
For the three-month period ended
Net gain on disposition of drilling equipment is comprised of gains on disposition of drilling equipment that typically result from insurance programs undertaken whereby proceeds for the lost equipment are at current replacement values, which are higher than the respective equipment’s book value. The recognized gain is net of losses, which typically result from asset retirements that were made before the end of the equipment’s useful life and self-insured downhole equipment losses. In the 2020-quarter, more instances of downhole equipment losses occurred as compared to the 2019-quarter, resulting in higher net gain on disposition of drilling equipment.
The Corporation recognized foreign exchange losses of
(Stated in thousands of dollars)
Three-month periods ended | ||||||||
2020 | 2019 | % Change | ||||||
Impairment loss | 10,249 | - | n.m. |
n.m. – not meaningful
In the first quarter of 2020, the Corporation recognized
(Stated in thousands of dollars, except percentages)
Three-month periods ended | ||||||
2020 | 2019 | |||||
Provision for income taxes | 1,376 | 234 | ||||
Effective tax rates | n.m. | n.m. |
n.m. – not meaningful
The provision for income taxes for the three-month period ended
Segmented Information
The Corporation reports three operating segments on a geographical basis throughout the Canadian provinces of
(Stated in thousands of dollars)
Three-month periods ended | ||||||||||
2020 | 2019 | % Change | ||||||||
Revenue | 24,604 | 24,864 | (1 | ) | ||||||
Reportable segment profit (loss) before tax | 3,292 | (394 | ) | n.m. |
n.m. – not meaningful
For the three-month period ended
During the 2020-quarter, 46 percent of the Canadian division’s activity was oil well drilling and PHX Energy was active in the
For the three-month period ended
(Stated in thousands of dollars)
Three-month periods ended | ||||||||
2020 | 2019 | % Change | ||||||
Revenue | 74,315 | 62,996 | 18 | |||||
Reportable segment profit before tax | 10,396 | 4,044 | 157 |
Building upon the success achieved throughout 2019,
For the three-month period ended
The Corporation’s reportable segment income before tax rose from
International
(Stated in thousands of dollars)
Three-month periods ended | ||||||||||
2020 | 2019 | % Change | ||||||||
Revenue | 4,101 | 4,261 | (4 | ) | ||||||
Reportable segment profit (loss) before tax | 225 | (105 | ) | n.m. |
n.m. – not meaningful
For the three-month period ended
In the first quarter of 2020, the Russian division generated revenue of
The International segment recognized reportable segment income of
Investing Activities
In the first quarter of 2020, the Corporation used
$10.4 million downhole performance drilling motors,$6.3 million in RSS tools, machinery and equipment, vehicles and other assets, and$2.3 million in MWD systems and spare components.
The capital expenditure program undertaken in the period was financed generally from funds from operations. Of the total capital expenditures in the 2020-quarter,
The change in non-cash working capital balances of
Financing Activities
The Corporation reported cash flows used in financing activities of
- made net payments of
$1.8 million to its syndicated facilities, - made payment of
$1.5 million relating to surrender value of stock options, - made payments of
$0.9 million towards lease liability, and - issued 5,000 common shares for proceeds of
$7,750 upon the exercise of share options.
Capital Resources
As of
As at
Cash Requirements for Capital Expenditures
Historically, the Corporation has financed its capital expenditures and acquisitions through cash flows from operating activities, debt and equity. The 2020 capital expenditures are expected to be
These planned expenditures are expected to be financed from a combination of one or more of the following: cash flow from operations, the Corporation’s unused credit facilities or equity, if necessary. However, if a sustained period of market uncertainty and financial market volatility persists in 2020, the Corporation's activity levels, cash flows and access to credit may be negatively impacted, and the expenditure level would be reduced accordingly. Conversely, if future growth opportunities present themselves, the Corporation would look at expanding this planned capital expenditure amount.
As at
Outlook
The global economy has entered an unprecedented time. The personal, business and economic impacts associated with COVID-19 are creating challenges that we have not seen in decades, if ever. For the energy industry these challenges are compounded by the oil price collapse brought on by the significant reductions in demand resulting from the global response to COVID-19 and supply issues.
The health and safety of our stakeholders is our top priority, and as COVID-19 began to appear in the areas we operate, we took swift action to implement various policies and measures to protect the people our business impacts. These measures were taken while ensuring business continuity as our operations are considered an essential services and we are continuing to actively monitor this situation and adopt guidance provided by government and health authorities. Our people have risen to the challenge of operating in this new environment and have responded with safety front of mind.
We started 2020 strong and until early-March our operations were on target to exceed our expectations. In the first quarter, we achieved the highest quarterly adjusted EBITDA since the third quarter of 2014, and the highest quarterly revenue since the first quarter of 2015. However, we are now operating in a new reality and although our strong first quarter results will help support us through the uncertainties ahead, our outlook and forecasts have dramatically changed.
In the second quarter, our North American activity has significantly declined with the rig counts shrinking to levels not seen since the industry started tracking rig counts. Pricing pressures are also mounting as operators work to sustain economic drilling operations amidst the market events and as competition intensifies. As a result, our activity levels and average revenue per day are contracting accordingly. Despite this, we believe our North American operations, particularly in the US, have opportunities to grow market share in the shrinking market due to the strength of our operational performance, personnel and leading edge technologies. In
We believe that the disciplined financial, operational and technology development strategies we have implemented in the prior years will provide the strength to withstand this difficult environment. We have worked diligently to position ourselves with a well-structured balance sheet and a low level of debt, and this will aide us in weathering this downturn. Despite oil prices collapsing, natural gas prices have remained stable and natural gas directed drilling activity is continuing which will help our operations remain active. Additionally, we have maintained an unwavering focus on becoming a technology leader in the directional drilling sector and this has equipped us with a fleet of high performance technologies that differentiates us from our competition. We believe that this fleet will continue to provide us a competitive advantage, although pricing concessions will be required, as operators focus on efficiency and high grading all aspects of their drilling operations to drill economically in this challenging environment. Our focus remains on retaining and attracting as much activity as possible as we align our cost structure and operations to this new reality.
Although well positioned, we were required to take quick actions to ensure we remained disciplined in our spending and that our cost structure was aligned with the circumstances of this unprecedented time. We are preserving the expertise to continue to provide exceptional service to our clients while adjusting to the dramatically reduced levels of activity that are forecasted for the remainder of 2020. We will continue to assess all aspects of our business for efficiencies, including the various government assistance programs announced in both
Even with our strong financial and operational position, we, along with our entire industry, are in for a very challenging year ahead. As we have proven in past downturns, we are committed to the steps required to exit this cycle ready for the upside. We will remain disciplined with our cost management strategies to preserve our healthy financial position and be relentless in protecting our position as a technology leader.
Non-GAAP Measures
Adjusted EBITDA
Adjusted EBITDA, defined as earnings before finance expense, finance expense lease liability, income taxes, depreciation and amortization, impairment losses on drilling and other equipment and goodwill, equity share-based payments, severance and vacation payouts relating to the oil market downturn beginning in
The following is a reconciliation of net earnings to adjusted EBITDA:
(Stated in thousands of dollars)
Three-month periods ended | ||||||||||
2020 | 2019 | |||||||||
Net Loss | (3,321 | ) | (1,067 | ) | ||||||
Add: | ||||||||||
Impairment loss | 10,249 | - | ||||||||
Depreciation and amortization drilling and other equipment | 7,905 | 10,167 | ||||||||
Depreciation and amortization right-of-use asset | 930 | 867 | ||||||||
Provision for income taxes | 1,376 | 234 | ||||||||
Severance expense | 583 | - | ||||||||
Finance expense | 353 | 384 | ||||||||
Finance expense lease liability | 543 | 646 | ||||||||
Equity-settled share-based payments | 63 | 184 | ||||||||
Unrealized foreign exchange loss | 5 | 16 | ||||||||
Adjusted EBITDA as reported | 18,686 | 11,431 |
Adjusted EBITDA per share - diluted is calculated using the treasury stock method whereby deemed proceeds on the exercise of the share options are used to reacquire common shares at an average share price. The calculation of adjusted EBITDA per share on a dilutive basis does not include anti-dilutive options.
Funds from Operations
Funds from operations is defined as cash flows generated from operating activities before changes in non-cash working capital, interest paid, and income taxes paid. This non-GAAP measure does not have a standardized meaning and is not a financial measure recognized under GAAP. Management uses funds from operations as an indication of the Corporation’s ability to generate funds from its operations before considering changes in working capital balances and interest and taxes paid. Investors should be cautioned, however, that this financial measure should not be construed as an alternative measure to cash flows from operating activities determined in accordance with GAAP. PHX Energy’s method of calculating funds from operations may differ from that of other organizations and, accordingly, it may not be comparable to that of other companies.
The following is a reconciliation of cash flows from operating activities to funds from operations:
(Stated in thousands of dollars)
Three-month periods ended | |||||
2020 | 2019 | ||||
Net cash flows from operating activities | 11,130 | 9,699 | |||
Add (deduct): | |||||
Changes in non-cash working capital | 9,357 | (17 | ) | ||
Interest paid | 204 | 278 | |||
Income taxes paid | 101 | 140 | |||
Funds from operations | 20,792 | 10,100 |
Funds from operations per share - diluted is calculated using the treasury stock method whereby deemed proceeds on the exercise of the share options are used to reacquire common shares at an average share price. The calculation of funds from operations per share on a dilutive basis does not include anti-dilutive options.
Free Cash Flow
Free cash flow is defined as funds from operations less maintenance capital expenditures and cash payment on leases. This non-GAAP measure does not have a standardized meaning and is not a financial measure recognized under GAAP. Management uses free cash flow as an indication of the Corporation’s ability to generate funds from its operations to support operations and maintain the Corporation’s drilling and other equipment. Investors should be cautioned, however, that this financial measure should not be construed as an alternative measure to cash flows from operating activities determined in accordance with GAAP. PHX Energy’s method of calculating free cash flow may differ from that of other organizations and, accordingly, it may not be comparable to that of other companies.
The following is a reconciliation of funds from operations to free cash flow:
(Stated in thousands of dollars)
Three-month periods ended | ||||||
2020 | 2019 | |||||
Funds from operations | 20,792 | 10,100 | ||||
Deduct: | ||||||
Maintenance capital expenditures | (2,559 | ) | (2,709 | ) | ||
Cash payment on leases | (1,466 | ) | (1,441 | ) | ||
Free cash flow | 16,767 | 5,950 |
Debt to Covenant EBITDA Ratio
Debt is represented by loans and borrowings. Covenant EBITDA, for purposes of the calculation of this covenant ratio, is represented by net earnings for a rolling four quarter period, adjusted for finance expense and finance expense lease liability, provision for income taxes, depreciation and amortization, equity-settled share-based payments, impairment losses on drilling and other equipment and goodwill, unrealized foreign exchange gains or losses, and IFRS 16 adjustment to restate cash payments to expense, subject to the restrictions provided in the amended credit agreement.
Working Capital
Working capital is defined as the Corporation’s current assets less its current liabilities and is used to assess the Corporation’s short-term liquidity. This non-GAAP measure does not have a standardized meaning and is not a financial measure recognized under GAAP. Management uses working capital to provide insight as to the Corporation’s ability to meet obligations as at the reporting date. PHX Energy’s method of calculating working capital may differ from that of other organizations and, accordingly, it may not be comparable to that of other companies.
Net Debt
Net debt is defined as the Corporation’s loans and borrowings and operating facility borrowings less cash and cash equivalents. This non-GAAP measure does not have a standardized meaning and is not a financial measure recognized under GAAP. Management uses working capital to provide insight as to the Corporation’s ability to meet obligations as at the reporting date. PHX Energy’s method of calculating working capital may differ from that of other organizations and, accordingly, it may not be comparable to that of other companies.
About
The Corporation, through its directional drilling subsidiary entities, provides horizontal and directional drilling technology and services to oil and natural gas producing companies in
PHX Energy’s Canadian directional drilling operations are conducted through
In the first quarter of 2020, the Corporation closed substantially all of its operations in its Stream division which marketed electronic drilling recorder (“EDR”) technology and services.
The common shares of PHX Energy trade on the
For further information please contact:
Suite 1400,
Tel: 403-543-4466 Fax: 403-543-4485 www.phxtech.com
Consolidated Statements of Financial Position
(unaudited)
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 7,179,544 | $ | 10,582,296 | |||||
Trade and other receivables | 91,931,663 | 93,641,885 | |||||||
Inventories | 34,591,115 | 30,826,700 | |||||||
Prepaid expenses | 3,329,206 | 2,569,046 | |||||||
Current tax assets | 434,522 | - | |||||||
Total current assets | 137,466,050 | 137,619,627 | |||||||
Non-current assets: | |||||||||
Drilling and other long-term assets | 92,557,953 | 78,416,229 | |||||||
Right-of-use asset | 32,401,901 | 32,825,964 | |||||||
Intangible assets | 18,480,750 | 18,901,559 | |||||||
- | 8,876,351 | ||||||||
Deferred tax assets | 924,075 | 613,355 | |||||||
Total non-current assets | 144,364,679 | 139,633,458 | |||||||
Total assets | $ | 281,830,729 | $ | 277,253,385 | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Lease liability | $ | 2,749,585 | $ | 2,765,633 | |||||
Operating facility | 159,666 | 11,395,835 | |||||||
Trade and other payables | 54,718,748 | 54,892,277 | |||||||
Current tax liability | - | 172,766 | |||||||
Total current liabilities | 57,627,999 | 69,226,511 | |||||||
Non-current liabilities: | |||||||||
Lease liability | 39,629,220 | 39,753,860 | |||||||
Loans and borrowings | 23,418,700 | 13,896,400 | |||||||
Deferred tax liability | 8,405,980 | 5,432,527 | |||||||
Total non-current liabilities | 71,453,900 | 59,082,787 | |||||||
Equity: | |||||||||
Share capital | 251,219,748 | 251,815,183 | |||||||
Contributed surplus | 10,003,005 | 10,854,650 | |||||||
Retained earnings | (131,223,279 | ) | (127,902,593 | ) | |||||
Accumulated other comprehensive income | 22,749,356 | 14,176,847 | |||||||
Total equity | 152,748,830 | 148,944,087 | |||||||
Total liabilities and equity | $ | 281,830,729 | $ | 277,253,385 |
Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
Three-month periods ended | ||||||||
2020 | 2019 | |||||||
Revenue | $ | 103,019,795 | $ | 92,120,704 | ||||
Direct costs | 83,354,051 | 78,790,218 | ||||||
Gross profit | 19,665,744 | 13,330,486 | ||||||
Expenses: | ||||||||
Selling, general and administrative expenses | 7,002,137 | 13,201,938 | ||||||
Research and development expenses | 1,272,417 | 899,586 | ||||||
Finance expense | 353,070 | 383,600 | ||||||
Finance expense lease liability | 542,520 | 646,161 | ||||||
Other expenses (income) | 2,191,519 | (968,256 | ) | |||||
Impairment loss | 10,248,719 | - | ||||||
21,610,382 | 14,163,029 | |||||||
Loss before income taxes | (1,944,638 | ) | (832,543 | ) | ||||
Provision for (Recovery of) income taxes | ||||||||
Current | (202,765 | ) | 348,472 | |||||
Deferred | 1,578,813 | (114,050 | ) | |||||
1,376,048 | 234,422 | |||||||
Net loss | (3,320,686 | ) | (1,066,965 | ) | ||||
Other comprehensive income (loss) | ||||||||
Foreign currency translation | 8,572,509 | (858,074 | ) | |||||
Total comprehensive income (loss) for the period | $ | 5,251,823 | $ | (1,925,039 | ) | |||
Loss per share – basic | $ | (0.06 | ) | $ | (0.02 | ) | ||
Loss per share – diluted | $ | (0.06 | ) | $ | (0.02 | ) |
Consolidated Statements of Cash Flows
(unaudited)
Three-month periods ended | ||||||
2020 | 2019 | |||||
Cash flows from operating activities: | ||||||
Net loss | $ | (3,320,686 | ) | $ | (1,066,965 | ) |
Adjustments for: | ||||||
Depreciation and amortization drilling and other equipment | 7,905,062 | 10,167,271 | ||||
Depreciation and amortization right-of-use asset | 929,978 | 867,203 | ||||
Provision for income taxes | 1,376,048 | 234,422 | ||||
Impairment loss | 10,248,719 | - | ||||
Unrealized foreign exchange loss | 4,512 | 16,075 | ||||
Gain on disposition of drilling equipment | (1,938,529 | ) | (1,280,178 | ) | ||
Equity-settled share-based payments | 63,212 | 183,957 | ||||
Finance expense | 353,070 | 383,600 | ||||
Provision for bad debts | 4,002,498 | 46,571 | ||||
Provision for inventory obsolescence | 1,167,884 | 547,401 | ||||
Interest paid | (203,870 | ) | (277,538 | ) | ||
Income taxes paid | (101,361 | ) | (139,940 | ) | ||
Change in non-cash working capital | (9,356,840 | ) | 17,414 | |||
Net cash from operating activities | 11,129,697 | 9,699,293 | ||||
Cash flows from investing activities: | ||||||
Proceeds on disposition of drilling equipment | 3,467,713 | 2,533,773 | ||||
Acquisition of drilling and other equipment | (18,992,098 | ) | (11,306,546 | ) | ||
Change in non-cash working capital | 5,259,884 | (1,755,135 | ) | |||
Net cash used in investing activities | (10,264,501 | ) | (10,527,908 | ) | ||
Cash flows from financing activities: | ||||||
Proceeds from loans and borrowings | 9,402,400 | 7,187,900 | ||||
Proceeds from issuance of share capital | 7,750 | 87,750 | ||||
Repurchase of shares under the NCIB | - | (670,600 | ) | |||
Payments of lease liability | (923,887 | ) | (795,063 | ) | ||
Surrender value cash payment | (1,518,042 | ) | - | |||
Repayment of operating facility | (11,236,169 | ) | (4,593,765 | ) | ||
Net cash from (used in) financing activities | (4,267,948 | ) | 1,216,222 | |||
Net increase (decrease) in cash and cash equivalents | (3,402,752 | ) | 387,607 | |||
Cash and cash equivalents, beginning of period | 10,582,296 | 3,643,418 | ||||
Cash and cash equivalents, end of period | $ | 7,179,544 | $ | 4,031,025 |
Source:
2020 GlobeNewswire, Inc., source