TSX Symbol: HNL

CALGARY, Nov. 4 /CNW/ - Horizon North Logistics Inc. ("Horizon" or the "Corporation") reported its financial and operating results for the quarter ended September 30, 2010 and 2009.

Third Quarter Highlights

 <<
 - Revenue and EBITDAS increased 100% and 234% respectively compared to
 Q3 2009;
 - 91% increase in bed rental days compared to Q3 2009;
 - 29% increase in mat rental days compared to Q3 2009;
 - 111% increase in manufacturing revenues as compared to Q3 2009.
 >>

Financial Summary

 <<
 -------------------------------------------------------------------------
 Three Months Three Months Nine Months Nine Months
 (000's except Ended Ended Ended Ended
 per share September 30, September 30, September 30, September 30,
 amounts) 2010 2009 2010 2009
 -------------------------------------------------------------------------

 Revenue from
 operations $ 67,660 $ 33,837 $ 157,633 $ 109,988
 Cancellation fee - - - 8,000
 -------------------------------------------------------
 Total revenue $ 67,660 $ 33,837 $ 157,633 $ 117,988

 EBITDAS(1) from
 operations 17,452 5,272 34,461 25,081
 Cancellation fee - - - 8,000
 -------------------------------------------------------
 Total EBITDAS(1) 17,452 5,272 34,461 33,081

 Earnings (loss)
 from operations(1) 10,489 (334) 13,895 6,343
 Cancellation fee - - - 8,000
 -------------------------------------------------------
 Total operating
 earnings (loss)(1) 10,489 (334) 13,895 14,343

 Net earnings (loss) 7,214 (105) 8,401 9,480
 Net earnings per
 share - diluted $ 0.07 $ 0.00 $ 0.08 $ 0.09
 Total assets 275,824 222,285 275,824 222,285
 Total long-term
 financial
 liabilities(2) 48,083 21,717 48,083 21,717
 Funds from
 operations(3) 15,205 4,620 29,809 29,925
 Capital spending 13,491 1,605 35,900 9,675
 Debt to total
 capitalization
 ratio(4) 0.21:1 0.11:1 0.21:1 0.11:1
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------
 (1) EBITDAS (Earnings before interest, taxes, depreciation, amortization,
 accretion of notes payable, gain/loss on disposal of property, plant
 and equipment and stock based compensation) and operating earnings
 (loss) are not recognized measures under Canadian generally accepted
 accounting principles (GAAP). Management believes that in addition to
 net earnings (loss), EBITDAS is a useful supplemental measure as it
 provides an indication of the Corporation's ability to generate cash
 flow in order to fund working capital, service debt, pay current
 income taxes and fund capital programs. Management believes that in
 addition to net earnings, operating earnings (loss) is a useful
 supplemental measure as it provides an indication of the results
 generated by the Corporation's principal business activities prior to
 consideration of how those activities are financed or taxed.
 Investors should be cautioned, however, that EBITDAS and operating
 earnings (loss) should not be construed as alternatives to net
 earnings determined in accordance with GAAP as an indicator of the
 Corporation's performance. Horizon's method of calculating EBITDAS
 and operating earnings (loss) may differ from other entities and
 accordingly, EBITDAS and operating earnings(loss) may not be
 comparable to measures used by other entities.
 (2) Long-term financial liabilities include operating lines of credit,
 and current and long-term portions of long-term debt.
 (3) Funds from operations is not a recognized measure under GAAP.
 Management believes that in addition to cash flow from operations,
 funds from operations is a useful supplemental measure as it provides
 an indication of the cash flow generated by the Corporation's
 principal business activities prior to consideration of changes in
 working capital. Investors should be cautioned, however, that funds
 from operations should not be construed as an alternative to cash
 flow from operations determined in accordance with GAAP as an
 indicator of the Corporation's performance. Horizon's method of
 calculating funds from operations may differ from other entities and
 accordingly, funds from operations may not be comparable to measures
 used by other entities. Funds from operations is equal to cash flow
 from operations before changes in non-cash working capital items
 related to operations.
 (4) Debt to total capitalization is calculated as the ratio of debt to
 total capitalization. Debt is defined as the sum of operating lines
 of credit and long-term debt. Total capitalization is calculated as
 the sum of debt and shareholder's equity
 >>

Overview and Outlook

Horizon's core businesses continue to be driven by oil sands development activity in northern Alberta. Our expanded BlackSand facilities near Fort McMurray, Alberta are running at capacity and are expected to remain full through 2011. Our manufacturing facilities are fully utilized and are 75% booked through 2011, primarily dedicated to oil sands related projects.

Activity in the western Canadian mining sector has continued to build following improved mineral pricing, with a number of new and expanding camp manufacturing and management projects on the horizon.

Opportunities continue to develop related to unconventional natural gas development projects with potential to participate through camp manufacturing and/or provision of camp rental and catering and management services.

Our road and location matting business has also benefited from increased activity and continues to experience strong utilization which we expect to continue through the rest of 2010 and into 2011.

Highlights for the quarter included:

 <<
 - 91% increase in bed rental days compared to Q3 2009;
 - 29% increase in mat rental days compared to Q3 2009;
 - 111% increase in manufacturing revenues as compared to Q3 2009.
 >>

These factors contributed to a 100% increase in revenue from operations for the three months ended September 30, 2010 to $67.7 million as compared to $33.8 million in the same period of the prior year.

EBITDAS for the quarter improved significantly over the same period in the prior year to $17.5 million or 26% of revenues as compared to $5.3 million or 16% of revenues in the prior year. Significant factors affecting EBITDAS for the quarter were:

 <<
 - EBITDAS from the Camps & Catering segment grew significantly with
 increased contributions from both the BlackSand operations and
 manufacturing projects;
 - EBITDAS from the Matting segment increased slightly and showed
 improved margins at 39% of revenues;
 - EBITDAS from Marine Services was $2.7 million or 55% of revenues in
 the current period as a result of some one-time summer projects
 compared to a slight loss in the prior year.
 >>

Activity is expected to continue to increase driven mainly by the Camps & Catering segment on both rental and catering and manufacturing activity. As a result, the Corporation's combined cash flow and borrowing capacity through our credit facilities will be sufficient to support existing capital and operational plans.

Financial Results

 <<
 -------------------------------------------------------------------------
 Three months ended September 30, 2010

 Inter-
 segment
 Camps & Marine Elimin-
 (000's) Catering Matting Services Corporate ations Total
 -------------------------------------------------------------------------
 Revenue $ 54,632 $ 8,298 $ 4,954 $ - $ (224) $ 67,660
 Expenses
 Cost of
 goods sold 12,118 1,486 - - - 13,604
 Operating 28,600 3,495 2,243 - (225) 34,113
 General &
 adminis-
 trative 707 101 - 1,742 - 2,550
 Foreign
 exchange
 (gain) loss (21) (43) 2 3 - (59)
 -------------------------------------------------------------------------
 EBITDAS $ 13,228 $ 3,259 $ 2,709 $ (1,745) $ 1 $ 17,452

 Stock based
 compensation 114 9 2 194 - 319
 Depreciation
 & amorti-
 zation 4,936 1,399 298 97 (21) 6,709
 Gain on
 disposal of
 property,
 plant and
 equipment (65) - - - - (65)

 -------------------------------------------------------------------------
 Total
 operating
 earnings
 (loss) $ 8,243 $ 1,851 $ 2,409 $ (2,036) $ 22 $ 10,489
 ---------------------------------------------------------------

 Interest income (9)
 Interest
 expense on
 operating lines
 of credit 43
 Interest expense
 on long-term
 debt 371
 Loss on equity
 investments 7
 Accretion of
 notes payable 184
 Income tax
 expense 2,679
 ----------

 Net earnings $ 7,214
 ----------
 ----------



 -------------------------------------------------------------------------
 Three months ended September 30, 2009

 Inter-
 segment
 Camps & Marine Elimin-
 (000's) Catering Matting Services Corporate ations Total
 -------------------------------------------------------------------------
 Revenue $ 27,892 $ 5,118 $ 1,109 $ - $ (282) $ 33,837
 Expenses
 Cost of
 goods sold 4,846 743 - - (4) 5,585
 Operating 17,174 2,504 1,285 - (278) 20,685
 General &
 adminis-
 trative 832 83 2 1,345 - 2,262
 Foreign
 exchange
 loss (gain) 18 (3) (3) 21 - 33
 -------------------------------------------------------------------------
 EBITDAS $ 5,022 $ 1,791 $ (175) $ (1,366) $ - $ 5,272

 Stock based
 compensation 101 22 1 (50) - 74
 Depreciation
 & amorti-
 zation 4,155 1,397 292 65 (10) 5,899
 Gain on
 disposal of
 property,
 plant and
 equipment (367) - - - - (367)

 -------------------------------------------------------------------------
 Total
 operating
 earnings
 (loss) $ 1,133 $ 372 $ (468) $ (1,381) $ 10 $ (334)
 ---------------------------------------------------------------

 Interest income (8)
 Interest expense
 on operating
 lines of credit 42
 Interest expense
 on long-term
 debt 127
 Earnings on
 equity
 investments (23)
 Income tax
 recovery (367)
 ----------

 Net loss $ (105)
 ----------
 ----------


 -------------------------------------------------------------------------
 Nine months ended September 30, 2010

 Inter-
 segment
 Camps & Marine Elimin-
 (000's) Catering Matting Services Corporate ations Total
 -------------------------------------------------------------------------
 Revenue $130,656 $ 23,474 $ 5,583 $ - $ (2,080) $157,633
 Expenses
 Cost of goods
 sold 26,326 4,832 - - (188) 30,970
 Operating 70,771 11,364 3,584 - (1,797) 83,922
 General &
 adminis-
 trative 2,274 330 7 5,725 - 8,336
 Foreign
 exchange
 (gain) loss (4) (63) 4 7 - (56)
 -------------------------------------------------------------------------
 EBITDAS $ 31,289 $ 7,011 $ 1,988 $ (5,732) $ (95) $ 34,461

 Stock based
 compensation 356 68 8 576 - 1,008
 Depreciation
 & amorti-
 zation 14,050 4,078 889 290 (56) 19,251
 Loss on
 disposal of
 property,
 plant and
 equipment 219 76 - 12 - 307

 -------------------------------------------------------------------------
 Total operating
 earnings
 (loss) $ 16,664 $ 2,789 $ 1,091 $ (6,610) $ (39) $ 13,895
 ---------------------------------------------------------------

 Interest income (23)
 Interest expense
 on operating
 lines of credit 213
 Interest expense
 on long-term
 debt 934
 Loss on equity
 investments 204
 Accretion of
 notes payable 130
 Income tax
 expense 4,036
 ----------
 Net earnings $ 8,401
 ----------
 ----------


 -------------------------------------------------------------------------
 Nine months ended September 30, 2009

 Inter-
 segment
 Camps & Marine Elimin-
 (000's) Catering Matting Services Corporate ations Total
 -------------------------------------------------------------------------
 Revenue
 Revenue from
 operations $ 91,933 $ 14,284 $ 4,856 $ - $ (1,085) $109,988
 Cancellation
 fee 8,000 - - - - 8,000
 -------------------------------------------------------------------------
 Total revenue $ 99,933 $ 14,284 $ 4,856 $ - $ (1,085) $117,988
 -------------------------------------------------------------------------

 Expenses
 Cost of
 goods sold 15,793 2,521 - - (9) 18,305
 Operating 50,469 7,179 3,194 - (1,076) 59,766
 General &
 adminis-
 trative 1,789 334 20 4,648 - 6,791
 Foreign
 exchange
 loss (gain) 18 177 (3) (147) - 45
 -------------------------------------------------------------------------

 EBITDAS
 EBITDAS from
 operations $ 23,864 $ 4,073 $ 1,645 $ (4,501) $ - $ 25,081
 Cancellation
 fee 8,000 - - - - 8,000
 -------------------------------------------------------------------------
 Total EBITDAS $ 31,864 $ 4,073 $ 1,645 $ (4,501) $ - $ 33,081
 -------------------------------------------------------------------------

 Stock based
 compensation 226 60 7 (111) - 182
 Depreciation
 & amorti-
 zation 14,496 4,466 870 175 (74) 19,933
 (Gain) loss
 on disposal
 of property,
 plant and
 equipment (1,390) 13 - - - (1,377)

 Earnings (loss)
 from operations
 Operating
 earnings
 (loss) $ 10,532 $ (466) $ 768 $ (4,565) $ 74 $ 6,343
 Cancellation
 fee 8,000 - - - - 8,000
 -------------------------------------------------------------------------
 Total operating
 earnings
 (loss) $ 18,532 $ (466) $ 768 $ (4,565) $ 74 $ 14,343
 ---------------------------------------------------------------

 Interest income (24)
 Interest expense
 on operating
 lines of credit 194
 Interest expense
 on long-term debt 981
 Loss on equity
 investments 141
 Income tax expense 3,571
 ----------

 Net earnings $ 9,480
 ----------
 ----------
 >>

Camps & Catering

Camps & Catering revenue is comprised of camp rental and catering revenue, camp and space unit sales, equipment and space rental revenue, and service revenue from transportation and installation.

 <<
 (000's except bed Three months ended Nine months ended
 rental days and September 30 September 30
 catering only --------------------------- ---------------------------
 days) 2010 2009 2010 2009
 ------------- ------------- ------------- -------------
 Camp rental and
 catering
 revenue $ 28,458 $ 14,246 $ 71,066 $ 53,042
 Camp and space
 sales revenue 15,785 7,484 36,032 23,394
 Rental revenue 1,109 1,277 4,531 2,856
 Service revenue 9,280 4,885 19,027 12,641
 ------------- ------------- ------------- -------------
 Revenue from
 operations $ 54,632 $ 27,892 $ 130,656 $ 91,933
 Cancellation fee - - - 8,000
 ------------- ------------- ------------- -------------
 Total revenue $ 54,632 $ 27,892 $ 130,656 $ 99,933
 ------------- ------------- ------------- -------------
 ------------- ------------- ------------- -------------
 EBITDAS
 Operations $ 13,228 $ 5,022 $ 31,289 $ 23,864
 Cancellation fee - - - 8,000
 ------------- ------------- ------------- -------------
 Total EBITDAS $ 13,228 $ 5,022 $ 31,289 $ 31,864
 ------------- ------------- ------------- -------------
 Operating earnings
 Operations $ 8,243 $ 1,133 $ 16,664 $ 10,532
 Cancellation fee - - - 8,000
 ------------- ------------- ------------- -------------
 Total operating
 earnings $ 8,243 $ 1,133 $ 16,664 $ 18,532
 ------------- ------------- ------------- -------------

 Bed rental days(1) 131,989 69,262 354,643 257,899
 Catering only
 days(2) 52,801 27,974 109,655 106,867

 (1) One bed rental day equals the rental of one bed and the provision of
 related catering and housekeeping services for one day.
 (2) One catering only day equals the provision of catering and
 housekeeping services with no related bed rental for one day.
 >>

Revenue from operations in the Camps & Catering segment was $54,632,000 for the three months ended September 30, 2010, compared to $27,892,000 for the same period in 2009, an increase of $26,740,000 or 96%. EBITDAS from operations for the three months ended September 30, 2010 was $13,228,000 or 24% of revenue compared to $5,022,000, or 18% of revenue in the same period in 2009.

Camp rental and catering revenue

Revenues from camp rental and catering operations were $28,458,000 for the three months ended September 30, 2010 compared to $14,246,000 for the same period in 2009, an increase of $14,212,000, or 100%. Revenues are derived from the following main business areas: (a) the BlackSand facilities which include the Executive Lodge and craft camp facilities, north of Fort McMurray, Alberta and (b) the Conventional camp and catering operations which include open camps, drill camps, catering only work, and ancillary equipment rentals.

 <<
 (a) BlackSand

 Revenues from the BlackSand facilities for the three months ended
 September 30, 2010 were $17,420,000 as compared to $7,557,000 for the
 same period in 2009. The increase of $9,863,000 came primarily from
 higher utilization and an increased number of rentable beds. The
 third quarter of 2010 was the first fully operational quarter for the
 expanded lodge and craft camp facilities. Throughout the second
 quarter of 2010, 144 newly manufactured beds were added to the
 Executive Lodge and 191 beds were redeployed from the existing open
 camp fleet and added to the craft camp. Total rentable beds available
 were 1,300 in the third quarter of 2010 as compared to 965 in the
 same period in 2009. Bed rental days for the three months ended
 September 30, 2010 were 107,858 as compared to 47,287 in the same
 period in 2009, for an average utilization of 90% during the three
 months ended September 30, 2010 as compared to average utilization of
 53% during the same period in 2009. On a per bed rental day basis,
 revenues increased to $162 per day for the three months ended
 September 30, 2010 from $160 per day in the same period in 2009 as a
 result of the rental mix between executive and craft accommodations.
 The higher utilization for the three months ended September 30, 2010
 was from increased activity by oil sands operators on turn-around
 projects and regular operational maintenance work as compared to the
 same period of 2009 when many oil sands operators had reduced
 activity waiting for signs of a more stable economy.

 (b) Conventional camp rental and catering

 Revenues from open camp and drill camp operations, which combine both
 bed rental and provision of catering and housekeeping services, for
 the three months ended September 30, 2010 were $3,399,000 as compared
 to $3,230,000 for the same period in 2009, an increase of $169,000.
 The increase in revenue was driven by higher volumes in the drill
 camp business which were offset by slightly lower volumes in the
 open camp business. Of note, 191 beds were redeployed from the open
 camp fleet in early 2010. Bed rental days were 24,131 for the three
 months ended September 30, 2010 as compared to 21,975 for the same
 period in 2009, an increase of 2,156 days with the majority of the
 increase from the drill camp business. Revenues per bed rental day
 basis were slightly lower at $141 per day in the three months ended
 September 30, 2010 as compared to $147 in the same period in 2009.
 The lower revenue per bed rental day is a result of the mix of
 equipment and service in the open camp business. The increased bed
 days in the drill camp business indicate a higher level activity
 however the utilization of the drill camp fleet was 6% in the three
 months ended September, 30 2010 compared to 10% for the same period
 in 2009. The decrease in utilization is a result of the net addition
 of 31 drill camps which occurred in the fourth quarter of 2009.
 Revenue generated by the provision of bed rental only for the three
 months ended September 30, 2010 was $1,643,000 as compared to
 $389,000 in the same period in 2009. The increase was from a single
 short-term contract for equipment rental only in the third quarter of
 2010.

 Revenues from the provision of catering and housekeeping only
 services, with no associated bed rentals, for the three months ended
 September 30, 2010 was $5,996,000 as compared to $3,070,000 in the
 same period in 2009, an increase of $2,926,000. Catering only days
 were 52,801 in the three months ended September 30, 2010 as compared
 to 27,974 for the same period in 2009. The majority of the increased
 volume was from the mining sector in the Northwest Territories where
 the Corporation operates a customer owned camp at a gold mine under
 construction. Catering and housekeeping only revenues associated with
 this project are expected to keep pace with ongoing, increasing
 development. The remainder of the increase in volume came from
 catering and housekeeping only on customer owned drill camps, which
 was consistent with the increased drilling activity in western
 Canada.
 >>

Camp and space sales revenue

Camp and space sales revenues for the three months ended September 30, 2010 were $15,785,000 as compared to $7,484,000 for the same period in 2009.

The increase of $8,301,000 in the three months ended September 30, 2010 came from two large projects which were announced in the second quarter of 2010. The Kamloops, British Columbia and Grande Prairie, Alberta plants completed orders in hand and internal production during the beginning of the quarter then ramped up mid-August to full production on these new projects in September. This production level is expected to continue well into 2011. For the same period of 2009 both production facilities had smaller projects and had scaled back resources in response to the slower economic conditions.

Rental revenue

Space rental revenues for the three months ended September 30, 2010 were $1,109,000 as compared to $1,277,000 in the same period 2009. Rental fleet utilization was 80% for the three months ended September 30, 2010 as compared to 73% in the same period 2009 with increased volumes offset by competitive pricing conditions.

Service revenue

Revenues from service work for the three months ended September 30, 2010 were $9,280,000 as compared to $4,885,000 in the same period of 2009, an increase of $4,395,000. Service revenue is comprised of camp mobilization, demobilization, transportation and installation work. This revenue is largely driven by activity levels in the camp rental and catering business and camp and space sales business. For the three months ended September 30, 2010 activity in both the camp rentals and camp and space sales was up significantly over the same period of 2009 as discussed above.

EBITDAS

EBITDAS from the Camps & Catering operations for the three months ended September 30, 2010 was $13,228,000 or 24% of revenue as compared to $5,022,000 or 18% of revenue for the same period of 2009. In the third quarter of 2009 additional costs of $540,000 were incurred to remediate some moisture issues at the BlackSand lodge and on an adjusted basis, the EBITDAS in the three months ended September 30, 2009 would have been $5,562,000 or 20% of revenue. The increase in EBITDAS, as a percentage of revenue, came primarily from higher utilization and improved efficiencies at the BlackSand facilities. EBITDAS, as a percentage of revenue, from the other operations remained relatively consistent for the three months ended September 30, 2010 as compared to the same period of 2009.

Matting

Matting revenue is comprised of mat rental revenue, mat sales revenue, installation, transportation, service, and other revenue as follows:

 <<
 Three months ended Nine months ended
 (000's except September 30 September 30
 rental days --------------------------- ---------------------------
 and mats) 2010 2009 2010 2009
 ------------- ------------- ------------- -------------
 Mat rental revenue $ 2,208 $ 1,504 $ 4,862 $ 3,717
 Mat sales revenue 2,059 1,220 6,635 3,340
 Installation,
 transportation,
 service and other
 revenue 4,031 2,394 11,977 7,227
 ------------- ------------- ------------- -------------
 Total revenue $ 8,298 $ 5,118 $ 23,474 $ 14,284
 ------------- ------------- ------------- -------------
 ------------- ------------- ------------- -------------
 EBITDAS $ 3,259 $ 1,791 $ 7,011 $ 4,073
 Operating earnings
 (loss) $ 1,851 $ 372 $ 2,789 $ (466)

 Mat rental days 1,034,474 649,750 2,364,414 1,493,597
 Average mats in
 rental fleet 13,400 13,421 12,673 13,125
 Mats sold
 New mats 2,305 870 5,019 2,144
 Used mats 951 1,738 6,312 3,828
 ------------- ------------- ------------- -------------
 Total mats sold 3,256 2,608 11,331 5,972
 >>

Revenues from the Matting segment for the three months ended September 30, 2010 were $8,298,000 as compared to $5,118,000 for the same period of 2009, an increase of $3,180,000 or 62%.

Mat rental revenues for the three months ended September 30, 2010 were $2,208,000 as compared to $1,504,000 in the same period of 2009, an increase of $704,000, or 47%. Mat rental days were 1,034,474 for the three months ended September 30, 2010 compared to 649,750 in the same period 2009. Activity was driven by stronger shale gas activity, demand from oil sands operators and by wet weather which required customers to rent mats and extend existing rentals. The increase in mat rental days was partially offset by slightly lower rental rates. Mat rental rates for the third quarter of 2010 were $2.13 per day as compared to $2.31 per day in the same period in 2009, a decrease of $0.18 per day. The year to date 2010 daily mat rental rate of $2.06 compared to the third quarter 2010 rate of $2.13 indicates that as rental demand increases daily mat rental rates are strengthening as well.

Mat sales revenues for the three months ended September 30, 2010 were $2,059,000 as compared to $1,220,000 for the same period in 2009, an increase of $839,000 or 69% of revenue. The total number of mats sold increased compared to the same period in 2009, as overall customer demand and activity levels increased in 2010. Revenue per mat sold during the third quarter of 2010 was $632, up from $468 in the third quarter of 2009. The higher revenue per mat is reflective of the mix of new and used mats sold, as new mats have a higher selling price than used mats.

Installation, transportation, service and other revenues for the three months ended September 30, 2010 were $4,031,000 as compared to $2,394,000 for the same period in 2009, an increase of $1,637,000 or 68%. Service revenue is driven primarily from the mat rental and mat sale business with the increase following stronger mat sales and mat rental days, as well as movement of 41,000 customer owned mats.

EBITDAS for the three months ended September 30, 2010 was $3,259,000 or 39% of revenue as compared to $1,791,000 or 35% of revenue for the same period in 2009. The increase is attributable to increased utilization of the mat rental fleet and the mix of more new mats sold as a percentage of total mats.

Marine Services

Marine Services revenue is comprised of tug and barge revenue, barge camp revenue, and rental and other revenue as follows:

 <<
 Three months ended Nine months ended
 September 30 September 30
 --------------------------- ---------------------------
 (000's) 2010 2009 2010 2009
 ------------- ------------- ------------- -------------
 Tug revenue $ 2,476 $ 517 $ 2,476 $ 547
 Barge revenue 151 191 151 191
 Barge camp revenue 1,591 75 1,692 3,033
 Rental and other
 revenue 736 326 1,264 1,085
 ------------- ------------- ------------- -------------
 Total revenue $ 4,954 $ 1,109 $ 5,583 $ 4,856
 ------------- ------------- ------------- -------------
 ------------- ------------- ------------- -------------
 EBITDAS $ 2,709 $ (175) $ 1,988 $ 1,645
 Operating earnings
 (loss) $ 2,409 $ (468) $ 1,091 $ 768
 >>

Revenues from the Marine Services segment for the three months ended September 30, 2010 were $4,954,000 as compared to $1,109,000 in the same period in 2009, an increase of $3,845,000. Tug and barge revenues were driven by a customer's offshore ocean rig refurbishment project. The project occurred as a direct result of increased scrutiny placed on offshore drilling projects. This work was performed to facilitate mobilization of the drilling vessel into US waters where it will provide relief capability for future offshore drilling. This work will not recur in 2011. There were 200 tug days in the third quarter of 2010 as compared to 57 in the same period in 2009. Barge camp revenues were related to the ongoing provision of two barge camps and associated service and support personnel at a customer's mining project in Nunavut. Rental and other revenue in the three months ended September 30, 2010 includes a penalty fee of $250,000 related to a customer postponing their 2010/2011 barge camp rental commitments.

EBITDAS for the three months ended September 30, 2010 was $2,709,000 as compared to a loss of $175,000 for same period in 2009, an increase of $2,884,000. As a percentage of revenue, EBITDAS for the three months ended September 30, 2010 was 55% compared to a loss of 16% in the same period of 2009. The third quarter of 2009 had one time expenses of $610,000 for repairs to a base camp facility, while the third quarter of 2010 included a penalty fee of $250,000. Normalizing for these factors EBITDAS for three months ended September 30, 2010 would have been $2,459,000 or 52% of revenue compared to $435,000 or 39% of revenue in the same period of 2009. The increase as a percent of revenue is mainly due to a large portion of the revenues being generated from the barge camp rentals which require minimal ongoing support costs.

Corporate

Corporate costs are the costs of the head office which include the Executive Chairman, President and Chief Executive Officer, Chief Financial Officer, Vice President of Safety, Vice President of Aboriginal Relations, Corporate Secretary, Corporate Accounting staff, and associated costs of supporting a public company. Cash costs for the three months ended September 30, 2010 were $1,742,000 as compared to $1,345,000 in the same period in 2009. This increase of $397,000 is related to additional staff and higher incentive compensation estimates based on the increased level of activity anticipated in 2010.

 <<
 Consolidated Balance Sheets
 September 30, 2010 and December 31, 2009 (Unaudited)
 -------------------------------------------------------------------------
 September 30, December 31,
 (000's) 2010 2009
 -------------------------------------------------------------------------
 Assets
 Current assets:
 Cash $ 4,496 $ 3,724
 Accounts receivable 44,807 23,218
 Inventory 13,670 11,834
 Prepaid expenses 3,065 1,830
 Income tax receivable - 990
 -------------------------------------------------------------------------
 66,038 41,596
 Other assets 2,966 3,061
 Property, plant and equipment, net 173,438 156,426
 Intangible assets, net 28,987 35,320
 Goodwill 2,136 2,136
 Long-term investments 2,259 2,463
 -------------------------------------------------------------------------
 $ 275,824 $ 241,002
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------

 Liabilities and Shareholders' Equity

 Current liabilities:
 Operating lines of credit $ 1,200 $ 6,900
 Accounts payable and accrued liabilities 19,310 12,391
 Deferred revenue 14,112 2,068
 Income taxes payable 724 -
 Current portion of long-term debt 1,640 1,939
 -------------------------------------------------------------------------
 36,986 23,298
 Long-term debt 45,243 35,863
 Future income tax liability 15,032 12,687
 -------------------------------------------------------------------------
 97,261 71,848
 Shareholders' equity:
 Share capital 245,353 245,353
 Contributed surplus 12,820 11,812
 Deficit (79,610) (88,011)
 -------------------------------------------------------------------------
 178,563 169,154

 -------------------------------------------------------------------------
 $ 275,824 $ 241,002
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------



 Consolidated Statements of Operations and Deficit
 For the quarter ended September 30, 2010 and 2009 (Unaudited)
 -------------------------------------------------------------------------
 Three months ended Nine months ended
 (000's except per September 30 September 30
 share amounts) 2010 2009 2010 2009
 -------------------------------------------------------------------------

 Revenue $ 67,660 $ 33,837 $ 157,633 $ 117,988
 Expenses:
 Cost of goods sold 13,604 5,585 30,970 18,305
 Operating 34,113 20,685 83,922 59,766
 General and
 administrative 2,550 2,262 8,336 6,791
 Stock based
 compensation 319 74 1,008 182
 Depreciation of
 property, plant
 and equipment 4,564 3,655 12,829 13,205
 Amortization of
 intangible assets 2,145 2,244 6,422 6,728
 (Gain) loss on
 disposal of
 property, plant
 and equipment (65) (367) 307 (1,377)
 Foreign exchange
 (gain) loss (59) 33 (56) 45
 -------------------------------------------------------------------------
 57,171 34,171 143,738 103,645
 -------------------------------------------------------------------------
 Operating earnings
 (loss) 10,489 (334) 13,895 14,343
 Interest income (9) (8) (23) (24)
 Interest expense on
 operating lines of
 credit 43 42 213 194
 Interest expense on
 long-term debt 371 127 934 981
 Accretion of notes
 payable 184 - 130 -
 Loss (earnings) on
 equity investments 7 (23) 204 141
 -------------------------------------------------------------------------
 Earnings (loss)
 before income
 taxes 9,893 (472) 12,437 13,051
 Income taxes
 Current tax
 expense 1,397 74 1,691 935
 Future tax expense
 (recovery) 1,282 (441) 2,345 2,636
 -------------------------------------------------------------------------
 2,679 (367) 4,036 3,571

 -------------------------------------------------------------------------
 Net earnings (loss)
 and other
 comprehensive
 income (loss) 7,214 (105) 8,401 9,480
 Deficit, beginning
 of period (86,824) (83,882) (88,011) (93,467)

 -------------------------------------------------------------------------
 Deficit, end of
 period $ (79,610) $ (83,987) $ (79,610) $ (83,987)
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------

 Earnings per share:
 Basic $ 0.07 $ - $ 0.08 $ 0.09
 Diluted $ 0.07 $ - $ 0.08 $ 0.09
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------



 Consolidated Statements of Cash Flows
 For the quarter ended September 30, 2010 and 2009 (Unaudited)
 -------------------------------------------------------------------------
 Three months ended Nine months ended
 September 30 September 30
 (000's) 2010 2009 2010 2009
 -------------------------------------------------------------------------
 Cash provided by
 (used in):
 Operating
 activities:
 Net earnings
 (loss) $ 7,214 $ (105) $ 8,401 $ 9,480
 Items not involving
 cash:
 Depreciation of
 property, plant
 and equipment 4,564 3,655 12,829 13,205
 Amortization of
 intangible assets 2,145 2,244 6,422 6,728
 Future tax expense
 (recovery) 1,282 (441) 2,345 2,636
 Stock based
 compensation 319 74 1,008 182
 Amortization of
 other assets 36 - 95 -
 Accretion of
 notes payable 184 - 130 -
 Loss (earnings)
 on equity
 investments 7 (23) 204 141
 Gain on sale of
 property, plant
 and equipment (546) (784) (1,625) (2,447)
 -------------------------------------------------------------------------
 15,205 4,620 29,809 29,925
 Changes in non-cash
 working capital
 items (4,220) 2,675 1,675 5,358
 -------------------------------------------------------------------------
 10,985 7,295 31,484 35,283
 Investing
 activities:
 Purchase of
 property, plant
 and equipment (13,491) (1,605) (35,900) (9,675)
 Purchase of
 intangibles (30) (626) (89) (626)
 Proceeds on sale
 of property,
 plant and equipment 1,512 2,924 7,684 8,196
 Business
 acquisitions - (818) - (818)
 -------------------------------------------------------------------------
 (12,009) (125) (28,305) (2,923)
 Changes in non-cash
 working capital
 items (5,852) 1,394 (5,813) 1,394
 -------------------------------------------------------------------------
 (17,861) 1,269 (34,118) (1,529)
 Financing activities:
 (Repayment of)
 proceeds from bank
 indebtedness (2,135) 782 - 435
 Share purchase costs - (53) - (53)
 Repurchase of shares - (5,793) - (5,793)
 Repayment of
 operating lines of
 credit (7,500) (1,132) (5,700) (628)
 Proceeds from
 long-term debt 24,900 7,200 45,043 7,200
 Repayment of
 long-term debt (4,010) (7,615) (36,092) (32,801)
 -------------------------------------------------------------------------
 11,255 (6,611) 3,251 (31,640)
 Changes in non-cash
 working capital
 items 117 (887) 155 (1,048)
 -------------------------------------------------------------------------
 11,372 (7,498) 3,406 (32,688)

 -------------------------------------------------------------------------
 Increase in cash
 position 4,496 1,066 772 1,066
 Cash, beginning of
 period - - 3,724 -
 -------------------------------------------------------------------------
 Cash, end of
 period $ 4,496 $ 1,066 $ 4,496 $ 1,066
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------
 Supplementary
 information:
 Income taxes
 (received) paid $ (224) $ 701 $ 10 $ 2,163
 Interest income
 received 9 8 23 24
 Interest paid 176 192 1,145 1,299
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------
 >>

This press release may contain forward-looking statements that are subject to risk factors associated with the oil and gas and mining businesses and the overall economy. The Corporation believes that the expectations reflected in this press release are reasonable, but results may be affected by a variety of variables. The Corporation relies on litigation protection for "forward-looking" statements.

For further information: Bob German, President and Chief Executive Officer, or Scott Matson, Vice President Finance and Chief Financial Officer, 1600, 505 - 3rd Street S.W., Calgary, Alberta, T2P 3E6, Telephone: (403) 517-4654, Fax: (403) 517-4678, website: www.horizonnorth.ca