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Press release from CNW Group

Horizon North Logistics Inc. Announces Results For The Quarter Ended June 30, 2011

Wednesday, August 03, 2011

Horizon North Logistics Inc. Announces Results For The Quarter Ended June 30, 201118:27 EDT Wednesday, August 03, 2011CALGARY, Aug. 3, 2011 /CNW/ - TSX Symbol: HNLHorizon North Logistics Inc. ("Horizon" or the "Corporation") reported its financial and operating results for the three and six months ended June 30, 2011 and 2010.Second Quarter HighlightsConsolidated revenues increased by 90% and consolidated EBITDAS increased by 201% as compared to the same period of 2010;Revenues from the Camps & Catering segment increased by 86% as compared to the same period of 2010, driven by increased rental and catering activity and strong service revenues; andRevenues from the Matting segment increased by 116% as compared to the same period of 2010, led by strong mat sales and related services.Financial Summary     (000's except per share amounts)Three Months EndedJune 30, 2011Three Months EndedJune 30, 2010(4)Six Months EndedJune 30, 2011Six Months EndedJune 30, 2010(4)     Revenue      $ 86,607      $ 45,644      $ 189,766      $ 89,346EBITDAS(1)22,0197,27144,82416,241Operating earnings (1)14,65251230,1933,119     Total profit and comprehensive income10,233(59)21,145982Earnings per share - basic and diluted      $ 0.10      $ 0.00      $ 0.20      $ 0.01     Total assets315,251251,115315,251251,115Long-term loans and borrowings42,77324,09842,77324,098Funds from operations(2)17,2326,37134,39912,909Capital spending30,42317,96856,24726,809Debt to total capitalization ratio(3)0.190.170.190.17(1)  EBITDAS (Earnings before interest, taxes, depreciation, amortization, gain/loss on disposal of property, plant and equipment, and share based compensation) and operating earnings are not a recognized measure under IFRS.  Management believes that in addition to net earnings, 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, and it is regularly provided to and reviewed by the Chief Operating Decision Maker.  Horizon's method of calculating EBITDAS and operating earnings (loss) may differ from other entities and accordingly, EBITDAS may not be comparable to measures used by other entities, EBITDAS and operating earnings should not be construed as alternatives to total profit and comprehensive income determined in accordance with IFRS as an indicator of the Corporation's performance. For a reconciliation of EBITDAS and operating earnings to total profit and comprehensive income, please refer to page 3of the Management's Discussion and Analysis.(2)  Funds from operations is not a recognized measure under IFRS.  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 IFRS 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, interest and income taxes paid, financing costs, and income tax expense.(3)  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 current and long-term portions of loans and borrowings. Total capitalization is calculated as the sum of debt and shareholders' equity (4)  All 2010 figures have been restated in accordance with International Financial Reporting Standards.Overview and OutlookHorizon's second quarter 2011 results reflect continued strong demand for our products and services.  Activity levels are being driven by improved and stable commodity prices, particularly oil prices.  Stronger oil pricing is providing support for oil sands development projects to which Horizon's core business lines are closely tied, with 63% of Horizon's consolidated second quarter 2011 revenues generated from oil sands related customers.  The long term nature of these projects, combined with mineral mining and infrastructure projects, have served to significantly reduce the seasonality in our business as evidenced by continued strong EBITDAS and earnings through what has historically been our slowest quarter.Capital ProgramHorizon is continuing to invest in its core business lines, raising its 2011 capital expenditure program from $84 million to $100 million.  The majority of this increase represents investment in camp rental fleet assets with our bed count expected to increase from 5,600 at June 30, 2011 to 6,400 by year end.  Additional investment is also being made in the matting rental fleet, which is expected to increase 24% by year end.Credit FacilitiesIn conjunction with increasing operational activity and an expanded capital expenditure program, Horizon increased its credit facilities in the quarter.  A new facility in the amount of $80 million replaces the previous aggregate $60 million of credit facilities, and includes a $35 million accordion feature, available upon request by the Corporation and subject to review and approval by the lenders. The new facility is a 3 year, committed facility with an initial maturity date of June 30, 2014 and is extendable annually, at the Corporation's request, for an additional 1 year.Dividend PaymentJuly 15, 2011 marked Horizon's first quarterly dividend payment of $4.2 million, or $0.04 per share, to shareholders of record as of June 30, 2011.  The Board of Directors of Horizon have declared a dividend for the third quarter of 2011 at $0.04 per share, payable to shareholders of record at close of business on September 30, 2011. The dividend will be paid on October 14, 2011.Quarterly Financial Results   Three months ended June 30, 2011(000's)Camps &CateringMattingMarineServicesCorporateInter-segmentEliminationsTotalRevenue      $ 74,695$ 12,255      $ 975      $ -$ (1,318)      $ 86,607Expenses       Direct costs53,3138,7117462(1,280)61,492 Selling & administrative8539572,141-3,096EBITDAS      $ 20,529 $ 3,449      $ 222  $ (2,143)      $ (38)      $ 22,019        Share based payments909153-153 Depreciation & amortization5,5571,50711588  (22)7,245 Gain on disposal of property, plant and equipment            (1)            (30)---            (31)       Operating earnings (loss)      $ 14,883$ 1,963      $ 106    $ (2,284)      $ (16)      $ 14,652       Finance costs     576Loss on equity investments     20Income tax expense     3,823Total profit and comprehensive income           $ 10,233       Earnings per share - diluted           $ 0.10   Three months ended June 30, 2010 (1)(000's)Camps &CateringMattingMarineServicesCorporateInter-segmentEliminations       TotalRevenue      $ 40,230      $ 5,686      $ 396      $ -      $ (668)      $ 45,644Expenses       Direct costs31,5913,822970            (5)            (646)35,732 Selling & administrative96811771,549-2,641EBITDAS      $ 7,671      $ 1,747      $ (581)      $ (1,544)      $ (22)      $ 7,271        Share based payments143272115-287 Depreciation & amortization4,4901,344283120            (20)6,217 Loss (gain) on disposal of property, plant and equipment264            (21)-12            -255       Operating earnings (loss)      $ 2,774      $ 397      $ (866)      $ (1,791)      $ (2)      $ 512       Finance costs     229Loss on equity investments     150Income tax expense     192Total profit and comprehensive income           $ (59)       Earnings per share - diluted           $ 0.00(1)  All 2010 figures have been restated in accordance with International Financial Reporting Standards.   Six months ended June 30, 2011(000's)Camps &CateringMattingMarineServicesCorporateInter-segmentEliminationsTotalRevenue      $ 160,818      $ 30,096      $ 1,807      $ -      $ (2,955)      $ 189,766Expenses       Direct costs118,03122,1791,205            2            (2,864)138,553 Selling & administrative1,7271947            4,461-6,389EBITDAS      $ 41,060      $ 7,723      $ 595      $ (4,463)      $ (91)      $ 44,824        Share based payments174192            114-309 Depreciation & amortization10,9682,817222            172            (38)14,141 Loss on disposal of property, plant and equipment8398-            --181       Operating earnings (loss)      $ 29,835      $ 4,789      $ 371      $ (4,749)      $ (53)      $ 30,193       Finance costs     1,189Loss on equity investments     41Income tax expense     7,818Total profit and comprehensive income           $ 21,145       Earnings per share - diluted           $ 0.20   Six months ended June 30, 2010 (1)(000's)Camps &CateringMattingMarineServicesCorporateInter-segmentEliminations       TotalRevenue      $ 75,397      $ 15,176      $ 629      $ -      $ (1,856)      $ 89,346Expenses       Direct costs56,53711,1951,3434            (1,760)67,319 Selling & administrative1,88522973,665-5,786EBITDAS      $ 16,975      $ 3,752      $ (721)      $ (3,669)      $ (96)      $ 16,241        Share based payments295515213-564 Depreciation & amortization8,7582,679591193            (35)12,186 Loss on disposal of property, plant and equipment28476-12-372       Operating earnings (loss)      $ 7,638      $ 946      $ (1,317)      $ (4,087)      $ (61)      $ 3,119       Finance costs     691Loss on equity investments     197Income tax expense     1,249Total profit and comprehensive income           $ 982       Earnings per share - diluted           $ 0.01(1)  All 2010 figures have been restated in accordance with International Financial Reporting Standards.Camps & CateringCamps & Catering revenue is comprised of camp rental and catering revenue, camp and space unit sales, equipment, space rental revenue and service revenue from transportation and installation. Three months ended June 30 Six months ended June 30(000's except bed rental days and catering only days)2011 2010(3) 2011 2010 (3) Camp rental and catering revenue      $ 39,818       $ 21,275       $ 82,081       $ 44,542 Camp and space unit sales revenue            15,196             14,142 40,378 19,414 Space rental revenue            1,540             1,057 2,654 1,819 Service revenue            18,141             3,756 35,705 9,622Total revenue      $ 74,695       $ 40,230       $ 160,818       $ 75,397EBITDAS      $ 20,529       $ 7,671       $ 41,060       $ 16,975Operating earnings      $ 14,883       $ 2,774       $ 29,835       $ 7,638                Bed rental days (1)206,491 106,130 416,046 222,654Catering only days (2)45,618 31,314 104,563 56,854(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. (3)  2010 revenue, EBITDAS and operating earnings have been restated in accordance with International Financial Reporting Standards.Revenues from operations in the Camps & Catering segment were $74.7 million for the three months ended June 30, 2011 compared to $40.2 million for the three months ended June 30, 2010, an increase of $34.5 million or 86%. EBITDAS from operations for the three months ended June 30, 2011 was $20.5 million or 27% of revenue compared to $7.7 million or 19% of revenue for the three months ended June 30, 2010, an increase of $12.8 million or 168%.The significant increase in both revenue and EBITDAS in the Camps & Catering segment is reflective of the robust business environment in the oil sands sector, which is driven by the significant investments oil sands operators are making in additional phases to existing operations and in new projects. In comparison to the second quarter of 2010, the current level of activity is a result of these investments being in the execution phase. This phase drives higher manpower levels resulting in increased demand for turnkey camp rental and for camp sales. For the six months ended June 30, 2011, 67% of this segments revenue was derived from oil sands as compared to 56% in the same period of 2010. The increased investment in the oil sands sector has been driven by the price of oil, which has remained between $75 and $100 per barrel since mid 2010. In the mining sector, continuing robust mineral prices resulted in several significant mine expansion projects in British Columbia and the Northwest Territories being initiated. In the second quarter of 2011, these mining projects were near the top of their manpower curve, as compared to the same period of 2010 when they were in the early stages of project planning and start-up.Camp rental and catering revenueRevenues from camp rental and catering operations were $39.8 million for the three months ended June 30, 2011 compared to $21.3 million for the three months ended June 30, 2010, an increase of $18.5 million or 87%. Revenues are derived from the following main business areas: large camp operations, drill camp operations, catering only operations, and ancillary equipment rentals.The table below outlines the key performance metrics used by management to measure performance in the large camp and drill camp operations. Three months ended June 30(000's for revenue only)2011 2010 (1) LargecampDrillcampTotal LargecampDrillcampTotalRevenue$33,863$867$34,730 $16,980$235$17,215Bed rental days201,2015,290206,491 105,0661,064106,130Revenue per bed rental day$168$164$168 $162$221$162        Available beds (2)3,6571,0184,675 2,6651,0183,683Utilization (3)60%6%49% 43%1%32%(1)  2010 revenue has been restated in accordance with International Financial Reporting Standards.(2) Available beds is equal to total average beds in the fleet less beds required for staff.(3)  Utilization equals the total number of bed rental days divided by total rentable beds times days in the quarter.  Six months ended June 30(000's for revenue only)2011 2010(1) LargecampDrillcampTotal LargecampDrillcampTotalRevenue$65,834$4,059$69,893 $34,273$2,554$36,827Bed rental days391,49624,550416,046 206,49516,159222,654Revenue per bed rental day$168$165$168 $166$158$165        Available beds (2)3,4881,0184,506 2,6651,0183,683Utilization (3)62%13%51% 43%9%33%(1)  2010 revenue has been restated in accordance with International Financial Reporting Standards.(2)  Available beds is equal to total average beds in the fleet less beds required for staff.(3)  Utilization equals the total number of bed rental days divided by total rentable beds times days in the quarter.Revenues from the large camp operations for the three months ended June 30, 2011 increased by $16.9 million or 99% as compared to the three months ended June 30, 2010. Revenues from large camps are closely tied to the level of activity in the oil sands, as oil sands operators' increased their manpower, the demand for camp rental and catering increased. The higher demand is reflected in 201,201 bed rental days for the quarter ended June 30, 2011 as compared to 105,066 in the same period in 2010, an increase of 96,135. The higher bed rental day volume was accommodated by increased capacity of 992 beds as at June 30 2011 as compared to June 30, 2010 and by higher utilization of the camps. In addition to higher volumes, the revenue per bed rental day increased by $6 which is reflective of the mix of customers, with an increase of the shorter term customers compared to the long term contract customers.Revenues from the drill camp operations increased for the three months ended June 30, 2011 as compared to the same period of 2010. Increased volumes and utilization were a result of overall higher drilling activity in Western Canada, with Canadian Association of Oilwell Drilling Contractors (CAODC) reporting average rig utilization in Western Canada for the three months ended June 30, 2011 at 24% as compared to 19% in the same period of 2010. The increase in drilling activity is reflected in the higher volumes by 4,226 bed days and 5% higher utilization for the three months ended June 30, 2011 as compared to the same period of 2010. These increases were offset by lower revenue per bed day. The lower rate was a combination of aggressive pricing and additional equipment and services requested by the customer once the camp is operational.The table below outlines the key performance metrics used by management to measure performance in the catering only and equipment rental operations. Three months ended June 30(000's for revenue only)2011 2010 (1) Catering onlyEquipmentrental Catering onlyEquipmentrentalRevenue$4,035$1,053 $3,547$513Catering only days45,618- 31,314-Revenue per catering only day$88- $113- Six months ended June 30(000's for revenue only)2011 2010 (1) Catering onlyEquipmentrental Catering onlyEquipmentrentalRevenue$9,796$2,392 $6,784$931Catering only days104,563- 56,854-Revenue per catering only day$94- $119-(1)  2010 revenue has been restated in accordance with International Financial Reporting Standards.Revenues from the provision of catering and housekeeping only services, with no associated bed rentals, for the three months ended June 30, 2011 increased marginally as compared to same period of 2010. The majority of the increased volume was due to higher manpower levels at a significant mine expansion project in the Northwest Territories. The project is now under full construction as compared to the same period of 2010 when it was initiating construction. The remaining volume increase came from catering and housekeeping services on customer owned drill camps. The higher volumes were offset by lower revenue per day rate, the decrease was primarily a result of renegotiating the agreement for higher volumes at a preferred daily rate.Camp and space unit sales revenueCamp and space unit sales revenues for the three months ended June 30, 2011 were $15.2 million as compared to $14.1 million for the same period in 2010, an increase of $1.1 million or 7%. The increase in revenues were mainly due to higher output put as a result of efficiencies gained from the longer production runs experienced in the three months ended June 30, 2011, as compared to short runs of non standard product in the same period of 2010. Production staff increased to an average of 400 people in the three months ended June 30, 2011 as compared to 300 people in the same period of 2010. This higher production capacity is focused on expanding the number of beds in the internal fleet, as a result, camp and space sales revenues are expected to continue at a similar level through-out the remainder of 2011 as the mix of internal fleet build and third party sales is expected to be relatively static.Rental revenueSpace rental revenues for the three months ended June 30, 2011 were $1.5 million as compared to $1.1 million for the same period in 2010, an increase of $0.4 million or 36%. The increase came from higher volumes with fleet utilization for the three months ended June 30, 2011 at 88% compared to 83% for the same period in 2010. Rental rates strengthened as a result of the customer mix, with more space units being rented to mining and resource customers where rates are higher.Service revenueRevenues from camp mobilization, demobilization, transportation, and installation work for the three months ended June 30, 2011 were $18.1 million as compared to $3.8 million in the same period of 2010, an increase of $14.3 million or 376%. These revenues are largely driven by activity levels in both the camp rental and catering business and the camp and space sales business. For the three months ended June 30, 2011, service revenues were derived primarily from the transport and installation of two large manufacturing projects in the Fort McMurray area, as well as the mobilization of equipment in response to the to the wild fires in the Slave Lake area of central Alberta. The equipment was used to support emergency response crews and the municipality in the aftermath of the wild fires. The same period of 2010 had one large manufacturing project which did not have any associated installation revenue.Direct costsDirect costs for the three months ended June 30, 2011 were $53.3 million or 71% of revenue as compared to $31.6 million or 79% of revenue for the same period of 2010. Direct costs are closely related to revenues with the increase in overall costs a result of the higher activity levels seen in the three months ended June 30, 2011 as compared to the same period of 2010. As a percentage of revenue, direct costs declined by 8% compared to the same period of 2010. The decrease was attributable, in part, to efficiency gains in the manufacturing process, which come from long production runs of similar product. The manufacturing efficiencies are derived mainly from decreased labour hours associated with the project. Direct cost in the Camps & catering segment declined as a percentage of revenue due to higher revenue volumes. These operations have a significant level of fixed cost, as utilization of the camps increases the fixed costs decrease as a percentage of revenue. The fixed costs are comprised of costs such as rent, taxes, utilities and minimum staff levels.MattingMatting revenue is comprised of mat rental revenue, mat sales revenue, installation, transportation, service, and other revenue as follows: Three months ended June 30 Six months ended June 30(000's except bed rental days and catering only days)2011 2010 (1) 2011 2010(1) Mat rental revenue      $ 2,067       $ 1,525       $ 2,698       $ 2,654 Mat sales revenue            4,993             889 15,580 4,576 Installation, transportation, service, and other revenue            5,195             3,272 11,818 7,946Total revenue      $ 12,255       $ 5,686       $ 30,096       $ 15,176EBITDAS      $ 3,449       $ 1,747       $ 7,723       $ 3,752Operating earnings      $ 1,963       $ 397       $ 4,789       $ 946        Mat rental days787,029 833,659 1,057,616 1,329,940Average mats in rental fleet9,109 12,190 8,181 12,673Mats sold        New mats6,219 659 18,604 2,714 Used mats111 1,010 2,493 5,361Total mats sold6,330 1,669 21,097 8,075(1)     2010 revenue, EBITDAS and operating earnings have been restated in accordance with International Financial Reporting Standards.Revenues from the Matting segment for the three months ended June 30, 2011 were $12.3 million as compared to $5.7 million for the same period of 2010, an increase of $6.6 million or 116%. EBITDAS for the three months ended June 30, 2011 were $3.4 million or 28% of revenue as compared to $1.7 million for the same period of 2010 or 31% of revenue, an increase of $1.7 million or 97%.Mat rental revenueMat rental revenues for the three months ended June 30, 2011 were $2.1 million as compared to $1.5 million for the same period of 2010, an increase of $0.6 million or 40%. The increase in rental revenue was driven by higher revenues per mat rental day, which averaged $2.63 per day for the three months ended June 30, 2011 as compared to $1.83 for the same period of 2010. The higher rates were offset by lower volumes, mat rental days for the three months ended June 30, 2011 were 787,029, or 95% utilization compared to 833,659 mat rental days or 75% utilization for the same period of 2010. The higher utilization is a result of the decreased rental mat fleet for the three months ended June 30, 2011 as compared to the same period of 2010. Due to the high customer demand for used mats in the fourth quarter of 2010 and the first quarter of 2011, several large used mat sales resulted in a lower average mat rental fleet.Mat sales revenueRevenues from mat sales for the three months ended June 30, 2011 were significantly higher by $4.1 million or 462% as compared the same period of 2010. The majority of the increase came from two significant new mat sales where both customers purchased them for steam assisted gravity drainage (SAGD) drilling projects. Revenue per mat sold during the second quarter of 2011 was $789, up from $533 in the same period of 2010. 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 revenueInstallation, transportation, service, and other revenues are driven primarily from the level of activity in the mat rental and mat sale businesses. Revenues for the three months ended June 30, 2011 were higher by $1.9 million as compared to the same period in 2010, the increase coming primarily from stronger mat sales.Direct costsDirect costs for the three months ended June 30, 2011 were $8.7 million or 71% of revenue as compared to $3.8 million or 67% of revenue for the same period of 2010. Direct costs are driven by the level of business activity, with the significant increase in revenue, as compared to the same period of 2010, direct costs have increased accordingly. Direct costs, as a percentage of revenue, increased 4% for the three months ended June 30, 2011 as compared the same period of 2010. This increase of direct cost, as a percentage of revenue, is mainly driven from higher costs associated with the mat rental operation, these costs are related to mats rented from third parties required to complete customer mat rental orders.Marine ServicesMarine Services revenue is comprised of, barge camp revenue, and rental and other revenue as follows: Three months ended June 30 Six months ended June 30(000's except bed rental days and catering only days)2011 2010 (1) 2011 2010 (1) Barge camp revenue         $   642          $  101 $ 1,308 $ 101 Rental and other revenue            333             295 499 528Total revenue      $ 975       $ 396       $ 1,807       $ 629EBITDAS      $ 222       $ (581)       $ 595       $ (721)Operating earnings      $ 106       $ (866)       $ 371       $ (1,317)(1)  2010 revenue, EBITDAS and operating earnings have been restated in accordance with International Financial Reporting Standards.Revenues from the Marine Services segment for the three months ended June 30, 2011 were $1.0 million as compared to $0.4 million in the same period of 2010, an increase of $0.6 million or 146%. The increase was primarily due to the ongoing provision of two barge camps and associated service and support personnel at a customer's mining project in Nunavut.EBITDAS for the three months ended June 30, 2011 was $0.2 million or 23% of revenue as compared to a loss of $0.6 million for the same period of 2010. The increase in EBITDAS was due to the ongoing barge camp rental in 2011, whereas these barge camps were not working in the same period of 2010.CorporateCorporate costs are the costs of the head office which include the 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. Costs for the three months ended June 30, 2011 were $2.1 million as compared to $1.5 million in the same period in 2010. This increase of $0.6 million reflects the increased cost to support the higher level of business activity. Corporate costs, as a percentage of revenue, decreased to 2.5% for the three months ended June 30, 2011 as compared to 3.4% in the same period of 2010.Consolidated Statement of Financial Position (Unaudited) June 30, 2011 and December 31, 2010      June 30, December 31,(000's) 2011 2010Assets  Current assets:   Trade and other receivables $  51,912 $  52,003 Inventories  13,123 13,726 Prepayments 6,899 8,953 71,934 74,682Non-current assets:   Property, plant and equipment 207,073 162,484 Intangible assets 22,751 26,892 Goodwill 2,136 2,136 Investments in equity accounted investees2,210 2,251 Deferred tax assets 6,273 6,458 Other assets 2,874 2,934 243,317 203,155 $  315,251$  277,837Liabilities and Shareholders' Equity  Current liabilities:   Bank indebtedness $  - $  834 Trade and other payables 33,558 25,377 Deferred revenue 11,882 7,206 Income taxes payable 5,248 1,344 Current portion of loans and borrowings 1,428 11,773 52,116 46,534Non-current liabilities:   Provisions 1,254 1,223 Loans and borrowings 42,773 30,363 Deferred tax liabilities  21,132 20,918 117,275 99,038Shareholders' equity:   Share capital 170,027 245,353 Contributed surplus 11,019 11,446 Retained earnings (Deficit) 16,930 (78,000) 197,976 178,799 $ 315,251 $ 277,837Consolidated Statement of Comprehensive Income (Unaudited)For the three and six months ended June 30, 2011 and 2010    Three months ended June 30 Six months ended June 30(000's) 2011 2010 2011 2010Revenue $  86,607 $  45,644 $  189,766 $  89,346Operating expenses:     Direct costs 61,492 35,732 138,553 67,319 Depreciation 5,164 4,078 10,000 7,909 Amortization of intangible assets 41 126 82 251 Share based compensation 99 171 194 351 (Gain) loss on disposal of property, plant and equipment  (31) 255 181 372Direct operating expenses 66,765 40,362 149,010 76,202Gross profit  19,842 5,282 40,756 13,144Selling & administrative expenses:     Selling & administrative expenses 3,096 2,641 6,389 5,786 Amortization of intangible assets 2,040 2,013 4,059 4,026 Share based compensation 54 116 115 213Selling & administrative expenses 5,190 4,770 10,563 10,025Operating earnings  14,652 512 30,193 3,119Finance costs 576 229 1,189 691Share of loss of equity accounted investees  20 150 41 197Profit before tax  14,056 133 28,963 2,231 Current tax expense (recovery) 2,731 (64) 7,419 294 Deferred tax expense  1,092 256 399 955Income tax expense 3,823 192 7,818 1,249Total profit (loss) and comprehensive income (loss) $  10,233 $  (59) $  21,145 $  982Earnings per share     Basic $  0.10 $  - $  0.20 $  0.01 Diluted $  0.10 $  - $  0.20 $  0.01Consolidated Statement of Changes in Equity (Unaudited)June 30, 2011, December 31, 2010, and June 30, 2010      (000's)ShareCapitalContributedSurplusRetained Earnings(Deficit)TotalBalance at January 1, 2010 $  245,353 $   10,339 $   (94,430) $  161,262Total profit and comprehensive income - - 982 982Share based compensation - 564 - 564Balance at June 30, 2010  245,353 10,903 (93,448) 162,808Total profit and comprehensive income - - 15,448 15,448Share based compensation - 543 - 543Balance at December 31, 2010  245,353 11,446 (78,000) 178,799Reduction of capital  (78,000)  - 78,000 -Total profit and comprehensive income - - 21,145 21,145Share based compensation - 309 - 309Fair value of stock options exercised 736 (736) - -Cash from stock options exercised 1,938 - - 1,938Dividends declared - - (4,215) (4,215)Balance at June 30, 2011 $  170,027 $   11,019 $   16,930 $  197,976Consolidated Statements of Cash Flows (Unaudited)For the six months ended June 30, 2011 and 2010   Six months ended June 30(000's) 2011 2010Cash provided by (used in):   Operating activities:  Profit for the period $      21,145 $         982Adjustments for:   Depreciation 10,000 7,909 Amortization of intangible assets 4,141 4,277 Share based compensation 309 564 Amortization of other assets 60 59 Loss on equity investments 41 197 Gain on sale of property, plant and equipment (1,297) (1,079) Finance costs 1,189 691 Income tax expense 7,818 1,249 43,406 14,849Income taxes paid (3,515) (234)Interest paid (811) (955)Changes in non-cash working capital items 11,369 11,316 50,449 24,976Investing activities:  Purchase of property, plant and equipment (56,247) (26,809)Purchase of intangibles - (59)Proceeds on sale of property, plant and equipment         2,955 6,172 (53,292) (20,696)Financing activities:  Proceeds from bank indebtedness 6,454 2,135Shares issued 1,938 -Repayment of loans and borrowings (5,549) (10,139) 2,843 (8,004)Decrease in cash position - (3,724)Cash, beginning of period - 3,724Cash, end of period $             - $              -Caution Regarding Forward-Looking Information and Statements Certain statements contained in this Press Release constitute forward-looking statements or information.  These statements relate to future events or future performance of Horizon.  All statements other than statements of historical fact are forward-looking statements.  The use of any of the words "anticipate", "plan" "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "should", "believe" and similar expressions are intended to identify forward-looking statements.In particular such forward-looking statements include: under the heading "Capital Program" under "Overview and Outlook" the statements that "Horizon is continuing to invest in its core business lines, raising its 2011 capital expenditure program from $84 million to $100 million. The majority of this increase represents investment in camp rental fleet assets with our bed count expected to increase from 5,600 at June 30, 2011 to 6,400 by year end. Additional investment is also being made in the matting rental fleet, which is expected to increase 24% by year end." Under the heading "Dividend Payment" under "Overview and Outlook" the statement that "The dividend will be paid on October 14, 2011."The foregoing statements are based on the assumption that the Corporation's revenues will continue to be as strong as anticipated to justify each increased capital spending.There are a number of risks which could impact these generally high levels of activity which could negatively impact the Corporation's business.  As such, many factors could cause the performance or achievements of the Corporation to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements.Corporate InformationAdditional information related to the Corporation, including the Corporation's annual information form, financial statements, and MD&A is available on SEDAR at www.sedar.com. Unless otherwise indicated, the consolidated financial statements have been prepared in accordance with IFRS and the reporting currency is in Canadian dollars.    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