Press release from Marketwire
Enseco Energy Services Corp. Announces Record Results for the Quarter Ended June 30, 2012
Wednesday, August 29, 2012
Enseco Energy Services Corp. Announces Record Results for the Quarter Ended June 30, 201222:06 EDT Wednesday, August 29, 2012CALGARY, ALBERTA--(Marketwire - Aug. 29, 2012) - Enseco Energy Services Corp. (TSX VENTURE:ENS) ("Enseco" or the "Company") is pleased announce its financial resultsfor the quarter ended June 30, 2012.HIGHLIGHTS FOR THE QUARTER ENDING JUNE 30, 2012Enseco has achieved record results and has showed continual quarter over quarter improvement:Record 1st quarter revenues of $13.9 million. An increase of 31% from the same time period last year. Positive EBITDA for the spring break-up quarter. An improvement of $0.5 million over the same period last year. Enseco's Motor Repair Facility located in Leduc Alberta became operational in mid- June, allowing the in house repair of our motor fleet. We anticipate this will increase service quality for our customers, result in quicker turnaround of equipment and lessen the need for rental equipment. Enseco's MWD facility opened in April 2011. The Company's MWD technicians have made a number of significant improvements to the MWD downhole tools since that time resulting in the creation of the Enseco Edge, the Company's proprietary Positive Pulse MWD system.RESULTS FROM OPERATIONSThree Months ended June 30,In thousands of dollars20122011Revenue$13,919$10,596Adjusted gross margin1$3,996$2,856EBITDAS1$154$(416)Net income (loss) before tax$(2,138)$(3,149)Per common share - basic and diluted$(0.11)$(0.16)Total net income (loss) before tax$(2,138)$(3,149)Per common share - basic and diluted$(0.11)$(0.16)Deferred taxes included in cash flow before changes in non-cash working capital items$(280)-Cash flow, before changes in non-cash working capital items 1$(593)$(416)Cash flow from/(used in), after changes in non-cash working capital items$6,299$6,6851See definition within the Non-IFRS Measures belowOUTLOOKManagement continues to carefully monitor industry activity levels in western Canada and the Corporation's US operating areas to ensure equipment and manpower are positioned to provide sustainable equipment utilization rates given the current volatility in commodity prices.With the engineering improvements and reductions in rebuild times now available through Enseco's in-house MWD lab and new Motor Repair Facility, it is expected that its rental requirements will remain low even as activity continues to grow throughout the upcoming year. The MWD and Motor facilities have also reduced Enseco's reliance on third party service providers. The addition of these facilities and the capital expenditures on additional equipment will allow Enseco to further increase its operating efficiencies. With continued and increasing positive cash flow, Enseco is focused on accelerating its expansion into the US and reducing overall debt level.Directional and horizontal drilling continues to increase as a percentage of total wells drilled and now comprises over 80% of total wells drilled. Demand for the Company's directional drilling services and production testing frac flowback services are expected to continue to grow. Longer, more complex, flow back operations are expected to continue to increase the requirements for production testing services in both Canada and the US.The Company will continue to search for efficiencies and cost reductions. It is expected that the pursuit of growth opportunities, accompanied by initiatives to both improve operating efficiency and reduced debt levels, will continue to improve the Company's financial performance going forward.On August 29, 2012 the Board of Directors approved the issuance of 675,000 options to directors, officers and employees of the Company, of which 500,000 have been allocated to directors and officers. The grant will be made on September 4, 2012 at an exercise price equal to the closing price of the common shares on the last trading day prior to the grant.FILINGSEnseco has filed with Canadian securities regulatory authorities its unaudited condensed consolidated financial statements for the three months ending June 30, 2012 and the accompanying management's discussion and analysis ("MD&A"). These filings are available under Enseco's SEDAR profile at www.sedar.comABOUT ENSECO ENERGY SERVICES CORP.Enseco is a premier supplier of directional drilling, production testing and frac flowback services operating throughout the Western Canadian Sedimentary Basin and select markets in the United States, Our corporate office is located in Calgary and sales offices are located in both Calgary and Denver. Enseco is led by an experienced management team with a focus on continued value creation through accretive acquisitions and organic growth.FORWARD LOOKING DISCLAIMERCertain information and statements contained in this press release constitute forward-looking information, including, but not limited to: statements concerning Enseco's future business strategy, marketing and expansion plans; expectations regarding future revenues, gross margins, cash flow, improved efficiencies, cost reductions, and other financial results; expectations regarding resource play drilling activity levels and drilling programs; general industry and operating conditions, expectations regarding future utilization rates and demand for the Company's services; future geographical and product focus; the impact of the Company's MWD lab and motor repair facility; anticipated future rental requirements; planned capital expenditures and acquisitions, and plans to continue to reduce debt levels; and the competitive position of Enseco's business divisions. Although management of the Company believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Accordingly, readers should not place undue reliance upon any of the forward-looking information set out in this press release. Readers should review the cautionary statement respecting forward- looking information that appears below. All of the forward looking statements of the Company contained in this press release are expressly qualified, in their entirety, by this cautionary statement.The information and statements contained in this press release that are not historical facts are forward-looking statements. Forward-looking statements (often, but not always, identified by the use of words such as "seek", "plan", "continue", "estimate", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "expect", "may", "anticipate" or "will" and similar expressions) may include plans, expectations, opinions, or guidance that are not statements of fact. Forward-looking statements are based upon the opinions, expectations and estimates of management as at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward- looking statements. These factors include, but are not limited to, such things as changes in industry conditions (including the levels of capital expenditures made by oil and gas producers and explorers), the credit risk to which the Company is exposed in the conduct of its business, fluctuations in prevailing commodity prices or currency and interest rates, the competitive environment to which the various business divisions are, or may be, exposed in all aspects of their business, the ability of the Company's various business divisions to access equipment (including parts) and new technologies and to maintain relationships with key suppliers, the ability of the Company's various business divisions to attract and maintain key personnel and other qualified employees, various environmental risks to which the Company's business divisions are exposed in the conduct of their operations, inherent risks associated with the conduct of the businesses in which the Company's business divisions operate, timing and costs associated with the acquisition of capital equipment, the impact of weather and other seasonal factors that affect business operations, availability of financial resources or third-party financing and the impact of new laws or changes in administrative practices on the part of regulatory authorities.Forward-looking information concerning the nature and timing of growth within the various business divisions is based on the current budget of the Company (which is subject to change), factors that affected the historical growth of such business divisions, sources of historic growth opportunities, anticipated capital expenditures, and expectations relating to future economic and operating conditions. Forward-looking information concerning the future competitive position of the Company's business divisions is based upon the current competitive economic and operating conditions, current and announced build programs and other expansion plans of other organizations that operate in the energy service business. Forward- looking information concerning the financing of future business activities is based upon the financing sources on which the Company has historically relied and expectations relating to future economic and operating conditions. Forward-looking information concerning future economic and operating conditions is based upon historical economic and operating conditions, opinions of third-party analysts respecting anticipated economic and operating conditions.With respect to forward-looking statements contained in this press release, Enseco has made assumptions regarding commodity prices and royalty regimes, availability of skilled labour, timing and amount of capital expenditures, future foreign exchange rates, interest rates, the impact of increasing competition, conditions in general economic and financial markets, effects of regulation by governmental agencies, and future operating costs.Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide shareholders with a more complete perspective on Enseco's future operations and such information may not be appropriate for other purposes. Enseco's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Enseco will derive there from. Readers are cautioned that the foregoing lists of factors are not exhaustive. These forward-looking statements are made as of the date of in this press release and Enseco disclaims any obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.NON-IFRS MEASURESEBITDAS means earnings before interest, taxes, depreciation and amortization, and stock-based compensation and is equal to earnings before income taxes from continuing operations plus interest on debt, other charges and interest expense, depreciation and amortization, stock-based compensation, unrealized foreign exchange loss, and loss on sale of equipment. Adjusted gross margin equals gross margin, plus interest on debt, other charges and interest expense, depreciation and amortization, stock-based compensation, impairment loss/recovery, and loss on sale of equipment. Cash flow means cash flows provided by continuing operations before changes in non-cash working capital items.EBITDAS, adjusted gross margin, and cash flows from continuing operations before changes in non-cash working capital items are not recognized measures under International Financial Reporting Standards ("IFRS"). Management believes t hat in addition to net losses, EBITDAS, adjusted gross margin and cash flows, are useful supplemental measures as they provide an indication of the results generated by the Company's primary business activities prior to consideration of how those activities are financed, amortized or how the results are taxed in various jurisdictions as well as the cash generated by the Company's primary business activities. Readers should be cautioned, however, that EBITDAS, adjusted gross margins and cash flows from continuing operations before changes in non-cash working capital items should not be construed as an alternative to net losses determined in accordance with IFRS as an indicator of Enseco's performance. Enseco's method of calculatin g operating losses, EBITDAS, adjusted gross margin and cash flows from continuing operations before changes in non-cash working capital items may differ from other organizations and, accordingly, such measures may not be comparable to measures used by other organizations. For reconciliation to the appropriate IFRS measure, see our MD&A.FOR FURTHER INFORMATION PLEASE CONTACT: Kent DevlinEnseco Energy Services Corp.President403-806-0088ORBlair LaytonEnseco Energy Services Corp.CFO403email@example.comNeither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.