Briefcase

Login Portal

+1.877.473.2008 | [email protected]

Thursday, October 26, 2000

CALGARY, ALBERTA-- /T/ FINANCIAL REVIEW ----------------------------------------------------------------------- ($ millions, except per share amounts) Three months ended Nine months ended September 30, September 30, (Unaudited) 2000 1999 2000 1999 ----------------------------------------------------------------------- Revenue $34.1 $19.2 $87.3 $39.4 Earnings before interest, income taxes and depreciation & amortization (EBITDA) 8.9 4.0 21.4 8.0 Net income 3.8 1.8 9.0 2.7 Net income per share before goodwill amortization (basic) 0.25 0.12 0.60 0.21 (fully diluted) 0.24 0.12 0.57 0.21 Net income (loss) per share (basic) 0.24 0.12 0.57 0.20 (fully diluted) 0.23 0.11 0.54 0.19 Funds from operations 6.5 3.4 16.3 7.0 Funds from operations per share (basic) 0.41 0.23 1.03 0.53 (fully diluted) 0.38 0.22 0.97 0.50 ----------------------------------------------------------------------- /T/ Trican Well Service Ltd. is pleased to announce its financial and operating results for the quarter and nine months ended September 30, 2000. Revenue increased 77% and 122% for the three months ended and the nine months ended September 30, 2000, respectively. These increases in revenue reflect a higher level of demand for services and continued operating and geographical expansion. The Company generated net income of $3.8 million for the quarter, an 118% increase over the 1999 third quarter. On a year-to-date basis, net income was $9.0 million, which is significantly higher than 1999 year-to-date earnings of $2.7 million. Earnings per share of $0.24 ($0.23 fully diluted) was recorded this quarter which compares to earnings per share of $0.12 ($0.11 fully diluted) recorded in the 1999 third quarter. For the nine months ended September 30, earnings per share is $0.57 ($0.54 fully diluted), which is approximately 3 times greater than last year's earnings per share of $0.20 ($0.19 fully diluted) for the comparable period. Funds from operations increased $3.1 million for the quarter and $9.3 million for the nine months compared to the comparable periods in 1999. Trican's strong results were achieved this quarter despite overall demand for services being hampered by periods of heavy rainfall during the quarter. High commodity prices over the past year have produced record cash flows for oil and gas producers which has translated into high demand for services in the well servicing industry. This high level of activity coupled with Trican's significant capital program over the past three years has resulted in the Company recording its highest quarterly job count ever this quarter. Trican experienced increases in the job count of 31% and 73% for the quarter and nine months respectively over the same periods in 1999. These increases in company activity have resulted in Trican recording the highest level of revenue, net income and cash flow for the first nine months of any year in the Company's history. Materials and operating expenses were 72% of revenue for the quarter and 73% for the nine months ended September 30th compared with 76% and 77% for the same periods last year. These decreases are a result of higher activity levels coupled with a strengthening price environment for our services. General and administrative expenses were 2% and 3% of revenue for the quarter and nine months ended September 30, 2000, respectively. Interest expense remained consistent with previous periods at 1% of revenue for the quarter and the nine months ended September 30th, 2000. Depreciation increased by $0.8 million for the quarter and $2.0 million for the nine months relative to the same periods in 1999. This non-cash expense has increased as a result of the continued expansion of the Company's equipment capacity. Trican continues to maintain its strong balance sheet with a working capital position of $7.9 million and relatively low levels of long-term debt compared to equity. OPERATIONAL REVIEW The Company's current year expansion program is well underway and is expected to be completed on time and on budget. This expansion includes additions to all service lines. This expansion will provide Trican with the operational capacity required to meet the anticipated strong demand for services in the fourth quarter of 2000 and into 2001. Trican opened its ninth operating base in Fort St. John, British Columbia during the third quarter. Fort St. John is the sixth base added by Trican over the past three years and represents a continuation of the Company's expansion into the deeper, more technically challenging markets of western Alberta and British Columbia. This new base provides Trican with the opportunity to service the high level of gas directed activity expected in northeastern British Columbia. OUTLOOK Trican's revenue, net income, earnings per share and cash flow over the past nine months have well surpassed the results recorded for all of 1999. These results are due to the combination of high levels of activity resulting from strong oil and gas prices, geographic and equipment capacity expansion and dedication by our employees. Industry experts continue to predict strong oil and gas prices into 2001, which should produce high demand for services for the balance of 2000 and into 2001. Trican is a well service company focused on serving the oil and gas industry in western Canada. Trican provides a comprehensive array of specialized products, equipment, services and technology for use in drilling, completion, stimulation and reworking of oil and gas wells. Through its bases in Red Deer, Lloydminster, Provost, Kindersley, Brooks, Whitecourt, Grande Prairie, Edmonton, and Fort St. John Trican provides coiled tubing, fracturing, stimulation, cementing and related services to the oil and gas industry. /T/ CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (000's), EXCEPT PER SHARE AMOUNTS, (UNAUDITED) Three months ended Nine months ended Sept. 30, Sept. 30, 2000 1999 2000 1999 ------------------------------------------ Revenue $ 34,074 $ 19,218 $ 87,305 $ 39,409 ---------------------------------------------------------------------- Expenses Materials & operating 24,366 14,606 63,588 30,495 General & administrative 821 590 2,379 1,291 Interest expense 417 77 984 362 Depreciation 1,804 997 4,912 2,956 Loss / (gain) on disposal of capital assets 9 - (66) (337) ---------------------------------------------------------------------- 27,417 16,270 71,797 34,767 ---------------------------------------------------------------------- Income before income taxes and goodwill amortization 6,657 2,948 15,508 4,642 Provision for income taxes 2,654 1,133 6,005 1,839 ---------------------------------------------------------------------- Net income before goodwill amortization 4,003 1,815 9,503 2,803 Goodwill amortization, net of tax 157 49 463 147 ---------------------------------------------------------------------- Net income 3,846 1,766 9,040 2,656 Retained earnings, beginning of period 16,011 7,400 11,360 6,510 Change in accounting policy - - (543) - ---------------------------------------------------------------------- Retained earnings, end of period 19,857 9,166 19,857 9,166 ---------------------------------------------------------------------- Earnings per share before goodwill amortization (basic) $ 0.25 $ 0.12 $ 0.60 $ 0.21 (fully diluted) $ 0.24 $ 0.12 $ 0.57 $ 0.21 ---------------------------------------------------------------------- Earnings per share (basic) $ 0.24 $ 0.12 $ 0.57 $ 0.20 (fully diluted) $ 0.23 $ 0.11 $ 0.54 $ 0.19 ---------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS (000's), (UNAUDITED) September 30, 2000 December 31, 1999 -------------------------------------- Assets Current assets $ 29,627 $ 22,689 Capital assets 71,409 47,148 Long term investment 2,753 - Goodwill 5,333 1,498 ----------------------------------------------------------------------- Total Assets $109,122 $ 71,335 ----------------------------------------------------------------------- Liabilities & Shareholders' Equity Current liabilities $ 22,233 $ 11,107 Long-term debt 17,573 5,653 Future income taxes 7,444 4,586 Shareholders' equity 61,872 49,989 ----------------------------------------------------------------------- Total Liabilities & Shareholders' Equity $109,122 $ 71,335 ----------------------------------------------------------------------- CONSOLIDATED CASH FLOW STATEMENTS (000's), (UNAUDITED) Nine Months Ended September 30, 2000 1999 ---------------------------------------------------------------------- Cash provided by (used in): Operations Net income $ 9,040 $ 2,656 Changes to income not involving cash: Depreciation and amortization 5,375 3,103 Future income taxes 1,987 1,614 Gain on disposal of capital assets (66) (337) ---------------------------------------------------------------------- Funds from operations 16,336 7,036 Net change in non-cash working capital from operations (2,141) (4,114) ---------------------------------------------------------------------- 14,195 2,922 ---------------------------------------------------------------------- Investments Purchase of capital assets (23,932) (10,712) Proceeds on disposal of capital assets 754 3,523 Acquisition of subsidiary (3,366) - Purchase of long term investment (2,220) - Net change in non-cash working capital from the purchase and disposal of capital assets 1,528 (4,560) ---------------------------------------------------------------------- (27,236) (11,749) ---------------------------------------------------------------------- Financing Net proceeds from issuance of share capital 703 11,209 Increase in long-term debt 10,139 (2,204) ---------------------------------------------------------------------- 10,842 9,005 ---------------------------------------------------------------------- Increase / (decrease) in cash position (2,199) 178 Cash (bank indebtedness), beginning of period 861 (2,848) ---------------------------------------------------------------------- Cash position, end of period $(1,338) $(2,670) ---------------------------------------------------------------------- /T/ Requests for shareholder information should be directed to: Murray Cobbe or Michael Kelly -30-