CALGARY, Nov. 12 /CNW/ - HSE Integrated Ltd. ("HSE", "Our", "We", or the
"Company") today announced its financial results for the third quarter and
year to date ended September 30, 2008.
Total revenue for the third quarter was $28.2 million, up 19.6% from
$23.6 million in 2007 and 4.4% from the previous highest Q3 revenue of $27.0
million in 2006. For the nine months ended September 30, 2008 revenue was
$83.9 million, an 18.3% increase from $70.9 million in 2007 and 12.9% higher
than the previous highest nine month revenue of $74.3 million in 2006.
The main source of revenue growth was the continued expansion of HSE's
Industrial safety services in all markets across Canada. In the three month
period, Industrial safety revenues were $16.2 million, 57.3% of total revenue
and a 36.3% increase from $11.9 million in the third quarter of 2007. For the
nine month period Industrial safety revenues were $47.2 million, a 43.6%
increase from $32.9 million in 2007 and 56.3% of total Company revenues.
Industrial safety services revenues are now larger than Oilfield safety
services revenues, a trend the Company expects will continue in the future.
For the quarter, Oilfield safety services revenues increased by 2.7% to
$12.0 million from $11.7 million in 2007. This reflects the improvement in
conventional oil and gas well drilling and completion activity during this
period. However, for the nine month period Oilfield safety services
experienced its second year of decline. Year-over-year, Oilfield safety
services revenue fell by 3.5% to $36.7 million from $38.0 million in 2007.
This reflects the overall downward trend of the drilling of new wells in the
Western Canadian Sedimentary Basin.
The operating margin and EBITDA (Earnings Before Interest, Taxes,
Depreciation and Amortization) continued to improve in the third quarter of
the 2008 fiscal year. For Q3, the operating margin rose to 20.5% from 14.7% in
2007. The increase in SG&A for the nine month period compared to last year
included approximately $0.4 million in non-recurring costs. EBITDA for this
period increased by 107.7% to $2.9 million from $1.4 million in 2007. A
similar trend for the nine-month period showed the operating margin rising to
18.4% from 16.4% in 2007, while year-to-date EBITDA to September 30 increased
by 74.9% to $7.7 million from $4.4 million last year.
All the foregoing had a positive effect on the bottom line. HSE reported
a profit for the period of $0.4 million ($0.01 per share), a significant
improvement from a loss of $15.9 million (a loss of $0.42 per share) in 2007.
For the nine months ended September 30, the Company reports a small loss of
$0.2 million ($0.00 per share) compared to a loss of $18.1 million (a loss of
$0.48 per share). The large losses in 2007 were largely caused by a one-time
write-down of goodwill carried on the balance sheet, a regulatory requirement
created by a significant decline in HSE's share price and market
capitalization in 2007.
The Company's balance sheet continues to strengthen. Working capital at
September 30, 2008 was $20.3 million while the non-current portion of all long
term bank debt and capital lease obligations was $14.3 million. HSE exited the
reporting period with $2 million in cash and cash equivalent on the balance
sheet. HSE continues to be fully compliant with all senior lending covenants
and believes it will continue to do so for the foreseeable future.
David Yager, Chairman and CEO, offered the following comments for HSE's
third quarter 2008 results:
"HSE is pleased with the continued growth of Industrial safety service
across the country and the improving profit margins resulting from ongoing
efforts to control costs and improve operating margins. It is clear from the
significant year-over-year growth that HSE has developed a product mix and
business model that is attractive to our clients. The Company has no reason to
believe that this growth will not continue, however due to global financial
conditions the rate of future expansion may be tempered.
On the Oilfield side, higher commodity prices in the second and most of
the third quarters did invigorate drilling and investment and a slight
increase in HSE's business during the third quarter. However, the sharp drop
in commodity prices through the end of September and into October quickly
re-introduced caution into this segment of our business. Business should be
steady for the remainder of 2008 and the first quarter of 2009. Seeing beyond
that in current market conditions is very difficult.
Expansion into the United States continued with delivery of the first
field service equipment. A field service location was opened in Midland,
Texas. HSE does not expect this investment to make a positive contribution to
overall financial results until 2009.
We're pleased with our Company's financial performance this year,
particularly in the second and third quarters. Due to volatile and unusual
global capital markets, HSE plans to exploit low-risk growth opportunities
while continuing to conservatively manage our balance sheet.
On behalf of the Board of Directors, we're extremely proud of the
outstanding work and commitment of our managers and staff. We're providing
quality services at fair prices for our clients across the country every day.
This is an essential foundation for the long-term success of our Company."
For further information and analysis please see the attached Management
Discussion and Analysis and Financial Statements.
CONFERENCE CALL
HSE will be hosting a conference to discuss their results at 11 AM
(Eastern Standard Time), 9 AM (Mountain Standard Time) on Thursday November
13, 2008.
Dial-In Number: 1-800-591-7539 or 1-416-644-3414
Conference Replay November 27, 2008: 1-416-640-1917 or 1-877-289-8525
(Passcode: 21288378 followed by the pound sign)
Webcast: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID(equal sign)2471040
HSE is an integrated, national supplier of industrial Health, Safety and
Environmental services. From its head office in Calgary, Alberta, it serves
its clients from field service locations in Alberta, British Columbia,
Saskatchewan, Ontario, Nova Scotia, New Brunswick and Michigan. HSE also
operates in Midland, Texas, through a jointly owned company called Boots &
Coots HSE Services LLC. HSE trades on the TSX under the symbol "HSL".
Forward Looking Statements
This news release may contain forward-looking statements concerning,
among other things, the Company's prospects, expected revenues, expenses,
profits, financial position, strategic direction, and growth initiatives, all
of which are subject to risks, uncertainties and assumptions. These
forward-looking statements are identified by their use of terms and phrases
such as expect, anticipate, estimate, believe, may, will, intend, plan,
continue, project, objective and other similar terms and phrases. These
statements are based on certain assumptions and analyses made by the Company
based on its experience and assessment of current conditions, known trends,
expected future developments and other factors it believes are appropriate
under the circumstances. Such statements are subject to numerous external
variables, both known and unknown, such as changes in commodity prices for
natural gas and oil, changes in drilling activity, weather conditions,
industry-specific and general economic conditions and exchange rate
fluctuations. If any of these risks and uncertainties materializes or if
assumptions are incorrect, actual results may differ materially from those
expressed or implied in the forward-looking statements. The forward-looking
statements included in this news release are not guarantees of future
performance and should not be unduly relied upon.
Non GAAP Measures
This report makes reference to EBITDA, a measure that is not recognized
under generally accepted accounting principles (GAAP). Management believes
that, in addition to net earnings, EBITDA is a useful supplementary measure.
EBITDA provides investors with an indication of earnings before provisions for
interest, taxes, amortization, gains or losses on the disposal of property and
equipment, foreign exchange gains or losses, and the non-cash effect of
stock-based compensation expense. Investors should be cautioned that EBITDA
should not be construed as an alternative to net earnings determined by GAAP
as an indication of the Company's performance. This method of calculating
EBITDA may differ from that of other companies and accordingly may not be
comparable to measures used by other companies.
HSE Integrated Ltd.
Management Discussion and Analysis ("MD&A")
For the three and nine months ended September 30, 2008 and 2007
The following management discussion and analysis is dated November 12,
2008, and is a review of the financial results of HSE Integrated Ltd. ("HSE",
"We", "Our", or the "Company") for the quarter and nine months ended September
30, 2008 and 2007. This should be read in conjunction with the documents filed
on SEDAR at www.sedar.com. Unless otherwise disclosed, the financial
information presented in this discussion has been prepared in accordance with
Canadian generally accepted accounting principles ("GAAP") and takes into
consideration information available to management up to November 12, 2008.
Unless otherwise stated, dollar figures presented are expressed in thousands
of Canadian dollars and per-share figures in dollars per weighted-average
common share. The following MD&A contains forward-looking information and
statements. We refer you to the end of the MD&A for the disclaimer on forward
looking statements.
Selected Financial Information
-------------------------------------------------------------------------
Three Months ended Nine Months ended
September 30, Quarter September 30, Period
------------------- Over ------------------- Over
Quarter Period
2008 2007 % Change 2008 2007 % Change
-------------------------------------------------------------------------
Revenue $ 28,202 $ 23,578 19.6% $ 83,857 $ 70,878 18.3%
Operating and
materials 22,408 20,113 11.4% 68,400 59,287 15.4%
Operating
margin 5,794 3,465 67.2% 15,457 11,591 33.4%
Operating
margin % 20.5% 14.7% 18.4% 16.4%
Selling,
general &
admini-
strative $ 2,936 $ 2,089 40.5% $ 7,780 $ 7,202 8.0%
Net earnings
(loss) 396 (15,920) 102.5% (183) (18,129) 101.0%
- per share
basic and
diluted 0.01 (0.42) 0.00 (0.48)
EBITDA(1) $ 2,858 $ 1,376 107.7% $ 7,677 $ 4,389 74.9%
EBITDA % 10.1% 5.8% 9.2% 6.2%
Total assets $ 71,544 $ 84,256 (15.1%)
Total
long-term
liabilities 20,004 23,969 (16.5%)
-------------------------------------------------------------------------
See Non-GAAP Measures for (1)
Financial Review
Revenue
HSE operates in a single industry segment, which involves providing an
integrated package of asset, worker and community safety protection services
including: on-site safety supervision; gas detection; fixed and mobile air
quality monitoring; breathing equipment rentals and services; fixed and mobile
firefighting and fire protection services and equipment; worker
decontamination (shower) services; on-site medical services; worker safety
training; pre-employment health testing; and safety management and consulting
services.
Total revenue for the three months ended September 30, 2008 was $28.2
million an increase of 19.6% from $23.6 million for the same period in 2007.
For the nine-months ended September 30, 2008, revenue rose to $83.9 million,
an 18.3% increase from $70.9 million in the prior year. For the reporting
quarter ended September 30, 2008, the Company had no customers representing
more than 10% of revenue.
The Company currently provides services to its customers in two main
business areas: Oilfield Services ("Oilfield") and Industrial Services
("Industrial"). Oilfield is the conventional upstream, or "wellhead", sector
of the oil and gas industry. Industrial represents non-conventional upstream
oil development and production including oilsands extraction, oil and gas
processing and refining plants and facilities, petrochemicals, pulp and paper,
utilities, power generation, diverse manufacturing industries, worker safety
training, and safety management and consulting services. The Company had
previously separately disclosed revenue for air quality monitoring
("Environment"), but has now grouped these services into either the Industrial
or Oilfield market in which these services are deployed.
The revenue for these customer groups is shown below:
-------------------------------------------------------------------------
Three Months ended Nine Months ended
September 30, Quarter September 30, Period
------------------- Over ------------------- Over
Quarter Period
2008 2007 % Change 2008 2007 % Change
-------------------------------------------------------------------------
Oilfield $12,039 11,722 2.7% 36,666 38,007 (3.5%)
Industrial $16,163 11,856 36.3% 47,191 32,871 43.6%
-------------------------------------------------------------------------
Total Revenue $28,202 $23,578 19.6% $83,857 $70,878 18.3%
-------------------------------------------------------------------------
As a % of
Revenue:
Oilfield 42.7% 49.7% 43.7% 53.6%
Industrial 57.3% 50.3% 56.3% 46.4%
-------------------------------------------------------------------------
Total Revenue 100.0% 100.0% 100.0% 100.0%
-------------------------------------------------------------------------
Oilfield - Canada
-----------------
Oilfield revenues increased by 2.7% in the third quarter of 2008 compared
to 2007. The year over year increase is due to higher overall activity levels
in the conventional upstream, or "wellhead", sector of the oil and gas
industry which includes oil and natural gas well drilling, completion and
work-over (repair and maintenance) operations. However, for the nine-month
period Oilfield safety services revenues declined by 3.5%. This reflects the
overall decline in the drilling of new wells in the first half of the 2008
fiscal year.
Services provided in the Oilfield sector are primarily oriented towards
supporting the development of natural gas, particularly sour gas containing
hydrogen sulphide. The primary driver of revenue fluctuations in the previous
comparative reporting periods relates to an increase or reduction in natural
gas drilling and work-over activity caused primarily by significant
fluctuations in natural gas prices and external factors such as interest
rates, currency exchange rates, equity and debt markets, and federal and
provincial taxation and royalty policies. In the past three years, new
conventional oil and gas well drilling activity levels declined sharply from
2006 to 2007 and, with the exception of the third quarter, declined further in
2008. Well workover and stimulation activities on existing wells have followed
a similar pattern. Higher crude oil and natural gas prices in the second and
third quarters of 2008 had a positive impact on overall spending and drilling
activity in the third quarter. However, the decline in commodity prices as the
third quarter progressed and ended will likely result in reduced investment
activity going forward.
To meet growing industry demand in British Columbia and Saskatchewan,
equipment and personnel were redeployed from Alberta generating increases in
Oilfield revenue of 70.6% and 153.2% respectively in these markets compared to
the same period in the prior year. The third quarter of 2007 is the first
period in which HSE had substantial operations in Saskatchewan due to the
acquisition of Prairie Wide Safety Ltd. in Weyburn, Saskatchewan, effective
July 1, 2007.
In the first half of the year, HSE had experienced some pricing pressure
with customers caused primarily by additional capacity added by competitors
and an overall industry reduction in demand. As conventional oil and gas
exploration and production has become less profitable for E&P companies
because of lower gas prices and higher overall operating costs, there has been
pressure to sustain profitability by asking vendors like HSE to provide
products and services at flat or lower prices.
However, these pricing pressures stabilized in the third quarter due to
the higher commodity prices, increased demand for equipment and services, and
an industry-wide shortage of qualified manpower to respond to increased demand
on short notice. Shortages of manpower and other critical mechanical
components required for the drilling and completion of new wells such as
casing and stimulation materials restrained overall activity in this sector
during the third quarter at lower levels than might have been achieved
otherwise. HSE experienced manpower capacity constraints in delivering
Oilfield safety services in the third quarter and may have been able to
generate higher revenues had more qualified personnel been available.
Oilfield - United States
------------------------
Activity in the third quarter related to the Company's business
arrangement with Boots & Coots International Well Control, Inc. - Boots &
Coots HSE Services LLC ("BCHSE") - focused on logistics such as asset
transfers, recruitment of personnel, securing of operating facilities and
other activities associated with setting up a new business operation. The
first safety equipment was transferred from HSE to BCHSE in the United States
and management and field personnel were recruited and hired. This operation
generated its first revenue in Texas in the third quarter, but the amount was
not material. In October, service shop space was secured and the first
stand-alone field service location opened in Midland-Odessa, Texas. BCHSE
generated an operating loss in the third quarter of approximately $0.2
million.
Industrial
----------
The Company continues its successful business diversification strategy,
and reported a 36.3% or $4.3 million increase in Industrial revenues in the
third quarter compared to the prior year. For the first nine months, the
increase was $14.3 million or 43.6%. For the first nine months Industrial
safety services comprised 56.3% or over half of total revenues for the first
time. Going forward, it is likely that Industrial revenues will continue to be
greater than Oilfield revenues.
The continuing growth in Industrial revenues is from increased demand for
safety equipment and services from oil and gas processing facilities, thermal
heavy oil recovery, and oilsands extraction and construction projects in
Alberta; safety services, gas detection and breathing air equipment rental
services to diverse industrial and commercial markets in British Columbia,
Alberta, and Ontario; safety services for the refining, mining, offshore
drilling and production and other industries in Atlantic Canada; and worker
safety training and safety consulting services in all markets.
The third quarter of 2008 was characterized by steady revenue growth in
all markets for HSE's expanding Industrial safety services suite in most
service locations. This is from a combination of repeat business from
satisfied clients from prior years, a more focused marketing effort, increased
expertise through the addition of experienced operations and marketing
personnel, more service contracts for services on a continuous basis, and
growing customer acceptance of HSE as a viable provider of these services. HSE
offered Industrial Hygiene consulting and advisory services to its clients for
the first time in the third quarter. Based on favorable customer response,
this essential but highly specialized worker protection service will be an
important element of the HSE Industrial health, safety and environment
services suite going forward.
Growth in two specific Industrial markets continued in the third quarter
in a manner which the Company believes to be sustainable.
In the oilsands regions of northeast Alberta - serviced from Fort
McMurray and Bonnyville - Industrial safety services revenues in the third
quarter rose 73.5% to $5.9 million from $3.4 million in the prior year. This
is based upon HSE continuing to provide quality services and the growing
acceptance by oilsands developers of having core safety services provided by
an expert third-party vendor as an alternative to internal initiatives. A new
operations and training facility in Bonnyville, opened in the first quarter,
has increased this location's capacity to service the local market, and
Bonnyville's new mobile safety equipment service unit contributed meaningful
revenues in the third quarter for the first time.
Equipment and services delivered in Central and Atlantic Canada and the
North Eastern United States is classified as Industrial revenue. Revenue from
these areas in the third quarter of 2008 was $6.3 million, an increase of
64.7% compared to 2007. New locations in Sudbury, Ontario and Hamilton,
Ontario, which were opened in the second quarter of 2008, contributed revenue
for the first time.
Operating and Materials Expense and Operating Margin
Operating and materials expense consists of costs directly attributable
to the delivery of safety and related services to customers. These include:
wages and benefits for field employees and contractors; equipment rentals and
leases; field service centre property costs; transportation; fuel;
consumables; equipment repairs and maintenance; and field office
administration including field sales.
Operating and materials expense for the quarter ended September 30, 2008
totaled $22.4 million or 79.4% of revenue as compared to $20.1 million or
85.3% of revenue in 2007. Operating margin for the quarter increased from $3.5
million or 14.7% of revenue in 2007 to $5.8 million or 20.5% of revenue in
2008.
The significant increase in operating margin is due to higher Industrial
safety services revenue and increased utilization of all the Company's capital
and manpower assets compared to the same period in the prior year. Higher fuel
costs negatively impacted the quarter.
Selling, General and Administrative Expense
Selling, general and administrative ("SG&A") expense consists of costs
not directly attributable to the delivery of services to customers. These
include costs generally associated with the following: corporate head-office
functions and services; administrative personnel; corporate sales and
marketing costs; liability insurance; professional fees; and investor
relations expenses.
SG&A for the quarter ended September 30, 2008 totaled $3.0 million, which
represents a 40.5% or $0.8 million increase from the same period in the prior
year. While overall staffing and salary levels remained stable, the
year-over-year increase was related to one-time executive severance expenses
and an upward adjustment of the accruals for performance bonuses under HSE's
executive bonus plan and based upon the improved overall financial performance
of the Company in 2008. For the nine-month period SG&A expenses have increased
by 8.0% compared to the prior year for the same reason. The one-time expenses
accounted for approximately 90% of the nine month period increase in SG&A.
However, as a percentage of total revenue for the nine-month period, SG&A is
down to 9.3% of revenue compared to 10.2% in 2007.
EBITDA and Net Earnings
Reflecting a 19.6% increase in revenues for the quarter ended September
30, 2008 compared to the prior year, EBITDA (see "Non-GAAP Measures")
increased to $2.9 million from $1.4 million in Q3 2007, an improvement of $1.5
million or 107.7%. This was caused by significant revenue increases for
Industrial safety services, higher equipment and manpower utilization rates.
Total amortization for the quarter was $1.8 million, a decline of $0.2
million from the same period in 2007. This was comprised of $1.6 million in
property and equipment amortization, and $0.2 million in intangible asset
amortization.
Interest on long term debt and bank charges in the quarter decreased
slightly from the same period in the prior year. Decreased interest from
obligations under capital leases was offset by some increases due to an
increase of non-interest bank and finance charges.
For the third quarter of 2008, the loss on disposal of property and
equipment was $0.1 million. Asset divestitures in the period were the result
of an ongoing review of all the capital assets of the Company to ensure
optimal utilization and on-going commercial viability.
HSE generated a profit of $0.4 million in the third quarter or $0.01 per
share compared to a loss of ($15.9 million) or ($0.42) per share in the
previous year. The reported loss in 2007 reflected a required one-time
impairment charge to goodwill carried on the balance sheet relative to the
market capitalization of the company on September 30, 2007, and lower levels
of revenue and profitability in the reporting period.
Liquidity and Capital Resources
The Company's principal sources of capital are cash flows from
operations, borrowings under an established credit facility with its senior
lender, and equity financing. Working capital at September 30, 2008 was $20.3
million.
The Company, through the conduct of its operations, has undertaken
certain outstanding contractual obligations as noted in the following table:
-------------------------------------------------------------------------
Years ended December 31, 2008 2009 2010 2011 2012 Total
-------------------------------------------------------------------------
Capital lease obligations $328 1,024 289 112 7 $1,760
Vehicle operating leases 414 1,526 1,440 747 21 4,148
Property & other leases 751 2,795 2,203 1,315 787 7,851
Long-term debt 42 1,138 13,854 8 - 15,042
-------------------------------------------------------------------------
Total contractual
obligations $1,535 6,483 17,786 2,182 815 $28,801
-------------------------------------------------------------------------
Cash provided by (used in) operations
Cash provided by operations in the quarter was $3.0 million as compared
to the cash used in operations of $3.0 million for the same period in the
prior year. The primary cause for the change is higher levels of
profitability. Management has maintained a provision for doubtful accounts to
$1.3 million as recognition of the potentially challenging environment faced
primarily by smaller customers in all markets across Canada.
Cash provided by (used in) financing and investing
During the quarter, the Company used its operating line from time to time
but at September 30, 2008, the Company held cash or cash equivalents of $2.0
million. This leaves $7.5 million available on the operating line for future
use. The Company also made scheduled debt reductions of $0.5 million toward
capital lease and other long term debt obligations.
Liquidity
The Company's credit facilities include a $25 million three-year
interest-only revolving facility and a $7.5 million operating facility. The
revolving facility matures on June 25, 2010, with an ability to extend the
term at the lender's option. The operating facility is renewable annually and
is margined to accounts receivable. The credit facilities are subject to
covenants that are typical for these types of facilities, and are
collateralized under a general security agreement.
At September 30, 2008, the draw against the revolving facility was $13.8
million. The Company has available to it the full $7.5 million operating
facility and $11.2 million on the revolving facility. The Company was in
compliance with all of its debt covenants at September 30, 2008.
Outlook
Oilfield - Canada
-----------------
The highly cyclical nature of the conventional upstream oil and gas
industry in the Western Canadian Sedimentary Basin - the sector served by
HSE's Oilfield safety services - was illustrated once again in the quarter
ended September 30, 2008. The period began with record high oil prices and the
highest natural gas prices in two years. During the quarter, clients responded
with increased spending and drilling activity compared to 2007. The main
operational issue for the Company's clients was a lack of skilled manpower and
shortages of certain equipment and materials required to service a sharp
activity increase in the third quarter.
However, the period ended with oil and gas prices down by about half and
world financial markets in distress. Equity values for publicly traded
energy-related companies declined sharply. While interest rates are lower due
to Canadian and international governments reducing key lending rates, credit
and liquidity for debt financing has become a critical issue on a global
basis.
Therefore, a level of uncertainty has returned to this sector for the
short and medium term caused by negative indicators that were not on the
horizon as little as 90 days ago when this report was written for the quarter
ended June 30, 2008. On October 27, 2008, the Canadian Association of Oilwell
Drilling Contractors ("CAODC") released its updated 2008 drilling activity
forecast for western Canada and its first estimates for 2009. The CAODC
indicated that for 2008 there would be 20% less wells drilled than 2007, and
in 2009 there would be a further decline of 6% from 2008 levels. The areas
where activity would stay steady or increase are British Columbia and
Saskatchewan due to attractive fiscal regimes and new resource plays, while
drilling in Alberta would continue to decline because, "the uncertainty
associated with the new royalty program continues to drive away investment".
However, in the short term the signal from HSE's clients is that they
will be relatively busy and therefore HSE's Oilfield safety services revenues
should remain at historical levels at least until the second quarter of 2009.
In recent years HSE has invested extensively in new equipment and, through
diversification, has maintained field staff levels. HSE has also continued to
focus on service quality. Management believes this commitment to excellence is
being recognized by our clients and therefore could give the Company a
competitive advantage going forward.
The Company's strategy will be to focus on quality service and continue
to find ways to drive efficiency by monitoring costs and redeploying, capital
assets in the various Oilfield markets in which it operates (British Columbia,
Alberta, Saskatchewan, USA) and Industrial markets in order to achieve the
highest possible asset utilization rates.
Oilfield - United States
------------------------
As announced on May 7, 2008, HSE continues to pursue the expansion of its
Oilfield safety services division in the continental United States through a
new company called Boots & Coots HSE Services, LLC. ("BCHSE"), jointly owned
by HSE (90%) and Boots & Coots International Well Control, Inc. ("Boots &
Coots") (10%).
In the third quarter significant progress was made in setting up
operations in selected U.S. markets. The President of BCHSE, Jarvis Jackson,
relocated from Canada to the head office in Houston, Texas. The first two
fire/shower combination units were transferred from HSE to BCHSE. More
equipment is scheduled to be shipped in the fourth quarter.
