EDMONTON, Aug. 14 /CNW/ - Hyduke Energy Services Inc. (HYD - TSX),
announced operating results for the three and six months ended June 30, 2009.
A summary of those results is as follows:
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Selected Income
Statement
Information Three Months Ended Six Months Ended
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($000's, except
per share data) June 30 June 30 June 30 June 30
2009 2008 2009 2008
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Revenue 6,892 15,947 16,541 27,761
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Gross margin (299) 2,157 217 3,432
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Gross margin (%) (4.3%) 13.5% 0.01% 12.4%
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Adjusted gross
margin(1) (88) 2,385 647 3,900
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Adjusted gross
margin (%) (1.3%) 15.0% 0.04% 14.0%
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EBITDAS(1) (1,728) 900 (2,656) 919
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Adjusted EBITDAS(1) (1,728) 900 (2,656) 919
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Net income (loss) (1,452) 287 (2,333) (49)
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Net income (loss)
per share - basic ($) (0.066) 0.013 (0.106) (0.002)
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Net income (loss)
per share -
diluted ($) (0.066) 0.013 (0.106) (0.002)
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(1) The Company uses certain non-GAAP measures as indicators of financial
performance and believes that these non-GAAP measures provide useful
supplemental information to investors. Gross margin, adjusted gross
margin, EBITDAS and adjusted EBITDAS are measures used by the Company
that do not have a standardized meaning prescribed by GAAP. The
Company's method of calculating these non-GAAP measures may differ
from other companies and may not be comparable to similar measures
presented by other companies.
Gross margin is defined as revenue less cost of sales. Cost of sales
includes direct materials, direct labor, variable and fixed
manufacturing overhead, and other costs closely associated with the
manufacture of goods; costs of service and supply inventory including
costs required to locate the inventory in its current location;
provisions to reduce inventory to estimated net realizable value; and
contract loss provisions. Adjusted gross margin is defined as gross
margin before manufacturing related amortization, provisions to
reduce inventory to estimated net realizable value, and contract loss
provisions. EBITDAS is defined as earnings before interest, taxes,
depreciation and amortization, gain or loss on sale of property,
plant and equipment, gain or loss on foreign exchange, and stock-
based compensation. Adjusted EBITDAS is defined as EBITDAS before
goodwill impairment charges, provisions to reduce inventory to
estimated net realizable value, contract loss provisions and
allowance for doubtful accounts receivable provisions.
Revenue levels continue to be severely negatively impacted by a
significant reduction in drilling and well service activity levels in Western
Canada. Per the Canadian Association of Oilwell Drilling Contractors (CAODC),
well count during the three months ended June 30, 2009 decreased 52% over the
same period in the prior year. To provide some historical perspective on the
reduced activity, well counts in 2009 have not been this low since 1992. The
weak domestic market resulted in a reduction in revenue for the three months
ended June 30, 2009, compared to the previous quarter and on a year-over-year
basis. Revenue of $6.9 million for the three months ended June 30, 2009,
represents a decrease of 28.5% or $2.5 million over the previous quarter (i.e.
three months ended March 31, 2009). For the three months ended June 30, 2009,
revenue decreased 57% or $9.1 million over the same period in 2008. For the
six months ended June 30, 2009, revenues of $16.5 million represents a
decrease of 41% or $11.3 million over the same period in 2008.
Gross margin of $(0.3) million for the three months ended June 30, 2009
represents a decrease of 158% or $0.8 million over the previous quarter (i.e.
three months ended March 31, 2009) and a decrease of 114% or $2.4 million on a
year over year basis. Adjusted gross margin of $0.09 million for the three
months ended June 30, 2009 represents a decrease of 112% or $0.8 million over
the previous quarter. Gross margin percentage of (4.3)% for the three months
ended June 30, 2009 represents an decrease of 10% points over the gross margin
percentage of 5.3% in the previous quarter and a decrease of 18% points over
the gross margin percentage of 13.5% on a year over year basis. Adjusted gross
margin percentage of (1.3)% for the three months ended June 30, 2009
represents an decrease of 8.9% points over the adjusted gross margin
percentage of 7.6% in the previous quarter. The significant reduction in
revenue combined with severe pricing pressure as too many competitors bid on a
small amount of work have resulted in reduced gross margins and gross margin
percentages.
