NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWCALGARY, Alberta, May 14, 2020 (GLOBE NEWSWIRE) — High Arctic Energy Services Inc. (TSX: HWO) (the “Corporation” or “High Arctic”) released its’ first quarter results today.
HIGHLIGHTSThe following highlights the Corporation’s results for Q1-2020:Internal promotion of Mike Maguire to CEO to lead the Corporation’s response to the current global crisis.Revenue of $39.6 million (Q1-2019 $46.5 million) and adjusted EBITDA of $2.7 million (Q1-2019 $5.5 million) for the Quarter.Implementation of programs with a target to reduce annualized cash outflows by $25 million compared to 2019.Deliverance of top-tier quality essential services to our core customers during the onset of the crisis to maintain our base business.Strict oversight of working capital to manage our cash balances and maintain a strong balance sheet through the crisis. Mike Maguire, Chief Executive Officer commented: “We are in challenging times, but we have a corporate culture of delivering high quality services for our customers. Our team is focused on keeping our base business and balance sheet strong to ensure we are ready to excel in the recovery when it comes.”The Corporation’s strategic priorities for 2020 include:Safety excellence and a focus on quality through global standards, including safeguarding our people against COVID-19.Reinforcement of existing core markets evidenced by top-tier customer market share in Canada and PNG.Cost control focused on operating cash flow while balancing strategic priorities, to emerge from the current conditions ready to reactivate and grow.Capital stewardship characterized by disciplined working capital management and capital allocation to maintain value for shareholders including common share buybacks, where appropriate.The unaudited interim consolidated financial statements (“Financial Statements”) and management discussion & analysis (“MD&A”) for the quarter ended March 31, 2020 will be available on SEDAR at www.sedar.com, and on High Arctic’s website at www.haes.ca. Non-IFRS measures, such as EBITDA, Adjusted EBITDA, Adjusted net earnings (loss), Oilfield services operating margin, Operating margin %, Percent of revenue, Funds provided from operations, Working capital and Net cash are included in this News Release. See Non-IFRS Measures section, below. All amounts are denominated in Canadian dollars (“CAD”), unless otherwise indicated.Within this News Release, the three months ended March 31, 2020 may be referred to as the “Quarter” or “Q1-2020”. The comparative three months ended March 31, 2019 may be referred to as “Q1-2019”. References to other quarters may be presented as “QX-20XX” with X being the quarter/year to which the commentary relates. RESULTS OVERVIEW
First Quarter 2020:High Arctic reported revenue of $39.6 million, incurred a net loss of $2.2 million and realized Adjusted EBITDA of $2.7 million during Q1-2020. This compares to Q1-2019, with revenue of $46.5 million, a net loss of $1.0 million and Adjusted EBITDA of $5.5 million. Changes were mainly due to $6.9 million of reduced revenue, attributable to reduced drilling services activity, with revenue reduction of $4.9 million over Q1-2019, together with $0.8 million of restructuring costs.Q1-2020 dividends amounted to $1.6 million ($0.03 per share), compared to $2.5 million in Q1-2019 ($0.05 per share).Dividends were suspended in March 2020, which amount to approximately $0.8 million per month.Cash increased $19.0 million as compared to a decrease of $8.5 million in Q1-2019.Late in Q1-2020, the Corporation drew $10 million on its available $45 million loan facility.Utilization for High Arctic’s 50 registered Concord Well Servicing rigs was 58% in the Quarter versus industry utilization of 36% (source: Canadian Association of Oilwell Drilling Contractors “CAODC”), andHigh Arctic did not repurchase any shares during the Quarter.RESPONDING TO RECENT GLOBAL DEVELOPMENTS
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