/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE
SERVICES OR FOR DISSEMINATION IN THE U.S./
TSX Symbol
"BRY"
EDMONTON, AB, May 13, 2021
/CNW/ - Bri-Chem Corp. ("Bri-Chem" or "Company") (TSX:
BRY), a North American oilfield chemical distribution and
blending company, is pleased to announce its 2021 first quarter
financial results.
|
|
|
|
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Three months
ended
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|
|
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March 31
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Change
|
|
(in '000s except
per share amounts)
|
2021
|
2020
|
$
|
%
|
|
Financial
performance
|
|
|
|
|
|
Sales
|
$
|
11,490
|
$
|
21,415
|
$
|
(9,925)
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(46%)
|
|
Adjusted
EBITDA(1)
|
851
|
383
|
468
|
122%
|
|
As a % of
revenue
|
7%
|
2%
|
|
|
|
Adjusted operating
earnings
|
559
|
294
|
265
|
90%
|
|
Adjusted net earnings
/ (loss) (1)
|
154
|
(470)
|
624
|
(133%)
|
|
Net earnings /
(loss)
|
$
|
141
|
$
|
(470)
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$
|
611
|
23%
|
|
Diluted per
share
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
0.03
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$
|
0.02
|
$
|
0.02
|
101%
|
|
Adjusted net (loss) /
earnings
|
0.01
|
$
|
(0.02)
|
$
|
0.03
|
(130%)
|
|
Net earnings /
(loss)
|
$
|
0.01
|
$
|
(0.02)
|
$
|
0.02
|
(127%)
|
|
Financial
position
|
|
|
|
|
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Total
assets
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$
|
27,737
|
$
|
46,284
|
$
|
(18,547)
|
(40%)
|
|
Working
capital
|
9,888
|
15,637
|
(5,749)
|
(37%)
|
|
Long-term
debt
|
7,216
|
7,983
|
(767)
|
(10%)
|
|
Shareholders
equity
|
$
|
10,529
|
$
|
16,593
|
$
|
(6,064)
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(37%)
|
Key Q1 2021 highlights include:
- Consolidated sales for the three months ended March 31, 2021 were $11.5
million, a decrease of 46% compared to the comparable period
last year due to weaker performance in the fluids distribution
divisions in Canada and
the United States as the industry
is facing significant challenges due to the effect of the
persistent novel coronavirus ("COVID-19") health pandemic,
including government responses and economic restrictions
implemented.
- Adjusted EBITDA for the first quarter was $851 thousand versus $383
thousand over Q1 2020, representing a 122% increase year
over year. The increase is mainly related to management's
undertakings of cost saving initiatives, a 20% reduction in payroll
and obtaining government assistance programs.
- Adjusted operating earnings was $559
thousand for the three months ended March 31, 2021 compared to earnings of
$294 thousand in the prior year
comparable quarter, representing a 90% increase.
- Net earnings per diluted share for the three months ended
March 31, 2021 was $0.01 per share compared to net loss of
$0.02 per diluted share for same
period last year.
- Working capital, as at March 31,
2021, was $9.9 million
compared to $15.6 million at
December 31, 2020, a decrease of
37%. The decrease predominantly relates to a reduction in
inventory levels as management maintains reduced inventory
stockpiles in response to COVID-19 and its impacts to the demand of
drilling fluids and related products.
Summary for the months ended March 31,
2021:
Bri-Chem's Canadian drilling fluids distribution division
generated sales of $2.4 million for
the three months ended March 31, 2021 compared to $3.8 million in the comparable period in
2020. Demand for drilling fluid products is driven by the
level of current and future capital drilling programs which have
been negatively impacted in Q1 2021 as a result of the market
conditions due to the effect of the persistent novel coronavirus
("COVID-19") health pandemic, including government responses and
economic restrictions implemented. The number of wells drilled in
Western Canada for the first
quarter of 2021 was 1,178 compared to 1,783 in the same period last
year which represents a decrease of 34% (Source: Petroleum Services
Association of Canada "PSAC"), the number of active operating rigs
in Q1 2021 averaged 138, a decrease of 29% over the Q1 2020
(Source: Baker Hughes). Bri-Chem's United States drilling fluids distribution
division generated sales of $4.7
million for the three months ended March 31, 2021 compared to sales of $12.5 million for the comparable period in 2020,
representing a decrease of 63%. The decreases were the result
of lower customer demand as the average number of active rigs
operating in the United States
fell to 405 at March 31, 2021 from
784 at March 31, 2020.
Bri-Chem's Canadian Blending and Packaging division generated
sales of $1.7 million for Q1 2021 a
decrease of $1.2 million from sales
of $2.9 million for the comparable
quarter in 2020. The decrease relates to reduced demand for
these services driven by the COVID-19 pandemic and associated
Government restrictions. US Blending and Packaging sales for
the three months ended March 31, 2021
were $2.8 million compared to
$2.2 million for the comparable
period in 2020, an increase of $543
thousand. Well abandonment work remains consistent in
the State of California. This work in tandem with the heavy
distribution of vaccines in the USA and subsequent relaxing of state COVID-19
restrictions has resulted in an increase to revenues over the
comparable quarter in 2020.
Adjusted operating earnings for the three months ended
March 31, 2021 was $559 thousand compared to $294 thousand during the same period last
year. Adjusted EBITDA was $851
thousand for Q1 2021 compared to $383
thousand for Q1 2020. Adjusted EBITDA as a percentage
of sales was 7% for the quarter. The increase is mainly related to
management's undertakings of cost saving initiatives, a 20%
reduction in payroll and obtaining government assistance
programs.
OUTLOOK
The world economy is regaining traction as vaccine distributions
and the lifting of economic restrictions continue to push demand
for energy. The Company's ability to maintain disciplined
capital spending and operating overheads in times of tight
budgeting by producers will continue to stem losses and maintain
liquidity until drilling activity further normalizes. While
there is still uncertainty regarding the emergence of new COVID-19
variants and timing of the further lifting of economic and travel
restrictions, management is encouraged by the 2021 upward
trajectory of crude oil prices which have already surpassed highs
realized in 2020. This uptick should entice producers to
re-enter the market or increase their existing operational
footprint, which should have a positive impact on the demand for
drilling fluids towards the second half of 2021. Management
is also optimistic regarding the political push towards sealing
orphaned and decommissioned wells in Canada and the USA. This federal
stimulus provided by both Canadian and USA federal governments could have a favorable
impact on the fluids blending and packing divisions given the
expected increase in demand for product and the Company's unique
geographical footprint in the USA
to service this type of work.
Stock Option Grant
Bri-Chem has granted options to acquire up to 100,000 common
shares to the Chief Financial Officer of Bri-Chem. The options are
granted in accordance with Bri-Chem's stock option plan and have
terms that vest over three years and expire ten years from the
grant date.
About Bri-Chem
Bri-Chem has established itself, through a combination of
strategic acquisitions and organic growth, as the North American
industry leader for wholesale distribution and blending of oilfield
drilling, completion, stimulation and production chemical fluids.
We sell, blend, package and distribute a full range of drilling
fluid products from 25 strategically located warehouses throughout
Canada and the United States. Additional information
about Bri-Chem is available at www.sedar.com or at Bri-Chem's
website at www.brichem.com.
To receive Bri-Chem news updates send your email to
ir@brichem.com.
Neither the TSX nor its Regulation Services Provider (as that
term is defined in the policies of the TSX) accepts responsibility
for the adequacy or accuracy of this release.
SOURCE Bri-Chem Corp.