/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE
SERVICES OR FOR DISSEMINATION IN THE U.S./
TSX Symbol "BRY"
EDMONTON, AB, Aug. 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 second quarter financial results.
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Three months
ended
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Six months
ended
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June
30
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Change
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June
30
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Change
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(in '000s except
per share amounts)
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2021
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2020
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$
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%
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2021
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2020
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$
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%
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Financial
performance
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Sales
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$
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13,910
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$
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6,819
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$
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7,091
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104%
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$
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25,400
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$
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28,234
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$
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(2,834)
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(10%)
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Adjusted
EBITDA(1)
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703
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(424)
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1,127
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266%
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1,554
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(41)
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1,595
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(3891%)
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As a % of
revenue
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5%
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(6%)
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6%
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0%
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Adjusted operating
earnings
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388
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(30)
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418
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1394%
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947
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940
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7
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1%
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Adjusted net earnings
/ (loss) (1)
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44
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(1,173)
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1,217
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104%
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199
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(1,643)
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1,842
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112%
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Net earnings /
(loss)
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$
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44
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$
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(1,276)
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$
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1,320
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103%
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$
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185
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$
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(1,746)
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$
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1,931
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111%
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Diluted per
share
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Adjusted
EBITDA
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$
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0.03
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$
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(0.02)
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$
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0.04
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250%
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$
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0.06
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$
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(0.00)
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$
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0.06
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3529%
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Adjusted net (loss) /
earnings
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$
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0.01
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$
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(0.00)
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$
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0.02
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1269%
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$
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0.01
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$
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(0.07)
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$
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0.08
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111%
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Net earnings /
(loss)
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$
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0.00
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$
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(0.05)
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$
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0.05
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103%
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$
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0.01
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$
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(0.07)
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$
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0.08
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110%
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Financial
position
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Total
assets
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$
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31,460
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$
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46,284
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$
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(14,824)
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(32%)
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Working
capital
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9,649
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15,637
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(5,988)
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(38%)
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Long-term
debt
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7,032
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7,983
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(951)
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(12%)
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Shareholders
equity
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$
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10,245
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$
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16,593
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$
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(6,348)
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(38%)
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Key Q2 2021 highlights include:
- Consolidated sales for the three months ended June 30, 2021 were $13.9
million, an increase of 104% compared to the comparable
period last year due to stronger performance in the fluids
distribution divisions in Canada
and the United States as the
demand for oil increased following further worldwide easements of
health and travel restrictions due to the COVID-19 pandemic.
- Adjusted EBITDA for the second quarter was $703 thousand versus negative $424 thousand over Q2 2020, representing a 266%
increase year over year. The increase is primarily related to
increased sales over the prior year. Management's undertakings of
cost saving initiatives and obtaining government assistance
programs have further improved the EBITDA over the prior year.
- Adjusted operating earnings was $388
thousand for the three months ended June 30, 2021 compared to a loss of $30 thousand in the prior year comparable
quarter, representing a 1394% increase;
- Net earnings per diluted share for the three months ended
June 30, 2021 was $0.00 per share compared to net loss of
($0.05) per diluted share for same
period last year;
- Working capital, as at June 30,
2021, was $9.6 million
compared to $15.6 million at
June 30, 2020, a decrease of
38%. The decrease predominantly relates to supporting
operating losses, a reduction in inventory levels and the
subsequent collection of accounts receivable balances.
Summary for the 3 and 6 months ended June 30, 2021:
Bri-Chem's Canadian drilling fluids distribution division
generated sales of $1.7 million and
$4.1 million for the three and six
months ended June 30, 2021 compared
to $175 thousand and $4.0 million in the comparable prior periods.
Demand for drilling fluid products is driven by the level of
current and future capital drilling programs which has been
negatively impacted by the COVID-19 pandemic. Recently, more
government authorities are lifting health and travel restrictions
which allowed for increased drilling activity and in turn a busier
second quarter than originally anticipated. The number of wells
drilled in Western Canada for the
second quarter of 2021 was 654 compared to 163 in the same period
last year which represents an increase of 301% (Source: Petroleum
Services Association of Canada "PSAC"), the number of active
operating rigs in Q2 2021 averaged 138, a decrease of 29% over Q2
2020 (Source: Baker Hughes). Bri-Chem's United States drilling fluids distribution
division generated sales of $8.3
million and $13 million for
the three and six months ended June 30,
2021 compared to sales of $3.9
million and $16 million for
the comparable periods in 2020, representing a quarterly increase
of 112% and a year to date decrease of 21%. Both of these
events relate to the corresponding decrease in rig activity in Q2
2020 in response to the COVID-19 pandemic and the resumption and
gradual increase of activity during Q2 2021 as restrictions eased
and demand increased for oil products. The number of active
operating rigs in Q2 2021 averaged 437, an increase of 15% over Q2
2020 (Source: Baker Hughes)
Bri-Chem's Canadian Blending and Packaging division generated
sales of $1.4 million and
$3.1 million for the three and six
months ended June 30, 2021 compared
to Q2 2020 sales of $1.3 million and
2020 six months sales of $4.2
million. The decrease relates to lost revenues
associated with hand sanitizer packaging contracts awarded during
the initial response to the COVID-19 pandemic. US Blending
and Packaging sales for the three months ended June 30, 2021 were $2.4
million compared to $1.4
million for the comparable period in 2020, an increase of
$1.0 million. The increase
predominantly relates to increased operating activity in 2021 for
certain established customers.
Adjusted operating earnings for the three months ended
June 30, 2021 was $388 thousand compared to $30 thousand operating loss during the same
period last year. Adjusted EBITDA was $703 thousand for Q2 2021 compared to negative
$424 thousand for Q2 2020.
Adjusted EBITDA as a percentage of sales was 5% for the quarter.
The increase is primarily related to the increase in rig count and
well production across all operating regions within Canada and the
United States in tandem with management perpetuating cost
saving strategies adopted early on in the pandemic.
OUTLOOK
In tandem with the easing of health and travel restrictions,
demand and commodity pricing for crude oil has steadily increased
in the North American market during the second quarter of
2021. It is expected this trend will continue, particularly
in the Canadian market where the traditional activity level highs
realized in the first quarter are likely to be matched in the third
quarter and exceeded in the fourth quarter of 2021 (Source:
PSAC). In the United States,
the expected liquid fuels consumption forecast is 1.5 million b/d
higher than 2020 and should surpass pre pandemic demands of 2019 in
the year 2022, providing a degree of optimism for the short and
medium term (Source: US Energy Information Administration). While
there is still a considerable degree of uncertainty related to the
economic recovery in North America
as further COVID-19 variants emerge and producers struggle to
recruit the skilled labour required to operate drilling rigs,
management will continue to be steadfast in terms of maintaining
appropriate inventory levels alongside stringent discretionary cost
spending to preserve both liquidity and profitability as the oil
market continues its path to recovery.
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.
Forward-Looking Statements
Certain statements contained in this press release constitute
forward-looking information or forward-looking statements
(collectively, "forward-looking statements"). These statements
relate to future events or future performance. The use of any of
the words "could", "intend", "expect", "believe", "will",
"projected", "estimated" and similar expressions and statements
relating to matters that are not historical facts are intended to
identify forward-looking statements and are based on the Company's
current belief or assumptions as to the outcome and timing of such
future events. Actual future results may differ materially.
Although the Company believes that the expectations and
assumptions on which such forward-looking statements are based are
reasonable, undue reliance should not be placed on the forward
looking statements because the Company can give no assurance that
they will prove to be correct. By their nature, such
forward-looking statements are subject to various risks and
uncertainties, which could cause actual results to differ
materially from the anticipated results or expectations expressed
herein. These risks and uncertainties, include, but are not limited
to general economic conditions, prevailing and anticipated industry
conditions, access to debt and equity financing on acceptable
terms, levels and volatility of commodity prices, market forces,
ability to obtain equipment from suppliers, ability to obtain and
retain skilled personnel, competition from other industry
participants and regulatory conditions. Readers are cautioned not
to place undue reliance on this forward-looking information, which
is given as of the date it is expressed in this press release or
otherwise. Except as required by applicable law, the Company does
not undertake any obligation to publicly update or to revise any of
the forward-looking statements, whether as a result of new
information, future events or otherwise. The forward-looking
statements contained in this document are expressly qualified by
this cautionary statement.
SOURCE Bri-Chem Corp.