CALGARY, April 4, 2018 /CNW/ - MATRRIX Energy Technologies
Inc. ("MATRRIX" or the "Corporation") (TSX-V: MXX) announces
financial results for the three month period and year ended
December 31,2017.
(All monetary amounts contained herein are expressed in
thousands of Canadian dollars, except for per share amounts)
FINANCIAL HIGHLIGHTS
|
Three Months
Ended
|
|
For the year
ended
|
|
|
December
31,
|
|
December
31,
|
|
(000's CAD
$)
|
2017
|
2016
|
%
Change
|
|
2017
|
2016
|
%
Change
|
2015
|
Revenue
|
4,984
|
1,135
|
339%
|
|
9,528
|
2,334
|
308%
|
4,381
|
EBITDA
(i)
|
(3,610)
|
(400)
|
(803%)
|
|
(4,184)
|
(1,771)
|
(136%)
|
(6,430)
|
EBITDA per
share
|
|
|
|
|
|
|
|
|
|
Basic
|
(0.05)
|
(0.01)
|
(400%)
|
|
(0.10)
|
(0.06)
|
(67%)
|
(0.20)
|
|
Diluted
|
(0.05)
|
(0.01)
|
(400%)
|
|
(0.10)
|
(0.06)
|
(67%)
|
(0.20)
|
Adjusted EBITDA
(ii)
|
355
|
(379)
|
193%
|
|
(189)
|
(1,618)
|
88%
|
(2,588)
|
Adjusted EBITDA per
share
|
|
|
|
|
|
|
|
|
|
Basic
|
-
|
(0.01)
|
nm
|
|
-
|
(0.05)
|
80%
|
(0.08)
|
|
Diluted
|
-
|
(0.01)
|
nm
|
|
-
|
(0.05)
|
80%
|
(0.08)
|
Net loss
|
(4,464)
|
(1,042)
|
(329%)
|
|
(6,875)
|
(4,423)
|
(55%)
|
(9,492)
|
Net loss per
share
|
|
|
|
|
|
|
|
|
|
Basic
|
(0.06)
|
(0.03)
|
(100%)
|
|
(0.16)
|
(0.14)
|
(14%)
|
(0.29)
|
|
Diluted
|
(0.06)
|
(0.03)
|
(100%)
|
|
(0.16)
|
(0.14)
|
(14%)
|
(0.29)
|
Funds flow from
operations (iii)
|
382
|
(503)
|
176%
|
|
(125)
|
(1,574)
|
92%
|
(2,444)
|
Gross Margin
(iv)
|
1,363
|
252
|
(441%)
|
|
2,822
|
603
|
(368%)
|
556
|
Capital
expenditures
|
7,181
|
110
|
nm
|
|
7,257
|
144
|
nm
|
251
|
Weighted Average
common shares
outstanding
|
73,847
|
32,185
|
129%
|
|
43,099
|
32,185
|
34%
|
32,185
|
Weighted Average
diluted common
shares
outstanding
|
73,847
|
32,185
|
129%
|
|
43,099
|
32,185
|
34%
|
32,185
|
nm - calculation is
not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December
31,
|
|
|
|
|
2017
|
2016
|
%
Change
|
2015
|
Current
assets
|
|
|
|
|
21,428
|
5,028
|
326%
|
6,317
|
Total
assets
|
|
|
|
|
42,525
|
14,661
|
190%
|
18,461
|
Total current
liabilities
|
|
|
|
|
3,511
|
892
|
294%
|
469
|
Total non-current
liabilities
|
|
|
|
|
2,297
|
-
|
nm
|
-
|
Shareholders'
Equity
|
|
|
|
|
36,717
|
13,769
|
167%
|
17,992
|
FOURTH QUARTER 2017 SUMMARY (Compared with year
prior)
- Revenue of $4,984, up 339% from
$1,135
- Gross margin of 27%, up from 22%
- Net loss of $4,483, increased
339% from a net loss of $1,042
- Impairment expense of $3,833,
from $nil
- Adjusted EBITDA of $355, up 193%
from an Adjusted EBITDA loss of $379
YEAR ENDED 2017 SUMMARY (Compared with year
prior)
- Revenue of $9,528, up 308% from
$2,334
- Gross margin of 30%, up from 26%
- Net loss of $6,875, increased 55%
from a net loss of $4,423
- Impairment expense of $3,833, up
from $nil
- Adjusted EBITDA loss of $189,
improved 88% from an Adjusted EBITDA loss of $1,618
OPERATIONS REVIEW
The Western Canadian Sedimentary Basin is showing signs of
recovery, with oil prices reaching into the $60bbl USD range in Q4
2017. However, the Corporation anticipates 2018 to mirror 2017 for
overall rig activity in Canada
with slow growth later in the year. The current trend of increased
well productivity being drilled in less days, has allowed for a
decrease in demand for drilling rigs as compared to 2014 in
Canada.
The decrease in demand for overall drilling activity in the WCSB
has put stress on competitor's balance sheets. With the
Corporation's strong cash position, we will continue to look for
investments that will provide a high rate of return for our
Shareholder's.
In Q4 2017, the Corporation continued down the path of its
previously announced intention to enter into the contract drilling
rig business earlier in the year. During Q4 2017, the corporation
acquired six heavy tele-doubles, three of which were acquired
through receivership related to Vortex Drilling and three related
to the acquisition of Stampede Drilling. In Q1 2018, the
Corporation added another heavy double from the acquisition of D2
Drilling. The contract drilling rig segment is being operated under
the Stampede banner. The Corporation was pleased with the strong
utilization of the contract drilling rig segment which currently
focuses on the southeast Saskatchewan market.
The Corporation continues to seek market share with the
directional drilling segment. The directional drilling segment
experienced its most active quarter operationally since Q4 2014.
The Corporation continues to build momentum with its current
customer base with its proprietary software platform called D2
ROXTM (pronounced DEE-ROCKS), which allows the Corporation and its
oil and gas clients to drive safe, predictable, repeatable, cost
effective drilling operations at the rig site, for the
Corporation's existing horizontal and directional drilling
operation and its emerging drilling rig business.
"Management is pleased with the improving financial results and
initial success in the contract drilling business. We will continue
to look for investments with the highest rate of return for our
shareholders utilizing our strong financial position."
NON-GAAP MEASURES
This press release contains references to (i) EBITDA; (ii)
Adjusted EBITDA; (iii) Funds Flow; and (iv) Gross Margin. These
financial measures are not measures that have any standardized
meaning prescribed by IFRS and are therefore referred to as
non-GAAP measures. The non-GAAP measures used by the Corporation
may not be comparable to similar measures used by other
companies.
(i)
|
EBITDA is not a
measure recognized under IFRS and does not have a standardized
meaning prescribed by IFRS. EBITDA is defined as "income (loss)
before interest expense, income taxes, depreciation and
amortization. Management believes that EBITDA provides useful
information to investors as it provides an indication of results
generated from the Corporation's operating activities prior to
financing, taxation and non-recurring/non-cash impairment charges
occurring outside the normal course of business.
|
|
Three Months
Ended
|
|
For the year
ended
|
|
December
31,
|
|
December
31,
|
(000's CAD
$)
|
2017
|
2016
|
% Change
|
|
2017
|
2016
|
% Change
|
Net loss
|
(4,464)
|
(1,042)
|
(329%)
|
|
(6,875)
|
(4,423)
|
(55%)
|
|
Depreciation
|
801
|
642
|
25%
|
|
2,638
|
2,652
|
(1%)
|
|
Interest on
Convertible Debenture
|
53
|
-
|
nm
|
|
53
|
-
|
nm
|
EBITDA
|
(3,610)
|
(400)
|
(803%)
|
|
(4,184)
|
(1,771)
|
(136%)
|
(ii)
|
Adjusted EBITDA is
defined as "income (loss) before interest income, interest expense,
taxes, business acquisition transaction costs, depreciation and
amortization, shared based compensation expense, gains on disposal
of property and equipment, impairment expenses, interest and other
income, and foreign exchange." Management believes that in addition
to net and total comprehensive income (loss), Adjusted EBITDA is a
useful supplemental measure as it provides an indication of the
results generated by the Corporation's principal business
activities prior to consideration of how these activities are
financed, how assets are depreciated, amortized and impaired: the
impact of foreign exchange, or how the results are affected by the
accounting standards associated with the Corporation's stock based
compensation plan.
|
|
Three Months
Ended
|
|
For the year
ended
|
|
December
31,
|
|
December
31,
|
(000's CAD
$)
|
2017
|
2016
|
% Change
|
|
2017
|
2016
|
% Change
|
EBITDA
|
(3,610)
|
(400)
|
(803%)
|
|
(4,184)
|
(1,771)
|
(136%)
|
|
Loss (gain) from
disposition of property and equipment
|
(140)
|
1
|
nm
|
|
(140)
|
1
|
nm
|
|
Gain from equipment
lost in hole
|
(268)
|
-
|
nm
|
|
(310)
|
-
|
nm
|
|
Interest and other
income
|
(2)
|
(17)
|
(88%)
|
|
(21)
|
(54)
|
(61%)
|
|
Share based
payments
|
99
|
37
|
168%
|
|
223
|
198
|
13%
|
|
Transaction
costs
|
454
|
-
|
nm
|
|
454
|
-
|
nm
|
|
Foreign exchange
(gain) loss
|
(11)
|
-
|
nm
|
|
(44)
|
8
|
nm
|
|
Impairment of
assets
|
3,833
|
-
|
nm
|
|
3,833
|
-
|
nm
|
Adjusted
EBITDA
|
355
|
(379)
|
193%
|
|
(189)
|
(1,618)
|
88%
|
nm - not
meaningful
|
|
|
|
|
|
|
|
(iii)
|
Funds flow from
operations is defined as "cash provided by operating activities
before the change in non-cash working capital". Funds flow from
operations is a measure that provides shareholders and potential
investors additional information regarding the Corporation's
liquidity and its ability to generate funds to finance its
operations. Management utilizes this measure to assess the
Corporation's ability to finance operating activities and capital
expenditures.
|
|
Three Months
Ended
|
|
For the year
ended
|
|
December
31,
|
|
December
31,
|
(000's CAD
$)
|
2017
|
2016
|
% Change
|
|
2017
|
2016
|
% Change
|
Operating cash
flow
|
133
|
(443)
|
130%
|
|
(1,337)
|
(1,313)
|
(2%)
|
Changes in non-cash
working capital
|
249
|
82
|
718%
|
|
1,213
|
(261)
|
564%
|
Funds flow
|
382
|
(361)
|
52%
|
|
(125)
|
(1,574)
|
92%
|
(iv)
|
Gross margin is
defined as "gross profit from services revenue before stock based
compensation and depreciation". Gross margin is a measure that
provides shareholders and potential investors additional
information regarding the Corporation's cash generating and
operating performance. Management utilizes this measure to assess
the Corporation's operating performance.
|
|
Three Months
Ended
|
|
For the year
ended
|
|
December
31,
|
|
December
31,
|
(000's CAD
$)
|
2017
|
2016
|
%
Change
|
|
2017
|
2016
|
%
Change
|
Revenue
|
4,984
|
797
|
525%
|
|
9,528
|
2,334
|
308%
|
Direct operating
expenses
|
3,621
|
883
|
310%
|
|
6,706
|
1,731
|
287%
|
Gross margin
(3)
|
1,363
|
273
|
nm
|
|
2,821
|
603
|
363%
|
Gross margin
%
|
27%
|
34%
|
(21%)
|
|
30%
|
26%
|
12%
|
(3)
Non-GAAP measure
|
|
|
|
|
|
|
|
nm - not
meaningful
|
|
|
|
|
|
|
|
FORWARD-LOOKING INFORMATION
Certain statements contained in this press release constitute
forward-looking statements or forward-looking information
(collectively, "forward-looking information"). This
information relates to future events or the Corporation's future
performance. All information other than statements of historical
fact is forward-looking information. The use of any of the words
"anticipate", "plan", "contemplate", "continue", "estimate",
"expect", "intend", "propose", "might", "may", "will", "could",
"believe", "predict", and "forecast" are intended to identify
forward-looking information.
This press release contains forward-looking information
pertaining to, among other things, the following: the expectation
that 2018 will be a recovery year for the industry; commodity
prices; industry activity for overall rig activity in 2018;
management of liquidity risk; capital spending; lower capital
expenditures of the industry; the expectations regarding seeking
additional market share with the directional drilling segment;
competition; the momentum created by its proprietary software
platform; foreign exchange rates; future cash flow; operational
efficiency; the Corporation's ability to continue to build
relationships with current and potential customers; and managing
costs through reductions in staffing and compensation levels.
This forward-looking information involves material assumptions
and known and unknown risks and uncertainties and other factors,
certain of which are beyond the Corporation's control, that may
cause actual results or events to differ materially from those
anticipated in such forward-looking information. This MD&A, the
Corporation's annual information form and other documents filed
with securities regulatory authorities (accessible through the
SEDAR website www.sedar.com) describe the risks, the material
assumptions and other factors that could influence actual results,
which include, among other things, anticipated financial
performance; the implementation of the Corporation's growth
strategy; business prospects; conditions in general economic and
financial markets; the ability to get additional market share with
the directional drilling segment; industry conditions; current
commodity prices and royalty regimes; regulatory developments; the
impact of increasing competition; future exchange rates; the
availability and cost of labour and services; the sufficiency of
budgeted capital expenditures in carrying out planned activities;
timing and amount of capital expenditures; the ability of the
Corporation to renew existing contracts and enter into new
contracts; utilization and pricing of the Corporation's systems and
rigs; supply and demand for oil and natural gas services relating
to the drilling and ancillary services; effects of regulation by
governmental agencies; tax laws; future operating costs; and the
ability to obtain financing on acceptable terms, which are subject
to change based on commodity prices, market conditions and
potential timing delays. Although management of the Corporation
considers these assumptions to be reasonable based on information
currently available to it, such assumptions may prove to be
incorrect. Actual results, performance or achievements could
differ material from those expressed in, or implied by, this
forward-looking information and, accordingly, no assurance can be
given that any of the events anticipated by the forward-looking
information will transpire or occur, or if any of them do so, what
benefits the Corporation will derive therefrom.
Statements, including forward-looking information, are made as
of the date of this press release and the Corporation does not
undertake any obligation to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, except as may be required by applicable securities
laws. The forward-looking information contained in this MD&A is
expressly qualified by this cautionary statement.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE MATRRIX Energy Technologies Inc.