EDMONTON, Alberta, Sept. 29, 2017 (GLOBE NEWSWIRE) -- John Babic, President and CEO of Dalmac Energy Inc. (“Dalmac”) (TSX Venture:DAL) is pleased to announce its first quarter financial results for the reporting period ended July 31, 2017.
| FINANCIAL HIGHLIGHTS | Change | |||||||||||
| (000’s Cdn Dollars, except per share data) | Q1'18 | Q1'17 | % | |||||||||
| Revenues | 4,734 | 3,752 | 26 | % | ||||||||
| Gross Profit | 1,086 | 780 | 39 | % | ||||||||
| Gross Margin (%) | 23 | % | 21 | % | 10 | % | ||||||
| EBITDAS (loss) | 364 | 33 | 987 | % | ||||||||
| Net earnings (loss) | (460 | ) | (797 | ) | 42 | % | ||||||
| Earnings (loss) per share - basic | (0.02 | ) | (0.03 | ) | 42 | % | ||||||
| Earnings (loss) per share - diluted | (0.02 | ) | (0.03 | ) | 42 | % | ||||||
Business Highlights
- Revenues in Q1’18 were up 26% over last year and gross margins were also up 2%. The first quarter is typically slowest of the year due to spring breakup conditions, holiday season, and annuals CVIPs on equipment.
- Margins from May to July were slightly lower than expected based on the type of work we undertook during that period. May and June are usually our weakest revenue months due to breakup and road bans being in effect; however, this year we bid on, and completed, a large plant turnaround project that spanned the months of May and June. To accomplish this project, we utilized our entire workforce from all 3 branches working 24/7, hired subcontractors to perform certain scopes of the project and had mechanics and support staff working overtime to support the job. These factors all were reflected in the margin results for these two months. In our typical year, May-July are usually the slow months where we undergo our yearly truck (CVIP) and (TDG) tank inspections on our equipment to correspond to low breakup activity, but with busy months, and situations where equipment would need repair to go out the next day, our capitalizations and repairs and maintenance were temporarily pushed higher than budgeted. These forced annualized R&M costs were front loaded into the first quarter.
- Quarterly EBITDAS was up 987% and our net loss for the quarter was 42% less than in the prior year.
Subsequent Developments
In August of 2017, Dalmac executed a commitment on a financing facility from a top tier Canadian bank for a 3-year committed revolving credit facility for $12M plus an uncommitted accordion agreement of an additional $5M, for a total loan maximum of $17M. Consistent with the terms of the agreement we anticipate having the new facility in place on or before the end of 2018’Q2.
On September 6 th , 2017 Dalmac entered in $750K working capital loan with its CEO John Babic to assist with its capital needs as it moves forward into the fall and winter seasons. Mr. Babic's loan to Dalmac will have a three-year, interest only, term and bears interest at a rate of 12.5 per cent per annum. In certain circumstances, including at the maturity of the loan, in the event Dalmac determines it will repay the loan in full, in the event another person gains ownership or control of over 20 per cent of Dalmac's issued and outstanding common shares, or upon the agreement of the corporation and Mr. Babic, Mr. Babic will have the option to convert the outstanding loan amount into an aggregate of 7.5 million units of Dalmac at a price of 9.5 cents per unit. Each unit shall entitle Mr. Babic to acquire, at no additional cost, one common share of Dalmac and one common share purchase warrant of Dalmac. Each warrant shall entitle Mr. Babic to acquire one common share at a price of 13 cents per share for a period of 18 months following the date of conversion.
Outlook
The industry downturn over the past two years has been extremely challenging not only for Dalmac but for the oilfield services industry as a whole. The degree to which our operations are affected by the levels of drilling activity and the price of crude oil and natural gas runs parallel to the E&P companies spending and investment budgets. In spite of the recent fluctuations in crude oil prices, our results for the current quarter generally are in line with our expectations and are consistent with the increased drilling oil field servicing activity in western Canada. Looking forward to the balance of 2017, we remain of the view that the second half of this year will be sequentially better than the first half. Economic activity is nearing levels that will support higher demand for our services as well as improve pricing for the majority of our operations. Overall, the drilling activity in western Canada is expected to be stronger than last year, and as such we expect it to have a positive impact on our operating segments. As the remainder of 2017 and 2018 continues to improve we should continue to see higher industry activity levels that should result in meaningful customer pricing improvements. These improvements, together with executing on our strategy on managing our costs along with focusing on growth through strategic geographic and industry diversification, should result in further improvements in our financial results.
For more information contact:
John Babic - CEO - Dalmac Energy Tel: 780-988-8510 Email: jbabic@dalmac.ca
Statements throughout this report that are not historical facts may be considered ‘forward looking statements’. Such statements are based on current expectations that involve risks and uncertainties, which could cause actual results to differ from those anticipated. Important factors that can cause anticipated outcomes to differ materially from actual outcomes include the impact of general economic conditions, industry conditions, competition from other industry participants, volatility of petroleum prices, the ability to attract and retain qualified personnel, changes in laws or regulation, currency fluctuations, continued ability to access capital from available facilities and environmental risks. References to “Dalmac’, the “Corporation”, “Company”, “us”, “we”, and “our” mean Dalamc Energy Inc. and its subsidiary Dalmac Oilfield Services Inc. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. We seek safe harbor.
