CALGARY, Alberta, Aug. 23, 2018 (GLOBE NEWSWIRE) -- Tornado Global Hydrovacs Ltd. (“Tornado” or the “Company”) (TGH: TSX-V) today reported its unaudited condensed consolidated financial results for the Three and Six Month periods ended June 30, 2018. The unaudited condensed consolidated financial statements and MD&A have been filed on SEDAR and can be reviewed under the Company’s profile at www.sedar.com . 

 
Financial and Operating Highlights (in CAD $000’s except per share data)
 
  Three Months ended June 30   Six Months ended June 30
    2018    2017      2018    2017 
           
Revenue     $ 10,213   $ 6,733         $ 15,044   $ 12,722  
Cost of sales   8,677     5,842       12,620     10,951  
Gross Profit   1,536     891       2,424     1,771  
           
Selling and general administrative expenses   1,229     1,181       2,473     2,154  
Depreciation and amortization   295     239       551     478  
Loss on disposal of fixed assets   -     -       4     -  
Stock-based compensation   68     -       136     -  
Change in fair value of derivative financial instruments   95     (12 )     99     (39 )
Net finance income and other   5     20       (4 )   37  
           
Loss before tax   (156 )   (537 )     (835 )   (859 )
Income tax expense   (64 )   -       (20 )   -  
           
Net loss $ (220 ) $ (537 )   $ (855 ) $ (859 )
Net loss per share - basic and diluted $ -   $ (0.01 )   $ (0.01 ) $ (0.01 )
           
EBITDAS (1) $ 307   $ (291 )   $ (49 ) $ (384 )
EBIT (1) $ (56 ) $ (530 )   $ (740 ) $ (862 )
           
Total assets $ 22,415   $ 19,358     $ 22,415   $ 19,358  
Shareholders Equity $ 17,320   $ 12,474     $ 17,320   $ 12,474  
 

Three months ended June 30, 2018

  • Revenue of $10,213 increased 51.7% compared to $6,733 in Q2/2017. The increase in revenue was due to the recent improvement in the hydrovac market equipment purchase demand with increased interest coming out of the municipal sector in both Canada and United States.  
  • Gross Profit of $1,536 increased by $645 compared to $891 in the same period of 2017 due to increased revenue and production efficiencies, including labour utilization, at the Company’s Stettler plant.  
  • EBITDAS of positive $307, comprising North America (positive $832), China (negative $333) and Corporate (negative $192), increased by $598 compared to negative $291 in Q2/2017, due to increased revenues and gross profit in North America. For the North America segment, EDITDAS during the quarter of $832 increased significantly compared to Q1 2018, due to increased activity levels. For China, negative EDITDAS during the quarter was $333.
  • Net loss of $220 decreased by $317 compared to a loss of $537 in Q2/2017. This is due to the factors discussed above, offset by stock-based compensation expense of $68, income tax expense of $64 and change in fair value of derivative financial instruments of $95.  
  • During the quarter two custom designed skid-mounted hydrovac units were delivered to China for demonstration purposes, with an additional four units shipped at the end of June. 1 Earnings (loss) before interest, tax, depreciation, amortization and stock-based compensation (EBITDAS) and Earnings (loss) before interest and tax (EBIT) are not defined by IFRS. The definition of EBITDAS does not consider gains and losses on the disposal of assets, fair value changes in foreign currency forward contracts and non-cash components of stock-based compensation. While not an IFRS measure, EBITDAS is used by management, creditors, analysts, investors and other financial stakeholders to assess the Group’s performance and management from a financial and operational perspective.
 
Segmented information (in CAD $000’s)
 
Three Months ended June 30, 2018 North America   China     Corporate   Total  
Revenue $ 10,213   $       -     $ -   $ 10,213  
Cost of sales   8,677           -       -     8,677  
Selling and general administrative   704           333       192     1,229  
EBITDAS $ 832   $       (333 )   $ (192 ) $ 307  
                               
                               
Six Months ended June 30, 2018 North America   China     Corporate   Total  
Revenue $ 15,044   $       -     $ -   $ 15,044  
Cost of sales   12,620           -       -     12,620  
Selling and general administrative   1,496           620       357     2,473  
EBITDAS $ 928   $        (620 )   $ (357 ) $ (49 )
 

O utlook

The market demand for hydrovac trucks in North America from the municipal sectors in both Canada and United States is expected to stay strong during 2018. The Company is also benefiting from increased demand because of the significant design improvements of its hydrovac trucks. The Company continues to develop its sales and distribution relationship with its US strategic partner, Custom Truck One Source (“Custom Truck”). With Custom Truck’s integrated network of 23 locations across North America, the Company expects revenue growth in the 2 nd half of 2018. As a result, the Company expects strong financial performance in North America.

In China, the Company continues to execute its business plan to capitalize on this significant market opportunity. By the end of Q2 2018, the Company had four unique hydrovac products for demonstration and potential future revenue. Additional sales staff have been recruited and marketing demonstrations were held in August. As a result of these factors management believes the Company’s medium and long-term outlook is positive in China.

About Tornado Global Hydrovacs Ltd.

The Company designs and manufactures hydrovac trucks in Canada and sells hydrovac trucks for excavation service providers to the oil and gas industry and the municipal markets in Canada and the USA. Hydrovac trucks use high pressure water to pulverize soil and turn it into mud, and then vacuum up the resulting mud into its tank. Tornado currently operates in North America. The Company intends to expand its hydrovac business into China and has established a wholly owned operation in China with a head office in Beijing.

     
For more information about Tornado Global Hydrovacs Ltd., visit www.tornadotrucks.com  or contact:
     
Bill Rollins   Al Robertson
Chief Executive Officer   Chief Financial Officer
Phone: (403) 204-6333   Phone: (403) 204-6363
Email:  brollins@tghl.ca   Email: arobertson@tghl.ca
     

Advisory

Neither the Exchange nor its Regulation Service Provider (as that term is defined in policies of the Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Certain statements contained in this news release constitute forward-looking statements. These statements relate to future events. All statements other than statements of historical fact are forward-looking statements. The use of the words ‘‘may”, “expects”, “expected”, “believes”, “anticipates” and other words of a similar nature are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although the Company believes these statements to be reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. Such statements include statements regarding the Company’s outlook for the rest of the year and the anticipated demand for the Company’s newly designed hydrovac truck. Actual results could differ materially from those anticipated in these forward-looking statements as a result of prevailing economic conditions, receipt of requisite regulatory approvals, and other factors, many of which are beyond the control of the Company. The forward-looking statements contained in this news release represent the Company’s expectations as of the date hereof, and are subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by applicable securities regulations.