CALGARY, April 3, 2012 /CNW/ - Winalta Inc. (TSX-V: WTA) ("Winalta" or the "Company") is pleased to announce record 2011 year end results with net earnings from continuing operations of $7.2 million or $0.18 per share fully diluted compared to a net loss from continuing operations of $6.4 million or $0.18 per share fully diluted for the 12 months ended October 2010.
Revenue of $21.6 million and EBITDA of $10.8 million compared favourably to revenue of $13.0 million and negative EBITDA of $4.2 million for the comparative 12 month period2010.
Year End Highlights
- Net earnings of $7.2 million or $0.18 per share fully diluted
- Revenue of $21.6 million, up 66% over 2010
- EBITDA margin of 50% compared to a negative EBITDA margin in 2010
- Utilization of Winalta's rental fleet averaged 71% in 2011 up 42% from 2010
Selected Financial Information
|Years Ended December 31, 2011 and October 31, 2010|
|All numbers in $1,000s unless per share||
12 months ended
12 months ended
|EBITDA from continuing operations||10,835||(4,213)|
|EBITDA from continuing operations per share, fully diluted||0.27||(0.12)|
|Earnings (loss) from continuing operations||7,237||(6,388)|
|Earnings (loss) from continuing operations per share, fully diluted||0.18||(0.18)|
|Net loss from discontinued operations||-||(11,132)|
|Net Earnings (loss)||7,237||(17,520)|
|Net Earnings (loss) per share, fully diluted||0.18||(0.49)|
2011 revenue of $21.6 million showed an $8.6 million increase over $13.0 million for the 12 months ending October 2010.
Due to the change in the Company's year end to December 31st, the comparative information has been adjusted to reflect the same twelve month period ending December 31, 2010.
Adjusting 2010 results to 12 months ended December to assist in a year over year comparison, 2011 year end revenue of $21.6 million showed an increase of $8.4 million over $13.2 million of revenue in 2010. This 64% increase in revenue year over year is attributable to year over year percentage increases in fleet size, utilization, third party revenue and day rates.
|Revenue Drivers 2011 versus 2010|
|Fleet size at year end (# of units, boxes)||8%||288||266|
|Utilization (365 day year)||42%||71%||
Day rates for the period showed a year over year improvement of 18%.
Adjusting 2010 results to 12 months ended December to assist in a year over year comparison, the Company increased its rental fleet by 22 units or 8% in 2011. Eleven Wellsite units and an additional eleven Dedicated Geo Lab units were built by third party manufacturers during the year at a total cost of $2.9 million.
The average age of Winalta's rental fleet as at December 31, 2011 is 4.4 years. It is the Company's position that maintaining an average fleet age below 5 years positions Winalta as a premium provider of oilfield accommodations in the industry.
|Fleet Growth 2011 versus 2010|
|Drill Camps (5 and 6 units)||0%||11||11|
|Dedicated Geo Labs||100%||12||0|
Adjusting 2010 results to 12 months ended December to assist in a year over year comparison, utilization for the period across the Company's entire fleet of rental units was 71%, a 42% improvement over 50% utilization obtained during adjusted 2010. Strong utilization in 2011 is attributable to Winalta's growing reputation as a premier Wellsites, Drill Camps and Dedicated Geo Lab provider, the Company's strong marketing presence, attention to service and the Company's rental fleet age.
|Utilization 2011 versus 2010|
|Drill Camps (5 and 6 units)||93%||58%||30%|
|Dedicated Geo Labs||100%||74%||0%|
General and Administrative
2011 general and administrative expenses of $4.2 million were up $1.2 from $3.0 million for the 12 months ending October 2010.
Adjusting 2010 results to 12 months ended December to assist in a year over year comparison, general and administrative expenses were $4.2 million, up $740,000 from the comparable period but decreased as a percentage of revenue from 26% in 2010 to 20% in 2011. General and administrative expenses decreased in the last six months of 2011 compared to the first six months, from $2.6 million to $1.6 million. Winalta continues to manage its corporate expenses to ensure corporate structure efficiencies are realized.
Depreciation and Amortization
Depreciation of $4.8 million in 2011 showed a $0.1 million decrease from $4.9 for the 12 months ending October 2010.
Adjusting 2010 results to 12 months ended December to assist in a year over year comparison, depreciation and amortization was $4.8 million for the period as compared to $4.9 million for the comparative period. The decrease in depreciation and amortization expense was a combination of the sale of the Carrier fleet of trucks in the second quarter of 2011 and the disposal of excess computer equipment which was offset by the acquisition of $2.9 million of rental equipment in 2011.
2011 interest expense of $2.1 million showed a $1.5 increase from $0.6 million for the 12 months ending October 2010.
Adjusting 2010 results to a 12 months ended December to assist in a year over year comparison, interest expense for the period was $2.1 million as compared to $1.1 million adjusted 2010. The additional interest expense came from interest and fees associated with Winalta's IFRS conversion, high interest debt (paid out April 2011) and new financing application fees.
Income Tax Recovery
In 2011, $3.3 million of income tax recovery was recognized. The Company's pool of operating losses established in 2009 and 2010 approximated $31 million as of December 31, 2011, equating to a total of approximately $7.8 million in potential tax recovery. With the recognition of $3.3 million in income tax recovery in 2011, a future potential tax recovery of $4.5 million remains to be recognized in relation to operating losses carried forward.
Winalta continues to see strong fleet utilization and strengthening rental rates as activity in the oil industry remains strong and the Company's customers are heavily weighted in oil exploration. The Company believes there is enough of a shortage in supply of quality Wellsite and related rentals in the industry to maintain 2011 utilization rates for Winalta's equipment. Winalta will continue to expand its fleet of Wellsite and Dedicated Geo Labs in order to not only meet today's demand but also to maintain its position in the industry as a provider of premier rental accommodation units.
Winalta Inc., operating under the trade name, Winalta Oilfield Rentals, is an oilfield service provider that specializes in portable industrial rental accommodations, remote offices and Dedicated Geo Labs; servicing the Western Canadian oil and gas Industry.
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.
Certain information set forth in this press release, including management's assessment of the potential for increased cash flows, accelerated growth of the Company's rental fleet and demand for the Company's rental units and potential income tax recoveries may constitute forward-looking statements. By their nature, forward-looking statements involve material assumptions and are subject to numerous risks and uncertainties, including with respect to market and economic conditions and their impact on the Company's business, some of which, are beyond our control. Readers are cautioned not to place undue reliance on the forward-looking statements as the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and actual results, performance or outcomes could materially differ from those expressed or implied in such forward-looking statements and accordingly, no assurance can be given that any of the events anticipated by forward looking statements will transpire or occur, or if any of them do so, what benefit Winalta will derive therefrom. The Company does not assume the obligation to revise or update this forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.
David Hopley, CFO
Phone: (780) 960-6900
Austin Fraser, Senior Vice President
Phone: (403) 826-5701