/NOT FOR DISSEMINATION IN
The Company achieved the following 2023 Q2 results and highlights:
- Revenue of
$115,058 in 2023 Q2 is the highest for any second quarter in the Company's history and represents an increase of 316%, compared to$27,652 in 2022 Q2. - Adjusted EBITDAS of
$18,222 in 2023 Q2 is also a new record for any second quarter in the Company's history and represents an increase of 543%, compared to$2,836 in 2022 Q2. - Net income of
$2,416 , compared to a net loss of$2,824 in 2022 Q2. - Despite the seasonally slower second quarter in
Canada , the Company generated free cash flow of$4,984 , a testament to size and scale and a business model with lower capital intensity. - Canadian directional drilling market share averaged 20.1% in 2023 Q2, an increase from 15.4% in 2022 Q2.
U.S. directional drilling market share averaged 8.7% in 2023 Q2.- Loans and borrowings less cash of
$39,957 as atJune 30, 2023 , compared to$69,360 as atDecember 31, 2022 . - The Company received
$16,012 in total cumulative proceeds related to theApril 2022 bought deal offering warrants, which accounted for 99.7% of eligible warrants. The Company also received warrants proceeds of$138 and$1,200 relating to theFebruary 2021 private placement warrants and the Precision Drilling acquisition, respectively, as of the date of this news release. - Subsequent to
June 30, 2023 , the Company acquiredRime Downhole Technologies, LLC ("Rime"), a privately-held,Texas -based, engineering business that specializes in building products for the downhole measurement-while-drilling ("MWD") industry in exchange for approximately USD$41,000 (refer to the subsequent event section of this news release). - The Company retains a great deal of flexibility in regards to its capital budget with the ability to increase or decrease expenditures in response to changing market conditions, including commodity prices which generally drive activity levels. The Company is maintaining its 2023 net capital budget of
$36,000 .
Comments from President & CEO
"Record revenue of
"With approximately 70% of our revenue on an annualized basis generated in the
"Despite the recent challenging market conditions in the
"In
"With MWD components active on an estimated 40% of
Canadian dollars in 000's except for otherwise noted
Three months ended | Six months ended | |||
2023 | 2022 | 2023 | 2022 | |
Revenues | $ 115,058 | $ 27,652 | $ 242,723 | $ 62,037 |
Gross margin % | 14 % | 2 % | 14 % | 10 % |
Adjusted gross margin % (1) | 23 % | 19 % | 22 % | 24 % |
Adjusted EBITDAS (1) | $ 18,222 | $ 2,836 | $ 33,409 | $ 9,749 |
Adjusted EBITDAS margin % (1) | 16 % | 10 % | 14 % | 16 % |
Cash flow - operating activities | $ 11,232 | $ 4,511 | $ 35,148 | $ 2,753 |
Free cash flow (deficit) (1) | $ 4,984 | $ (12,008) | $ 4,285 | $ (9,197) |
Net income (loss) | $ 2,416 | $ (2,824) | $ 3,210 | $ (581) |
Per share - basic and diluted | $ 0.01 | $ (0.02) | $ 0.01 | $ (0.01) |
Weighted average shares outstanding: | ||||
Basic (000s) | 238,394 | 129,200 | 231,516 | 110,353 |
Diluted (000s) | 240,653 | 131,898 | 238,563 | 112,969 |
As at |
|
|
Working capital, excluding current portion of loans and borrowings | $ 62,048 | $ 60,447 |
Total assets | $ 344,491 | $ 353,990 |
Loans and borrowings | $ 60,080 | $ 80,535 |
Shareholders' equity | $ 169,914 | $ 153,897 |
(1) Refer to the "Non-GAAP Measures" section |
Despite recent volatility in oil and gas prices, the outlook for oilfield services remains constructive.
A survey of forecasts from seven Canadian-based investment banks shows an expectation for a bottoming of the
In
In 2022, the Company executed five strategic acquisitions as detailed below:
U.S. - based company,Altitude Energy Partners, LLP inJuly 2022 for total consideration of$124,112 , comprised of a cash payment of$87,245 and a common share issuance of$36,867 , with the purchase price allocated primarily to working capital, property, plant and equipment, intangible assets and goodwill;U.S. - based operations, Discovery Downhole Services ("Discovery") inFebruary 2022 for total consideration of$20,892 , comprised of a cash payment of$18,160 and a common share issuance of$2,732 , with the purchase price allocated primarily to inventory and property, plant and equipment;LEXA Drilling Technologies Inc. ("Lexa") inJune 2022 for total consideration of$1,761 in exchange for intangible assets;- Compass Directional Services ("Compass") in
June 2022 for total consideration of$8,315 , comprised of a cash payment of$4,000 and a common share issuance of$4,315 , with the purchase price allocated primarily to inventory and property, plant and equipment; and - the Canadian directional drilling business of Ensign Energy Services ("Ensign") in
October 2022 for total common share consideration of$5,965 with the purchase price allocated primarily to inventory and property, plant and equipment.
In addition to the assets acquired as described above, there were certain other minor working capital, right-of-use assets and lease liabilities, and deferred tax liabilities recognized as part of the purchase price allocations.
Three months ended | Six months ended | |||
2023 | 2022 | 2023 | 2022 | |
Revenues | ||||
$ 21,515 | $ 13,091 | $ 66,858 | $ 38,490 | |
93,543 | 14,561 | 175,865 | 23,547 | |
Total revenues | 115,058 | 27,652 | 242,723 | 62,037 |
Cost of sales: | ||||
Direct costs | (88,509) | (22,481) | (189,741) | (47,005) |
Depreciation and amortization | (10,115) | (4,622) | (19,340) | (8,911) |
Share-based compensation | (96) | (49) | (240) | (92) |
Cost of sales | (98,720) | (27,152) | (209,321) | (56,008) |
Gross margin | $ 16,338 | $ 500 | $ 33,402 | $ 6,029 |
Gross margin % | 14 % | 2 % | 14 % | 10 % |
Adjusted gross margin % (1) | 23 % | 19 % | 22 % | 24 % |
(1) Refer to the "Non-GAAP Measures" section. |
The Company recognized
The Company recognized
The Gross margin % increased to 14% both in 2023 Q2 and the six months ended
The Adjusted gross margin % increased to 23% in 2023 Q2, compared to 19% in 2022 Q2. The Adjusted gross margin % decreased to 22% in the six months ended
Depreciation and amortization expense allocated to cost of sales increased to
Depreciation and amortization expense included in cost of sales as a percentage of revenue was 9% and 8% for 2023 Q2 and the six months ended
Revenues
Canadian revenues were
Canadian revenues were
Based on publicly disclosed Canadian drilling activity, Cathedral's Canadian market share in 2023 Q2 and the six months ended
Direct costs
Canadian direct costs included in cost of sales were
Canadian direct costs included in cost of sales were
Revenues
Based on publicly disclosed
Direct costs
Selling, general and administrative ("SG&A") expenses
Three months ended | Six months ended | |||
2023 | 2022 | 2023 | 2022 | |
Selling, general and administrative expenses: | ||||
Direct costs | $ 12,004 | $ 3,287 | $ 26,090 | $ 6,853 |
Depreciation and amortization | 1,499 | 124 | 3,008 | 248 |
Share-based compensation | 674 | 83 | 1,449 | 174 |
Selling, general and administrative expenses | $ 14,177 | $ 3,494 | $ 30,547 | $ 7,275 |
The Company recognized SG&A expenses of
The Company recognized SG&A expenses of
Depreciation and amortization recognized in SG&A were
Stock-based compensation recognized in SG&A were
Technology group expenses
The Company recognized technology group expenses of
Gain on disposal of equipment
The Company recognized a gain on disposal of equipment of
Finance costs
Finance costs were
The higher costs are mainly due to the Company's increased debt levels from
In addition, the Company had
Foreign exchange
The Company recognized a foreign exchange gain of
The Company recognized a foreign currency translation loss on foreign operations of
Income tax
Income tax expense was
The Company's effective income tax rate is higher than expected at approximately 45% due to its Canadian entity incurring losses for income tax purposes in the period, the tax benefit of which has not been recognized.
Annually, the Company's principal source of liquidity is cash generated from operations and its proceeds from equipment lost-in-hole. In addition, the Company has the ability to fund liquidity requirements through its syndicated credit facility and the issuance of additional debt and/or equity, if available.
In order to facilitate the management of its liquidity, the Company prepares an annual budget, which is updated as necessary depending on varying factors, including changes in capital structure, execution of the Company's business plan and general industry conditions. The annual budget is approved by the Board of Directors and updated forecasts are prepared as the fiscal year progresses with changes reviewed by the Board of Directors.
Cash flow provided by operating activities was
During the six months ended
As at
At
Syndicated credit facility
During the six months ended
At
- Consolidated Funded Debt to Consolidated Credit Agreement EBITDA ratio shall not exceed 2.5.0:1; and
- Consolidated Fixed Charge Coverage ratio shall not be less than 1.25:1
Subsequent to
Contractual obligations and contingencies
As at
The Company also holds six letters of credit totaling
The Company is involved in various legal claims associated with the normal course of operations. The Company believes that any liabilities that may arise pertaining to such matters would not have a material impact on its financial position.
Subsequent event
On
The EP Notes have a three-year term and accrue interest payable quarterly at a rate of 5% per annum. Any time prior to expiry of the EP Notes, if the 20-day volume weighted average trading price of the common shares of Cathedral ("Common Shares") equals or exceeds CAD
Share capital
As at
Change of Transfer Agent
Effective
The following table details the property, plant and equipment additions:
Three months ended | Six months ended | |||
2023 | 2022 | 2023 | 2022 | |
Motors and related equipment | $ 5,231 | $ 1,346 | $ 12,647 | $ 2,825 |
MWD and related equipment | 885 | $ 4,866 | 5,408 | 6,671 |
Shop and automotive equipment | 973 | $ — | 1,750 | — |
Other | 1,100 | $ 6 | 2,638 | 26 |
Capital expenditures | $ 8,189 | $ 6,218 | $ 22,443 | $ 9,522 |
The additions of
The Company's 2023 net capital program has been maintained at
Cathedral uses certain performance measures throughout this news release that are not defined under IFRS or Generally Accepted Accounting Principles ("GAAP"). These non-GAAP measures do not have a standardized meaning and may differ from that of other organizations, and accordingly, may not be comparable.
These measures include the Adjusted gross margin, Adjusted gross margin %, Adjusted EBITDAS, Adjusted EBITDAS margin %, Adjusted EBITDAS per diluted share and Free cash flow. Management believes these measures provide supplemental financial information that is useful in the evaluation of Cathedral's operations. They are commonly used by other oilfield service companies. Investors should be cautioned, however, that these measures should not be construed as alternatives to IFRS measures as an indicator of Cathedral's performance.
These non-GAAP measures are defined as follows:
i) | "Adjusted gross margin" - calculated as gross margin plus non-cash items (depreciation, amortization and share-based compensation); is considered a primary indicator of operating performance (see tabular calculation); |
ii) | "Adjusted gross margin %" - calculated as Adjusted gross margin divided by revenues; is considered a primary indicator of operating performance (see tabular calculation); |
iii) | "Adjusted EBITDAS" - calculated as net income before finance costs, unrealized foreign exchange on intercompany balances, income tax expense, depreciation, amortization, non-recurring costs (including acquisition and restructuring costs), write-down of inventory and share-based compensation; provides supplemental information to earnings that is useful in evaluating the results and financing of the Company's business activities before considering certain charges (see tabular calculation); |
iv) | "Adjusted EBITDAS margin %" - calculated as Adjusted EBITDAS divided by revenues; provides supplemental information to earnings that is useful in evaluating the results and financing of the Company's business activities before considering certain charges as a percentage of revenues (see tabular calculation); |
v) | "Adjusted EBITDAS per diluted share" - calculated as Adjusted EBITDAS divided by the diluted weighted average shares outstanding; provides supplemental information to earnings that is useful in evaluating the results and financing of the Company's business activities before considering certain charges on a per diluted share basis; and |
vi) | "Free cash flow" - calculated as cash flow provided by (used in) operating activities prior to: i) changes in non-cash working capital, ii) income taxes paid (refunded) and iii) non-recurring costs less: i) property, plant and equipment additions, excluding assets acquired in business combinations, ii) required repayments on loans and borrowings, and iii) cash lease payments, offset by proceeds from dispositions of property, plant and equipment. Management uses this measure as an indication of the Company's ability to generate funds from its operations to support future capital expenditures, additional debt repayment or other initiatives (see tabular calculation). |
The following tables provide reconciliations from the IFRS measures to non-GAAP measures.
Adjusted gross margin
Three months ended | Six months ended | |||
2023 | 2022 | 2023 | 2022 | |
Gross margin | $ 16,338 | $ 500 | $ 33,402 | $ 6,029 |
Add non-cash items included in cost of sales: | ||||
Inventory write-down | — | — | 378 | — |
Depreciation and amortization | 10,115 | 4,622 | 19,340 | 8,911 |
Share-based compensation | 96 | 49 | 240 | 92 |
Adjusted gross margin | $ 26,549 | $ 5,171 | $ 53,360 | $ 15,032 |
Adjusted gross margin % | 23 % | 19 % | 22 % | 24 % |
Adjusted EBITDAS
Three months ended | Six months ended | |||
2023 | 2022 | 2023 | 2022 | |
Net income (loss) | $ 2,416 | $ (2,824) | $ 3,210 | $ (581) |
Add (deduct): | ||||
Income tax expense (recovery) | 2,176 | (756) | 2,583 | (756) |
Depreciation and amortization included in cost of sales | 10,115 | 4,622 | 19,340 | 8,911 |
Depreciation and amortization included in selling, general and administrative expenses | 1,499 | 124 | 3,008 | 248 |
Share-based compensation included in cost of sales | 96 | 49 | 240 | 92 |
Share-based compensation included in selling, general and administrative expenses | 674 | 83 | 1,449 | 174 |
Finance costs - loans and borrowings | 1,486 | 295 | 3,216 | 524 |
Finance costs - lease liabilities | 205 | 195 | 419 | 384 |
18,667 | 1,788 | 33,465 | 8,996 | |
Unrealized foreign exchange gain on intercompany balances | (910) | 758 | (899) | 463 |
Inventory write-down and non-recurring expenses | 465 | 290 | 843 | 290 |
Adjusted EBITDAS | $ 18,222 | $ 2,836 | $ 33,409 | $ 9,749 |
Adjusted EBITDAS margin % | 16 % | 10 % | 14 % | 16 % |
Free cash flow
Three months ended | Six months ended | |||
2023 | 2022 | 2023 | 2022 | |
Cash flow provided by operating activities | $ 11,232 | $ 4,511 | $ 35,148 | $ 2,753 |
Add (deduct): | ||||
Income tax paid (refund) | 817 | (20) | 648 | (28) |
Changes in non-cash operating working capital | 1,617 | (3,243) | (9,987) | 4,614 |
Non-recurring expenses | 465 | 290 | 465 | 290 |
Proceeds on disposal of property, plant and equipment | 4,208 | 3,091 | 9,780 | 4,324 |
Less: | ||||
Property, plant and equipment additions(1) | (8,714) | (6,218) | (22,465) | (9,522) |
Required repayments on loans and borrowings(2) | (3,727) | (9,686) | (7,455) | (10,292) |
Repayments of lease liabilities, net of finance costs | (914) | (733) | (1,849) | (1,336) |
Free cash flow (deficit) | $ 4,984 | $ (12,008) | $ 4,285 | $ (9,197) |
(1) Property, plant and equipment additions exclude non-cash additions and assets acquired in business combinations. | |
(2) Required repayments on loans and borrowings in accordance with the credit facility agreement. Excludes discretionary debt repayments. |
This news release contains certain forward-looking statements and forward-looking information (collectively, referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words suggesting future outcomes. In particular, this news release contains forward-looking statements relating to, among other things:
- Future commitments;
- The 2023 capital program and financing of the program;
- The Company retains a great deal of flexibility in regards to its capital budget with the ability to increase or decrease expenditures in response to changing market conditions, including commodity prices which generally drive activity levels;
- We have continued confidence in activity levels and corresponding cash flows to maintain a strong level of liquidity in the business;
- With a focus on disciplined capital deployment, Cathedral will continue to reduce its leverage profile over the coming quarters, while also having the financial flexibility to allocate funds to share repurchases, depending on market conditions;
- We expect the
U.S. rig count will bottom sometime in 2023 Q3 and are encouraged by our strong job count on approximately 60 active rigs that continues into the third quarter; - We expect the job count to remain steady or slightly improved through the remainder of the year;
- With the higher job count comes full asset utilization, and in the short-term we anticipate a higher level of equipment rentals to meet demand as we wait on deliveries from our capital program;
- Our customers remain disciplined with most committed to maintaining capital programs for 2023;
- Industry rig counts have ticked lower than the same period in 2022, but are expected to remain somewhat consistent to slightly improved in the back half of the year;
- We anticipate improved margins and consistent market share in the third quarter as the benefits from our repair program earlier in the year flow through to a lower need for rentals;
- With MWD components active on an estimated 40% of
U.S. land rigs, our recent acquisition of Rime will provide a pipeline of technology that has wide market acceptance and adoption; - We have a tremendous opportunity to deploy industry recognized technology to minimize rentals in Altitude and significantly expand margins as we build out our own proprietary MWD platform beginning in 2023 and into 2024;
- We are also excited about the expanded capacity to further differentiate ourselves in the market with industry leading technology now and into the future;
- Despite recent volatility in oil and gas prices, the outlook for oilfield services remains constructive;
U.S. natural gas prices have also moved higher in 2023 Q3 from second quarter levels, although the lack of additional North American LNG takeaway capacity until later 2024 may be a barrier to a larger near-term price recovery;- A survey of forecasts from seven Canadian-based investment banks shows an expectation for a bottoming of the
U.S. land rig count sometime in 2023 Q3 or early 2023 Q4 with a slow ramp up through all four quarters of 2024; - Specifically, the consensus average
U.S. land rig count is forecast to decline to 661 active rigs in 2023 Q3 from 699 in 2023 Q2 (5% drop) before recovering to 670 in 2023 Q4 (1% recovery); - The forecast average
U.S. land rig count for 2023 is currently 693, down only 2% year over year, on average; - Although it is early, the forecast average among these seven investment banks is for a modest uptick in 2024 – to an average of approximately 700 active rigs;
- Looking to 2024 and beyond, oil and natural gas prices need to stabilize at current or higher levels, while natural gas takeaway capacity needs to be added from the Haynesville and Permian, to supply the plethora of LNG projects now under development. Once this infrastructure is in place, the call on oilfield service companies with a well-scaled
U.S. operating footprint is likely to be considerable. Cathedral believes it is well on the way to establishing such an operating footprint in theU.S ; - In
Western Canada , the seven analysts predict that the average rig count will be modestly stronger year-over-year in 2023 and 2024 (9% and 4%, respectively), mostly due to the ramping in field spending, related to supplying the first natural gas into LNG Canada for 2025; - Although the
U.S. has been a much stronger growth market over the last decade, due primarily to field spending in the Permian, looking out to 2024,Canada appears to offer more near-term growth visibility; - Improved E&P balance sheets are less exposed to oil and gas price volatility, which may lead to a moderation in the amplitude of the drilling cycles going forward;
- Cathedral expects to maintain a strong market share in
Canada through the rest of 2023 and is equally optimistic on 2024 activity, given the ongoing ramp in LNG-related spending.
The Company believes the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.
Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Those material factors and assumptions are based on information currently available to the Company, including information obtained from third-party industry analysts and other third-party sources. In some instances, material assumptions and material factors are presented elsewhere in this news release in connection with the forward-looking statements. You are cautioned that the following list of material factors and assumptions is not exhaustive. Specific material factors and assumptions include, but are not limited to:
- the performance of Cathedral's business;
- impact of economic and social trends;
- oil and natural gas commodity prices and production levels;
- capital expenditure programs and other expenditures by Cathedral and its customers;
- the ability of Cathedral to retain and hire qualified personnel;
- the ability of Cathedral to obtain parts, consumables, equipment, technology, and supplies in a timely manner to carry out its activities;
- the ability of Cathedral to maintain good working relationships with key suppliers;
- the ability of Cathedral to retain customers, market its services successfully to existing and new customers and reliance on major customers;
- risks associated with technology development and intellectual property rights;
- obsolesce of Cathedral's equipment and/or technology;
- the ability of Cathedral to maintain safety performance;
- the ability of Cathedral to obtain adequate and timely financing on acceptable terms;
- the ability of Cathedral to comply with the terms and conditions of its credit facility;
- the ability to obtain sufficient insurance coverage to mitigate operational risks;
- currency exchange and interest rates;
- risks associated with future foreign operations;
- the ability of Cathedral to integrate its transactions and the benefits of any acquisitions, dispositions and business development efforts;
- environmental risks;
- business risks resulting from weather, disasters and related to information technology;
- changes under governmental regulatory regimes and tax, environmental, climate and other laws in
Canada and theU.S. ; and - competitive risks.
Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause the Company's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks identified in this news release and in the Company's Annual Information Form under the heading "Risk Factors". Any forward-looking statements are made as of the date hereof and, except as required by law, the Company assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.
All forward-looking statements contained in this news release are expressly qualified by this cautionary statement. Further information about the factors affecting forward-looking statements is available in the Company's current Annual Information Form that has been filed with Canadian provincial securities commissions and is available on www.sedarplus.ca and the Company's website (www.cathedralenergyservices.com).
As at
Canadian dollars in '000s
(unaudited)
As at |
|
|
Assets | ||
Current assets: | ||
Cash | $ 20,123 | $ 11,175 |
Trade receivables | 93,487 | 113,477 |
Prepaid expenses | 2,652 | 4,529 |
Inventories | 35,282 | 26,195 |
Total current assets | 151,544 | 155,376 |
Property, plant and equipment | 109,435 | 108,530 |
Intangible assets | 34,855 | 38,511 |
Right-of-use assets | 10,169 | 12,178 |
38,488 | 39,395 | |
Total non-current assets | 192,947 | 198,614 |
Total assets | $ 344,491 | $ 353,990 |
Liabilities and Shareholders' Equity | ||
Current liabilities: | ||
Trade and other payables | $ 85,467 | $ 90,389 |
Current taxes payable | 807 | 909 |
Loans and borrowings, current | 15,680 | 15,735 |
Lease liabilities, current | 3,222 | 3,631 |
Total current liabilities | 105,176 | 110,664 |
Loans and borrowings, long-term | 44,400 | 64,800 |
Lease liabilities, long-term | 12,851 | 14,249 |
Deferred tax liability | 12,150 | 10,380 |
Total non-current liabilities | 69,401 | 89,429 |
Total liabilities | 174,577 | 200,093 |
Shareholders' equity: | ||
Share capital | 198,923 | 180,484 |
(709) | (959) | |
Contributed surplus | 14,223 | 15,854 |
Accumulated other comprehensive income | 13,138 | 17,389 |
Deficit | (55,661) | (58,871) |
Total shareholders' equity | 169,914 | 153,897 |
Total liabilities and shareholders' equity | $ 344,491 | $ 353,990 |
Three and six months ended
Canadian dollars in '000s except per share amounts
(unaudited)
Three months ended | Six months ended | |||
2023 | 2022 | 2023 | 2022 | |
Revenues | $ 115,058 | $ 27,652 | $ 242,723 | $ 62,037 |
Cost of sales: | ||||
Direct costs | (88,509) | (22,481) | (189,741) | (47,005) |
Depreciation and amortization | (10,115) | (4,622) | (19,340) | (8,911) |
Share-based compensation | (96) | (49) | (240) | (92) |
Total cost of sales | (98,720) | (27,152) | (209,321) | (56,008) |
Gross margin | 16,338 | 500 | 33,402 | 6,029 |
Selling, general and administrative expenses: | ||||
Direct costs | (12,004) | (3,287) | (26,090) | (6,853) |
Depreciation and amortization | (1,499) | (124) | (3,008) | (248) |
Share-based compensation | (674) | (83) | (1,449) | (174) |
Total selling, general and administrative expenses | (14,177) | (3,494) | (30,547) | (7,275) |
Technology group expenses | (458) | (231) | (1,010) | (450) |
Gain on disposal of property, plant and equipment | 4,091 | 1,298 | 7,135 | 2,120 |
Income (loss) from operating activities | 5,794 | (1,927) | 8,980 | 424 |
Finance costs - loans and borrowings | (1,486) | (295) | (3,216) | (524) |
Finance costs - lease liabilities | (205) | (195) | (419) | (384) |
Foreign exchange (loss) gain | 954 | (873) | 913 | (563) |
Acquisition and restructuring costs | (465) | (290) | (465) | (290) |
Income (loss) before income taxes | 4,592 | (3,580) | 5,793 | (1,337) |
Income tax expense (recovery): | ||||
Current | (525) | — | (561) | — |
Deferred | (1,651) | 756 | (2,022) | 756 |
Total income tax expense (recovery) | (2,176) | 756 | (2,583) | 756 |
Net income (loss) | 2,416 | (2,824) | 3,210 | (581) |
Other comprehensive income (loss): | ||||
Foreign currency translation differences on foreign operations | (3,826) | 983 | (4,251) | 627 |
Total comprehensive income (loss) | $ (1,410) | $ (1,841) | $ (1,041) | $ 46 |
Net income (loss) per share - basic and diluted | $ 0.01 | $ (0.02) | $ 0.01 | $ (0.01) |
Six months ended
Canadian dollars in '000s
(unaudited)
Share capital | shares | Contributed surplus | Accumulated other comprehensive income | Non-controlling interest | Deficit | Total shareholders' | |
Balance, | $ 98,918 | $ — | $ 11,793 | $ 9,011 | $ — | $ (77,218) | $ 42,504 |
Comprehensive (loss) income for the period | — | — | — | 627 | — | (581) | 46 |
Issued pursuant to private placements, net of share issue costs | 27,983 | — | 3,074 | — | — | — | 31,057 |
Consideration for business combination, net of share issue costs | 8,038 | — | — | — | — | — | 8,038 |
Non-controlling interest | — | — | — | — | 177 | — | 177 |
business combination | 959 | (959) | — | — | — | — | — |
Issued pursuant to stock option exercises | 148 | — | (46) | — | — | — | 102 |
Share-based compensation | — | — | 266 | — | — | — | 266 |
Balance, | $ 136,046 | $ (959) | $ 15,087 | $ 9,638 | $ 177 | $ (77,799) | $ 82,190 |
Share capital | shares | Contributed surplus | Accumulated other comprehensive income | Deficit | Total shareholders' equity | |
Balance, | $ 180,484 | $ (959) | $ 15,854 | $ 17,389 | $ (58,871) | $ 153,897 |
Comprehensive (loss) income for the period | — | — | — | (4,251) | 3,210 | (1,041) |
Contributed surplus on vesting of treasury shares
| — | 250 | (250) | — | — | — |
Issued pursuant to warrant exercises | 18,186 | — | (2,976) | — | — | 15,210 |
Issued pursuant to stock option exercises | 253 | — | (94) | — | — | 159 |
Share-based compensation | — | — | 1,689 | — | — | 1,689 |
Balance, | $ 198,923 | $ (709) | $ 14,223 | $ 13,138 | $ (55,661) | $ 169,914 |
Three and six months ended
Canadian dollars in '000s
(unaudited)
Three months ended | Six months ended | |||
2023 | 2022 | 2023 | 2022 | |
Cash provided by (used in): | ||||
Operating activities: | ||||
Net income (loss) | $ 2,416 | $ (2,824) | $ 3,210 | $ (581) |
Non-cash adjustments: | ||||
Income tax expense (recovery) | 2,176 | (756) | 2,583 | (756) |
Depreciation and amortization | 11,614 | 4,746 | 22,348 | 9,159 |
Share-based compensation | 770 | 132 | 1,689 | 266 |
Gain on disposal of property, plant and equipment | (4,091) | (1,298) | (7,135) | (2,120) |
Write-down of inventory included in cost of sales | — | — | 378 | — |
Finance costs - loans and borrowings | 1,486 | 295 | 3,216 | 524 |
Finance costs - lease liabilities | 205 | 195 | 419 | 384 |
Income tax refund (paid) | (817) | 20 | (648) | 28 |
Unrealized foreign exchange loss (gain) on intercompany balances | (910) | 758 | (899) | 463 |
12,849 | 1,268 | 25,161 | 7,367 | |
Changes in non-cash operating working capital | (1,617) | 3,243 | 9,987 | (4,614) |
Cash flow - operating activities | 11,232 | 4,511 | 35,148 | 2,753 |
Investing activities: | ||||
Cash paid on acquisition | — | (3,930) | — | (22,090) |
Property, plant and equipment additions | (8,714) | (6,218) | (22,465) | (9,522) |
Intangible asset additions | (22) | — | (144) | — |
Proceeds on disposal of property, plant and equipment | 4,208 | 3,091 | 9,780 | 4,324 |
Changes in non-cash investing working capital | 174 | 1,046 | (1,755) | 841 |
Cash flow - investing activities | (4,354) | (6,011) | (14,584) | (26,447) |
Financing activities: | ||||
Advances of loans and borrowings | — | — | — | 19,859 |
Repayments on loans and borrowings | (16,727) | (10,779) | (20,455) | (16,723) |
Payments on lease liabilities, net of finance costs | (914) | (733) | (1,849) | (1,336) |
Interest paid | (1,691) | (490) | (3,635) | (908) |
Proceeds on share issuance | 14,479 | 24,686 | 15,367 | 31,160 |
Cash flow - financing activities | (4,853) | 12,684 | (10,572) | 32,052 |
Effect of exchange rate on changes on cash | (990) | 87 | (1,044) | 56 |
Change in cash | 1,035 | 11,271 | 8,948 | 8,414 |
Cash, beginning of period | 19,088 | 41 | 11,175 | 2,898 |
Cash, end of period | $ 20,123 | $ 11,312 | $ 20,123 | $ 11,312 |
SOURCE
© Canada Newswire, source