10:46:31 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



Clearstream Energy Services Inc
Symbol CSM
Shares Issued 109,941,241
Close 2017-05-03 C$ 0.23
Market Cap C$ 25,286,485
Recent Sedar Documents

Clearstream loses $3.99-million in Q1

2017-05-03 18:28 ET - News Release

Mr. John Cooper reports

CLEARSTREAM ANNOUNCES FIRST QUARTER 2017 FINANCIAL RESULTS

Clearstream Energy Services Inc. has released its results for the three months ended March 31, 2017.

First quarter 2017 highlights:

  • Revenue for the first quarter of 2017 increased by $9.0-million or 13 per cent compared with the first quarter of 2016.
  • Adjusted EBITDAS (net earnings determined in accordance with international financial reporting standards, before depreciation and amortization, interest expense, income tax expense (recovery), and stock-based compensation excluding income from equity investments, the gain on sale of assets held for sale, impairment of goodwill and intangible assets, restructuring costs, and gain on sale of property plant and equipment) for the first quarter of 2017 increased significantly by $1.6-million or 389 per cent compared with the same period 2016.
  • Fixed costs, which include indirect costs of sales and selling, general and administrative expenses, were down 24 per cent compared with the same period in 2016.
  • Many of the company's customers deferred maintenance spending in 2016 in response to very challenging market conditions, and with commodity price improvements, its customers have shown a willingness to increase critical maintenance spending in 2017.
  • The company began operations in Saskatchewan during the first quarter of 2017 and added new customers in the fertilizer, utility, and oil and gas industries.
  • Turnaround demand is typically strong during the second quarter, and this is expected to be the case in 2017, which is expected to benefit second quarter financial results.

                   OVERVIEW OF FINANCIAL RESULTS  
              ($ millions, except per-share amounts)                      
                                                       Q1 2017       Q1 2016

Revenue                                                  $77.7         $68.6
Gross profit                                               6.5           5.3
Selling, general and administrative expenses              (4.5)         (5.0)
(Loss) from continuing operations                         (3.6)        (16.1)
EBITDAS                                                    3.8          (7.4)
Adjusted EBITDAS                                           2.1           0.4
(Loss) per share from continuing operations,
basic and diluted                                        (0.03)        (0.15)

Revenues for the three months ended March 31, 2017, were $77.7-million compared with $68.6-million for the same period in 2016, an increase of 13 per cent. Demand for Clearstream's services increased for both reportable segments due largely to higher oil and gas prices and increased revenue from new customers.

Gross profit for the three months ended March 31, 2017, was $6.5-million compared with $5.3-million for the same period in 2016, and gross margins were 8.4 per cent compared with 7.7 per cent for the same period in 2016. Gross margins improved on a year-over-year basis as cost-cutting initiatives executed in 2016 led to reductions in fixed indirect costs.

Selling, general and administrative costs for the three months ended March 31, 2017, were $4.5-million compared with $5.0-million in 2016. The 9-per-cent decrease reflects cost-cutting initiatives that were implemented in 2016.

The loss from continuing operations for the first quarter of 2016 included $8.7-million in goodwill impairment losses. The first quarter of 2017 did not include such losses.

Outlook

Modest improvements to oil and gas prices led to stronger industry conditions during the first quarter of 2017. Clearstream expects this trend to continue with increased maintenance and turnaround demand expected in the second quarter of 2017 compared with the same period in 2016. Its customers deferred a significant amount of maintenance spending throughout 2016 given the weak market conditions combined with the impact of the Fort McMurray fires. As a result, spending on critical maintenance and turnaround programs is expected to increase with the improvements in oil and gas prices and overall market conditions. In addition, turnaround demand is typically strong during the second quarter, and this is expected to be the case in 2017, which is expected to benefit second quarter financial results.

Although maintenance and turnaround demand is expected to improve in 2017, customer project activity is not expected to increase significantly compared with 2016. New infrastructure projects within the Western Canadian oil and gas industry are not expected to increase until a substantial increase in commodity prices occurs.

Given the uncertainty of commodity prices and the competitiveness of the oil field service industry, Clearstream management will continue to focus on cost control, customer retention, process and efficiency improvements, and diversification of its business into new geographies and markets outside of oil and gas.

About Clearstream Energy Services Inc.

Clearstream is a fully integrated provider of upstream, mid-stream and refinery production services, which include facility maintenance and turnarounds, pipeline wear technology, facilities construction, welding and fabrication, and transportation to the energy and other industries in Western Canada.

                            
                   CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS      
                     (in thousands of dollars, except per-share amounts)
                                                                           Three months ended
                                                                        March 31,       March 31,
                                                                            2017            2016

Revenue                                                              $    77,689     $    68,640
Cost of revenue                                                          (71,149)        (63,324)
                                                                      ----------      ----------
Gross profit                                                               6,540           5,316
Selling, general and administrative expenses                              (4,528)         (4,952)
Stock-based compensation                                                    (309)              -
Amortization of intangible assets                                           (863)           (901)
Depreciation                                                              (1,231)         (1,548)
Income (loss) from equity investment                                          37            (235)
Interest expense                                                          (5,032)         (6,241)
Gain on sale of assets held for sale                                         123           1,114
Restructuring costs                                                         (277)              -
Impairment of goodwill and intangible assets                                   -          (8,700)
Gain on sale of property, plant and equipment                              1,917              55
                                                                      ----------      ----------
(Loss) from continuing operations                                         (3,623)        (16,092)
                                                                      ----------      ----------
(Loss) from discontinued operations (net of income taxes)                   (370)         (4,725)
                                                                      ----------      ----------
Net (loss) and comprehensive (loss)                                  $    (3,993)    $   (20,817)
                                                                      ----------      ----------
(Loss) per share
Basic and diluted
Continuing operations                                                $     (0.03)    $     (0.15)
Discontinued operations                                              $     (0.00)    $     (0.04)
Net (loss)                                                           $     (0.04)    $     (0.19)
                                                                      ----------      ----------

We seek Safe Harbor.

© 2024 Canjex Publishing Ltd. All rights reserved.