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Enter Symbol
or Name
USA
CA



Lonestar West Inc
Symbol LSI
Shares Issued 29,153,053
Close 2014-08-28 C$ 3.39
Market Cap C$ 98,828,850
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Lonestar loses $132,744 in Q2

2014-08-28 16:55 ET - News Release

Mr. James Horvath reports

LONESTAR WEST ANNOUNCES Q2 RESULTS

Lonestar West Inc. has released the financial results for the quarter ended June 30, 2014.

Lonestar has achieved record revenues and earnings from continuing operations before interest, income taxes, depreciation, amortization and the change in estimated acquisition earn-out payables in the six-month period ended June 30, 2014.

On Nov. 12, 2013, Lonestar West announced that it changed its financial year-end from June 30 to Dec. 31. This change in year-end allows the company to provide continuous disclosure information on a comparable basis with its industry peer group.

Highlights for the six-month period ended June 30, 2014, include:

  • Revenues increased 40.6 per cent to $21,074,881 from $14,988,921 in the previous-year-equivalent period.
  • Gross margin increased to 22.1 per cent from 18.9 per cent in the previous-year-equivalent period.
  • Normalized EBITDAC increased 66.1 per cent to $2,933,376 from $1,765,306 in the previous-year-equivalent period.
  • Normalized EBITDAC per basic share increased 28.8 per cent to 12.8 cents from 9.9 cents in the previous-year-equivalent period.
  • Income before taxes was $935,946, a $449,453 increase in comparison with the $486,493 income before taxes in the previous-year-equivalent period.
  • Net earnings for the period were $701,960, a $388,438 increase in comparison with the $313,552 net earnings in the previous-year-equivalent period.
  • The company realized a $242,114 profit in relation to a legal settlement in the company's favour.

Normalized EBITDAC rose to $2,933,376 from the previous-year-equivalent period of $1,765,306. The significant growth can be credited to improved results from both the Canadian and U.S. divisions year over year.

Gross margins for the Canadian division increased to 23.7 per cent from 19.6 per cent in the prior-year-equivalent period, which is a direct result of improved operating efficiencies achieved during the period. These efficiencies translated to EBITDAC growth for the Canadian division to $2,597,465 or 15.1 per cent of revenues compared with $1,774,529 or 12.6 per cent of revenues in the comparable prior-year quarter.

Gross margins for the U.S. division increased to 15.1 per cent from 7.5 per cent in the comparable prior-year period. The significant increase in margins was mainly due to significant revenue growth experienced during the period. Revenues rose to $3,906,491 for the first half of fiscal 2014 from $948,574 in the prior-year-equivalent period. A total of 28 trucks were added to the U.S. division since June 30, 2013. The increased revenues translated to improved EBITDAC for the U.S. division to $335,911 or 8.6 per cent of revenues, a $344,834 improvement from the negative EBITDAC of $8,926 or negative 0.9 per cent of revenues experienced in the comparable prior-year period. The U.S. division currently has nine supervisory staff operating 38 trucks as of the date of this news release. Management estimates that the current level of supervisory staff will support an additional 20 to 30 trucks. Management anticipates the U.S. division will experience a significant improvement in its operating efficiencies when additional trucks are added.

A total of 69 trucks were added to the company's fleet since June 30, 2013, for a total of 122 trucks at the end of the period. In addition, the geographical reach of the business has been expanded with the addition of seven bases since June 30, 2013. The company now operates 15 bases throughout Western Canada, California, Oklahoma, Texas and Kansas as of June 30, 2014. The increase in fleet size and base coverage was reflected with a 40.6-per-cent increase in gross revenues from the previous-year-equivalent period.

Highlights for the quarter ended June 30, 2014, include:

  • Revenues increased 53.8 per cent to $9,555,922 from $6,212,254 in the previous-year-equivalent period.
  • Gross margin increased to 18.2 per cent from 12.4 per cent in the previous-year-equivalent quarter.
  • Normalized EBITDAC increased 286.6 per cent to $808,682 from $209,172 in the previous-year-equivalent quarter.
  • Normalized EBITDAC per basic share increased 191.8 per cent to 3.4 cents from 1.2 cents in the previous-year-equivalent quarter.
  • Loss before taxes was $176,993, a $355,834 improvement in comparison with the $532,827 loss before taxes in the previous-year-equivalent quarter.
  • Net loss for the quarter was $132,744, a $315,952 improvement in comparison with the $448,696 net loss in the previous-year-equivalent quarter.
  • The company realized a $242,114 profit in relation to a legal settlement in the company's favour.

Normalized EBITDAC rose by 286.6 per cent from the previous-year-equivalent quarter with a rise from $209,172 to $808,682. The increase in operating results can be credited to the significant improvement in gross margins as a result of improved operating efficiencies.

Normalized EBITDAC for the Canadian division rose 666.4 per cent from $52,531 to $402,564. In addition, normalized EBITDAC margin rose from 1.0 per cent to 5.8 per cent of Canadian revenues. The significant increase in results can be attributed to increased operating efficiencies realized from infrastructure implemented in the Canadian division over the last four quarters.

The U.S. division also contributed positively during the quarter ended June 30, 2014. EBITDAC for the U.S. division was $406,118, a 159.3-per-cent increase when compared with $156,641 in the comparable prior-year quarter. EBITDAC margin decreased 3.2 per cent to 15.3 per cent from 18.5 per cent: This is a result of the increased costs related to the build-out of the U.S. platform. Since June 30, 2013, the company hired key personnel and opened four bases. These additional costs had a direct impact on the EBITDAC margin for the U.S. division for the second quarter of fiscal 2014. Management anticipates the EBITDAC margin will improve in the coming quarters as the build-out of the U.S. division continues.

"Lonestar continues to realize strong revenues and EBITDAC growth as a result of the company's implementation of its planned expansion strategy," commented James Horvath, chief executive officer and president of Lonestar. "The Vamp purchase has positively contributed to the company's EBITDAC since the acquisition on June 20, 2014, and is continuing to significantly contribute to the Canadian division subsequent to June 30, 2014. The U.S. division is continuing to experience revenue growth and is positively contributing to the overall EBITDAC as the seven U.S. bases build on their existing infrastructure."

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