Mr. Bharat Mahajan reports
AVEDA TRANSPORTATION AND ENERGY SERVICES REPORTS SOLID THIRD QUARTER RESULTS
Aveda Transportation and Energy Services Inc. has released its financial results for the three months and nine months ended Sept. 30, 2017.
"We've been fortunate to build a team for Aveda that shows a passion for excellence and commitment to the goals of the organization, allowing us to execute at a new level," said Ronnie Witherspoon, president and chief executive officer for Aveda. "I'm proud of their achievements over the last year, and look forward to the excitement of tackling the future together. I believe our foundation and practices, along with strong vision, will lead to continued success as we navigate forward."
2017 third quarter business highlights
-
Generated record revenue for the three months ended Sept. 30, 2017, of $53.5-million. This is the most revenue Aveda has ever reported in any quarter in the company's history. Aveda has now reported five sequential quarters of revenue growth and three sequential quarters of record revenue. Revenue in the third quarter of 2017 increased by $32.5-million or almost 160 per cent, compared with revenue of $21.0-million for the same period in 2016;
- For the three months ended Sept. 30, 2017, the company reported gross profit before depreciation and amortization of $9.2-million. Gross profit excluding depreciation and amortization in the third quarter of 2017 increased by $6.2-million or 215 per cent compared with $2.9-million in 2016;
- Generated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $4.7-million for the three months ended Sept. 30, 2017. This amount of adjusted EBITDA continues the strong performance the company has experienced throughout fiscal 2017. Adjusted EBITDA in the third quarter of 2017 increased by $4.6-million compared with $100,000 in the third quarter of 2016;
-
Net loss for the three months ended Sept. 30, 2017, decreased by $4.5-million to $1.1-million, compared with a net loss of $5.6-million for the same period in 2016. Loss per share was two cents compared with 30 cents in the comparative period last year;
- Aveda expanded its operational footprint by opening a new terminal in Martins Ferry, Ohio. The Ohio terminal is expected to contribute to fourth quarter results; and
- Aveda ended the quarter with a net asset value per share of 64 cents, $20.4-million in working capital with a current ratio of 1.7:1, and undrawn cash availability of $32.8-million on its senior debt facility.
First nine months 2017 business highlights
-
Generated record revenue for the nine months ended Sept. 30, 2017, of $146.5-million. This is the most revenue that Aveda has ever reported in the first three quarters of any year in the company's history. Revenue in the first nine months of 2017 increased by almost $105.0-million or approximately 250 per cent, compared with revenue of $41.9-million for the same period in 2016;
- Gross profit excluding depreciation and amortization in the first nine months of 2017 increased by $23.1-million to $25.7-million compared with $2.6-million in 2016;
-
Reported adjusted EBITDA of $12.4-million for the nine months ended Sept. 30, 2017. Adjusted EBITDA in the first nine months of 2017 increased by almost $20.0-million compared with a loss of $7.5-million in the comparative period of 2016;
-
Net loss for the nine months ended Sept. 30, 2017, decreased by almost $20.0-million to $5.8-million, compared with a net loss of $25.7-million for the same period in 2016. Loss per share was 12 cents compared with $1.35 in the comparative period;
-
In addition to the opening of the Martins Ferry, Ohio., terminal discussed elsewhere, Aveda expanded its operational footprint by opening new terminals in Midland, Tex., and Casper, Wyo., in 2017;
- Aveda restructured its debt in the first quarter of 2017 as further outlined in the September management's discussion and analysis and in the news release dated Jan. 13, 2017;
-
The company also raised gross proceeds of $22.9-million through an equity offering as outlined in the news release dated, Feb. 22, 2017; and
- As a result of both successfully restructuring its debt and raising the equity outlined above, the company now has a significantly stronger balance sheet.
The company's consolidated financial statements and management's discussion and analysis for the three and nine months ended Sept. 30, 2017, are available on the company's website and on SEDAR.
Investor relations update
The company has posted an updated corporate presentation and fact sheet to its website.
Aveda's chief executive officer and chief financial officer also expect to be presenting at the World Outlook Financial Conference on Feb. 2 and Feb. 3, 2018, in Vancouver.
Conference call
The company will host its third quarter fiscal 2017 results conference call on Tuesday, Nov. 21, 2017, at 10:30 a.m. Eastern Time. President and chief executive officer, Ronnie Witherspoon, and vice-president, finance, and chief financial officer, Bharat Mahajan, will discuss Aveda's financial results for the quarter and then take questions from securities analysts.
To access the conference call by telephone, dial 416-915-3239 or 403-351-0324. A live audio webcast of the conference call will be available on-line.
The conference call webcast will be archived and available until Dec. 31, 2017, on-line.
FINANCIAL OVERVIEW
(in thousands, except per share and ratio amounts)
Three months Three months Nine months Nine months
ended ended ended ended
Sept. 30 Sept. 30 Sept. 30 Sept. 30
2017 2016 2017 2016
Revenue 53,502 20,955 146,523 41,886
Gross profit (loss) 5,288 (1,563) 14,001 (10,930)
Gross margin 10% -7% 10% -26%
Gross profit excluding
depreciation and amortization 9,154 2,905 25,676 2,577
Gross margin excluding
depreciation and amortization 17% 14% 18% 6%
Adjusted EBITDA (loss) 4,708 71 12,370 (7,539)
Adjusted EBITDA as a
percentage of revenue 9% 0% 8% -18%
Net (loss) (1,105) (5,645) (5,802) (25,696)
Net (loss) as a percentage of
revenue -2% -27% -4% -61%
Adjusted EBITDA (loss)
per share 0.08 - 0.25 (0.40)
(Loss) per share -- basic
and diluted (0.02) (0.30) (0.12) (1.35)
Current ratio 1.7 2.0 1.7 2.0
Debt to equity ratio 2.0 3.0 2.0 3.0
Outlook
Aveda earns revenue primarily by providing specialized transportation services to companies engaged in the exploration, development and production of petroleum resources. As a result, demand for Aveda's transportation services is generally linked to the economic conditions of the energy industry and the level of drilling activity in the United States and the Western Canadian sedimentary basin.
Relative to the first half of 2016, both oil and natural gas prices have rebounded and rig counts in both Canada and the United States have substantially risen in the first three quarters of 2017 and stabilized into the fourth quarter. Based both on general market enthusiasm with respect to commodity prices and discussions with Aveda's customers, management expects 2018 to be an even stronger year in terms of drilling activity.
Accordingly, the company is planning for increased activity levels through its equipment activation and refurbishment program. The company began refurbishing its working fleet as well as idled assets in the third quarter of 2017. This refurbishment program also included upgrading and enhancing the capabilities of several of the company's assets. In the third quarter of 2017, the company invested approximately $1.8-million of capital into its fleet and estimates that its direct operating expenses were negatively impacted by $100,000 to $200,000 as result of the refurbishment and reactivation program. The company anticipates making similar investments in the fourth quarter of 2017. Aveda is expected to have most of its equipment activated and working in the first quarter of 2018 to ensure the company is able to take advantage of what appears to be a year of stronger activity. As these assets are activated and refurbished, the company will need additional people to operate them. Aveda is expecting to hire approximately 120 employees in the fourth quarter of 2017. Aveda is committed to improving the quality of its revenue by shifting more revenue to owned equipment versus the use of third party subcontractors.
The company also anticipates that it will increase its hoisting capacity by re-engineering several of its assets in 2018. Accordingly, Aveda is planning to invest $6.0-million in its capital program in 2018, with approximately $3.0-million to $4.0-million allocated toward maintenance capital and the remainder toward purchasing and re-engineering hoisting equipment.
Based on the information above, Aveda expects to see continued improvements in revenue, adjusted EBITDA and net income results in 2018.
About Aveda Transportation and Energy Services Inc.
Aveda provides specialized transportation services and equipment required for the exploration, development and production of petroleum resources in the Western Canadian sedimentary basin and in the United States, principally in and around the states of Texas, Pennsylvania, Wyoming, Oklahoma, Ohio and North Dakota.
We seek Safe Harbor.
© 2024 Canjex Publishing Ltd. All rights reserved.