TSX: PSD
OTCQX: PLSDF
CALGARY, Aug. 1, 2014 /CNW/ - Pulse Seismic Inc. ("Pulse" or "the
Company") reports its financial and operating results for the three and
six months ended June 30, 2014. The unaudited condensed consolidated
interim financial statements and MD&A will be filed on SEDAR (www.sedar.com) and will be available on Pulse's website (www.pulseseismic.com).
Pulse has declared a quarterly dividend of $0.02 per common share. This
dividend will be paid on September 19, 2014 to shareholders of record
at the close of business on September 5, 2014. Dividends are designated
as an eligible dividend for Canadian income tax purposes. For
non-resident shareholders, Pulse's dividends are subject to Canadian
withholding tax.
HIGHLIGHTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014
Pulse's key performance metrics, which include cash EBITDA(a), shareholder free cash flow(a), funds from operations(b) and net earnings or loss, all improved in the three-month period ending
June 30, 2014 over the prior year's period. The improvement resulted
from the period-over-period increase in data library sales.
For the six months ended June 30, 2014, the period-over-period reduction
in data library sales and participation survey revenue reduced Pulse's
key performance metrics, with the exception of net loss.
The net loss in both prior-year periods was increased by the record
seismic amortization expense recorded upon completion of the 2012-2013
winter seismic surveys.
-
Seismic data library sales for the second quarter of 2014 increased to
$7.3 million from $4.5 million for the comparable period in 2013.
Seismic data library sales for the six months ended June 30, 2014 were
$12.8 million compared to $18.4 million for the first half of 2013.
-
Total seismic revenue (including revenue from participation surveys) was
$7.3 million for the three months ended June 30, 2014 and $12.8 million
for the six months ended June 30, 2014, compared to $4.8 million and
$31.8 million for the respective periods in 2013. There were no
participation surveys in progress during the first two quarters of
2014. The Company recognized $13.4 million of participation survey
revenue for the 2012-2013 winter seismic surveys in the first half of
2013.
-
Cash EBITDA was $5.5 million ($0.09 per share basic and diluted) for the
second quarter of 2014 compared to $2.3 million ($0.04 per share basic
and diluted) for the comparable period in 2013. Cash EBITDA was $9.2
million ($0.16 per share basic and diluted) for the six months ended
June 30, 2014 compared to $13.6 million ($0.22 per share basic and
diluted) for the six months ended June 30, 2013.
-
Shareholder free cash flow was $5.2 million ($0.09 per share basic and
diluted) for the second quarter of 2014 compared to $2.8 million ($0.05
per share basic and diluted) for the comparable period in 2013.
Shareholder free cash flow was $8.8 million ($0.15 per share basic and
diluted) for the six months ended June 30, 2014 compared to $13.2
million ($0.22 per share basic and diluted) for the first half of 2013.
-
A net loss of $612,000 (including non-cash amortization expense of $5.8
million) was incurred in the second quarter of 2014, bringing the net
loss for the six months ended June 30, 2014 to $2.4 million (including
non-cash amortization expense of $11.7 million). The net loss for the
second quarter of 2013 was $15.1 million (including non-cash
amortization expense of $22.3 million) and for the six months ended
June 30, 2013 was $12.5 million (including non-cash amortization
expense of $42.3 million).
-
During the second quarter of 2014, Pulse reduced its total debt(c) by $2.5 million. At June 30, 2014 total debt was $16.0 million. On July
31, 2014 Pulse made an additional $4.5 million repayment. Subsequent to
the repayment, Pulse's total debt was $11.5 million, with $38.5 million
available for future draws.
-
Pulse paid two dividends of $0.02 per share each, in the second quarter,
totalling $2.4 million. The first, paid in April, had been declared in
the first quarter and the second dividend, paid in June, was declared
in the second quarter of 2014.
Selected Financial and Operating Information |
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(thousands of dollars except per share data and number of shares)
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| Three months ended | Six months ended |
|
| June 30 | June 30 | Year ended |
| 2014 | 2013 | 2014 | 2013 | December 31, |
|
(unaudited)
|
(unaudited)
| 2013 |
Revenue
|
|
|
|
|
|
|
|
|
|
|
Data library sales
|
$
|
7,321
|
$
|
4,486
|
$
|
12,827
|
$
|
18,350
|
$
|
27,079
|
Participation surveys
|
|
-
|
|
361
|
|
-
|
|
13,429
|
|
13,429
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Total revenue
|
$
|
7,321
|
$
|
4,847
|
$
|
12,827
|
$
|
31,779
|
$
|
40,508
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of seismic data library
|
$
|
5,842
|
$
|
22,287
|
$
|
11,674
|
$
|
42,314
|
$
|
55,619
|
Net loss
|
$
|
(612)
|
$
|
(15,081)
|
$
|
(2,432)
|
$
|
(12,540)
|
$
|
(18,834)
|
Per share basic and diluted
|
$
|
(0.01)
|
$
|
(0.25)
|
$
|
(0.04)
|
$
|
(0.21)
|
$
|
(0.31)
|
Cash EBITDA (a) |
$
|
5,467
|
$
|
2,298
|
$
|
9,230
|
$
|
13,639
|
$
|
19,145
|
Per share basic and diluted (a) |
$
|
0.09
|
$
|
0.04
|
$
|
0.16
|
$
|
0.22
|
$
|
0.32
|
Shareholder free cash flow (a) |
$
|
5,246
|
$
|
2,849
|
$
|
8,796
|
$
|
13,220
|
$
|
20,682
|
Per share basic and diluted (a) |
$
|
0.09
|
$
|
0.05
|
$
|
0.15
|
$
|
0.22
|
$
|
0.34
|
Funds from operations (b) |
$
|
8,796
|
$
|
1,982
|
$
|
12,407
|
$
|
22,689
|
$
|
27,751
|
Per share basic and diluted (b) |
$
|
0.15
|
$
|
0.03
|
$
|
0.21
|
$
|
0.37
|
$
|
0.46
|
Capital expenditures
|
|
|
|
|
|
|
|
|
|
|
Participation surveys
|
$
|
-
|
$
|
515
|
$
|
-
|
$
|
21,215
|
$
|
21,265
|
Seismic data purchases and related costs
|
|
184
|
|
290
|
|
367
|
|
588
|
|
961
|
Property and equipment additions
|
|
7
|
|
75
|
|
21
|
|
149
|
|
127
|
Total capital expenditures
|
$
|
191
|
$
|
880
|
$
|
388
|
$
|
21,952
|
$
|
22,353
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
59,314,120
|
|
60,664,740
|
|
59,330,197
|
|
60,810,594
|
|
60,280,876
|
Shares outstanding at period end
|
|
|
|
|
|
59,314,120
|
|
60,377,670
|
|
59,349,120
|
Seismic library
|
|
|
|
|
|
|
|
|
|
|
2D in kilometres
|
|
|
|
|
|
339,991
|
|
339,991
|
|
339,991
|
3D in square kilometres
|
|
|
|
|
|
28,284
|
|
28,284
|
|
28,284
|
|
|
|
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Financial Position and Ratios |
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(thousands of dollars except ratio calculations)
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June 30,
|
|
June 30,
|
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December 31,
|
|
|
|
|
|
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2014
|
|
2013
|
|
2013
|
Working capital
|
|
|
|
|
$
|
5,691
|
$
|
4,600
|
$
|
6,476
|
Working capital ratio
|
|
|
|
|
|
3.06:1
|
|
2.16:1
|
|
3.71:1
|
Total assets
|
|
|
|
|
$
|
86,188
|
$
|
110,784
|
$
|
98,017
|
Total debt (c) |
|
|
|
|
$
|
16,000
|
$
|
21,100
|
$
|
22,100
|
TTM cash EBITDA (d) |
|
|
|
|
$
|
14,736
|
$
|
25,405
|
$
|
19,145
|
Shareholders' equity
|
|
|
|
|
$
|
60,771
|
$
|
78,255
|
$
|
65,962
|
Total debt to equity ratio
|
|
|
|
|
|
0.26:1
|
|
0.27:1
|
|
0.34:1
|
Total debt to TTM cash EBITDA ratio
|
|
|
|
|
|
1.09:1
|
|
0.83:1
|
|
1.15:1
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(a) The Company's continuous disclosure documents provide discussion and
analysis of "cash EBITDA", "cash EBITDA per share", "shareholder free
cash flow" and "shareholder free cash flow per share". These financial
measures do not have standard definitions prescribed by IFRS and,
therefore, may not be comparable to similar measures disclosed by other
companies. The Company has included these non-GAAP financial measures
because management, investors, analysts and others use them as measures
of the Company's financial performance. The Company's definition of
cash EBITDA is cash available for interest payments, cash taxes if
applicable, debt servicing, discretionary capital expenditures and the
payment of dividends, and is calculated as earnings (loss) from
operations before interest, taxes, depreciation and amortization less
participation survey revenue, plus any non-cash and non-recurring
expenses. Cash EBITDA excludes participation survey revenue as these
funds are directly used to fund specific participation surveys and this
revenue is not available for discretionary capital expenditures. The
Company believes cash EBITDA assists investors in comparing Pulse's
results on a consistent basis without regard to participation survey
revenue and non-cash items, such as depreciation and amortization,
which can vary significantly depending on accounting methods or
non-operating factors such as historical cost. Cash EBITDA per share is
defined as cash EBITDA divided by the weighted average number of shares
outstanding for the period. Shareholder free cash flow further refines
the calculation of capital available to invest in growing the Company's
3D and 2D seismic data library, to repay debt, to purchase its common
shares and to pay dividends by deducting non-discretionary expenditures
from cash EBITDA. Non-discretionary expenditures are defined as debt
financing costs (net of deferred financing expenses amortized in the
current period) and current tax provisions. Shareholder free cash flow
per share is defined as shareholder free cash flow divided by the
weighted average number of shares outstanding for the period.
(b) Funds from operations is an additional GAAP measure. Funds from
operations is defined as cash provided by operations as prescribed by
IFRS, excluding the impact of changes in non-cash working capital.
Funds from operations represents the cash that was generated during the
period, regardless of the timing of collection of receivables and
payment of payables. Funds from operations per share is defined as
funds from operations divided by the weighted average number of shares
outstanding for the period. Funds from operations for the comparative
three and six months ended June 30, 2013 reflect a reclassification to
conform to the current year's financial statement presentation.
(c) Total debt is defined as long-term debt, including current portion,
excluding deferred financing costs.
(d) TTM cash EBITDA is defined as the sum of the trailing 12 month's cash
EBITDA and is used to provide a comparable annualized measure.
OUTLOOK
Pulse's low cost structure and strong balance sheet enable the Company
to continue operating under low revenue levels and still provide
returns to shareholders. The moderate quarter-over-quarter improvement
in data library sales generated significantly higher cash EBITDA and
shareholder free cash flow.
Pulse maintains its cautious outlook for the remainder of 2014. The
current environment continues to be depressed, while conversely there
are also signs of improvement. There has been developing momentum in
publicly announced asset transactions as well as mergers and
acquisitions in 2014. Natural gas prices have eased somewhat since the
first quarter, but the AECO spot price remained in the $4-per-gigajoule
range throughout July. Hydraulic fracturing providers are known to be
busy, suggesting a reasonable pace of capital spending by oil and
natural gas producers. There is some uncertainty whether these
activities will translate into more active data library sales.
In June, the Canadian Association of Oilwell Drilling Contractors issued
a slight upward revision to its 2014 drilling forecast, noting
higher-than-forecast fleet utilization and a larger number of total
drilling days in the second quarter. In the latest forecast, 11,494
wells are forecast to be completed in 2014, up from 11,102 in 2013.
Pulse will continue to practise prudent cost and capital management and
remain focused on generating returns for shareholders.
CONFERENCE CALL
The Company's next conference call will be held after the release of its
year-end 2014 results. Investors or analysts should feel free to
contact Neal Coleman or Pamela Wicks at the telephone numbers or e-mail
address provided below.
CORPORATE PROFILE
Pulse is a market leader in the acquisition, marketing and licensing of
2D and 3D seismic data to the western Canadian energy sector. Pulse
owns the second-largest licensable seismic data library in Canada,
currently consisting of approximately 28,300 square kilometres of 3D
seismic and 340,000 kilometres of 2D seismic. The library extensively
covers the Western Canada Sedimentary Basin where most of Canada's oil
and natural gas exploration and development occur.
Forward-Looking Information
This news release contains information that constitutes "forward looking
information" or "forward looking statements" (collectively, "forward
looking information") within the meaning of applicable securities
legislation. This forward looking information includes, among other
things, statements regarding:
-
The Company can continue to operate under low revenue levels and still
provide returns to shareholders;
-
The current environment continues to be depressed, while conversely
there are also signs of improvement;
-
There has been developing momentum in publicly announced asset
transactions as well as mergers and acquisitions in 2014;
-
General economic and industry outlook;
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Industry activity levels and capital spending;
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Forecast commodity prices;
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Oil and natural gas producer's forecast capital budgets and cash flows;
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Estimated future demand for seismic data;
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Estimated future seismic data sales;
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Estimated future demand for participation surveys;
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Management's expectations on the sufficiency of Pulse's capital
resources;
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Pulse's business and growth strategy; and
-
Other expectations, beliefs, plans, goals, objectives, assumptions,
information and statements about possible future events, conditions,
results and performance.
Often, but not always, forward looking information uses words or phrases
such as: "expects", "does not expect" or "is expected", "anticipates"
or "does not anticipate", "plans" or "does not plan", "estimates" or
"estimated", "projects" or "projected", "forecasts" or "forecast",
"believes" or "does not believe", "intends" or "does not intend",
"likely" or "unlikely", "possible", "probable", "scheduled",
"positioned", "goal", "objective", "hopes", "optimistic" or states
that certain actions, events or results "should", "may", "could",
"would", "might" or "will" be taken, occur or be achieved.
Undue reliance should not be placed on forward-looking information.
Forward looking information is based on current expectations, estimates
and projections that involve a number of risks and uncertainties which
could cause actual results to vary and in some instances to differ
materially from those anticipated in the forward looking information.
Pulse does not publish specific financial goals or otherwise provide
guidance, due to the inherently unclear visibility of seismic revenue.
The material risk factors that could cause actual results to differ
materially from the forward-looking information include, but are not
limited to:
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Oil and natural gas prices;
-
Seismic industry cycles and seasonality;
-
The demand for seismic data and participation surveys;
-
The pricing of data library license sales;
-
Relicensing (change of control) fees and partner copy sales;
-
The level of pre-funding of participation surveys, and the ability of
the Company to make subsequent data library sales from such
participation surveys;
-
The Company's ability to complete participation surveys on time and
within budget;
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Environmental, health and safety risks;
-
The effect of seasonality and weather conditions on participation
surveys;
-
Federal and provincial government laws and regulations, including those
regarding taxation, royalty rates, environmental protection and safety;
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Competition;
-
Dependence on qualified seismic field contractors;
-
Dependence on key management, operations and marketing personnel;
-
Loss of seismic data;
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Protection of intellectual property; and
-
The introduction of new products.
The foregoing list of risks is not exhaustive. Additional information on
these risks and other factors which could affect the Company's
operations or financial results are included in the Risk Factors
section of the Company's MD&A for the most recent calendar year and
interim periods. Forward looking information is based upon the
assumptions, expectations, estimates and opinions of the Company's
management at the time the information is presented.
SOURCE Pulse Seismic Inc.
<p> <b>Neal Coleman</b>, President and CEO<br/> Or<br/> <b>Pamela Wicks</b>, VP Finance and CFO<br/> Tel.: (403) 237-5559<br/> Toll-free: 1-877-460-5559<br/> E-mail: <a href="mailto:info@pulseseismic.com">info@pulseseismic.com</a>.<br/> Please visit our website at <a href="http://www.pulseseismic.com/">www.pulseseismic.com</a>. </p>