Pulse Seismic Inc. press release
Pulse Seismic Inc. reports Q1 2010 results
TSX - Toronto Stock Exchange ยท Canada
May 5, 2010 (Canada NewsWire Group) --
TSX Symbol - PSD
Douglas Cutts, President and Chief Executive Officer of Pulse Seismic Inc. ("Pulse" or "the Company"), reports the financial and operating results of Pulse for the three months ended March 31, 2010. The unaudited interim consolidated financial statements, accompanying notes and MD&A are being filed on SEDAR. These documents will also be available on Pulse's website www.pulseseismic.com.
HIGHLIGHTS
<< Seismic data library sales increased to $5.1 million for the three months ended March 31, 2010 from $2.2 million for the same period in 2009.
Cash EBITDA(a) for the three months ended March 31, 2010 was $3.5 million ($0.07 per share basic and diluted) compared to $0.7 million ($0.01 per share basic and diluted) for the same period in 2009.
The net loss for the three months ended March 31, 2010 was $1.5 million ($0.03 per share basic and diluted) compared to the net loss of $2.9 million ($0.05 per share basic and diluted) for the three months ended March 31, 2009.
Pulse's working capital position at March 31, 2010 was $18.1 million (including cash of $19.9 million and current portion of long term debt of $7.0 million) compared to $11.0 million (including cash of $17.0 million and current portion of long term debt of $7.0 million) at March 31, 2009.
On February 3, 2010 Pulse prepaid $2.8 million of its long-term debt, without penalty, in order to reduce interest charges. This prepayment represented 10 percent of the revolving term bank loan balance as at January 1, 2010. The Company's total long-term debt less cash balance as at March 31, 2010 was $3.0 million.
SELECT FINANCIAL AND OPERATING INFORMATION
('000's except per share data and number of shares)
3 months ended Year ended March 31, December 31, 2010 2009 2009 (unaudited) (unaudited)
Revenue: Data library sales $ 5,116 $ 2,152 $ 23,444 Participation surveys - 4,872 7,302 Total revenue $ 5,116 $ 7,024 $ 30,746
Amortization of seismic data library $ 4,896 $ 8,856 $ 24,569
Net loss $ (1,533) $ (2,925) $ (2,755) Loss per share: Basic and diluted $ (0.03) $ (0.05) $ (0.05)
Funds from operations(a) $ 3,072 $ 5,176 $ 22,084 Funds from operations per share(a): Basic and diluted $ 0.06 $ 0.10 $ 0.41
Cash EBITDA(a) $ 3,460 $ 656 $ 16,359 Cash EBITDA(a) per share $ 0.07 $ 0.01 $ 0.31
Capital expenditures: Seismic data purchases $ - $ - $ 315 Participation surveys (cost recoveries) (276) 8,900 12,083 Changes to work in progress - (1,641) (1,681) Property & equipment additions - 22 29 Total capital expenditures $ (276) $ 7,281 $ 10,746
Seismic library: 2D in net kilometres 257,994 257,281 257,994 3D in net square kilometres 12,913 12,805 12,913
Weighted average shares outstanding: Basic 53,071,383 53,263,616 53,318,318 Diluted 53,071,383 53,263,616 53,318,318 Shares outstanding at period end 53,071,383 53,160,483 53,071,383
Financial Position and Ratios ($000s except per ratio and percentage calculations)
Working capital $ 18,091 $ 10,988 $ 19,296 Working capital ratio 2.8 2.0 2.8 Total assets $ 90,865 $ 102,654 $ 98,219 Long-term debt(b) $ 22,932 $ 32,384 $ 27,407 TTM cash EBITDA(c) $ 19,163 $ 22,959 $ 16,359 Shareholders' equity $ 61,883 $ 63,067 $ 63,345 Long-term debt to equity ratio 0.37 0.51 0.43 Long-term debt to TTM cash EBITDA ratio 1.20 1.41 1.68
(a) The Company's continuous disclosure documents provide discussion and analysis of "Cash EBITDA", "funds from operations" and "funds from operations per share". These financial measures do not have standard definitions prescribed by GAAP in Canada 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 before interest, taxes, depreciation and amortization less participation survey revenue, plus non-cash and non-recurring G&A 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. The Company's definition of funds from operations is cash flow from operations as prescribed by Canadian GAAP but excluding the impact of changes in non-cash working capital. Funds from operations represent 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.
(b) Long-term debt is defined as total long-term debt, including current portion, net of debt financing cost.
(c) TTM cash EBITDA is defined as the sum of the trailing twelve months cash EBITDA and is used to provide a comparable annualized measure. >>
OUTLOOK
Pulse is cautiously optimistic about energy industry activity levels and capital spending over the remainder of 2010 and, hence, about the Company's data library sales. The main drivers of Pulse's business remain the same as those discussed in the Outlook section of the MD&A for the year ended December 31, 2009, and the reader is referred to that document for background information germane to Pulse's current quarterly outlook.
The Company's cautious optimism is based on a number of positive economic and industry signals. These include:
>
The positive signals are offset to a large degree by the continued weakness in natural gas prices - coupled with poor visibility on natural gas pricing trends - and the generally weak ability of natural gas-focused producers to access substantial new capital for exploration spending. The AECO 'C' spot natural gas price was well below $4per mcf at the end of April. The lack of pricing visibility is shared by commodity experts and forecasting agencies, which are also generally cautious in their short-term scenarios. The number of natural gas-focused drilling rigs in the United Statescontinued to increase in April, and natural gas storage has shifted back to net weekly injection, with United Statesstorage volumes reaching all-time records for the time of year at the end of April. All of this is bearish for short-term natural gas prices. The United StatesDepartment of Energy's Energy Information Administration recently forecast high rates of natural gas storage injection during 2010 and reduced its short-term natural gas price forecast.
In summary, although there are more positive economic and industry factors currently evident compared to a year ago, Pulse expects 2010 to unfold as a slow recovery period.
CORPORATE PROFILE
Pulse is a market leader in the acquisition, marketing and licensing of 2D and 3D seismic data for the western Canadian energy sector. Pulse owns the second-largest licensable seismic data library in Canada, currently consisting of approximately 258,000 net kilometres of 2D seismic and 12,900 net square kilometres of 3D seismic. The library extensively covers the Western CanadaSedimentary Basin where most of Canada's oil and natural gas exploration and development occurs.
Forward Looking Information
The "Outlook" section of 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:
>
Undue reliance should not be placed on forward-looking information. Forward looking information is based upon 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.
The sources for forecasts and the material assumptions underlying this forward looking information are noted in the "Outlook" section of this news release.
The material risk factors that could cause actual results to differ materially from the forward-looking information include, but are not limited to:
>
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.