May 1st, 2000
?ASL? - Toronto Stock Exchange
Investor Relations: Jason Krueger
Toll Free: (877) 474-4544
Telephone: (403) 263-7800
Internet: www.alpineoil.com
Email: invest@alpineoil.com
ALPINE ANNOUNCES YEAREND AND RECORD FIRST QUARTER RESULTS
Twelve months ended Dec 31 Three months ended Mar 31
1999 1998 2000 1999
Revenue $31,968,286 $34,334,943 $14,982,183 $9,819,052
Gross margin 6,619,611 11,602,400 6,261,383 3,362,787
EBITDA 701,119 7,390,453 4,868,750 2,353,179
Per Share $0.03 $0.35 $0.17 $0.11
Net income (loss) (3,363,320) 3,075,984 1,958,078 1,007,358
Per share ($0.15) $0.15 $0.07 $0.05
Cash flow from operations 1,475,518 6,372,949 3,222,192 2,066,538
Per share $0.06 $0.30 $0.11 $0.10
Weighted average shares outstanding 22,909,111 21,212,110 28,510,261 21,374,659
FISCAL 1999 RESULTS
For the year ended December 31, 1999, total revenues decreased by 7% to $32.0 million, down from $34.3 million during the same period last year. The decrease was due primarily to a decline in revenues from wireline, production and underbalanced drilling services in North America. Revenues from wireline, production testing and underbalanced drilling services decreased 4% to $19.5 million compared with $20.2 million for the same period in 1998. Drill stem testing and telemetry services were $7.3 million, up by 8% from the previous year. Equipment sales and other service revenue were $5.2 million, down by 29% from $7.4 million during 1998.
Approximately 86% of total revenues were generated within North America, primarily Canada and the United States, during 1999 compared with 77% in 1998. International markets (excluding the United States) accounted for around 15% of total revenues in 1999 compared with 21% in the prior year. International revenues were down by 37% over the same period in 1998. The decrease was primarily attributable to lower international product sales as a result of lower world oil prices. Revenues from Alpine Oil Services International Ltd. (Barbados) were $4.6 million in 1999, compared with $7.3 million in 1998.
Direct costs as a percentage of total revenues were 79% in 1999, up significantly from 66% of gross revenues in 1998. The increase was directly attributable to a combination of high fixed costs associated with lower overall gross revenues, as well as a number of non-recurring charges related primarily to discontinued operations in the amount of $0.5 million.
General, administrative and selling expenses rose dramatically from $3.9 million in 1998 to $6.0 million in 1999, an increase of 53%. Higher general, administrative and selling expenses were due primarily to higher sales costs in 1999, as well as $0.9 million of non-recurring expenses. Sales expenses were up by more than 33% in 1999 to $1.3 million compared with $1.0 million in 1998. Non-recurring general and administrative expenses included $750,000 in bad debt expenses incurred during the year, compared with $45,000 in 1998. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) in 1999 were $0.7 million compared with $7.4 million in 1998, a drop of 85%.
The Company generated a net loss for the year ending December 31, 1999 of $3.4 million, down from a profit of $3.0 million during the same period in 1998. The deficit was a result of significantly lower activity levels in the oil and gas industry worldwide as caused by record low prices for oil and gas. While energy prices rebounded during the second half of the year, activity levels were slow to recover as a result of the uncertainty experienced in North American stock markets and unseasonably wet weather in western Canada and Mexico. Earnings per share for the year ending December 31, 1999 was a loss of $0.15 compared with earnings of $0.15 for the same period in 1998.
FIRST QUARTER 2000 RESULTS
Alpine achieved record revenue and earnings during the first quarter of 2000, as a result of substantially higher levels of drilling activity in Canada and the United States, in response to record prices for both oil and natural gas. These results were consistent with management?s expectations. The most notable revenue increases occurred in the drill stem testing and telemetry and wireline, production testing and underbalanced drilling divisions.
The phenomenal growth in revenues during the first quarter were driven by higher levels of drilling activity in Canada and the United States in response to record high energy prices. In addition, the impact of Alpine?s acquisition and expansion efforts into drill stem testing and oilfield products during 1999 have positioned the Company for significant revenue growth in 2000. As a result of its consolidation strategy, Alpine controls over 50% of the Canadian market for drill stem testing and 75% of the market for telemetry in Canada. The acquisition of Techcorp Industries Inc. further contributed to the expansion of its wireline and production testing and underbalanced drilling businesses by providing the Company with a complete line of proprietary oilfield tools to further enhance its traditional service businesses.
The most significant growth in revenues came from drill stem testing and telemetry services. Virtually all of these revenues were generated in Canada. The number of drilling rigs working during the first three months of 2000 averaged 514 per month, compared with 324 during the same period last year, up from a utilization rate of 56% to 86%. A substantial portion of the increase in revenues from wireline, production testing and underbalanced drilling came from underbalanced drilling services performed in the United States.
Revenues during the three-month period ending March 31, 2000 were $15.0 million, compared with $9.8 million during the same period last year, an increase of 53%. Revenues from wireline, production testing and underbalanced drilling services were $8.1 million, up by 35% from $6.0 million in 1999. Equipment, product, sales and service revenues were $2.1 million, roughly the same as last year. Drill stem testing and telemetry services were $4.7 million, up by 169% from $1.8 million in 1999. North American revenues were $14.0 million in 2000, up 77% from $7.9 million during the same period last year. International revenues were $1.0 million, down from $1.9 million in 1999, a decrease of 47%.
Gross profits as a percent of revenues were 42% during the first quarter of 2000, up from 34% in 1999. General, administrative and selling expenses during the first quarter of 2000 were up by 42% from last year. However, this represented only 9% of gross revenue, down slightly from 10% in 1999. Total amortization expense was $1.3 million, up from $0.8 million in 1999, an increase of 61%. Of the total increase in amortization expense of $0.5 million, $0.3 million was attributable to goodwill relating to business acquisitions completed during 1999. The balance of the increase was due to higher amortization charges associated with deferred product development charges as well as additions to capital assets.
Interest expense on both current and long-term debt was up as a result of higher levels of short and long-term indebtedness. Bank indebtedness during the first quarter of 2000 averaged $3.7 million compared with $3.3 million during the same period in 1999. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the three-month period ending March 31, 2000 was $4.9 million compared with $2.4 million for the same period in 1999, an increase of 107%.
Net income during the first quarter of 2000 was $2.0 million ($0.07 per share) compared with $1.0 million ($0.05 per share) in 1999. Cash flow from operations was $3.2 million ($0.11 per share), up from $2.1 million ($0.10 per share) in 1999.
OUTLOOK
We anticipate that Alpine?s financial results will continue to strengthen over the course of the year. Weather permitting, spring break-up is expected to be shorter than in previous years as a result of record high prices for oil and natural gas. Our efforts for 2000 are directed at increasing revenue and earnings from operations within Canada and the United States, as well as international markets through internal growth of each of Alpine?s service divisions, as well as the Company?s extensive suite of proprietary oilfield products.
Alpine Oil Services Corporation is an innovative, value-added energy services entity competing in the Canadian upstream oil and gas market. Alpine is the second largest provider of Underbalanced Drilling surface pressure control equipment complete with rotating blowout preventers, and largest provider of Real-Time Drill Stem Testing services, in North America. Alpine is the only company in North America that has developed and now offers a mechanical wireline-set and retrievable production telemetry tool. Internationally the Company is involved in the sale of its proprietary equipment into select markets. Alpine is a recognized leader in the research, development and application of innovative technologies related to the services it provides. Alpine uses this technological knowledge base to design and manufacture many of the downhole tools used in its services. To date, Alpine has developed and presently uses more than 100 types of proprietary tools and equipment in its three main service lines. |
