Monday May 10, 4:44 pm Eastern Time
Company Press Release
Dynatec Reports First Quarter Results
RICHMOND HILL, ONTARIO--Dynatec Corporation (''Dynatec'') today
announced that for the first quarter ended March 31, 1999, revenue was $29.4
million compared to revenue of $42.5 million for the same period of 1998.
EBITDA in the first quarter of 1999 was $2.0 million compared to EBITDA of $5.7 million for the same period of
1998.
The Company reported a loss of $0.2 million or ($0.001) per share for the first quarter ended March 31, 1999
compared to net earnings of $1.8 million or $0.016 per share for the same period of 1998.
''The loss in the first quarter reflects the global downturn in the mineral industry and especially in exploration
drilling,'' said W.R. Dengler, President and CEO. He added, ''The downturn in market conditions has, however,
led to a number of exciting investment and acquisition opportunities that are being evaluated.''
Dynatec Corporation, based in Richmond Hill, Ontario, is a widely held Canadian public company that provides
a broad range of services, principally to mineral exploration, mining and refining companies in North America
and internationally. Its business is composed of three divisions: mining services, drilling services and
metallurgical technologies.
Dynatec trades on both the Toronto Stock Exchange (''TSE'') and the Montreal Exchange (''ME'') under the
symbol ''DY''.
DYNATEC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
(unaudited)
Three Months Three Months
Ended Ended
March 31, 1999 March 31, 1998
-----------------------------------
ASSETS
Current assets:
Cash $ 23,973 $ 24,513
Accounts receivable 22,703 23,002
Marketable securities 267 117
Inventories 19,787 22,841
Prepaid expenses and other assets 2,254 2,063
--------------------------------
68,984 72,536
Capital assets 42,621 41,118
Other assets 754 284
--------------------------------
$ 112,359 $ 113,938
---------------------------------------------------------------
LIABILITIES
Current liabilities:
Bank indebtedness $ 7,629 $ 9,798
Accounts payable and accrued
liabilities 13,365 16,391
Income taxes payable 1,246 1,815
Deferred revenue 811 1,879
Current portion of long-term debt 3,146 3,057
--------------------------------
26,197 32,940
Deferred revenue 112 382
Long-term debt 11,381 11,009
Future income taxes 2,649 2,385
--------------------------------
40,339 46,716
--------------------------------
SHAREHOLDERS' EQUITY:
Capital stock 59,489 59,489
Cumulative foreign translation
adjustments 2,063 391
Retained earnings 10,468 7,342
--------------------------------
72,020 67,222
--------------------------------
$ 112,359 $ 113,938
---------------------------------------------------------------
The accompanying note is an integral part of these financial
statements.
DYNATEC CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands of dollars - except for per share amounts)
(unaudited)
Three Months Three Months
Ended Ended
March 31, 1999 March 31, 1998
-----------------------------------
Revenue
Contract revenues $ 29,362 $ 42,538
Contract expenses 23,909 33,533
--------------------------------
5,453 9,005
Other revenues 362 226
--------------------------------
5,815 9,231
Expenses:
General and administrative 3,784 3,509
Depreciation and amortization 1,848 1,954
Interest 457 714
--------------------------------
6,089 6,177
Earnings (loss) before income taxes (274) 3,054
Income taxes (120) 1,220
--------------------------------
Net earnings (loss) ($ 154) $ 1,834
---------------------------------------------------------------
Earnings per common share:
Basic earnings (loss) ($0.001) $0.016
Fully diluted ($0.001) $0.015
DYNATEC CORPORATION
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(In thousands of dollars)
(unaudited)
Three Months Three Months
Ended Ended
March 31, 1999 March 31, 1998
-----------------------------------
Retained earnings at
beginning of period $ 10,622 $ 5,508
Net earnings (loss) (154) 1,834
--------------------------------
Retained earnings at end of
period $ 10,468 $ 7,342
DYNATEC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)
(unaudited)
Three Months Three Months
Ended Ended
March 31, 1999 March 31, 1998
---------------------------------------------------------------
Cash provided by (used for):
Operations:
Net earnings (loss) ($ 154) $ 1,834
Items not involving cash
Depreciation and amortization 1,848 1,954
Future income taxes (761) (718)
Other items (118) (1,083)
---------------------------------------------------------------
Cash provided before working capital
changes 815 1,987
---------------------------------------------------------------
Decrease (increase) in non-cash working
capital
Accounts receivable (443) 2,689
Inventories (665) (1,378)
Prepaid expenses and other assets (747) (344)
Accounts payable and accrued
liabilities (1,330) 774
Income taxes payable (1,890) 982
Interest payable (2) (3)
Other (148) 81
---------------------------------------------------------------
(5,225) 2,801
---------------------------------------------------------------
Cash provided from (used in)
operating activities (4,410) 4,788
---------------------------------------------------------------
Financing:
Warrants exercised - 37
Increase in long-term debt 1,236 383
Repayment of long-term debt (890) (1,647)
---------------------------------------------------------------
Cash provided from (used for)
financing activities 346 (1,227)
---------------------------------------------------------------
Investments:
Additions to capital assets (1,978) (804)
Proceeds on sale of capital assets 83 524
Other (371) -
---------------------------------------------------------------
Cash used for investing activities (2,266) (280)
---------------------------------------------------------------
Unrealized gains from changes in
foreign currency exchange rates (221) (170)
---------------------------------------------------------------
Increase (decrease) in net cash (6,551) 3,111
Net cash at beginning of period 22,895 11,604
---------------------------------------------------------------
Net cash at end of period $16,344 $ 14,715
---------------------------------------------------------------
---------------------------------------------------------------
Net cash is comprised of cash and bank indebtedness.
DYNATEC CORPORATION
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
SEGMENTED INFORMATION
(In thousands of dollars)
(unaudited)
--------------------------------------------------------------
Three Months
Ended
March 31, 1999
--------------------------------------------------------------
Metallurgical
Mining Drilling Technologies Total
--------------------------------------------------------------
Contract revenues 20,039 6,611 2,712 29,362
Earnings (loss) before
income taxes 839 (1,348) 235 (274)
Identifiable assets 66,641 37,812 7,906 112,359
--------------------------------------------------------------
Three Months
Ended
March 31, 1998
--------------------------------------------------------------
Metallurgical
Mining Drilling Technologies Total
--------------------------------------------------------------
Contract revenues 27,088 11,403 4,047 42,538
Earnings (loss)
before income taxes 1,956 (566) 1,664 3,054
Identifiable assets 69,242 38,254 6,442 113,938
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