SERVICE SECTOR / Destiny Resource Services Corp. Second Qtr Report
DESTINY ANNOUNCES SECOND QUARTER RESULTS
CALGARY, AB--
Destiny Resource Services Corp. today announced its financial and
operating results for the second quarter and six month period
ended November 30, 1998.
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Three Months Six Months
Ended Ended
November 30 November 30
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(unaudited) 1998 1997 1998 1997
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(thousands, except per share amounts) $ $ $ $
OPERATING RESULTS
Revenue
Canada 13,568 2,022 22,272 5,645
International 7,640 7,445 17,106 13,881
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Total revenue 21,208 9,467 39,378 19,526
Direct expenses 17,214 7,618 31,822 15,291
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Gross margin 3,994 1,849 7,556 4,235
Other expenses (income)
General and administrative 1,273 579 2,014 1,254
Depreciation, amortization and
depletion 1,834 456 2,893 839
Interest 480 124 720 227
Other (20) (69) (141) (149)
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3,567 1,090 5,486 2,171
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Income before income taxes 427 759 2,070 2,064
Income taxes 297 181 642 594
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Net income 130 578 1,428 1,470
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Cash flow (before net change in
non-cash working capital) 1,964 1,034 4,321 2,309
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EBITDA 2,741 1,736 5,683 3,130
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Earnings per share
Basic 0.01 0.07 0.12 0.19
Fully diluted 0.01 0.06 0.11 0.15
Cash flow from operations per share
Basic 0.14 0.14 0.35 0.30
Fully diluted 0.12 0.11 0.28 0.23
Weighted average shares
outstanding (000s)
Basic 14,172 7,785 12,174 7,734
Fully diluted 16,667 10,113 15,275 10,113
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AS AT NOVEMBER 30 1998 1997
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(unaudited) $ $
BALANCE SHEET
Current assets
Cash 1,535 1,258
Receivables 14,648 7,266
Other 5,613 1,706
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Total current assets 21,795 10,230
Capital assets 35,115 8,706
Goodwill 12,730 -
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Total assets 69,640 18,936
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Current liabilities
Bank indebtedness 3,463 1,656
Accounts payable and accrued liabilities 9,032 5,002
Income taxes payable 1,275 553
Current portion of long-term debt 4,661 819
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Total current liabilities 18,731 8,318
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Long-term debt 11,192 1,137
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Deferred income taxes 479 -
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Convertible debentures 10,000 275
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Share capital 22,354 5,121
Retained earnings 7,184 4,373
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29,538 9,494
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Total liabilities and
shareholders' equity 69,640 18,936
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For the three months ended November 30, 1998, revenue increased
124% to $21.2 million compared to $9.5 million a year ago. Net
income for the second quarter decreased 78 percent to $130,000 in
fiscal 1999 compared with $578,000 in fiscal 1998. The Company's
basic earnings per share were $0.01 compared to $0.07 a year ago,
while fully diluted earnings per share were $0.01 compared to
$0.06 last year.
During the second quarter of fiscal 1999, Destiny recorded cash
flow (before net change in non-cash working capital) of $2.0
million, a 90% increase over the $1.0 million in fiscal 1998.
Basic cash flow per share was $0.14 per share compared to $0.14
a year ago, while fully diluted cash flow per share increased to
$0.12 from $0.11.
For the six months ended November 30, 1998, revenue increased
102% to $39.4 million compared to $19.5 million a year ago. Net
earnings for the six-month period decreased marginally to $1.4
million compared to $1.5 million for the same period of fiscal
1998. The Company's basic earnings per share decreased to $0.12
from $0.19 a year ago, while fully diluted earnings per share
decreased to $0.11 from $0.15.
Cash flow from operations (before net change in non-cash working
capital) for the six months ended November 30, 1998 increased 87%
to $4.3 million from $2.3 million a year ago. Basic cash flow per
share was $0.35 compared to $0.30 a year ago, while fully diluted
cash flow per share increased to $0.28 from $0.23. As at November
30, 1998, working capital increased to $3.1 million from $1.9
million last year and shareholders equity was $29.6 million,
compared to $9.5 million last year.
Mr. Adrian Erickson, President & Chief Executive Officer of
Destiny stated, "Even though Destiny's focus is on the gas
sector, our second quarter results have been adversely affected
by the continuing depressed oil prices which have resulted in oil
company exploration budgets being cut by up to forty percent. The
oil price situation has gone on much longer than any of us in the
industry had expected. However, even in these very tough times,
we are pleased with our ability to grow market share in the line
clearing, wellsite construction and reclamation service sectors
of our business as well as our ability to continue to generate
strong cash flow."
"During the quarter, the company completed three acquisitions
which are included in the second quarter results. We are
completely focussed, as a company, on integrating these
acquisitions and maximizing the efficiencies of our organization.
This process will involve streamlining and rationalizing the
various components of the business, while at the same time,
realizing the synergies that exist between the product lines,
particularly through equipment utilization."
"Our second quarter is typically weak and while our gross margins
have remained fairly constant we continue to challenge our
administrative expense line in looking for operating efficiencies
in our business".
"The outlook for the balance of the year and into fiscal 2000 is
for continuing depressed oil pricing and smaller exploration
budgets, which will affect activity levels. As a result our
revenue growth rate is expected to slow somewhat in the second
half."
"In the second half we expect that some 51% of revenue will come
from our recent acquisitions, which tend to be less susceptible
to the front end exploration cycle, as opposed to 29% in the
first half. This, combined with our global focus and continued
preference for the gas services industry, makes us optimistic
that we will continue to maintain and expand our market share,
and be very well positioned for continued strong growth when
activity levels improve."
Destiny Resource Services Corp. is a Calgary-based exploration
service company providing essential integrated services to the
seismic, exploration and production industries in Canada, the
United States, Central and South America, the Middle East, Africa
and Southeast Asia.
Neither The Toronto Stock Exchange nor the Alberta Stock Exchange
has approved or disapproved of the information contained herein. |
