Newalta Reports First Quarter 2015 Results, Introduces Five-Year Strategic Plan and New Organizational Structure
(firmenpresse) - CALGARY, ALBERTA -- (Marketwired) -- 05/05/15 -- Newalta Corporation ("Newalta") (TSX: NAL) today reported results for the three months ended March 31, 2015 and introduced its five year-strategic plan to enhance growth, performance and corporate velocity as a pure play environmental energy services company.
FINANCIAL HIGHLIGHTS(1)
MANAGEMENT COMMENTARY
First Quarter Results
"Performance in Q1 2015, while down significantly, was in line with our expectations and tracked our previously disclosed sensitivities to oil price and drilling activity," said John Barkhouse, President and CEO. "Q1 revenue and Adjusted EBITDA decreased 12% and 48%, respectively, compared to prior year, driven primarily by the $40 drop in oil prices and 40% decline in drilling activity. Cost savings measures taken early in the quarter, and 6% growth in onsite contract revenue somewhat mitigated the impact of reduced market activity."
Newalta responded to the steep decline in crude oil prices and drilling activity by cutting expenses and streamlining overhead in the first quarter and taking follow-on actions early in the second quarter, which in aggregate save approximately $30 million on an annualized basis. While the magnitude of the current downturn is expected to continue to impact results for the remainder of 2015, we will see significant improvements in the second half of the year driven by contributions from our oil sands mining contracts, commissioned growth capital and run rate savings from implemented cost rationalizations. Of particular importance, Newalta''s performance in the second half of 2015 and the resulting run rate improvements are not predicated on any anticipated recovery in oil pricing or drilling activity over the Q1 baseline, reaffirming the strength of our business model.
"We continue to remain focused on protecting the balance sheet in this uncertain time; however, we are pleased with the impact we have had on the elements of the business we control, and our overall resilience. Managing our costs, continuing to gain efficiencies throughout the organization, protecting our balance sheet, and working with our customers and suppliers to develop solutions and reduce total value chain costs are key imperatives. We have a strong core foundation to build upon as we turn our attention to the longer term strategic horizon."
Vision and Strategy
Today, Newalta introduced its new five-year vision, along with specified growth strategies and financial objectives (outlined below). Our plan considers the current volatility in the energy sector and assumes recovery in activity and crude oil prices over the next two to three years.
"Our Vision 2020 plan is detailed, realistic and immediately actionable," said Mr. Barkhouse. "For our customers, it means Newalta will simplify the sustainability equation and enhance the recovery of value from waste at each stage of drilling, completions, production and reclamation through a business approach that we call Sustainability Simplified™. For fellow shareholders, it means enhanced performance with emphasis on improving our scale and operating footprint geographically, growing our onsite business and contracts and leveraging our core capabilities to add differentiated services. The time is right for us to employ this framework to make Newalta the North American leader in environmental energy services and to drive accelerated progress and shareholder value."
Specific financial targets over the five-year period include:
Change in Divisional Reporting Structure
In Q1 2015, we reorganized into two divisions - Heavy Oil and Oilfield. This structure more closely aligns operations with customer activities, facilitates a seamless service package to customers, optimizes our resource allocations, and aids in the execution of our growth strategies.
Heavy Oil
Oilfield
Please refer to "Reporting Structure" below for restated historical segmented information and key metrics.
CORPORATE OVERVIEW
In Q1, we completed the sale of the Industrial Division to Revolution Acquisition LP and transitioned to a pure play environmental energy services company. Net loss from Combined Operations for the quarter was $27.7 million compared to net earnings of $6.5 million in the prior year. The decrease in earnings was driven by lower contributions from both Continuing and Discontinued Operations, and restructuring and other related costs.
Continuing Operations
Q1 revenue and Adjusted EBITDA decreased 12% and 48%, respectively, to $97.6 million and $12.9 million compared to prior year. Performance in the first quarter of 2015 was significantly impacted by the challenging environment, in line with previous guidance. The year-over-year decline of $12.1 million in Adjusted EBITDA was driven equally by crude oil prices and drilling activity declines (approximately $7 million each). Crude oil prices decreased by over $40/bbl while drilling activity in the areas we serve decreased more than 40% over prior year.
The severity of the drop in oil prices and activity levels resulted in reduced waste volumes at our facilities, changes in waste mix and pricing pressure across our business units. This was partially offset by improved performance across our business, specifically our contract revenue and returns from growth capital. Our contract revenue increased 6% year-over-year, and continued to demonstrate resiliency at the margin line. The combination of these factors, which we refer to as step change, had a net negative impact on the quarter of approximately $1 million.
To date, our contract model has performed well during this downturn, continuing to provide steady, predictable cash flow. These contracts are not tied directly to commodity price changes or drilling activity and provide a solid foundation for our business, particularly in depressed markets. During the quarter, growth in contract revenue was driven primarily by mature fine tailings (MFT) contracts. On a trailing-twelve month basis, contracts represented 26% of revenue.
Efficiencies of approximately $3 million realized from our cost rationalization initiatives implemented in February 2015 had a positive impact in the quarter.
In February, we announced a number of cost reduction and rationalization initiatives to maximize business efficiencies and drive improved margins. Actions taken included eliminating 180 positions, office space consolidation and general reductions in all expense categories including discretionary items. In addition to the overhead reductions, we announced the suspension of company-matching payments to the employee savings plans and implemented hiring and salary freezes. During the quarter, we incurred $18.4 million in restructuring and other related costs, including $8.5 million in cash charges primarily for severance and related costs, and $9.9 million in non-cash onerous lease charges for corporate office consolidation.
Heavy Oil revenue and Divisional EBITDA in the quarter decreased by 4% and 29%, respectively, to $38.4 million and $11.6 million compared to prior year. The decrease was driven by lower contributions from Heavy Oil Facilities, partially offset by increased contributions from Onsite.
Oilfield revenue and Divisional EBITDA in the quarter decreased 16% and 38%, respectively, to $59.2 million and $15.2 million, driven by lower contributions from Oilfield Facilities due to weaker crude oil prices, drilling activity and reduced production-driven waste volumes at our Canadian Facilities.
Capital expenditures from Continuing Operations for the three months ended March 31, 2015 were $34.7 million, focused primarily on the completion of modular processing facilities, the Fort McMurray facility and an additional drill cuttings treatment unit.
At March 31, 2015, Total Debt was $282.9 million, reduced by $189.3 million from December 31, 2014. In addition to normal course funds from operations flows, the change in debt reflects cash proceeds from the Industrial sale offset by payments for Q4 capital expenditures, divestiture transaction costs, one-time restructuring charges and dividend payments.
Discontinued Operations
Q1 2015 revenue and net loss before loss on sale were $42.1 million and $10.1 million, respectively, compared to $77.3 million and $2.9 million in prior year. The decrease in performance was driven by the timing of the sale in February, weaker performance across all business lines, and restructuring and other related charges. During the quarter, we recorded a net loss on sale of $3.2 million.
Recent Developments
On April 30th, we entered into an amended and restated credit agreement. We elected to decrease the borrowing amount under our Credit Facility from $280 million to $175 million. Other key changes to the Credit Facility include improved covenant thresholds, specifically the maximum Total Debt to Consolidated EBITDA ratio has been increased from 4:1 to 4.5:1, and the maximum Senior Secured Debt to Consolidated EBITDA ratio has been increased from 2.75:1 to 3:1. The revised terms of the Credit Facility provide increased financial flexibility in the current environment and facilitate the execution of our growth strategy.
In April 2015, we completed the second phase of the two-phase program initiated in February to maximize business efficiencies and drive improved margins. Actions taken in April 2015 included the elimination of an incremental 20 positions and further reductions across associated expense lines.
In aggregate, we expect to realize approximately $30 million in annualized ongoing savings from these actions with approximately $25 million in savings in 2015. Approximately 70% of the savings will be realized in corporate overhead, with the balance in operations. We expect to incur approximately $2 million in one-time restructuring and other related costs associated with our April 2015 actions, excluding any incremental non-cash charges associated with ongoing office space consolidation initiatives.
While we have completed the bulk of our cost rationalization initiatives, we continue to review opportunities for cost reduction and margin efficiencies across the organization.
We recently entered into a Memorandum of Understanding with a midstream provider to develop, on a joint venture basis, up to two full service oilfield waste processing facilities in the Western Canadian Sedimentary Basin (WCSB) over the next 18 months. A joint venture agreement was entered into for one commissioned modular processing facilities (MPF), which under this agreement will be expanded to include a full service offering to customers. Under this agreement, both parties contributed equal capital assets to the joint venture. We are excited about the opportunity of leveraging our respective expertise in serving our oil and gas customers by combining our safety and operational excellence with a counterparty having strong midstream expertise.
Dividends
In determining the dividend to be paid to our shareholders, the Board of Directors considers a number of factors, including: the forecasts for operating and financial results, maintenance and growth capital requirements, as well as market activity and conditions. After reviewing all factors, Newalta''s Board of Directors declared a first quarter dividend of $0.125 per share ($0.50 per share annualized), paid April 15, 2015, to shareholders on record as at March 31, 2015.
The Board reviews dividends on a quarterly basis. In light of the current market environment and outlook, we will provide an update in the quarters ahead regarding any dividend changes as visibility of our market environment improves.
The following section contains forward-looking information as it outlines our Outlook for 2015. Our Outlook is based on several key assumptions including growth capital contributions, commodity prices and activity levels of the industries we serve. Changes to these assumptions could cause our actual results to differ materially.
OUTLOOK
In Q1, we experienced oil prices nearing 2009 lows and declines in drilling activity in excess of 40%. The magnitude of this downturn is expected to continue to impact our results for the balance of 2015. To date, results are in line with management expectations and previous guidance on sensitivities provided to the market in the last quarter. While we expect Q2 performance to remain relatively muted given existing oil price and activity assumptions, combined with seasonality of spring break-up in Canada''s WCSB and in North Dakota, Adjusted EBITDA in the second half of 2015 is expected to increase significantly over the first half. The improvement in the second half of the year will be driven primarily by contributions from our growth capital investments and contracts, and the benefit from our cost rationalization. In Heavy Oil, contributions will improve from our mature fine tailings (MFT) contracts, the Silver Lake MPF and the full-service facility in Fort McMurray, which is expected to be commissioned in Q2. In Oilfield, growth will be driven by two new MPFs, Fox Creek and Gold Creek, anticipated to contribute in Q3. In addition, in the second half of 2015, we expect to realize approximately $15 million of year-over-year EBITDA impact from our cost rationalization actions taken in the first half of the year.
The following table outlines the factors we expect to impact performance in the second quarter and for the remainder of the year.
Crude oil prices
Drilling Activity
Step Change (Production waste volumes, shifts in waste mix, customer pricing reductions, offset by returns from growth capital and operational efficiencies)
Savings from Cost Rationalization
Net Debt and Leverage
We have a resilient business model and a strong balance sheet to weather the volatile market. Management of our debt leverage and optimal use of our cash and capital are of the highest priority. We will remain well within our debt covenants throughout 2015. Given our assumptions for reduced oil prices and drilling activity for the remainder of the year, we anticipate our Net Debt leverage to increase beyond 3.00, ending 2015 below 3.50.
Capital Forecast
We have reviewed our capital spend in light of market conditions and plan to spend approximately $80 million for the year, below our budget of $105 million. Our primary focus will be to complete our carry-over projects and we will continue to fund contract opportunities as they arise. We have the financial flexibility to increase our capital spending as market conditions improve.
Outlook beyond 2015
Performance in the second half of 2015, and resulting run rate improvements to Adjusted EBITDA are not predicated on any recovery in oil pricing or drilling activity over our Q1 performance baseline, underscoring the strength of our business model. Extending the second half run rate improvements into 2016 with oil remaining at US$50 WTI and drilling activity down approximately 50% from 2014 levels, Adjusted EBITDA in 2016 would approximate $120 million. Assuming oil pricing improves somewhat to US$60 WTI, and we see some modest recovery in activity, Adjusted EBITDA would be expected to approximate closer to $140 million, further demonstrating torque in our business model. And for additional context, this is set against the expectation of Adjusted EBITDA in excess of $170 million in a normalized US$70 to $75 WTI oil price environment with improved activity levels.
NEWALTA''S STRATEGY - VISION 2020
Under new leadership from John Barkhouse, President and CEO, we have refreshed our five-year growth strategy. This strategy leverages our core competencies with emphasis on increasing the pace of business activity, driving improved returns from our investments and growing profitable revenue streams both organically and through accretive acquisitions. Over the next five years, we will focus on growing our onsite capabilities, leveraging our satellite MPF model, expanding our presence in the U.S. and Canada, and on commercializing innovative solutions. Our five-year plan considers the current volatility in the energy sector and assumes recovery in activity and crude oil prices over the next two to three years.
WHO WE ARE
Newalta is a leading provider of innovative engineered environmental solutions that enable customers to reduce disposal, enhance recycling and recover valuable resources from oil and gas exploration and production waste streams. We simplify the critical challenges of sustainable environmental practices through the use of advanced processing capabilities deployed through a differentiated business model. We serve customers onsite directly at their operations and through a network of locations throughout North America. Our proven processes and excellent record of safety make us the first-choice provider of sustainability-enhancing services for oil and gas customers. With a highly skilled team of people, a two-decade track record of innovation and a commitment to commercializing new solutions, Newalta is positioned for sustained future growth and improvement. We are Sustainability Simplified™.
Differentiated Value Creation
Newalta applies a processing and recovery focus to the complex waste streams generated from exploration, drilling, completions and production phases of the oil and gas industry. We utilize processing to extract recoverable value from the waste generated, and seek to reduce, and where possible, eliminate the reintroduction of those wastes into disposal wells and landfills.
Customer value is created through the recovery of oil from generated waste, which otherwise would be stabilized and shipped to landfills. In addition to enhancing the production of oil, we reduce the volume of solids deposited in landfills, minimize the volume of water being injected into disposal wells, lower transportation costs and provide reliability in the management and tracking of these elements of the waste stream. Everything we do simplifies the sustainability equation for our customers, our communities and our families. We are not a paragraph in a producer''s sustainability report; we are a solutions provider delivering value and protecting our environment. To put this in context, we recover in excess of two million barrels of oil a year through processing, reducing the volume sent to landfill and disposal wells.
We differentiate ourselves from our peers with our core competencies of designing, building and operating advanced processing equipment to recover value from complex waste streams. We have salt water disposal wells, and some landfills where it creates value to our customers in providing a cradle to grave solution to their waste streams; however, first and foremost we seek to reduce, reuse and recycle through processing. This sets us apart from our industry sector peers, many of whom focus on disposal as their core competency.
It is difficult to replicate our model, because it is technology, innovation, engineering and operations driven, underscored by an established safety excellence record. These demonstrated core competencies have been pioneered and developed over the last two decades and provide a foundation for Newalta to be a solutions source for our customers, and, along with the capital intensive nature of the market, provide a significant barrier to entry in the market.
Newalta''s Top Five Differentiators
Our Markets
Newalta sees growth opportunities in both the U.S. and Canadian markets driven predominantly by the macro-economic considerations outlined above, however these markets are quite different. The Canadian market is well established and highly regulated. Newalta has demonstrated the ability to create new markets in this space, establishing a processing presence with SAGD producers seven years ago and more recently developing the mature fines tailings remediation market with mining producers. These highly engineered solutions have enabled the creation of contractual relationship structures with major E&P players in Canada and continue to represent a focus area of growth for Newalta. In addition, we see the MPF strategy allowing us to economically increase our presence in the developing Montney and Duvernay plays with a focus on cradle to grave waste optimization. This will help form the core of the Canadian organic growth focus, which will be supplemented with acquisitions to bring new technologies and services to market through our comprehensive footprint.
Alternatively, the U.S. market, which is approximately five-six times the size of the Canadian market shares very few similarities. Without federal regulations driving the treatment of E&P waste, the decisions are left at the state level and therefore show wide variability between states. There are very few companies with presence and footprint across multiple plays and the economics vary greatly across those plays. Shale depletion rates are driving the need for continuous "factory" style drilling techniques and a significant shift from vertical to pad based horizontal drilling. Each play is made up of an assortment of E&P customers and a very fragmented service industry predicated on the disposal of waste with limited treatment which is where we see opportunity. Growth for Newalta will occur through the disciplined acquisition of assets which enable access to waste streams, where Newalta will deploy its processing expertise and assets. Newalta will focus on targeted plays, develop a processing and disposal footprint based on market knowledge and execute a targeted program to deploy growth capital focusing on generating the greatest returns.
Emerging Core Market Opportunities
Newalta will continue to grow during the plan period, intelligently and with purpose leveraging our deep technical development and engineering capabilities. We see a number of emerging market opportunities that we will exploit to further expand our footprint and enhance our scope of services. We continue our work to transform an industry which has been served by traditional approaches, where wastes are transported to processing and disposal facilities, including landfills and disposal wells. The transformation is good for the industry, it''s good for the environment and is leading to a deep roster of opportunities for us in the key sectors of our business.
Drilling
Completions
Production
Sustainability Simplified™
Sustainability is a popular term with broad and inconsistent definitions across the industry. For Newalta, sustainability is the integration and alignment of three key elements we call the 3E''s. Environmental, Economical and Ethical. Only through the balance of environmental stewardship, economical viability and alignment to regulatory and ethical practices will we achieve a sustainable position in the oil and gas industry. Newalta incorporates the 3E''s into everything we do and measures success along those lines. By providing solutions to our customers in the management and remediation of the wastes generated from the exploration and production processes, Newalta simplifies the sustainability equation enabling our customers to focus on their core competencies while we focus on ours. This is Sustainability Simplified™ and this is what sets us apart.
Our vision is to:
Achievement of this vision will position Newalta as the North American industry leader in sustainable solutions to the oil and gas industry.
OUR STRATEGIES
1. Geographic Expansion - Establish operating footprint and scale
Proximity to oil and gas waste stream sources is critical to success in North America. New drilling techniques, expanding plays, increased water usage and the sheer volume of waste being generated that requires processing are driving new customer requirements. This provides opportunity to Newalta. Our business model of modular processing facilities (MPF) designed to expand capacity or services with reduced sunk costs suit this mobile market. In the U.S., the market has limited processing capability and is highly fragmented resulting in opportunities to expand our service program and for consolidation in targeted plays. We will establish scale in the U.S. and in Canada by leveraging our MPF model and through select acquisitions. We will continue to develop our inventory of locations and permits for expansion in the U.S. and in Western Canada to improve our speed of execution and agility. We will partner with customers to add services to the network when and where markets dictate the need. In addition to the core plays we serve today, target markets include the Bakken, Permian and Eagle Ford in the U.S. and the Montney and Duvernay plays in Western Canada.
2. Growth in Heavy Oil - Expansion of long-term contracts as well as processing and recovery capabilities
The Heavy Oil market consists of a limited number of very sophisticated customers looking for highly engineered solutions for their production waste streams. Newalta has become a trusted service provider with our innovative approach and professional operations. The region continues to hold significant opportunity for growth as the producers ramp up their production using Steam Assisted Gravity Drainage (SAGD) and mining techniques. The majority of slop oil is still processed by producers or transported long distances to fixed third-party waste processing facilities. Wastewater being generated from the SAGD operations requires treatment prior to disposal. The mining sector faces significant environmental challenges, from managing legacy tailings ponds to finding economical solutions to ongoing process residues. Currently, there are approximately 80 square kilometres of wet legacy tailings ponds requiring remediation. By processing onsite, Newalta enhances the customer''s sustainability performance and reduces transportation costs. We will focus on providing technically differentiated solutions to these customers, expanding long-term contacts and extracting additional product value from our processes. We will leverage our first-mover expertise, in-depth waste processing knowledge and solid track record with safety to drive growth.
3. Enhanced Customer Value Creation - Sustainability Simplified™
E&P customers interact with numerous service providers through a well life-cycle, with few end-to-end solution options and little information available for environmental stewardship. Our strategy is to make sustainability simple for customers by providing a full-service offering at each stage of drilling, completions, production and reclamation with a focus on value creation through product recovery. Newalta''s core competencies of technical development and engineering are key enablers in developing solutions to provide end-to-end management of the physical waste stream (Oil/Water & Solids) in addition to providing the end-to-end data necessary to support the sustainability/environmental requirements in the jurisdictions in which customers operate. This will drive the transfer, management and treatment of waste closer to the source, enabled by modular processing and value stream management. A full-service solution will leverage our long-standing centrifugation operating expertise as well as the introduction of commercialized innovative processing solutions. These processing capabilities will position us to build strong partnerships with key customers to simplify their sustainability initiatives. Our onsite track record proves the trusted nature of the relationships we have developed with many of the largest and most sophisticated oil and gas producers. By adding processing assets, disposal wells and landfills, and by moving processing closer to source, enhanced value optimization is possible. We will continue to move information gathering and processing closer to source to optimize traceability and logistics, resulting in Sustainability Simplified™.
4. Adjacent Market Growth - Leverage our capabilities to develop a presence in the Midstream and Downstream industries
We believe our core competencies in centrifugation, onsite processing, project management, and finding innovative solutions for the upstream oil and gas industry can be leveraged to provide value in adjacent markets. The midstream and downstream industries are highly regulated and dominated by sophisticated customers requiring innovative process solutions. Although we do not service these industries today, the characteristics are similar to the oil and gas industry that we have been operating in during the past 20 years. We will develop a presence in these markets by focusing on value creation through product recovery.
OUR GROWTH PHILOSOPHY
Organic Versus Inorganic Growth Philosophy
Newalta will continue to seek opportunities that advance our strategies that are aligned with core competencies to grow the company both organically and through acquisitions.
Our current MPF and onsite business models generate strong returns with a well understood risk profile. We have developed a robust, standardized process design that we believe uniquely positions us to rapidly deploy our MPF business model. We are currently investing significant time and effort in developing an inventory of land and permits with a priority on basins we are currently operating as well as basins with high drilling and completion activity. With the ability to deploy an MPF within four months of receipt of the necessary permits, our expectation is that waste streams requiring processing by centrifugation will be executed through our organic program. On the other hand, where speed to market is critical, land or permits are difficult to obtain, or where a particular market may already be fully serviced, an acquisition strategy will be pursued.
We will pursue acquisitions where a particular opportunity has a developed business that is complementary to our core business thereby providing a platform from which we can deploy our proven business models through add on organic growth investments. In this context, the businesses that we are looking to acquire will provide access to new waste streams or incremental access to existing waste streams.
We will also seek out businesses that have high barriers to entry which typically exhibit a high degree of process or technology orientation, or are capital intensive. Once acquired, we have the ability to add significant value to the business either through deployment of our current service offering within the acquired network, through exporting the acquired service offering into our pre-existing network or through consolidation from additional acquisitions.
In an isolated view, businesses that exhibit low barriers to entry, such as transportation and pure rental equipment, will not be pursued. However, when coupled with our ability to secure access to a waste stream for processing within our network, these types of businesses may be attractive and therefore considered in the broader context.
KEY FINANCIAL TENETS
Within our refreshed Vision 2020, we have set out a number of key tenets and priorities for our business model, in addition to setting out certain key financial metrics that will define our success over the business plan (2015 - 2020) period.
Capital Allocation Priorities
We will take a balanced and disciplined approach to effective deployment of our capital so as to maximize shareholder value.
Our priorities for capital allocation are as follows - We will invest in:
We will drive incremental and ongoing improvement to Return on capital employed (ROCE) each year after 2015, and more than double our Energy Services ROCE in 2014.
Free Cash Flow Generation
Excluding acquisitions, we will, within the plan period, move towards a model of free cash flow generation, after funding of all capital investments, tax, financing, and dividend payments.
Long Term Debt and Leverage Targets
We will grow our business while maintaining our financial flexibility and solid balance sheet.
Funding for investments will be aligned with our long-term debt leverage target range, allowing for fluctuations due to timing of both organic growth and inorganic growth capital spending; sources of funding will include funds from operations, debt and equity.
Total Shareholder Return
We will drive Total Shareholder Return through the execution of our strategy and achievement of our targets. We will eliminate our share valuation discount to peers, and move in line with or ahead of our peer group average. Valuation torque will be driven by a recovery, in time, to a normalized market oil pricing and activity environment, returns from investments aligned with our core competencies and key differentiators, and multiple expansion driven by our pure play focus in the energy services sector.
Financial Metrics - Through our Business Plan Period (2015 - 2020)
Through our Business Plan period, and by 2020:
Quarterly Conference Call
Management will hold a conference call on Wednesday, May 6, 2015 at 11:00 a.m. (ET) to discuss Newalta''s performance for the quarter ended March 31, 2015. To participate in the teleconference, please call 416-340-2218 or 866-223-7781. To access the simultaneous webcast, please visit . For those unable to listen to the live call, a taped broadcast will be available at and, until midnight on Wednesday, May 13, 2015 by dialing 800-408-3053 and entering passcode 2768993 followed by the pound sign.
Annual Meeting
Newalta will hold its annual meeting of shareholders on Thursday, May 7, 2015 at 11:00 a.m. Mountain Time.
Location: Newalta''s corporate office, Building ''C''
220 - 12th Avenue, S.W.
Calgary, Alberta
For those unable to attend the annual meeting, the presentation will be webcast live at and subsequently archived on Newalta''s website.
About Newalta
Newalta is a leading provider of innovative engineered environmental solutions that enable customers to reduce disposal, enhance recycling and recover valuable resources from oil and gas exploration and production waste streams. We simplify the critical challenges of sustainable environmental practices through the use of advanced processing capabilities deployed through a differentiated business model. We serve customers onsite directly at their operations and through a network of locations throughout North America. Our proven processes and excellent record of safety make us the first-choice provider of sustainability-enhancing services for oil and gas customers. With a highly skilled team of people, a two-decade track record of innovation and a commitment to commercializing new solutions, Newalta is positioned for sustained future growth and improvement. We are Sustainability Simplified™. Newalta trades on the TSX as NAL. For more information, visit .
The press release contains certain statements that constitute forward-looking information. Please refer to the section below "Forward-Looking Information", for further discussion of assumptions and risks relating to this forward looking information.
The unaudited interim Condensed Consolidated Financial Statements and MD&A, which contain additional notes and disclosures, are available on SEDAR at or our website at under Investor Relations/Financial Reports.
CHANGE IN FINANCIAL STATEMENT PRESENTATION
As a result of the Industrial sale and shift in strategic focus, we changed our income statement presentation from functional to nature based, to provide financial statement users with more relevant information. Prior period comparative figures have been amended to conform to the new presentation. As part of this change, we have reclassified sales expense directly attributable to our operating divisions from Corporate and Other to the respective division. Please refer to "Reporting Structure" below for restated historical segmented information and key metrics.
REPORTING STRUCTURE
The tables below restate the historical segmented information and key metrics from the New Markets and Oilfield divisions to Heavy Oil and Oilfield divisions.
HEAVY OIL RESTATED INFORMATION BY QUARTER
HEAVY OIL RESTATED INFORMATION BY YEAR
OILFIELD RESTATED INFORMATION BY QUARTER
OILFIELD RESTATED INFORMATION BY YEAR
G&A RESTATED INFORMATION
SELECTED FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - Expressed in thousands of Canadian Dollars)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - Expressed in thousands of Canadian Dollars)
(Except per share data)
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited - Expressed in thousands of Canadian Dollars)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - Expressed in thousands of Canadian Dollars)
FORWARD-LOOKING STATEMENTS
Certain statements contained in this document constitute "forward-looking information" as defined under applicable securities laws. When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", "potential", "strategy", "target", and similar expressions, as they relate to Newalta Corporation and the subsidiaries of Newalta Corporation, or their management, are intended to identify forward-looking information. In particular, forward-looking information included or incorporated by reference in this document includes statements with respect to:
Expected future financial and operating performance and related assumptions are set out under "Outlook".
Such information reflects our current views with respect to future events and is subject to certain risks, uncertainties and assumptions, including, without limitation:
By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking information will not occur. Many other factors could also cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking information and readers are cautioned that the foregoing list of factors is not exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Furthermore, the forward-looking information contained in this document is made as of the date of this document and, in each case, is expressly qualified by this cautionary statement. Unless otherwise required by law, we do not intend, or assume any obligation, to update any such forward-looking information.
RECONCILIATION OF NON-GAAP MEASURES
This Press Release contains references to certain financial measures, including some that do not have any standardized meaning prescribed by International Financial Reporting Standards (IFRS or GAAP) and may not be comparable to similar measures presented by other corporations or entities. These financial measures are identified and defined below.
"EBITDA", "EBITDA per share", "Adjusted EBITDA", and "Adjusted EBITDA per share" are measures of our operating profitability. EBITDA provides an indication of the results generated by our principal business activities prior to how these activities are financed, assets are amortized or impaired, or how the results are taxed in various jurisdictions. In addition, Adjusted EBITDA provides an indication of the results generated by our principal business activities prior to recognizing stock-based compensation and restructuring and other related costs. Adjusted EBITDA provides improved continuity with respect to the comparison of our operating results over a period of time. Stock-based compensation, a component of employee remuneration, can vary significantly with changes in the price of our common shares (Shares), while restructuring and other related costs are outside of our normal course of business. Restructuring and other related costs are charges primarily attributable to cost rationalization initiatives. EBITDA and Adjusted EBITDA are derived from the condensed consolidated statements of operations and comprehensive income. EBITDA per share and Adjusted EBITDA per share are derived by dividing EBITDA and Adjusted EBITDA by the basic weighted average number of Shares.
EBITDA and Adjusted EBITDA from Continuing Operations are calculated as follows:
"Divisional EBITDA" provides an indication of the results generated by the division''s principal business activities prior to how activities are financed, the assets are amortized or impaired and before allocation of General and administrative costs (G&A), restructuring and other related costs or stock-based compensation. Divisional EBITDA is derived from Net (loss) earnings before income tax from Continuing Operations as follows:
"Adjusted net earnings" and "Adjusted net earnings per share" are measures of our profitability from Continuing Operations. Adjusted net earnings from Continuing Operations (Adjusted net earnings) provides an indication of the results generated by our principal business activities prior to recognizing stock-based compensation recovery or expense, the gain or loss on embedded derivatives, impairment and restructuring and other related charges. Stock-based compensation, a component of employee remuneration, can vary significantly with changes in the price of our Shares. The (gain) loss on the embedded derivative is a result of the change in the trading price of the debentures and the volatility of the applicable bond market. Impairment and restructuring and other related costs are related to initiatives outside of our normal course of business. As such, Adjusted net earnings provides improved continuity with respect to the comparison of our results over a period of time. Adjusted net earnings per share is derived by dividing Adjusted net earnings by the basic weighted average number of Shares.
"Tangible book value per share" is used to assist management and investors in evaluating the book value compared to the market value.
"Return on Capital Employed" (ROCE) is used to assist management and investors in measuring the returns realized at the consolidated level from capital employed. ROCE is derived from Net earnings plus tax-adjusted interest divided by the average of the beginning and ending balances of our total assets less current liabilities for the period (Net Assets).
"Cash Basis Return on Capital" (ROC - Cash) is also used to assist management and investors in measuring the returns realized at the consolidated level from capital employed. ROC - Cash is derived from Adjusted EBITDA less cash stock-based compensation, cash taxes and maintenance capital divided by Net Assets.
"Net Debt" is defined as sum of amount drawn on the Credit Facility, Letters of Credit and Senior Unsecured Debentures less Cash on hand.
"Funds from operations" is used to assist management and investors in analyzing cash flow and leverage from Continuing Operations. Funds from operations as presented is not intended to represent operating funds from operations or operating profits for the period, nor should it be viewed as an alternative to cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. Funds from operations is derived from the condensed consolidated statements of cash flows and is calculated as follows:
References to EBITDA, EBITDA per share, Adjusted EBITDA, Adjusted EBITDA per share, Divisional EBITDA, Adjusted net earnings, Adjusted net earnings per share, ROC - Cash, Net Debt, Funds from operations and Funds from operations per share throughout this document have the meanings set out above.
Contacts:
Anne M. Plasterer
Executive Director, Investor Relations
(403) 806-7019
Themen in dieser Pressemitteilung:
Unternehmensinformation / Kurzprofil:
Datum: 05.05.2015 - 16:55 Uhr
Sprache: Deutsch
News-ID 1356730
Anzahl Zeichen: 0
contact information:
Contact person:
Town:
CALGARY, ALBERTA
Phone:
Kategorie:
Air Pollution Control
Anmerkungen:
Diese Pressemitteilung wurde bisher 409 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Newalta Reports First Quarter 2015 Results, Introduces Five-Year Strategic Plan and New Organizational Structure
"
steht unter der journalistisch-redaktionellen Verantwortung von
Newalta Corporation (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
