Formation Fluid Announces Second Quarter Results
(firmenpresse) - CALGARY, ALBERTA -- (Marketwired) -- 02/29/16 -- Formation Fluid Management Inc. (TSX VENTURE: FFM) ("Formation Fluid" or the "Company") announces its financial results for the three and six months ended December 31, 2015 and 2014.
THREE AND SIX MONTH RESULTS - FISCAL 2016
KEY FINANCIAL TAKEAWAYS
KEY MILESTONES
Continued performing pilot projects to create significant new applications for the Hydro-Cycle system beyond the historic remediation uses for the system;
The success in these projects will allow the Company to develop year round commercial applications for the Hydro-Cycle system which result in clean water available for re-use.
FINANCIAL SUMMARY
(1) Refer to Non-GAAP discussion below.
Business Outlook
The Company expects to see growth as a result of the following factors:
The Company has seen a slower growth rate than previously anticipated due to the following factors:
Financial Results
During the three months ended December 31, 2015, the Company generated $92,944 (2014: $NIL) in revenue from water remediation services and incurred field expenses of $126,463 (2014: $NIL) resulting in negative gross margin of $33,519 (2014: NIL) or negative 36% (2014: NIL), and net loss of $693,695, $0.01 basic and diluted loss per share (2014: net loss of $601,443; $0.01 basic and diluted loss per share). EBITDA for the three months ended December 31, 2015 was negative $534,383 (2014: negative $507,869). Field expenses consist of the direct costs associated with providing the water remediation services generating the Company''s revenues.
During the six months ended December 31, 2015, the Company generated $153,395 (2014: $1,154,480) in revenue from water remediation services and incurred field expenses of $166,925 (2014: $400,739) resulting in negative gross margin of $13,530 (2014: positive $753,741) or negative 9% (2014: positive 65%), and net loss of $1,157,341, $0.02 basic and diluted loss per share (2014: net loss of $455,512; $0.01 basic and diluted loss per share). EBITDA for the six months ended December 31, 2015 was negative $889,874 (2014: negative $28,945). Field expenses consist of the direct costs associated with providing the water remediation services generating the Company''s revenues.
In the six months ended December 31, 2015 the Company used cash in operations of $537,940 (2014: positive $559,617). The Company used net cash of $123,921 during the first six months ended December 31, 2015 for capital expenditures (2014: $1,254,035). The capital expenditures were incurred to complete construction of additional water processing plants to meet expected customer demand.
The Company''s financing activities in the six months ended December 31, 2015 generated cash of net $560,843 from the receipt of two related party loans totaling $700,000 less repayments on bank loan payable of $139,157 corresponding to a long term bank loan agreement for the construction of capital equipment. During the six months ended December 31, 2014 the Company generated cash of $588,523 from the long term bank loan agreement and the exercise of stock options in the amount of $50,000. Total cash outflows exceeded total cash inflows during the period ended December 31, 2015 by $343,518. During the period ended December 31, 2014, total cash outflows exceeded total cash inflows by $105,895.
At December 31, 2015, the Company had cash of $14,427 and negative working capital of $1,397,492, (December 31, 2014: cash of $2,027,561, working capital of $1,787,757). Shareholders'' equity at December 31, 2015 was $3,690,692 (December 31, 2014: $5,868,477).
This financial information has been prepared on a going concern basis, with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. In assessing whether or not there are material uncertainties that may lend doubt as to the ability of the Company to continue as a going concern, management takes into account all available information about the future, which is at least but not limited to twelve months from the end of the reporting period. Management is aware of the material uncertainties that could cast significant doubt upon the Company''s ability to continue as a going concern. The Company has negative cash flows from operations of $537,940 and a net loss and comprehensive loss of $1,157,341 for the six months ended December 31, 2015, and negative working capital of $1,397,492 at December 31, 2015. As a result, the Company will need to raise additional financing within the next twelve months in order to meet its liabilities as they come due and to continue with its business activities.
The Company''s full financial statements and management discussion and analysis are available online at SEDAR at .
Non-GAAP Measures
The Company uses certain performance measures throughout this document that are not recognizable under International Financial Reporting Standards ("IFRS"). These performance measures include EBITDA, EBITDA per share, funds from operations and funds from operations per share. Management believes that these measures provide supplemental financial information that is useful in the evaluation of the Company''s operations and are commonly used by other oil and natural gas service companies.
Investors should be cautioned, however, that these measures should not be construed as alternatives to measures determined in accordance with IFRS as an indicator of Formation Fluid''s performance. The Company''s method of calculating these measures may differ from that of other organizations, and accordingly, these may not be comparable. Per share amounts are calculated using the treasury stock method whereby deemed proceeds on the exercise of the share options are used to reacquire common shares at an average share price. The calculations of per share amounts on a dilutive basis do not include anti-dilutive options.
EBITDA
EBITDA, defined as earnings before interest, taxes, share-based compensation, depreciation and amortization, is not a financial measure that is recognized under GAAP. Investors should be cautioned that EBITDA should not be construed as an alternative measure to net earnings determined in accordance with GAAP.
The following is a reconciliation of net earnings to EBITDA:
Funds from Operations
Funds from operations is defined as cash flows generated from operating activities before changes in non- cash working capital. Investors should be cautioned that this financial measure should not be construed as an alternative measure to cash flows from operating activities determined in accordance with IFRS.
The following is a reconciliation of cash flows from operating activities to funds from operations:
Subsequent Events
In February 2016, the Company initiated temporary layoffs estimated to be for a period of up to 60 days for all staff except the Chief Executive Officer, Chief Financial Officer and the Chief Engineer. Upon receiving the layoff notice, the Company''s Chief Operating Officer submitted his resignation.
In February 2016, the bank with a loan payable due from the Company, agreed to change the monthly payment amounts to interest only until June 2016 at a rate of prime plus 3.32%. The Company and the bank are in the process of finalizing the corresponding documentation at the time of writing related to this.
In February 2016, the Company closed its Calgary corporate office and is working on finalizing documentation with the landlord to formally cancel the corresponding lease agreement.
About Formation Fluids
Formation Fluid Management has developed a three stage waste water treatment plant (Hydro-Cycle) that uses a proprietary process to clean waste water. Each plant is mobile and can process up to 1000 m3 of water per day. This system treats water to meet or exceed CCME Guidelines (Canadian Environmental Quality Guidelines), resulting in reusable water that can be used for: Boilers, Frac Water, Water Floods, and Drilling Operations. Formation Fluids has identified commercial applications for the Hydro-Cycle system within the oil and gas industry. The waste water treatment system has a primary use to reduce producers costs of dealing with produced water. The system also satisfies the need to reuse and recycle an increasing valuable resource. For more information, please visit: or contact Investor Relations at 403 887-8874.
On behalf of the Board of Directors.
Ken Rose, Chief Executive Officer
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain statements contained in this news release, including references to the Company''s receipt of applicable approvals, may constitute forward-looking information under applicable Canadian securities legislation. These statements relate to future events and are prospective in nature. All statements other than statements of historical fact may constitute forward-looking statements or contain forward-looking information. Forward-looking statements are often, but not always, identified by the use of words such as "may", "will", "project", "predict", "potential", "plan", "continue", "estimate", "expect", "targeting", "intend", "could", "might", "seek", "anticipate", "should", "believe" or variations thereof. Forward- looking information may relate to management''s future outlook and anticipated events or results and may include statements or information regarding the future plans or prospects of the Company. Forward- looking information is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements. The Company believes that the expectations reflected in the forward-looking statements contained in this news release are reasonable, but no assurance can be given that they will prove to be correct. Actual results and future events may differ materially from those anticipated and accordingly forward-looking statements should not be unduly relied upon. Forward-looking statements contained in this document speak only as of the date of this news release. Except as required by applicable law, the Company disclaims any obligation to update any forward-looking information.
Contacts:
Formation Fluid Management Inc.
Investor Inquiries:
1 (403) 887-8874
E-mail inquiries:
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Datum: 29.02.2016 - 21:17 Uhr
Sprache: Deutsch
News-ID 1418536
Anzahl Zeichen: 2938
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CALGARY, ALBERTA
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Oil & Gas
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