CALGARY, Alberta, July 19, 2018 (GLOBE NEWSWIRE) -- Pulse Seismic Inc. (TSX:PSD) (OTCQX:PLSDF) (“Pulse” or “the Company”) is pleased to report its financial and operating results for the three and six months ended June 30, 2018. The unaudited condensed consolidated interim financial statements, accompanying notes and MD&A are being filed on SEDAR (www.sedar.com) and will be available on Pulse’s website at www.pulseseismic.com.
HIGHLIGHTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018
SELECTED FINANCIAL AND OPERATING INFORMATION
Three months ended June 30, | Six months ended June 30, | Year ended | |||||||
(thousands of dollars except per share data, | 2018 | 2017 | 2018 | 2017 | December 31, | ||||
numbers of shares and kilometres of seismic data) | (unaudited) | (unaudited) | 2017 | ||||||
Revenue – Data library sales | 1,941 | 2,929 | 4,269 | 5,648 | 43,525 | ||||
Amortization of seismic data library | 1,836 | 4,638 | 3,714 | 9,273 | 15,870 | ||||
Net earnings (loss) | (1,016 | ) | (2,426 | ) | (1,712 | ) | (4,928 | ) | 15,087 |
Per share basic and diluted | (0.02 | ) | (0.04 | ) | (0.03 | ) | (0.09 | ) | 0.27 |
Cash provided by (used in) operating activities | 213 | 833 | (8,379 | ) | 4,131 | 38,755 | |||
Per share basic and diluted | 0.00 | 0.02 | (0.16 | ) | 0.07 | 0.70 | |||
Cash EBITDA (a) | 482 | 1,542 | 1,416 | 2,872 | 37,070 | ||||
Per share basic and diluted (a) | 0.01 | 0.03 | 0.03 | 0.05 | 0.67 | ||||
Shareholder free cash flow (a) | 630 | 1,605 | 1,510 | 2,859 | 29,729 | ||||
Per share basic and diluted (a) | 0.01 | 0.03 | 0.03 | 0.05 | 0.54 | ||||
Capital expenditures | |||||||||
Seismic data purchases, digitization and related costs | - | 60 | 62 | 125 | 1,575 | ||||
Property and equipment | 2 | 10 | 4 | 37 | 48 | ||||
Total capital expenditures | 2 | 70 | 66 | 162 | 1,623 | ||||
Special dividend | - | - | - | - | 10,915 | ||||
Weighted average shares outstanding | |||||||||
Basic and diluted | 53,850,917 | 55,337,560 | 53,868,998 | 55,539,541 | 55,135,035 | ||||
Shares outstanding at period-end | 53,850,917 | 55,337,560 | 54,020,817 | ||||||
Seismic library | |||||||||
2D in kilometres | 450,000 | 447,000 | 447,000 | ||||||
3D in square kilometres | 28,956 | 28,647 | 28,956 | ||||||
FINANCIAL POSITION AND RATIO | |||||||||
June 30, | June 30, | December 31, | |||||||
(thousands of dollars except ratio) | 2018 | 2017 | 2017 | ||||||
Working capital | 22,586 | 11,811 | 22,486 | ||||||
Working capital ratio | 15.3:1 | 11.2:1 | 3.1:1 | ||||||
Cash and cash equivalents | 18,040 | 8,263 | 27,422 | ||||||
Total assets | 39,246 | 36,632 | 51,693 | ||||||
Shareholders’ equity | 35,305 | 32,338 | 37,810 | ||||||
(a) The Company’s continuous disclosure documents provide discussion and analysis of “cash EBITDA”, “cash EBITDA per share”, “shareholder free cash flow” and “shareholder free cash flow per share”. These financial measures do not have standard definitions prescribed by IFRS and, therefore, may not be comparable to similar measures disclosed by other companies. The Company has included these non-GAAP financial measures because management, investors, analysts and others use them as measures of the Company’s financial performance. The Company’s definition of cash EBITDA is cash available for interest payments, cash taxes, repayment of debt, purchase of its shares, discretionary capital expenditures and the payment of dividends, and is calculated as earnings (loss) from operations before interest, taxes, depreciation and amortization less participation survey revenue, plus any non-cash and non-recurring expenses. Cash EBITDA excludes participation survey revenue as these funds are directly used to fund specific participation surveys and this revenue is not available for discretionary capital expenditures. The Company believes cash EBITDA assists investors in comparing Pulse’s results on a consistent basis without regard to participation survey revenue and non-cash items, such as depreciation and amortization, which can vary significantly depending on accounting methods or non-operating factors such as historical cost. Cash EBITDA per share is defined as cash EBITDA divided by the weighted average number of shares outstanding for the period. Shareholder free cash flow further refines the calculation of capital available to invest in growing the Company’s 2D and 3D seismic data library, to repay debt, to purchase its common shares and to pay dividends by deducting non-discretionary expenditures from cash EBITDA. Non-discretionary expenditures are defined as debt financing costs (net of deferred financing expenses amortized in the current period) and current tax provisions. Shareholder free cash flow per share is defined as shareholder free cash flow divided by the weighted average number of shares outstanding for the period.
These non-GAAP financial measures are defined, calculated and reconciled to the nearest GAAP financial measures in the Management’s Discussion and Analysis.
OUTLOOK
With second-quarter and first-half 2018 sales considerably lower than in the comparable periods of 2017, Pulse continues to look ahead cautiously to the rest of the year. Visibility as to Pulse’s traditional sales remains poor and transaction-based sales are innately unpredictable.
As in Pulse’s first-quarter 2018 Outlook, traditional industry indicators remain contradictory. Among these are:
Western Canada’s oil and gas producing sector continues to struggle to achieve a solid recovery from its extremely difficult, three-and-a-half-year-long downturn. The industry has not benefited from the virtually across-the board strengths driving U.S. industry activity. Pulse anticipates the Canadian sector’s slower recovery will continue.
Further barriers to accelerated field activity are ongoing takeaway pipeline constraints, weak intra-Alberta gas demand, strong productivity from newly drilled wells in the Montney, Duvernay, Deep Basin and other unconventional plays, fluctuating gas exports to the U.S., and Canada’s failure to move forward with large LNG export projects. These are significant handicaps for a gas-focused supply basin.
Government policies at all levels in Canada remain, on balance, less supportive of oil and gas industry capital investment than in the past (or in the U.S. at present). The ongoing nationwide controversy over the politically-driven holdup of the National Energy Board-approved expansion of the Trans-Mountain Pipeline from Alberta to tidewater in Burnaby, B.C., is an example.
Fortunately, Pulse’s business has been grown, enlarged and fine-tuned to be resilient against industry volatility, negative market forces and unpredictable government policies. The Company’s strong balance sheet, with effectively zero cash financing costs, its low cash operating costs and the absence of other spending commitments make Pulse cash-flow positive at annual revenue of approximately $6 million. Despite poor sales in the first and second quarters, Pulse’s first-half sales are approaching that level. Pulse’s lowest annual sales in the depths of the energy industry’s downturn were $14.3 million. Even with weaker first- and second-quarter sales, Pulse generated positive cash EBITDA and shareholder free cash flow in each quarter.
For the rest of 2018, Pulse remains cautious about the level of traditional sales. Large or small transaction-based sales can occur at any time, creating potential upside to Pulse’s quarterly and annual revenues. The strength or weakness of transaction-based sales will determine whether 2018 financial results exceed or underperform historical averages.
CORPORATE PROFILE
Pulse is a market leader in the acquisition, marketing and licensing of 2D and 3D seismic data to western Canada’ energy sector. Pulse owns the second-largest licensable seismic data library in Canada, currently consisting of approximately 28,956 square kilometres of 3D seismic and 450,000 kilometres of 2D seismic. The library extensively covers the Western Canada Sedimentary Basin where most of Canada’s oil and natural gas exploration and development occur.
For further information, please contact:
Neal Coleman, President and CEO
Or
Pamela Wicks, Vice President Finance and CFO
Tel.: 403-237-5559
Toll-free: 1-877-460-5559
E-mail: info@pulseseismic.com.
Please visit our website at www.pulseseismic.com.
This document contains information that constitutes “forward-looking information” or “forward-looking statements” (collectively, “forward-looking information”) within the meaning of applicable securities legislation.
The Outlook section contains forward-looking information which includes, among other things, statements regarding:
Undue reliance should not be placed on forward-looking information. Forward-looking information is based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to vary and in some instances to differ materially from those anticipated in the forward-looking information. Pulse does not publish specific financial goals or otherwise provide guidance, due to the inherently poor visibility of seismic revenue.
The material risk factors include, without limitation:
The foregoing list is not exhaustive. Additional information on these risks and other factors which could affect the Company’s operations and financial results is included under “Risk Factors” of the Company’s MD&A for the year ended December 31, 2017. Forward-looking information is based on the assumptions, expectations, estimates and opinions of the Company’s management at the time the information is presented.