CALGARY, ALBERTA -- (Marketwired) -- 08/09/13 -- Tuscany International Drilling Inc. ("Tuscany" or the "Company") (TSX: TID)(COLOMBIA: TIDC) announces second quarter 2013 results. The unaudited condensed interim consolidated financial statements of the Company for the second quarter ended June 30, 2013 and the related management's discussion and analysis will be filed under the Company's profile on the SEDAR website at www.sedar.com. The financial information described below should be read in conjunction therewith. Unless otherwise stated, the financial information included herein has been presented in thousands of United States dollars.
Q2 2013 Highlights
-- The Company recorded revenue of $71,771 during the second quarter
compared to $85,197 during the same period last year. This decline in
revenue reflects a drop in revenue days from 2,612 in Q2 2012 to 2,343
in Q2 2013.
-- Gross margin(1) was $23,062 during the second quarter compared to
$26,128 during the same period last year.
-- Adjusted EBITDA(1) was $14,140 during the second quarter compared to
adjusted EBITDA of $17,037 during the same period in 2012.
-- Cash used in operations was $195 during the second quarter of 2013
compared to cash generated by operations of $11,593 during the same
period in 2012.
-- Net loss was $9,741 during the second quarter compared to net income of
$1,269 during the same period in 2012.
-- General and administrative expenses were $9,318 (including stock-based
compensation of $396), or 13.0% of revenue during the second quarter
compared to $10,072 (including stock-based compensation of $981), or
11.8% of revenue during the same period in 2012. Included in the $9,318
is $1,147 in bad debt expense written off during the second quarter of
2013.
-- Revenue utilization of the Company's fleet was 69.6% during the second
quarter of 2013 as compared to 78.7% during the same period in 2012. The
following is a brief table illustrating the status of our fleet as at
August 9, 2013.
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Working/ Not
Country Mobilizing Working Total
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Colombia 10 4(i) 14
Brazil 3 6(ii) 9
Ecuador 5 - 5
Gabon 5 - 5
Tanzania - 1 1
Uganda 1 - 1
Republic of Congo 1 1 2
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25 12 37
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(i) 2 of the 4 non-working rigs in Colombia have received letters of
intent for long term contract commitments to commence in Q3 2013.
(ii) 1 of the 6 non-working rigs in Brazil has received a letter of intent
for long term contract commitment to commence in Q3 of 2013.
OPERATIONAL HIGHLIGHTS
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$ thousands,
except per share
data and
operating % %
information 2013 2012 change 2013 2012 change
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Revenue 71,771 85,197 (16)% 130,862 179,511 (27)%
Gross margin(1) 23,062 26,128 (12)% 39,417 57,498 (31)%
Gross margin
percentage 32.1% 30.7% 5% 30.1% 32.0% (6)%
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Adjusted EBITDA(2) 14,140 17,037 (17)% 23,507 37,197 (37)%
Adjusted EBITDA
per share (basic
and diluted) $ 0.04 $ 0.05 (20)% $ 0.06 $ 0.11 (45)%
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Net income (loss)
for the period (9,741) 1,269 (868)% (16,820) 1,544 (1,189)%
Net income (loss)
per share (basic
and diluted) $ (0.03) $ 0.00 N/A $ (0.05) $ 0.00 N/A
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Funds from (used
in) operations(1) (195) 11,593 (102)% 105 25,333 (100)%
Funds from (used
in) operations
per share (basic
and diluted) $ 0.00 $ 0.03 (100)% $ 0.00 $ 0.07 (100)%
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Cash from (used
in) operating
activities (1,292) 2,722 (147)% (72) (2,619) 97%
Cash from (used
in) operating
activities per
share (basic and
diluted) $ (0.00) $ 0.01 (100)% $ (0.00) $ (0.01) 100%
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General and
administrative
expenses 9,318 10,072 (7)% 16,542 22,395 (26)%
General and
administrative
expenses as a% of
revenue 13.0% 11.8% 10% 12.6% 12.5% 1%
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Total assets 642,925 648,179 1% 642,925 648,179 1%
Total long-term
liabilities 165,588 171,970 (4)% 165,588 171,970 (4)%
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Operating
Information
Number of
available rigs 37 37 0% 37 37 0%
Revenue days 2,343 2,612 (10)% 4,538 5,630 (19)%
Utilization 69.6% 78.7% (12)% 67.8% 84.2% (19)%
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Non-IFRS Measures
This MD&A contains references to adjusted EBITDA, adjusted EBITDA per share, funds from operations, funds from operations per share, and gross margin.
Adjusted EBITDA is defined as "Oilfield services revenue less oilfield services expenses less general and administrative expenses (excluding stock-based compensation expense)". Management believes that in addition to net income, adjusted EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company's principal business activities prior to the consideration of how these activities are financed, how the results are taxed in various jurisdictions and how the results are impacted by accounting standards associated with the Company's share-based compensation plan and corporate development activities. Per share amounts are calculated using the weighted average number of outstanding shares for the period under review.
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$ thousands 2013 2012 2013 2012
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Oilfield services revenue 71,771 85,197 130,862 179,511
Oilfield services expenses (48,709) (59,069) (91,445) (122,013)
General and administrative expenses (9,318) (10,072) (16,542) (22,395)
Stock-based compensation expense 396 981 632 2,094
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Adjusted EBITDA 14,140 17,037 23,507 37,197
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Funds from operations is defined as "cash flow provided by/used in operating activities before the change in non-cash working capital". Funds from operations is a measure that provides shareholders and potential investors additional information regarding the Company's liquidity and its ability to generate funds to finance its operations. Management will use this measure to assess the Company's ability to finance operating activities, capital expenditures and corporate development initiatives. Per share amounts are calculated using the weighted average number of outstanding shares for the period under review.
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$ thousands 2013 2012 2013 2012
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Cash flow provided by (used in)
operating activities (1,292) 2,722 (72) (2,619)
Changes in non-cash working capital 1,097 8,871 177 27,952
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Funds from (used in) operations (195) 11,593 105 25,333
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Gross margin is defined as "oilfield services revenue less oilfield services expenses". Gross margin is a measure that provides shareholders and potential investors additional information regarding the profitability of the Company's rig operations and is used by management to help assess operational performance.
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$ thousands 2013 2012 2013 2012
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Oilfield services revenue 71,771 85,197 130,862 179,511
Oilfield services expenses (48,709) (59,069) (91,445) (122,013)
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Gross margin 23,062 26,128 39,417 57,498
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Adjusted EBITDA, adjusted EBITDA per share, funds from operations, funds from operations per share, and gross margin are not measures that have any standard meaning prescribed by IFRS and accordingly, may not be comparable to similar measures used by other companies.
Overview
During the three months ended June 30, 2013, the Company recorded a net loss of $9,741 ($0.03 per common share) compared to net income of $1,269 ($0.00 per common share) for the three months ended June 30, 2012. During the six months ended June 30, 2013, the Company recorded a net loss of $16,820 ($0.05 per common share) compared to net income of $1,544 ($0.00 per common share) for the six months ended June 30, 2012. During the three months ended June 30, 2013, the Company recorded oilfield services revenue of $71,771, adjusted EBITDA(3) of $14,140 and gross margin(1) from rig operations of $23,062 compared to revenue of $85,197, adjusted EBITDA of $17,037 and gross margin from rig operations of $26,128 during the three months ended June 30, 2012. During the six months ended June 30, 2013, the Company recorded oilfield services revenue of $130,862, adjusted EBITDA of $23,507 and gross margin from rig operations of $39,417 compared to revenue of $179,511, adjusted EBITDA of $37,197 and gross margin from rig operations of $57,498 during the six months ended June 30, 2012.
The decreases in revenue, adjusted EBITDA and gross margin for the second quarter of 2013 compared to the second quarter of 2012 reflect a 10% decrease in operating activity and a 6% decrease in average revenue per day during the three months ended June 30, 2013, compared to the three months ended June 30, 2012, as a result of rigs coming off contract in the second half of 2012. For the three months ended June 30, 2013, the Company had 2,343 revenue days from rig operations compared to 2,612 revenue days from rig operations during the three months ended June 30, 2012. Gross margin for the three months ended June 30, 2013, was offset by general and administrative expenses of $9,318 (2012 - $10,072), net finance costs of $6,323 (2012 - $6,515), foreign exchange contract loss of $65 (2012 - gain of $480) and depreciation of $8,179 (2012 - $7,495). For the three months ended June 30, 2013, the Company also recorded current income tax expense of $2,198 (2012 - $1,781), deferred income tax expense of $4,637 (2012 - recovery of $632), foreign exchange losses of $228 (2012 - gain of $239) and equity losses of $257 (2012 - income of $627). The decrease in general and administrative expense from the three months ended June 30, 2013 compared to the three months ended June 30, 2012, reflects management's continued efforts to realize efficiencies associated with its 2011 corporate acquisitions and general cost control initiatives.
The decreases in revenue, adjusted EBITDA and gross margin for the six months ended June 30, 2013, compared to the six months ended June 30, 2012, reflect a 19% decrease in operating activity and a 10% decrease in average revenue per day during the six months ended June 30, 2013, compared to the six months ended June 30, 2012, as a result of rigs coming off contract in the second half of 2012. For the six months ended June 30, 2013, the Company had 4,538 revenue days from rig operations compared to 5,630 revenue days from rig operations during the six months ended June 30, 2012. Gross margin for the six months ended June 30, 2013, was offset by general and administrative expenses of $16,542 (2012 - $22,395), net finance costs of $12,025 (2012 - $13,813), foreign exchange contract expense of $13 (2012 - $502) and depreciation of $13,738 (2012 - $17,263). For the six months ended June 30, 2013, the Company also recorded current income tax expense of $4,138 (2012 - $4,653), deferred income tax expense of $8,005 (2012 - recovery of $1,662), foreign exchange gains of $535 (2012 - losses of $277) and equity losses of $583 (2012 - income of $1,301). The decrease in general and administrative expense in the six months ended June 30, 2013, compared to the six months ended June 30, 2012, reflects management's continued efforts to realize efficiencies associated with the 2011 corporate acquisitions and general cost control initiatives.
During the six months ended June 30, 2013, Tuscany spent $13,426 on investing activities, which includes $13,679 of capital expenditures comprised primarily of rig refurbishment activity, and a $253 decrease in restricted cash. During the six months ended June 30, 2013, Tuscany drew an additional $15,000 on its credit facility, repaid $2,000 of its long term debt and increased its bank indebtedness and operating lines by $4,950.
Review of Interim Condensed Consolidated Statement of Financial Position
($ thousands)
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Change
($)(4) Explanation
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Cash and cash 3,939 See consolidated statement of cash flows.
equivalents
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Restricted cash (253) Restricted cash results from the requirement
to maintain a debt service reserve account
pursuant to the Company's credit facility. In
June 2013, debt interest was paid from this
reserve account, bringing the balance of the
account to $Nil. Subsequent to the interest
payment, deposits of $20 were made.
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Accounts 705 Increase results primarily from a 4% increase
receivable in revenue days in Q2, 2013 compared to Q4,
2012.
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Prepaid expenses (3,293) Decrease due to amortization of prepaid
and deposits expenses during the first and second quarters
of 2013.
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Inventory 4,089 Increase due to purchases partially offset by
the usage of inventory on hand at December 31,
2012.
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Foreign VAT 2,378 Increase due to delays in recovery of VAT from
recoverable Gabon.
(current and non-
current)
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Long-term (774) Decrease due to losses incurred by Warrior Rig
investments Ltd. ("Warrior") for the period and a foreign
exchange loss resulting from the translation
of this investment.
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Property and (59) Decrease is due to depreciation expense
equipment partially offset by costs capitalized related
to the refurbishment of rigs.
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Bank indebtedness 5,072 Increase due to draw on Company's overdraft
facilities.
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Lines of credit 14,878 Increase due to draw on the Company's
revolving line of credit.
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Accounts payable (2,928) Decrease reflects increased payments made to
and accrued vendors during the first six months of 2013.
liabilities
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Income taxes (1,374) Decrease due to tax installment payments made
payable in the first six months of 2013 offset by
expenses on taxable income for the first six
months of 2013.
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Long-term debt 235 Increase is due to amortization of financing
(current and costs included in long-term debt partially
long-term) offset by repayment of debt.
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Change
($)(5) Explanation
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Derivative (776) Decrease is due to the change in fair value of
contracts hedging contracts entered into during the
first quarter of 2012.
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Net deferred taxes (8,004) Decrease is due primarily to revaluation of
tax assets due to the change in foreign
exchange rates.
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Share capital 23,128 Increase is due to the exercise of warrants
during the first quarter of 2013.
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Contributed 3,208 Increase relates to the expiry of warrants and
surplus stock-based compensation expense recorded
during the first two quarters of 2013.
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Warrants (25,704) Decrease is due to the exercise and expiry of
warrants during the first and second quarters
of 2013.
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Review of Interim Condensed Consolidated Statement of Comprehensive Income and Loss
($ thousands)
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% %
2013 2012 Change 2013 2012 Change
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Oilfield services
revenue 71,771 85,197 (16)% 130,862 179,511 (27)%
Oilfield services
expenses (48,709) (59,069) (18)% (91,445) (122,013) (25)%
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Gross margin(6) 23,062 26,128 (12)% 39,417 57,498 (31)%
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Gross margin % 32.1% 30.7% 5% 30.1% 32.0% (6)%
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Oilfield services revenue was $71,771 for the three months ended June 30, 2013, compared to $85,197 for the three months ended June 30, 2012, a decrease of 16%. The decrease in revenue is a result of the decrease in the number of revenue days and average revenue per day in the three months ended June 30, 2013, compared to the three months ended June 30, 2012. During the three months ended June 30, 2013, the Company had 2,343 revenue days (69.6% utilization) compared to 2,612 revenue days (78.7% utilization) in the three months ended June 30, 2012, a decrease of 10%. Revenue days decreased in the three months ended June 30, 2013, primarily as a result of rigs coming off contract during the last six months of 2012. For the three months ended June 30, 2013, average revenue per day decreased to $30.64 from $32.62 for the three months ended June 30, 2012. Average revenue per day decreased in the second quarter of 2013 compared to the second quarter of 2012 due to larger, high day rate rigs coming off contract during the last six months of 2012, and three rigs in Colombia being contracted at lower day rates compared to rigs of similar capacity. These lower day rates are more than offset by contract terms that provide that the majority of the operating costs are borne by the customer. Twenty-nine of the Company's 37 available drilling and heavy-duty workover rigs earned revenue from drilling operations during the three months ended June 30, 2013. During the three months ended June 30, 2012, the Company earned revenues from 35 rigs.
Oilfield services revenue was $130,862 for the six months ended June 30, 2013, compared with $179,511 for the six months ended June 30, 2012, a decrease of 27%. The decrease in revenue is a result of decrease in the number of revenue days and average revenue per day in the six months ended June 30, 2013, compared to the six months ended June 30, 2012. During the six months ended June 30, 2013, the Company had 4,538 revenue days (67.8% utilization) compared to 5,630 revenue days (84.2% utilization) in the six months ended June 30, 2012. Revenue days decreased in the six months ended June 30, 2013, primarily as a result of rigs coming off contract during the second half of 2012. For the six months ended June 30, 2013, average revenue per day decreased to $28.84 from $31.89 for the six months ended June 30, 2012. Average revenue per day decreased in the first half of 2013 compared to the first half of 2012 due to larger, high day rate rigs coming off contract during 2012, and three rigs in Colombia being contracted at lower day rates compared to rigs of similar capacity. These lower day rates are more than offset by contract terms that provide that the majority of the operating costs are borne by the customer. Thirty of the Company's 37 available drilling and heavy-duty workover rigs earned revenue from drilling operations during the six months ended June 30, 2013. During the six months ended June 30, 2012, the Company earned revenues from 35 rigs.
For the three months ended June 30, 2013, gross margin was $23,062, or 32.1%, compared with a gross margin of $26,128, or 30.7%, for the three months ended June 30, 2012. For the six months ended June 30, 2013, gross margin was $39,417, or 30.1%, compared with a gross margin of $57,498 or 32.0%, for the three months ended June 30, 2012. The increase in gross margin percentage for the three months ended June 30, 2013, compared to the gross margin percentage for the three months ended June 30, 2012, is primarily due to three rigs in Colombia being contracted at lower day rates, and these lower day rates being more than offset by contract terms that provide that the majority of the operating costs are borne by the customer, resulting in higher gross margin percentages. The decrease in gross margin percentage for the six months ended June 30, 2013, compared to the gross margin percentage for the six months ended June 30, 2012, is primarily due to costs incurred in the first quarter of 2013 associated with rigs that have come off contract during the latter part of 2012.
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% %
2013 2012 Change 2013 2012 Change
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Depreciation 8,179 7,495 9% 13,738 17,263 (20)%
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Depreciation expense totaled $8,179 for the three months ended June 30, 2013, compared with $7,495 for the three months ended June 30, 2012. Depreciation expense totaled $13,738 for the six months ended June 30, 2013, compared with $17,263 for the six months ended June 30, 2012. Under the Company's depreciation policy, depreciation of rigs and related equipment is based on the number of days in operation. The increase in depreciation for the three months ended June 30, 2013, compared to the three months ended June 30, 2012, is a result of a $1,803 out of period adjustment for additional depreciation for items which are not in use or impaired in prior periods. The decrease in depreciation expense for the six months ended June 30, 2013, compared to the six months ended June 30, 2012, is a result of a decrease in the operating days in the six months ended June 30, 2013, compared to the corresponding period in 2012. During the six months ended June 30, 2013, the Company recorded depreciation on 28 rigs.
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2013 2012 Change 2013 2012 Change
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General and
administrative 9,318 10,072 (7)% 16,542 22,395 (26)%
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General and administrative expense was $9,318 (13.0% of revenue) for the three months ended June 30, 2013, compared to $10,072 (11.8% of revenue) for the three months ended June 30, 2012. General and administrative expense was $16,542 (12.6% of revenue) for the six months ended June 30, 2013, compared to $22,395 (12.5% of revenue) for the six months ended June 30, 2012. Included in general and administrative expenses for the three and six months ended June 30, 2013, is $1,147 of bad debt expense relating to one customer whose accounts receivable was deemed to be uncollectible. The decrease in general and administrative expense for the three and six months ended June 30, 2013, compared to the three and six months ended June 30, 2012, reflects management's efforts to realize efficiencies associated with its 2011 corporate acquisitions and general cost control initiatives. The increase in general and administrative expense as a percentage of revenue from the three and six months ended June 30, 2013 compared to the three and six months ended June 30, 2012, is due to a 16% and 27% decrease in revenue for the three and six months ended June 30, 2013, respectively, compared to the corresponding periods of 2012.
Included in general and administrative expense for the three and six months ended June 30, 2013, is $396 and $632, respectively, of stock-based compensation compared to $981 and $2,094, respectively, for the three months and six months ended June 30, 2012. Stock-based compensation expense represents the value, calculated using the Black-Scholes option pricing model, related to the granting of stock options.
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% %
2013 2012 Change 2013 2012 Change
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Net finance costs 6,323 6,515 (3)% 12,025 13,813 (13)%
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For the three and six months ended June 30, 2013, net finance costs includes interest and amortization of costs associated with the Company's credit facility, the change in value on the Company's interest rate hedges and other smaller interest charges in various countries, net of interest income. Net finance costs decreased to $6,323 for the three months ended June 30, 2013, from $6,515 for the three months ended June 30, 2012. Net finance costs decreased to $12,025 for the six months ended June 30, 2013, from $13,813 for the six months ended June 30, 2012.
The Company currently has a $253,000 credit facility comprised of a $208,000 term loan and a $45,000 revolving line of credit. Fees associated with the credit facility have been presented as a direct reduction to the face value of the long-term debt. The effective interest rate method has been applied and results in the amortization of the debt discount over the life of the loan. As a result, amortization of financing fees related to the credit facility of $1,377 and $2,748 have been included in net finance costs for the three months and six months ended June 30, 2013, respectively, compared to $1,087 and $2,168 for the three and six months ended June 30, 2012. In addition to the financing fees associated with this facility, the Company incurs interest expense on the amount drawn under the credit facility at three-month LIBOR plus 7.5% per annum. During the three and six months ended June 30, 2013, the Company recorded $5,261 and $9,406, respectively, of interest related to the credit facility compared to $4,221 and $8,193, respectively, for the three and six months ended June 30, 2012.
During the year ended December 31, 2012, the Company entered into two separate agreements to hedge the interest rate on a total of $100,000 of the $210,000 term loan. The Company has entered into floating for fixed swap agreements on three-month LIBOR to maturity of the term loan under the Company's credit facility. The fair value of these interest rate contract liabilities decreased by $385 for the three months ended June 30, 2013, compared to an increase of $954 for the three months ended June 30, 2012. The fair value of these interest rate contract liabilities decreased by $363 for the six months ended June 30, 2013, compared to an increase of $3,107 for the three months ended June 30, 2012.
Interest of $201 and $453 was incurred in various countries for the three and six months ended June 30, 2013, respectively, compared to $318 and $422 for the three and six months ended June 30, 2012, respectively.
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% %
2013 2012 Change 2013 2012 Change
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Foreign exchange
contracts (65) 480 (114)% 13 502 (97)%
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During the six month period ended June 30, 2012, the Company entered into a Euro/United States dollar cross costless collar on a total of 19,200 Euro. The contract consists of 24 contracts with notional amounts of 800 Euro per contract. The contract has a two year term and the fair value of this foreign exchange contract liability decreased $65 (2012 - increased $480) in the three months ended June 30, 2013 and increased $13 in the six months ended June 30, 2013 (2012 - $502).
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2013 2012 Change 2013 2012 Change
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Change in fair value of
contingent refundable
consideration 1,728 - N/A 1,728 - N/A
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These costs relate to the acquisition of Drillfor Perfuracoes do Brasil Ltda ("Drillfor") in May 2011 which were identified during the quarter. The costs would normally be included in the acquisition costs at the time of acquisition; however under IFRS standards there can be no changes to the purchase price allocation of an acquired company subsequent to the end of the measurement period, which is one year after the date of acquisition. Since the one year period has expired, these costs are recorded as an expense, as prescribed by IFRS standards.
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% %
2013 2012 Change 2013 2012 Change
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Foreign exchange (loss) gain (228) 239 195% 535 (277) 293%
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In addition to incurring operating expenses and capital expenditures in the Company's functional currency (United States dollars), the Company also incurs operating expenses and capital expenditures in Colombian pesos (COP), Canadian dollars (CDN $), Brazilian real (BRL), African francs (CFA) and Euros. Foreign exchange gains and losses arise primarily on the settlement of accounts payable invoices that are denominated in currencies other than the United States dollar.
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% %
2013 2012 Change 2013 2012 Change
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Equity income (loss) (257) 627 (141)% (583) 1,301 (145)%
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The Company has a 33.87% ownership interest in Warrior, a private oilfield services company involved in the development and manufacture of oilfield services equipment. The carrying value of this investment is adjusted to include the pro-rata share of the investee's earnings, less dividends received. Equity losses totaled $257 for the three months ended June 30, 2013, compared with equity income of $627 for the three months ended June 30, 2012. Equity losses totaled $583 for the six months ended June 30, 2013, compared with equity income of $1,301 for the six months ended June 30, 2012. Equity income has decreased as a result of decreased activity in Warrior in the first half of 2013 compared to the first half of 2012.
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2013 2012 Change 2013 2012 Change
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Current income taxes 2,198 1,781 23% 4,138 4,653 (11)%
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For the three and six months ended June 30, 2013, Tuscany's total current income tax expense is $2,198 and $4,138, respectively. This is comprised primarily of income taxes calculated on equity in Colombia and income taxes calculated on earnings in Gabon.
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2013 2012 Change 2013 2012 Change
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Deferred income taxes
(recovery) 4,637 (632) 834% 8,005 (1,662) 582%
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For the three and six months ended June 30, 2013, Tuscany's total deferred income tax expense is $4,637 and $8,005, respectively, as a result of the revaluation of the deferred tax assets in Colombia resulting from a nine percent strengthening of the Colombian peso compared to the United States dollar since December 31, 2012.
Tuscany International Drilling Inc.
Condensed Interim Consolidated Statement of Financial Position (Unaudited)
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(expressed in thousands of US dollars)
June 30 December 31
2013 2012
-----------------------------
Assets
Current Assets
Cash and cash equivalents 10,242 6,303
Restricted cash 20 273
Accounts receivable 107,667 106,962
Prepaid expenses and deposits 2,791 6,084
Inventory 22,755 18,666
Foreign VAT recoverable 6,184 4,219
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149,659 142,507
Foreign VAT recoverable 5,868 5,455
Deferred tax asset 6,970 15,772
Long-term investment 5,638 6,412
Property and equipment 474,790 474,849
-----------------------------
642,925 644,995
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-----------------------------
Liabilities
Current Liabilities
Bank indebtedness 9,567 4,495
Lines of credit 46,347 31,469
Accounts payable and accrued liabilities 60,441 63,369
Current portion of long-term debt 40,625 16,875
Income taxes payable 7,473 8,847
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164,453 125,055
Long-term debt 156,038 179,553
Derivative contracts 3,161 3,937
Deferred tax liability 6,389 7,187
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330,041 315,732
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Shareholders' Equity
Share capital 389,428 366,300
Contributed surplus 24,868 21,660
Warrants - 25,704
Accumulated other comprehensive loss (580) (389)
Deficit (100,832) (84,012)
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312,884 329,263
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642,925 644,995
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Tuscany International Drilling Inc.
Condensed Interim Consolidated Statement of Comprehensive Income and Loss
(Unaudited)
For the three and six months ended June 30, 2013 and 2012
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(expressed in thousands of US dollars, except per share data)
Three months Six months
ended ended
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June 30 June 30 June 30 June 30
2013 2012 2013 2012
------------------------------------
Revenue
Oilfield services 71,771 85,197 130,862 179,511
Expenses
Oilfield services 48,709 59,069 91,445 122,013
Depreciation 8,179 7,495 13,738 17,263
General and administrative 9,318 10,072 16,542 22,395
Foreign exchange (gain) loss 228 (239) (535) 277
Equity (income) loss 257 (627) 583 (1,301)
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5,080 9,427 9,089 18,864
Net finance costs 6,323 6,515 12,025 13,813
Gain on sale of property & equipment - (44) - (44)
Loss on sale of investment - 58 - 58
Foreign exchange contract (65) 480 13 502
Change in fair value of contingent
refundable consideration 1,728 - 1,728 -
------------------------------------
Income (loss) before income taxes (2,906) 2,418 (4,677) 4,535
Current income taxes 2,198 1,781 4,138 4,653
Deferred income taxes 4,637 (632) 8,005 (1,662)
------------------------------------
Net income (loss) for the period (9,741) 1,269 (16,820) 1,544
Other comprehensive loss
Items that may be subsequently
reclassified to income and loss:
------------------------------------
Foreign currency translation (72) (58) (191) (215)
------------------------------------
Total comprehensive income (loss) (9,813) 1,211 (17,011) 1,329
------------------------------------
------------------------------------
Net income (loss) per share, basic and
diluted (0.03) 0.00 (0.05) 0.00
------------------------------------
------------------------------------
Tuscany International Drilling Inc.
Condensed Interim Consolidated Statement of Changes in Equity (Unaudited)
----------------------------------------------------------------------------
(expressed in thousands of US dollars)
Attributable to equity owners of the Company
--------------------------------------------------------------
Accumulated
other
Share Contributed comprehensive Total
Capital surplus Warrants income (loss) Deficit equity
---------------------------------------------------------------
Balance -
January 1,
2013 366,300 21,660 25,704 (389) (84,012) 329,263
Net loss for
the period - - - - (16,820) (16,820)
Cumulative
foreign
currency
translation
adjustment - - - (191) - (191)
---------------------------------------------------------------
Comprehensive
loss for the
period - - - (191) (16,820) (17,011)
Stock-based
compensation - 632 - - - 632
Exercise of
warrants 23,128 - (23,128) - - -
Expiration of
warrants - 2,576 (2,576) - - -
---------------------------------------------------------------
Balance -
June 30,
2013 389,428 24,868 - (580) (100,832) 312,884
---------------------------------------------------------------
---------------------------------------------------------------
Balance -
January 1,
2012 366,300 18,106 25,704 (251) (48,948) 360,911
Net income
for the
period - - - - 1,544 1,544
Cumulative
foreign
currency
translation
adjustment - - - (215) - (215)
---------------------------------------------------------------
Comprehensive
income
(loss) for
the period - - - (215) 1,544 1,329
Stock-based
compensation - 2,094 - - - 2,094
---------------------------------------------------------------
Balance -
June 30,
2012 366,300 20,200 25,704 (466) (47,404) 364,334
---------------------------------------------------------------
---------------------------------------------------------------
Tuscany International Drilling Inc.
Condensed Interim Consolidated Statement of Cash Flows (Unaudited)
For the three and six months ended June 30, 2013 and 2012
----------------------------------------------------------------------------
(expressed in thousands of US dollars)
Three months Six months
ended ended
----------------------------------------
June 30 June 30 June 30 June 30
2013 2012 2013 2012
----------------------------------------
Cash flow provided by (used in):
Operating Activities
Net income (loss) for the period (9,741) 1,269 (16,820) 1,544
Items not affecting cash
Depreciation 8,179 7,495 13,738 17,263
Gain on sale of property and
equipment - (44) - (44)
Equity (income) loss 257 (627) 583 (1,301)
Amortization of financing fees 1,377 1,087 2,748 2,168
Change in fair value of derivative
contracts (663) 1,432 (776) 3,609
Stock based compensation 396 981 632 2,094
Changes in non-cash working capital (1,097) (8,871) (177) (27,952)
----------------------------------------
(1,292) 2,722 (72) (2,619)
----------------------------------------
Investing Activities
Acquisition of property and
equipment (10,659) (7,571) (13,679) (10,807)
Proceeds from sale of property and
equipment - 588 - 588
Restricted cash 2,061 (274) 253 1,226
----------------------------------------
(8,598) (7,257) (13,426) (8,993)
----------------------------------------
Financing Activities
Proceeds from bank indebtedness 4,929 - 4,950 -
Proceeds from lines of credit 5,000 - 15,000 -
Repayment of long term debt (2,000) - (2,000) -
Proceeds from long term debt - 14,048 - 14,048
Payment of financing fees (426) - (513) -
----------------------------------------
7,503 14,048 17,437 14,048
----------------------------------------
Increase (decrease) in cash and cash
equivalents (2,387) 9,513 3,939 2,436
Cash and cash equivalents, beginning
of period 12,629 6,079 6,303 13,156
----------------------------------------
Cash and cash equivalents, end of
period 10,242 15,592 10,242 15,592
----------------------------------------
----------------------------------------
Cash Flow Supplementary Information
Interest received 131 65 219 77
Interest paid 5,137 4,071 9,493 8,063
Income taxes paid 3,723 3,789 5,511 3,789
----------------------------------------
----------------------------------------
The Toronto Stock Exchange has not reviewed, nor does it accept responsibility for the adequacy or accuracy of this release.
The listing of Tuscany's common shares on the Colombian Stock Exchange does not imply a certification by the BVC of the value or the solvency of Tuscany.
(1) Refer to Non-GAAP Measures.
(2) Refer to "Non-IFRS Measures."
(3) Refer to "Non-IFRS Measures."
(4) Reflects the movement in accounts from December 31, 2012 to June 30,
2013.
(5) Reflects the movement in accounts from December 31, 2012, to June 30,
2013.
(6) Refer to "Non-IFRS Measures."
Contacts:
Tuscany International Drilling Inc.
Walter Dawson
President and CEO
(403) 265-8258
(403) 265-8793 (FAX)
Tuscany International Drilling Inc.
Matt Moorman
CFO
(403) 265-8258
(403) 265-8793 (FAX)
www.tuscanydrilling.com
