CALGARY, ALBERTA -- (Marketwired) -- 11/12/15 -- Northern Frontier Corp. (TSX VENTURE: FFF) ("Northern Frontier" or the "Corporation") announces its third quarter 2015 financial results.
For the three and nine months ended September 30, 2015, Northern Frontier:
-- generated $18.3 million and $37.6 million in revenue;
-- realized EBITDA of $2.3 million and $5.1 million;
-- recorded a net income of $0.2 million and a net loss of $2.5 million;
-- paid down its Senior Credit Facilities by $7.5 million since January 1,
2015;
-- formed two legal partnerships with First Nations owned entities; and
-- acquired Northern Frontier Facilities LP ("NFF LP") and SL Oilfield
Construction Ltd. ("SL").
Financial Results
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Three months ended Nine months ended
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(in 000's CAD, except as Sep 30, Sep 30, Sep 30, Sep 30,
noted) 2015 2014 2015 2014
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Revenue $ 18,301 $ 15,446 $ 37,602 $ 44,877
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Gross Profit 5,047 4,260 10,880 10,739
as a % of revenue 28% 28% 29% 24%
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EBITDA (1) 2,295 3,022 5,065 7,320
per share $ 0.09 $ 0.19 $ 0.21 $ 0.58
as a % of revenue 13% 20% 13% 16%
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Net income (loss) and
comprehensive income 200 (2,583) (2,508) (4,745)
(loss)
per share - basic and
diluted $ 0.01 $ (0.16) $ (0.10) $ (0.37)
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Dividends declared - 580 - 2,038
per share N/A $ 0.025 N/A $ 0.155
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Cash generated by
operations (before non- 1,589 453 3,174 2,187
cash working capital)
per share $ 0.03 $ 0.03 $ 0.07 $ 0.17
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Capital expenditures 292 170 1,466 7,740
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Capital management: (2)
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Funded debt to EBITDA 2.72
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Fixed charge coverage
ratio (3) 1.69
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Weighted average common
shares outstanding -
diluted 26,393,407 15,702,228 24,309,943 12,722,621
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Financial Position
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As at (in 000's CAD, except as noted) Sep 30, 2015 Dec 31, 2014
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Working Capital (4) $ 8,976 $ 3,879
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Total assets $ 86,969 $ 82,871
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Senior Funded Debt (5) $ 38,596 $ 38,329
Funded Debt (6) $ 46,128 $ 38,329
Equity $ 26,932 $ 26,888
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Common shares outstanding 28,698,071 23,250,944
Common share purchase warrants outstanding 11,933,403 17,049,042
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(1) EBITDA (earnings before finance costs, taxes, depreciation and
amortization, gain/loss on disposal of property and equipment, share
-based compensation and other specified items) is not a recognized
measure under IFRS. Refer to "Non-GAAP Measures".
(2) The definition of these measures are in accordance with the lending
agreement and are calculated based on the lenders' interpretation, which
may not be equal to individual financial statement amounts.
(3) Fixed coverage ratio is defined as EBITDA less cash taxes, unfunded
capital expenditures and distributions to required principal and
interest payments on funded debt.
(4) Working Capital (current assets excluding cash and cash equivalents and
restricted cash less current liabilities excluding bank indebtedness,
current portion of loans and borrowings and obligations under finance
lease) is not a recognized measure under IFRS. Refer to "Non-GAAP
Measures".
(5) Senior Funded Debt (senior secured loans and borrowings (before
unamortized debt issue costs) and obligations under finance lease less
cash and cash equivalents and restricted cash) is not a recognized
measure under IFRS. Refer to "Non-GAAP Measures".
(6) Funded Debt (loans and borrowings (before unamortized debt issue costs
and unamortized fair value accretion) and obligations under finance
lease less cash and cash equivalents and restricted cash) is not a
recognized measure under IFRS. Refer to "Non-GAAP Measures".
Pro Forma Financial Information
Northern Frontier acquired Central Water & Equipment Services Ltd. ("Central Water") on August 28, 2014, Black Diamond Group Limited's construction services operation on July 30, 2015 for which the Corporation branded as NFF LP and SL on September 1, 2015. Actual financial results of the Corporation only reflect the activities of these acquisitions subsequent to their effective dates.
Assuming Northern Frontier acquired Central Water, NFF LP, and SL on January 1, 2014, the pro forma consolidated financial results would have been as follows:
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Three months ended Nine months ended
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(in 000's CAD, Sep 30, Sep 30, % Sep 30, Sep 30, %
except as noted) 2015 2014 Change 2015 2014 Change
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Revenue $ 22,658 $ 34,676 (49) $ 66,607 $ 91,111 (52)
Direct costs 16,266 22,853 (29) 48,422 64,560 (25)
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Gross profit 6,392 11,823 (46) 18,185 26,551 (32)
as a % of revenue 28% 34% 27% 29%
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EBITDA (1) $ 2,624 $ 7,920 (67) $ 8,315 $ 15,964 (48)
as a % of revenue 12% 23% 12% 18%
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Outlook
As outlined in the second quarter of 2015, the overall significant downward pressure on oil prices and uncertainty regarding oil pricing recovery timelines has resulted in industry caution regarding future expenditure profiles. Forward visibility on industry activity remains very limited. The Corporation continues to experience a material deferral in its customers' civil construction and tank hydro testing programs that the Corporation is involved with. Management has taken steps to adjust its cost structure commensurate with the expected reduced operating activity levels and has had some success with marketing its services in markets outside of its traditional region via the acquisition of SL, Logistics sales activity in the British Columbia lower mainland and the SCFN Frontier partnership.
During the third quarter, the Corporation completed its third platform acquisition NFF LP and formed the Aventur Mechanical partnership that comprise the Facilities operating segment. Management believes that there is significant opportunity for this operating segment and expects it to make a positive contribution to the Corporation's financial performance.
Additional information
Northern Frontier's unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2015 and 2014 and management's discussion and analysis ("MD&A") for the three and nine months ended September 30, 2015 have been filed with the Canadian securities regulatory authorities and may be accessed under the Corporation's profile on SEDAR at www.sedar.com.
Conference call
Management will hold a conference call on Friday November 13, 2015, at 9:30 a.m. Calgary / 11:30 a.m. Toronto time. The call will feature remarks by Chris Yellowega, President and CEO and Monty Balderston, Executive Vice President and CFO regarding the financial results.
Conference dial-in instructions are as follows: Toronto: 416.340.2216 North America: 1.866.225.2055
A replay of the call will be available 24 hours after the event until 11:59 p.m. EST on November 20, 2015. To access the archived conference call, please dial 905.694.9451 or 1.800.408.3053 and enter passcode 4043690.
About Northern Frontier Corp.
Northern Frontier's strategic objective is to create a large industrial and environmental services business through a buy and build growth strategy. Currently, the Corporation provides: civil construction, excavation, fabrication and maintenance services to the industrial industry, bulk water transfer logistic services and installs and dismantles remote workforce lodging and modular offices in western Canada.
The Corporation's common shares and common share purchase warrants are listed on the TSX Venture Exchange under the trading symbol "FFF" and "FFF.WT.A", respectively.
Reader Advisory
Forward-Looking Statements
This news release includes certain statements that constitute forward-looking statements under applicable securities legislation. All statements other than statements of historical fact are forward -looking statements. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", or the negative of these terms or other comparable terminology. These forward-looking statements include, among other things, statements in respect of:
-- expectations of future financial performance of the Corporation; and -- the diversification of the Corporation's operations.
These statements are only predictions and are based upon current expectations, estimates, projections and assumptions, which the Corporation believes are reasonable but which may prove to be incorrect and therefore such forward-looking statements should not be unduly relied upon. In making such forward -looking statements, assumptions have been made regarding, among other things, industry activity, the state of financial markets, business conditions, continued availability of capital and financing, future oil and natural gas prices and the ability of the Corporation to obtain necessary regulatory approvals. Although the Corporation believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.
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 statements will not occur. Investors are cautioned that forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. The Corporation has no obligation to update any forward-looking statements set out in this news release, except as required by applicable law.
Non-GAAP Measures
Selected financial information for the three and six months ended June 30, 2015 is set out above and includes the following measures that are not recognized under International Financial Reporting Standards ("IFRS") and are non-generally accepted accounting principles ("non-GAAP") measures: EBITDA, Working Capital and Funded Debt. This information should be read in conjunction with the unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2015 and 2014 and the Corporation's MD&A for the three and six months ended June 30, 2015 available under the Corporation's profile on SEDAR at www.sedar.com. Further information regarding these non-GAAP measures is contained in the Corporation's MD&A.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Northern Frontier Corp.
Chris Yellowega
President and Chief Executive Officer
587.350.7232
cyellowega@nfcorp.ca
Northern Frontier Corp.
Monty Balderston
Executive Vice President and Chief Financial Officer
587.350.7231
mbalderston@nfcorp.ca
Northern Frontier Corp.
400, 435 - 4th Avenue SW
Calgary, AB T2P 3A8
www.nfcorp.ca
