Welcome!

News Feed Item

North American Energy Partners Announces Results for the Three and Nine Months Ended December 31, 2012

EDMONTON, ALBERTA -- (Marketwire) -- 02/05/13 -- North American Energy Partners Inc. ("NAEP" or "the Company") (TSX:NOA) (NYSE:NOA) today announced results for the three and nine months ended December 31, 2012.

The Company has prepared its consolidated financial statements in conformity with accounting principles generally accepted in the United States (US GAAP). Unless otherwise specified, all dollar amounts discussed are in Canadian dollars.

Highlights of the Three Months Ended December 31, 2012


--  The Company achieved $25.3 million in Consolidated EBITDA(1) compared to
    $15.5 million in the previous year. 

--  The Company achieved 14.0% gross profit margin compared to 11.3% in the
    prior year. 

--  Since September 30, 2012, NAEP reduced total debt (excluding the
    revolving facility) by $24.4 million through term facility repayments
    and lease refinancing. 

--  On November 19, 2012, NAEP announced the sale of its Pipeline related
    assets for total cash consideration of $16.3 million of which $15.0
    million was applied against its term facility. 

--  On November 5, 2012, the Company announced the award of a five-year
    master services contract for the provision of civil mine support
    services at a new mine site near Fort McMurray, Alberta. 

Consolidated Financial Highlights

As a result of the divestiture of its pipeline related assets, the Company has excluded the current and prior year results of its pipeline related operations from results from continuing operations. The results for the discontinued pipeline related operations will be reported under "Income (loss) from discontinued operations".


(dollars in                                                                 
 thousands, except           Three Months Ended           Nine Months Ended 
 per share amounts)                December 31,                December 31, 
                             2012          2011          2012          2011 
                    --------------------------------------------------------
Revenue                 $ 189,099     $ 218,213     $ 603,520     $ 622,033 
Gross profit            $  26,387     $  24,739     $  69,741     $  64,316 
 Gross profit margin         14.0%         11.3%         11.6%         10.3%
General and                                                                 
 administrative                                                             
 expenses               $  13,300     $  15,031     $  41,316     $  39,273 
Operating income        $  11,435     $   7,612     $  24,447     $  20,171 
 Operating margin             6.0%          3.5%          4.1%          3.2%
Net income (loss)                                                           
 from continuing                                                            
 operations             $   2,889     $   1,694     $   1,363     $    (799)
Income (loss) from                                                          
 discontinued                                                               
 operations             $   1,731     $  (3,584)    $   1,841     $  (3,486)
Net income (loss)       $   4,620     $  (1,890)    $   3,204     $  (4,285)
Per share                                                                   
 information                                                                
 Net income (loss) -                                                        
  basic                 $    0.13     $   (0.05)    $    0.09     $   (0.12)
 Net income (loss) -                                                        
  diluted               $    0.13     $   (0.05)    $    0.09     $   (0.12)
Consolidated                                                                
 EBITDA(1)              $  25,304     $  15,477     $  60,257     $  49,417 
Capital spending        $  10,698     $  17,434     $  31,066     $  32,168 
                                                                            
(1) For a definition of Consolidated EBITDA and reconciliation to net       
    income, see "Non-GAAP Financial Measures" and "Consolidated EBITDA" at  
    the end of this release.                                                

For the three months ended December 31, 2012, the Company reported consolidated revenue of $189.1 million, compared to $218.2 million during the same period last year. The change in revenue reflects lower Heavy Construction and Mining revenue during the period due to a reduction in demand for mine support services, partially offset by increased site development activity at the Joslyn mine and overburden removal activity returning to normal operating levels at the Horizon mine. The lower Heavy Construction and Mining revenues were also partially offset by revenue growth in the Commercial and Industrial Construction segment, which benefited from the continuation of strong piling activity in the oil sands at the Surmont SAGD site and Base Plant mine.

For the three months ended December 31, 2012, gross profit increased to $26.4 million, from $24.7 million last year and gross profit margin improved to 14.0%, compared to 11.3% during the same period last year. The improvement primarily reflects lower equipment maintenance costs and reduced equipment operating lease expense resulting from the refinancing of certain operating leases to capital leases and from the sale of certain operating leased assets to Canadian Natural. These improvements were partially offset by a reduction in Commercial and Industrial Construction segment margin, reflecting the completion of two unusually high-margin projects in the prior-year period.

Business restructuring activities in the current year contributed to a $1.7 million year-over-year reduction in general and administrative expense in the current quarter. As a result, Consolidated EBITDA as a percentage of revenue was 13.4% in the three months ended December 31, 2012, up from 7.1% in the same period last year.

During the three months ended December 31, 2012, NAEP also reduced total debt (excluding revolving facility) by a further $24.4 million through the refinancing of certain operating leases to capital leases and by generating net proceeds of $15.5 million from the sale of Pipeline related assets.

On November 5, 2012, the Company announced the award of a five-year master services contract for the provision of civil mine support services at a new mine site near Fort McMurray, Alberta. The scope of the new contract covers overburden removal, reclamation, mine services and civil support and maintenance and should enable the Company to improve the utilization of their heavy equipment fleet. NAEP anticipates annual revenues of $40 to $50 million under the new contract.

"Our successful efforts to improve our financial performance, reduce risk and pay down debt were clearly reflected in our third quarter results," said NAEP's President and CEO, Martin Ferron. "We have now established a pattern of positive performance that we plan to sustain and build upon. Our exit from the Pipeline business has helped reduce risk and enables us to better focus on the areas of our business that will generate sustainable shareholder value. Although market conditions for the Heavy Construction and Mining business are likely to remain challenging over the near term, we expect to reap the benefits of our new major contract and an improved cost structure, while continuing to improve our performance and reduce debt"

Segment Results


                                                                            
Heavy Construction and Mining                                               
                                                                            
                             Three Months Ended           Nine Months Ended 
                                   December 31,                December 31, 
(dollars in                                                                 
 thousands)                  2012          2011          2012          2011 
----------------------------------------------------------------------------
Segment revenue         $ 113,997     $ 159,915     $ 396,029     $ 482,611 
Segment profit          $  12,440     $   8,264     $  31,458     $  35,137 
 Segment margin              10.9%          5.2%          7.9%          7.3%

For the three months ended December 31, 2012, Heavy Construction and Mining segment revenue was $114.0 million, compared to $159.9 million during the same period last year. The change reflects a reduction in mine support services activity at the Jackpine, Muskeg River and Millennium mines, and reduced demand for tailings and environmental construction services across the oil sands. The reduction was partially offset by increased overburden removal activity at the Horizon mine and increased site development activity at the Joslyn mine.

For the three months ended December 31, 2012, Heavy Construction and Mining segment margin increased to 10.9% of revenue, from 5.2% of revenue during the same period last year. The increase primarily reflects a reduction in equipment costs mainly driven by lower equipment maintenance and operating lease expense. Improved margin on overburden removal activity at the Horizon mine under the Company's amended contract and the close-out of two highly successful SAGD site development projects also helped to offset lower-margin heavy civil construction activity and a reduction of higher-margin mine support services activity.

Nine-month segment revenue followed a similar trend, with reduced mine services activity at the Jackpine, Muskeg River, and Millennium mines and reduced demand for tailings and environmental construction services in the oil sands, partially offset by increased overburden removal activity at the Horizon mine, increased heavy civil construction at Base Plant mine and site development activity at Joslyn mine and the Dover SAGD site.

Segment margin for the nine-month period increased to 7.9% from 7.3% last year. Higher margin on overburden removal activity at the Horizon mine, reduced equipment maintenance and operating lease costs, and an increase in higher-margin SAGD site development projects was partially offset by lower-margin heavy civil construction activity and a reduction in higher-margin mine support services activity.


                                                                            
Commercial and Industrial Construction                                      
                                                                            
                             Three Months Ended           Nine Months Ended 
                                   December 31,                December 31, 
(dollars in                                                                 
 thousands)                  2012          2011          2012          2011 
----------------------------------------------------------------------------
Segment revenue         $  75,102     $  58,298     $ 207,491     $ 139,422 
Segment profit          $  14,600     $  17,323     $  41,100     $  32,686 
 Segment margin              19.4%         29.7%         19.8%         23.4%

For the three months ended December 31, 2012, Commercial and Industrial Construction segment revenues rose to $75.1 million from $58.3 million in the prior year. Piling activity was particularly strong during the current period, with high level of activity in the oil sands at several projects including the Surmont SAGD site, Base Plant mine, and Millennium mine. Strong international sales of manufactured screw piles also contributed to the year-over-year increase. These revenue gains were partially offset by lower piling activity in Saskatchewan and the completion of structural steel construction activity at the Mt. Milligan Copper/Gold mine early in the period.

Commercial and Industrial Construction segment margin decreased to 19.4%, from 29.7% last year, reflecting the completion of two large projects at unusually high margins in the prior-year period. Margins were also negatively impacted by project close-out costs at the Mt. Milligan Copper/Gold mine in the current period.

Revenue results in the nine-month period was similarly positive reflecting a high level of piling activity in the oil sands, strong international sales of manufactured screw piles, and structural steel construction activity at the Mt. Milligan Copper/Gold mine. The strong year-over-year improvement also reflects a return to normal operating conditions in the current period, compared to the extreme weather conditions that caused schedule and project disruptions in the prior year.

Segment margin for the nine-month period decreased to 19.8% from 23.4% last year, reflecting the completion of two large piling projects at unusually high margins in the prior year and the impact of project close-out costs at the Mt. Milligan Copper/Gold mine in the current year.

Outlook

Heading into the fourth quarter of fiscal 2013, the Company expects to see continued weakness in the demand for mine support services in the oil sands and expects to see the typical seasonal slowdown in the commercial and industrial construction industry.

In the Heavy Construction and Mining segment, NAEP anticipates that demand for mine support services and mine construction services will continue to be weak through the fourth quarter due to deferred industry spending and continued project delays. As a result, the Company expects to experience lower activity levels overall, compared to prior years. NAEP anticipates strong levels of reclamation and steady activity under existing long-term mine service agreements. Site development activity at the Joslyn mine is also expected to remain steady through to the end of the fiscal year and the Company expects to begin ramping up mine services activities at the Kearl mine during the quarter.

In the Commercial and Industrial Construction segment, demand for piling services remains strong with solid performance expected through the seasonal slowdown in the fourth quarter, subject to favourable weather conditions.

Overall, NAEP continues to see challenges in the oil sands contracting environment and remains focused on managing the Company's resources and costs to maintain profitability levels. NAEP is well positioned to compete for projects as they arise and expect that the impact of lower activity levels will be mostly offset by the continued cost reduction benefits realized from strategic initiatives and the Company's focus on performance, efficiency and risk management.

Conference Call and Webcast

Management will hold a conference call and webcast to discuss its financial results for the three months ended December 31, 2012 tomorrow, Wednesday, February 6th at 9:00 am Eastern time.

The call can be accessed by dialing:

Toll free: 1-877-407-8031

International: 1-201-689-8031

A replay will be available through March 7, 2013 by dialing:

Toll Free: 1-877-660-6853

International: 1-201-612-7415

Conference ID: 408509

The live and archived webcast can be accessed at:

http://www.investorcalendar.com/IC/CEPage.asp?ID=170528

Non-GAAP Financial Measures

This release contains non-GAAP financial measures. These measures do not have standardized meanings under US GAAP and are therefore unlikely to be comparable to similar measures used by other companies. The non-GAAP financial measure disclosed by the Company in this release is Consolidated EBITDA (as defined within the credit agreement). The Company provides a reconciliation of Consolidated EBITDA to net income reported in accordance with US GAAP below. Investors and readers are encouraged to review the reconciliation of this non-GAAP financial measure to reported net income.

Consolidated EBITDA

Consolidated EBITDA is a measure defined by the Company's credit agreement. This measure is defined as EBITDA (which is calculated as net income before interest, income taxes, depreciation and amortization) excluding the effects of unrealized foreign exchange gain or loss, realized and unrealized gain or loss on derivative financial instruments, non-cash stock-based compensation expense, gain or loss on disposal of property, plant and equipment the impairment of goodwill, the amendment related to the fiscal 2011 $42.5 million revenue write-down on the Canadian Natural overburden removal contract and certain other non-cash items included in the calculation of net income. The credit agreement requires the Company to maintain a minimum interest coverage ratio and a maximum senior leverage ratio, which are calculated using Consolidated EBITDA. Non-compliance with these financial covenants could result in the Company being required to immediately repay all amounts outstanding under its credit facility. Consolidated EBITDA should not be considered as an alternative to operating income or net income as a measure of operating performance or cash flows as a measure of liquidity. We believe that EBITDA is a meaningful measure of the performance of our business because it excludes items, such as interest, income taxes, depreciation and amortization that are not directly related to the operating performance of our business. Management reviews EBITDA to determine whether plant and equipment are being allocated efficiently. In addition, our credit facility requires us to maintain a minimum interest coverage ratio and a maximum senior leverage ratio, both of which are calculated using Consolidated EBITDA. In addition, our credit facility covenants provide limits on our net capital expenditures calculated using Consolidated EBITDA. Non-compliance with these financial covenants could result in a requirement to immediately repay all amounts outstanding under our credit facility. Consolidated EBITDA has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under US GAAP. For example, Consolidated EBITDA:


--  does not reflect cash expenditures, net proceeds from asset disposals or
    requirements for capital expenditures or capital commitments; 
--  does not reflect changes in cash requirements for working capital needs;
--  does not reflect the interest expense or the cash requirements necessary
    to service interest or principal payments on debt; 
--  excludes tax payments or recoveries that represent changes in cash
    available to the Company; and 
--  does not reflect any cash requirements for assets being depreciated and
    amortized that may have to be replaced in the future. 

Consolidated EBITDA also excludes unrealized foreign exchange gains and losses and realized and unrealized gains and losses on derivative financial instruments, which, in the case of unrealized losses, may ultimately result in a liability that will need to be paid and in the case of realized losses, represents an actual use of cash during the period. A reconciliation of net income to Consolidated EBITDA is as follows:


                                                                            
                              Three Months Ended          Nine Months Ended 
                                     December 31,              December 31, 
(dollars in thousands)          2012         2011         2012         2011 
----------------------------------------------------------------------------
Net income (loss)           $  4,620     $ (1,890)    $  3,204     $ (4,285)
Adjustments:                                                                
 Interest expense              8,292        7,599       24,259       22,524 
 Income tax expense                                                         
  (benefit)                    1,455         (643)       2,184       (1,927)
 Depreciation                  9,998       10,319       28,666       27,939 
 Amortization of                                                            
  intangible assets            1,232        1,174        3,857        4,463 
 Unrealized gain on                                                         
  derivative financial                                                      
  instruments                   (677)      (2,392)      (2,595)        (960)
 (Gain) loss on disposal                                                    
  of property plant and                                                     
  equipment                       (8)         273          359          701 
 (Gain) loss on disposal                                                    
  of assets held for                                                        
  sale                           (10)          40          (80)        (456)
 Stock-based                                                                
  compensation expense           402          388          999        1,254 
 Equity in loss of                                                          
  unconsolidated joint                                                      
  venture                          -          609         (596)         164 
                        ----------------------------------------------------
Consolidated EBITDA         $ 25,304     $ 15,477     $ 60,257     $ 49,417 
                        ----------------------------------------------------
                        ----------------------------------------------------
                                                                            
(1) Includes both continuing and discontinued operations                    

Forward-Looking Information

This release contains forward-looking information that is based on expectations and estimates as of the date of this release. Forward-looking information is information that is subject to known and unknown risks and other factors that may cause future actions, conditions or events to differ materially from the anticipated actions, conditions or events expressed or implied by such forward-looking information. Forward-looking information is information that does not relate strictly to historical or current facts and can be identified by the use of the future tense or other forward-looking words such as "believe", "expect", "anticipate", "intend", "plan", "estimate", "should", "may", "could", "would", "target", "objective", "projection", "forecast", "continue", "strategy", "position" or the negative of those terms or other variations of them or comparable terminology.

There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Each of the forward-looking statements in this news release is subject to significant risks and uncertainties and is based on a number of assumptions which may prove to be incorrect. The material factors or assumptions used to develop the above forward-looking statements and the risks and uncertainties that could cause actual results to differ materially from the information presented in the above are discussed in NAEP's Management Discussion & Analysis for the three months ended December 31, 2012. While management anticipates that subsequent events and developments may cause its views to change, the Company does not intend to update this forward-looking information, except as required by applicable securities laws. This forward-looking information represents management's views as of the date of this document and such information should not be relied upon as representing their views as of any date subsequent to the date of this document.

For more complete information about NAEP, you should read the disclosure documents filed with the SEC and the CSA. You may obtain these documents for free by visiting the SEC website at www.sec.gov or SEDAR on the CSA website at www.sedar.com.

About the Company

North American Energy Partners Inc. (www.naepi.ca) is the premier provider of mining, heavy construction, industrial, and piling services in Canada. For more than 50 years, NAEP has provided services to large oil, natural gas and resource companies, with a principal focus on the Canadian oil sands. The Company maintains one of the largest independently owned equipment fleets in the region.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Both SaaS vendors and SaaS buyers are going “all-in” to hyperscale IaaS platforms such as AWS, which is disrupting the SaaS value proposition. Why should the enterprise SaaS consumer pay for the SaaS service if their data is resident in adjacent AWS S3 buckets? If both SaaS sellers and buyers are using the same cloud tools, automation and pay-per-transaction model offered by IaaS platforms, then why not host the “shrink-wrapped” software in the customers’ cloud? Further, serverless computing, cl...
SYS-CON Events announced today that Dataloop.IO, an innovator in cloud IT-monitoring whose products help organizations save time and money, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Dataloop.IO is an emerging software company on the cutting edge of major IT-infrastructure trends including cloud computing and microservices. The company, founded in the UK but now based in San Fran...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smart...
Why do your mobile transformations need to happen today? Mobile is the strategy that enterprise transformation centers on to drive customer engagement. In his general session at @ThingsExpo, Roger Woods, Director, Mobile Product & Strategy – Adobe Marketing Cloud, covered key IoT and mobile trends that are forcing mobile transformation, key components of a solid mobile strategy and explored how brands are effectively driving mobile change throughout the enterprise.
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @CloudExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at 20th Cloud Expo, Ed Featherston, director/senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
Tintri VM-aware storage is the simplest for virtualized applications and cloud. Organizations including GE, Toyota, United Healthcare, NASA and 6 of the Fortune 15 have said "No to LUNs." With Tintri they manage only virtual machines, in a fraction of the footprint and at far lower cost than conventional storage. Tintri offers the choice of all-flash or hybrid-flash platform, converged or stand-alone structure and any hypervisor. Rather than obsess with storage, leaders focus on the business app...
Information technology (IT) advances are transforming the way we innovate in business, thereby disrupting the old guard and their predictable status-quo. It’s creating global market turbulence. Industries are converging, and new opportunities and threats are emerging, like never before. So, how are savvy chief information officers (CIOs) leading this transition? Back in 2015, the IBM Institute for Business Value conducted a market study that included the findings from over 1,800 CIO interviews ...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Some people worry that OpenStack is more flash then substance; however, for many customers this could not be farther from the truth. No other technology equalizes the playing field between vendors while giving your internal teams better access than ever to infrastructure when they need it. In his session at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will talk through some real-world OpenStack deployments and look into the ways this can benefit customers of all sizes....
"A lot of times people will come to us and have a very diverse set of requirements or very customized need and we'll help them to implement it in a fashion that you can't just buy off of the shelf," explained Nick Rose, CTO of Enzu, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Web Real-Time Communication APIs have quickly revolutionized what browsers are capable of. In addition to video and audio streams, we can now bi-directionally send arbitrary data over WebRTC's PeerConnection Data Channels. With the advent of Progressive Web Apps and new hardware APIs such as WebBluetooh and WebUSB, we can finally enable users to stitch together the Internet of Things directly from their browsers while communicating privately and securely in a decentralized way.
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
Ayehu provides IT Process Automation & Orchestration solutions for IT and Security professionals to identify and resolve critical incidents and enable rapid containment, eradication, and recovery from cyber security breaches. Ayehu provides customers greater control over IT infrastructure through automation. Ayehu solutions have been deployed by major enterprises worldwide, and currently, support thousands of IT processes across the globe. The company has offices in New York, California, and Isr...