Welcome!

News Feed Item

Logan International Reports First Quarter 2014 Financial Results

(All reported figures are in US dollars unless otherwise noted)

CALGARY, ALBERTA -- (Marketwired) -- 05/13/14 -- Logan International Inc. (TSX:LII) ("Logan" or the "Company") today reported the results of its first quarter ended March 31, 2014. The financial reports for the quarter ended March 31, 2014 include the post-acquisition operating results of the Sup-R-Jar product line, which was acquired in April 2013.

Highlights include:

--  The Company has rebuilt Logan Oil Tools backlog to approximately $25
    million at April 30, 2014, which is its greatest level since early 2013.
--  Reorganization of the downhole tool segment's supply chain and the
    rental tool segment structure. 
--  Logan appointed David MacNeill as President and Chief Executive Officer
    beginning June 16, 2014, ensuring outstanding leadership. Gerald Hage
    will remain as a director and will provide assistance during the
    transition. 

Logan recorded revenue of $43.6 million in this year's first quarter and $49.2 million in the prior year's first quarter. For the three month period ended March 31, 2014, Logan earned $2.9 million, $.09 per share, as compared to $5.2 million, $.16 per share in the prior year period. Modified EBITDA declined in this year's first quarter to $9.3 million from $12.1 million in last year's first quarter. Management utilizes Modified EBITDA to evaluate its operating results because this measurement eliminates the effects of noncash and nonrecurring revenue and cost.

For the quarter ended March 31, 2014, the downhole tool segment, which includes Logan Oil Tools, Logan Completion Systems ("Logan Completions"), Kline Oilfield Equipment ("Kline"), Logan SuperAbrasives ("SuperAbrasives") and Scope Production Developments ("Scope"), recorded revenue of $40.4 million as compared to $44.3 million for the quarter ended March 31, 2013. For the quarter ended March 31, 2014, this segment generated EBITDA of $9.9 million as compared to $10.9 million for the quarter ended March 31, 2013. For the first quarter of 2014, the rental tool segment, which includes Xtend Energy Services ("Xtend") and Logan Jar, recorded revenue of $3.2 million and EBITDA of approximately $780 thousand as compared to revenue of $4.9 million and EBITDA of $2.8 million in last year's first quarter.

Gerald Hage, President and Chief Executive Officer, commented, "Our first quarter performance was below expectations as revenue in both segments trailed last year's first quarter and also fell short of our plan. The decline in the downhole tool segment's EBITDA was a direct result of the decline in revenue. Logan Oil Tools' sales declined by approximately $5 million, most of which was related to a decline in sales of stroking tools. We believe the weakness in Logan Oil Tools is short term and we fully expect to see a recovery in the remainder of the year as the order flow has rebounded. We have booked orders totaling approximately $48 million during the four months ended April 30, 2014 as compared to approximately $32 million in the corresponding period last year. SuperAbrasives' sales declined by approximately $500 thousand in the current year quarter from the prior year quarter, primarily due to a reduction in international sales, which tend to be sporadic. We also expect an improvement in SuperAbrasives' operating results throughout the remainder of the year due to recently booked international orders and anticipated increases in bearings sales and service work. Logan Completions and Kline both reported stronger operating results in this year's first quarter as compared to last year's first quarter.

"Logan Completions' improved operating results were due to an increase in sales of approximately $2.5 million, while Kline's improvement resulted from increased operating margins due to better execution. Scope reported modest declines in both revenue and operating results in this year's first quarter. In the rental tool segment, Xtend's first quarter revenue declined to $2.9 million from $4.9 million in 2013. The decline occurred mostly in our Canadian operations and was attributable to a decline in demand and, to a lesser extent, a slower startup in 2014 drilling activity and a decrease in the value of the Canadian dollar relative to the U.S. dollar. We also experienced a decline in U.S. operations, which was related to customer drilling efficiencies in the Eagle Ford basin, which was our largest U.S. market. As a result, drilling days per well have been reduced, which has led to lower rental revenue. We have recently expanded to West Texas and the Mid-Continent markets to reduce our dependence on the South Texas market."

Looking forward, Mr. Hage added, "While the first quarter results did not meet our expectations, we have not changed our outlook for the year. We believe the downhole tool segment's operating results will recover in the second quarter due to the upward trend in order flow for Logan Oil Tools and SuperAbrasives. Except for the seasonal slowdown in Logan Completions' Canadian operations, we also expect strong performance from our completion operations, Logan Completions and Kline, for the remainder of 2014. We recently initiated the reorganization of Logan Completions' and Kline's supply chains by combining their engineering and manufacturing operations with those of Logan Oil Tools. We have also initiated a reorganization of the rental tool segment by combining the operations of the Xciter and Sup-R-Jar drilling tools with the fishing jar rentals into a single business unit. We believe this will broaden both the North American and international markets for the rental tools and will also allow for improved management accountability for operating results."

"In our last report, we announced the addition of David MacNeill as our Chief Operating Officer. I am pleased to announce Mr. MacNeill's appointment as my successor as the President and Chief Executive Officer. Dave's experience in drilling engineering in the West African, Eastern European and Far Eastern markets will accelerate Logan's international business. I want to emphasize that I will continue my relationship with Logan as a director and will assist Dave in the transition period," said Mr. Hage.

Logan manufactures and sells a comprehensive line of quality fishing and intervention tools, including retrieving, surface, stroking and remedial tools for a variety of well workover, intervention, drilling, and completion activities (Logan Oil Tools, Inc.); manufactures and sells high-performance polycrystalline diamond compact (PDC) cutters and bearings (Logan SuperAbrasives), manufactures and sells packers, bridge plugs, and other completion products (Kline Oilfield Equipment, Inc.); provides proprietary multi-zonal completion technology and conventional completion production products and services (Logan Completion Systems Inc.); provides proprietary and patented products and services that are focused on production optimization in sand-laden heavy oil wells (Scope Production Development Ltd.); and provides proprietary tools that enhance the effectiveness of horizontal drilling (Xtend Energy Services Inc. and Logan Jar, LLC). Common shares of Logan are traded on the Toronto Stock Exchange (TSX) under the ticker symbol "LII".

                                                                            
Selected Consolidated Financial Information                                 
(in thousands of US dollars, except per share                               
 data)                                                                      
                                                 Three month periods ended  
                                                          March 31,         
                                               -----------------------------
                                                         2014           2013
                                               -------------- --------------
                                                                            
Revenue                                         $      43,644  $      49,194
                                                                            
Net earnings for the period                             2,901          5,238
                                                                            
Earnings per share:                                                         
  Basic                                         $        0.09  $        0.16
  Diluted                                       $        0.09  $        0.16
                                                                            
EBITDA (1)                                      $       8,840  $      11,770
Modified EBITDA (1)                             $       9,321  $      12,139
                                               -------------- --------------
                                                                            
                                                    March 31,   December 31,
                                                         2014           2013
                                               -------------- --------------
                                               -------------- --------------
Working Capital                                 $      36,387  $      82,399
Total Assets                                    $     278,659  $     283,559
Debt (2)                                        $      55,460  $      57,788
Shareholders' Equity                            $     192,357  $     191,144
                                                                            
Note: On April 17, 2013, the Company, through its wholly-owned subsidiaries 
Logan Oil Tools, Inc. and Logan Jar, LLC, purchased certain assets and      
operations related to the Sup-R-Jar drilling jar product line. As such, none
of the Sup-R-Jar product line's operating results have been included in the 
Company's condensed interim consolidated financial statements for the three 
month period ended March 31, 2013.                                          
                                                                            
(1) Non-IFRS Measurements: The MD&A presents: (a) EBITDA as earnings before 
net finance cost, income taxes, and depreciation and amortization           
("EBITDA"), and (b) Modified EBITDA as EBITDA before acquisition accounting 
adjustments, transaction fees, share-based compensation and severance costs 
("Modified EBITDA"). Neither of these measurements should be considered an  
alternative to, or more meaningful than, "net earnings for the period" or   
"cash flow from operating activities" as determined in accordance with IFRS 
as an indicator of the Company's financial performance. EBITDA and Modified 
EBITDA do not have standardized definitions as prescribed by IFRS;          
therefore, the Company's presentation of these measurements may not conform 
to similar presentations by other companies. Management calculates EBITDA   
and Modified EBITDA each period and evaluates the Company's operating       
performance based on these measurements. Management believes that Modified  
EBITDA, which eliminates significant non-cash or non-recurring items of     
revenue or cost, more accurately presents the results of the Company's      
ongoing operations and its ability to generate the cash required to fund or 
finance future growth, acquisitions and capital investments. A              
reconciliation of EBITDA and Modified EBITDA with net earnings for each     
period follows.                                                             
                                                                            
                                                                            
                                                 Three month periods ended  
                                                         March 31,          
                                              ------------------------------
                                                       2014             2013
                                              -------------    -------------
                                                                            
  Net earnings for the period                   $     2,901      $     5,238
Addbacks:                                                                   
  Depreciation and amortization                       3,249            2,791
  Finance cost, net                                   1,323            1,250
  Income tax expense                                  1,367            2,491
                                              -------------    -------------
EBITDA                                                8,840           11,770
Adjustments:                                                                
  Acquisition accounting adjustments                    188       -         
  Transaction fees                                       16               92
  Severance costs                                       140       -         
  Share-based compensation payments                     137              277
                                              -------------    -------------
Modified EBITDA                                 $     9,321      $    12,139
                                              -------------    -------------
                                              -------------    -------------
                                                                            
EBITDA and Modified EBITDA are provided as measures of the Company's        
 operating performance without regard to financing decisions, share-based   
 compensation payments, age and cost of equipment used and income tax       
 impacts, all of which are factors that are not controlled at the operating 
 management level. The acquisition accounting adjustments reverse the effect
 of the increase or step-up in cost basis of inventories and subsequently   
 sold fixed assets acquired in business combinations. The transaction fees  
 include the professional and other fees incurred in connection with        
 acquisitions in 2012 and 2013. Share-based compensation relates to expense 
 recognized from the granting of stock appreciation rights, stock options   
 and restricted share units.                                                
                                                                            
(2) Includes bank and other borrowed debt and capital leases.               
                                                                            
Reconciliation of EBITDA by Segment                                         
                                                                            
               Three months ended March 31,    Three months ended March 31, 
                           2014                            2013             
              ------------------------------  ------------------------------
               Downhole   Rental               Downhole   Rental            
                   Tool     Tool   Corporate       Tool     Tool  Corporate 
              ------------------------------  ------------------------------
                                                                            
Revenue       $  40,395 $  3,249  $        -  $  44,318 $  4,876 $        - 
                                                                            
Earnings                                                                    
 (loss) from                                                                
 operations   $   7,691 $   (176) $   (1,924) $   8,606 $  2,369 $   (1,996)
 Depreciation                                                               
  and                                                                       
  amortization    2,244      956          49      2,312      432         47 
              ------------------------------- ----------------------------- 
EBITDA        $   9,935     780$  $   (1,875)  $ 10,918 $  2,801 $   (1,949)
              ------------------------------- ----------------------------- 

Forward-Looking Statements

This press release contains forward-looking statements. These statements relate to future events or future performance of Logan. When used in this press release, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "propose", "expect", "potential", "continue", and similar expressions, are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such statements reflect Logan's current views with respect to certain events, including the previously announced strategic review process and fourth quarter operating results, and are subject to certain risks, uncertainties and assumptions. Although Logan believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because we can give no assurance that they will prove to be correct. Many factors could cause Logan's actual results, performance, or achievements to materially differ from those described in this press release. Readers are referred to Logan's Annual Information Form filed on www.sedar.com, which identifies significant risk factors that could cause actual results to differ from those contained in the forward-looking statements. Should one or more risks or uncertainties materialize or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this press release. The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. These statements speak only as of the date of this press release. Logan does not intend and does not assume any obligation to update these forward-looking statements to reflect new information, subsequent events or otherwise, except as required by law. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities described herein in any jurisdiction.

For more information about Logan International Inc., please visit our website at www.loganinternationalinc.com.

Contacts:
Logan International Inc.
David MacNeill
Chief Operating Officer
281-617-5300 Houston

Logan International Inc.
Larry Keister
Chief Financial Officer
832-386-2534 Houston

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
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Enterprises are adopting Kubernetes to accelerate the development and the delivery of cloud-native applications. However, sharing a Kubernetes cluster between members of the same team can be challenging. And, sharing clusters across multiple teams is even harder. Kubernetes offers several constructs to help implement segmentation and isolation. However, these primitives can be complex to understand and apply. As a result, it’s becoming common for enterprises to end up with several clusters. Thi...
In his session at 21st Cloud Expo, Carl J. Levine, Senior Technical Evangelist for NS1, will objectively discuss how DNS is used to solve Digital Transformation challenges in large SaaS applications, CDNs, AdTech platforms, and other demanding use cases. Carl J. Levine is the Senior Technical Evangelist for NS1. A veteran of the Internet Infrastructure space, he has over a decade of experience with startups, networking protocols and Internet infrastructure, combined with the unique ability to it...
"ZeroStack is a startup in Silicon Valley. We're solving a very interesting problem around bringing public cloud convenience with private cloud control for enterprises and mid-size companies," explained Kamesh Pemmaraju, VP of Product Management at ZeroStack, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"Infoblox does DNS, DHCP and IP address management for not only enterprise networks but cloud networks as well. Customers are looking for a single platform that can extend not only in their private enterprise environment but private cloud, public cloud, tracking all the IP space and everything that is going on in that environment," explained Steve Salo, Principal Systems Engineer at Infoblox, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventio...
"Codigm is based on the cloud and we are here to explore marketing opportunities in America. Our mission is to make an ecosystem of the SW environment that anyone can understand, learn, teach, and develop the SW on the cloud," explained Sung Tae Ryu, CEO of Codigm, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
The question before companies today is not whether to become intelligent, it’s a question of how and how fast. The key is to adopt and deploy an intelligent application strategy while simultaneously preparing to scale that intelligence. In her session at 21st Cloud Expo, Sangeeta Chakraborty, Chief Customer Officer at Ayasdi, provided a tactical framework to become a truly intelligent enterprise, including how to identify the right applications for AI, how to build a Center of Excellence to oper...
"IBM is really all in on blockchain. We take a look at sort of the history of blockchain ledger technologies. It started out with bitcoin, Ethereum, and IBM evaluated these particular blockchain technologies and found they were anonymous and permissionless and that many companies were looking for permissioned blockchain," stated René Bostic, Technical VP of the IBM Cloud Unit in North America, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventi...
Gemini is Yahoo’s native and search advertising platform. To ensure the quality of a complex distributed system that spans multiple products and components and across various desktop websites and mobile app and web experiences – both Yahoo owned and operated and third-party syndication (supply), with complex interaction with more than a billion users and numerous advertisers globally (demand) – it becomes imperative to automate a set of end-to-end tests 24x7 to detect bugs and regression. In th...
Large industrial manufacturing organizations are adopting the agile principles of cloud software companies. The industrial manufacturing development process has not scaled over time. Now that design CAD teams are geographically distributed, centralizing their work is key. With large multi-gigabyte projects, outdated tools have stifled industrial team agility, time-to-market milestones, and impacted P&L stakeholders.
High-velocity engineering teams are applying not only continuous delivery processes, but also lessons in experimentation from established leaders like Amazon, Netflix, and Facebook. These companies have made experimentation a foundation for their release processes, allowing them to try out major feature releases and redesigns within smaller groups before making them broadly available. In his session at 21st Cloud Expo, Brian Lucas, Senior Staff Engineer at Optimizely, discussed how by using ne...
"Cloud Academy is an enterprise training platform for the cloud, specifically public clouds. We offer guided learning experiences on AWS, Azure, Google Cloud and all the surrounding methodologies and technologies that you need to know and your teams need to know in order to leverage the full benefits of the cloud," explained Alex Brower, VP of Marketing at Cloud Academy, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clar...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
"CA has been doing a lot of things in the area of DevOps. Now we have a complete set of tool sets in order to enable customers to go all the way from planning to development to testing down to release into the operations," explained Aruna Ravichandran, Vice President of Global Marketing and Strategy at CA Technologies, in this SYS-CON.tv interview at DevOps Summit at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.