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
As ridesharing competitors and enhanced services increase, notable changes are occurring in the transportation model. Despite the cost-effective means and flexibility of ridesharing, both drivers and users will need to be aware of the connected environment and how it will impact the ridesharing experience. In his session at @ThingsExpo, Timothy Evavold, Executive Director Automotive at Covisint, will discuss key challenges and solutions to powering a ride sharing and/or multimodal model in the...
Big Data has been changing the world. IoT fuels the further transformation recently. How are Big Data and IoT related? In his session at @BigDataExpo, Tony Shan, a renowned visionary and thought leader, will explore the interplay of Big Data and IoT. He will anatomize Big Data and IoT separately in terms of what, which, why, where, when, who, how and how much. He will then analyze the relationship between IoT and Big Data, specifically the drilldown of how the 4Vs of Big Data (Volume, Variety,...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, discussed the importance of WebRTC and how it enables companies to focus...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
Apache Hadoop is a key technology for gaining business insights from your Big Data, but the penetration into enterprises is shockingly low. In fact, Apache Hadoop and Big Data proponents recognize that this technology has not yet achieved its game-changing business potential. In his session at 19th Cloud Expo, John Mertic, director of program management for ODPi at The Linux Foundation, will explain why this is, how we can work together as an open data community to increase adoption, and the i...
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
DevOps and microservices are permeating software engineering teams broadly, whether these teams are in pure software shops but happen to run a business, such Uber and Airbnb, or in companies that rely heavily on software to run more traditional business, such as financial firms or high-end manufacturers. Microservices and DevOps have created software development and therefore business speed and agility benefits, but they have also created problems; specifically, they have created software sec...
Much of the value of DevOps comes from a (renewed) focus on measurement, sharing, and continuous feedback loops. In increasingly complex DevOps workflows and environments, and especially in larger, regulated, or more crystallized organizations, these core concepts become even more critical. In his session at @DevOpsSummit at 18th Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, showed how, by focusing on 'metrics that matter,' you can provide objective, transparent, and meaningful f...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
SYS-CON Events announced today that Interface Masters Technologies, a leader in Network Visibility and Uptime Solutions, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Interface Masters Technologies is a leading vendor in the network monitoring and high speed networking markets. Based in the heart of Silicon Valley, Interface Masters' expertise lies in Gigabit, 10 Gigabit and 40 Gigabit Eth...
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.
Ask someone to architect an Internet of Things (IoT) solution and you are guaranteed to see a reference to the cloud. This would lead you to believe that IoT requires the cloud to exist. However, there are many IoT use cases where the cloud is not feasible or desirable. In his session at @ThingsExpo, Dave McCarthy, Director of Products at Bsquare Corporation, will discuss the strategies that exist to extend intelligence directly to IoT devices and sensors, freeing them from the constraints of ...
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
In his session at @ThingsExpo, Kausik Sridharabalan, founder and CTO of Pulzze Systems, Inc., will focus on key challenges in building an Internet of Things solution infrastructure. He will shed light on efficient ways of defining interactions within IoT solutions, leading to cost and time reduction. He will also introduce ways to handle data and how one can develop IoT solutions that are lean, flexible and configurable, thus making IoT infrastructure agile and scalable.