Welcome!

News Feed Item

Macro Enterprises Inc. Announces 2014 Second Quarter Results

FORT ST. JOHN, BRITISH COLUMBIA -- (Marketwired) -- 08/27/14 -- Macro Enterprises Inc. (TSX VENTURE: MCR) -

                                          Summary of financial results
                                     (thousands of dollars except per share
                                                    amounts)
                                    ----------------------------------------
                                     Three months ended   Six months ended
                                           June 30             June 30
                                    ----------------------------------------
                                          2014      2013      2014      2013
                                    ----------------------------------------
                                                   (unaudited)
                                    ----------------------------------------

Revenue                               $ 36,698  $ 37,282  $124,477  $ 97,404

EBITDA1                                  2,726     9,814     7,830    24,835

Net earnings                               495     5,710     2,648    15,395

Net earnings per share                $   0.01  $   0.21  $   0.08  $   0.61

                                    ----------------------------------------
Weighted average common shares
 outstanding (thousands)                                    30,007    25,120
                                                        --------------------

Note 1 - References to EBITDA are to net income from continuing operations before interest, taxes, amortization and impairment charge. EBITDA is not an earnings measure recognized by International Financial Reporting Standards ("IFRS") and does not have a standardized meaning prescribed by IFRS. Management believes that EBITDA is an appropriate measure in evaluating the Company's performance. Readers are cautioned that EBITDA should not be construed as an alternative to net income (as determined under IFRS) as an indicator of financial performance or to cash flow from operating activities (as determined under IFRS) as a measure of liquidity and cash flow. The Company's method of calculating EBITDA may differ from the methods used by other issuers and, accordingly, the Company's EBITDA may not be comparable to similar measures used by other issuers.

Highlights

--  The Company continues to build on and maintains a strong working capital
    position increasing it from $40.3 million as at December 31, 2013 to
    $41.4 million as at June 30, 2014

--  The Company added a net $4.7 million of new property, plant and
    equipment. In addition, the Company obtained a 3rd party valuation of
    its existing fleet of equipment that shows a surplus in excess of $30
    million over book value

--  The Company reduced total long-term debt by $1.5m from year end to $18.8
    million as at June 30, 2014

--  Revenues were comparable to 2013 Q2 revenues, however, operating margins
    decreased as a result of the absorption of a loss from a strategic job

Second quarter results

Consolidated revenue was $36.7 million compared to $37.3 million in the second quarter last year. Most of the revenue in the quarter was derived from two larger facility jobs, the completion of a big inch pipeline project and a series of integrity digs for one of the Company's key customers. In the second quarter last year, the Company worked on three larger facility and pipeline projects as well as maintenance and pipeline integrity work for two other customers.

Operating expenses were $31.9 million or 87% of revenue compared to $25.5 million or 68% of revenue in the second quarter last year. The decline in operating margins as reported was the result of carry over completion work performed on a large pipeline project in Fort McMurray which had commenced in December 2013 and was materially accounted for in the first quarter 2014. The increased costs have resulted in lower than anticipated profits for the Company. For strategic reasons, Macro originally bid this job at low margins but unanticipated problems with the project resulted in a final loss of $8.0 million dollars of which an addition $1.1 million dollars was accounted for this quarter completing and demobilizing the job. Total operating expenditures incurred in the second quarter of 2014 for a strategic job amounted to $4.9 million dollars compared to $3.8 million dollars recognized as revenue.

Macro has entered into discussions with the pipeline operator requesting additional compensation. Additional compensation, if any, will be recorded when such further compensation has been formally agreed to.

During the prior year three month period ended June 30th the Company realized improved bid margins and a greater percentage of non-fixed price work that resulted in improved operating margins compared to prior periods.

General and administrative expenses were $2.4 million, up from $2.2 million last year, but consistent with levels of the most recent quarter. Costs were higher compared to prior year as a result of increased professional fees and additional staff costs associated with the increased work activity. As part of the Company's strategy to pursue large scale projects, it incurred significant expenditures in connection with the bid process. It anticipates that this will continue. In addition, the Company has engaged the advisory services of an investment bank to assist in evaluating its financial requirements for large scale projects. In this regard, the Company also commissioned an independent valuation of its existing fleet of equipment which provided for a fair market value in excess of $82 million before fiscal 2014 additions.

Total depreciation expense of $1.8 million was comparable to prior year period reflecting the additional assets obtained in the November 2012 acquisition.

Interest expense of $0.2 million was approximately $0.1 million lower than the second quarter last year as a result of improved interest rates and a decrease in total amount of debt outstanding.

Income tax expense in the quarter of $0.2 million was in line with current enacted tax rates of approximately 26.6%.

Net income was $0.5 million ($0.01 per share) compared to $5.7 million ($0.21 per share). The decrease in net income is a result of increased operating costs being incurred during the quarter.

OUTLOOK

Activity in the oil and gas industry in western Canada remains very active. Macro is strategically pursuing multiple large scale potential projects that combine commercial, logistic, and time scheduled criteria that are conducive to minimizing risk and maximizing the synergies of pipeline and facility construction. Macro is continuing to see benefits from numerous pipeline integrity and facility projects derived from its multiple major clients. However, primarily as a result of customer project scheduling delays within the industry, the Company is expecting revenues in the third quarter of fiscal 2014 to be below those recorded in third quarter of fiscal 2013 with total revenues being recognized for the nine months ended September 30, 2014 to be slightly less than prior year. With the completion of the strategic pipeline project in the second quarter, the Company is targeting margins more in line with historical averages and as such expects to see significant financial improvements to its operations over the balance of fiscal 2014.

In addition, the Company is seeking out pipeline construction contracts in connection with the Liquefied Natural Gas (LNG) projects being planned on the west coast of British Columbia, an industry that is anticipated to bring substantial economic activity to British Columbia over the next 30 years. Macro has completed bid processes and has entered into discussions with several of the LNG project owners regarding future pipeline and facilities construction.

Macro's core business is providing pipeline and facilities construction and maintenance services to major companies in the oil and gas industry. The Company's corporate office is in Fort St. John, British Columbia. Its shares are listed on the TSX Venture Exchange under the symbol MCR. Information on the Company's principal operating unit, Macro Industries Inc., can be found at www.macroindustries.ca.

Forward Looking Statements

Certain statements in this news release may include forward-looking information that involves various risks and uncertainties. These may include, without limitation, statements regarding expected revenues, expenses and industry trends and the pursuit of strategic acquisitions. These risks and uncertainties include, but are not restricted to, global economic conditions, government regulation of energy and resource companies, seasonal weather patterns, maintaining and increasing market share, terrorist activity, the price and availability of alternative fuels, the availability of pipeline capacity, and potential instability or armed conflict in oil producing regions. These risks and uncertainties may cause actual results to differ from information contained herein. There can be no assurance that such forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These statements are based on the estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, the Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contacts:
Macro Enterprises Inc.
Frank Miles
President and C.E.O.
(250) 785-0033

Macro Enterprises Inc.
Jeff Redmond
Interim C.F.O.
(250) 785-0033

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
SYS-CON Events announced today that Synametrics Technologies will exhibit at SYS-CON's 22nd International Cloud Expo®, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Synametrics Technologies is a privately held company based in Plainsboro, New Jersey that has been providing solutions for the developer community since 1997. Based on the success of its initial product offerings such as WinSQL, Xeams, SynaMan and Syncrify, Synametrics continues to create and hone inn...
As many know, the first generation of Cloud Management Platform (CMP) solutions were designed for managing virtual infrastructure (IaaS) and traditional applications. But that's no longer enough to satisfy evolving and complex business requirements. In his session at 21st Cloud Expo, Scott Davis, Embotics CTO, explored how next-generation CMPs ensure organizations can manage cloud-native and microservice-based application architectures, while also facilitating agile DevOps methodology. He expla...
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
DevOps promotes continuous improvement through a culture of collaboration. But in real terms, how do you: Integrate activities across diverse teams and services? Make objective decisions with system-wide visibility? Use feedback loops to enable learning and improvement? With technology insights and real-world examples, in his general session at @DevOpsSummit, at 21st Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, explored how leading organizations use data-driven DevOps to close th...
Continuous Delivery makes it possible to exploit findings of cognitive psychology and neuroscience to increase the productivity and happiness of our teams. In his session at 22nd Cloud Expo | DXWorld Expo, Daniel Jones, CTO of EngineerBetter, will answer: How can we improve willpower and decrease technical debt? Is the present bias real? How can we turn it to our advantage? Can you increase a team’s effective IQ? How do DevOps & Product Teams increase empathy, and what impact does empath...
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software. They hope to capture value from emerging technologies such as IoT, SDN, and AI. Ultimately, irrespective of the vertical, it is about deriving value from independent software applications participating in an ecosystem as one comprehensive solution. In his session at @ThingsExpo, Kausik Sridhar, founder and CTO of Pulzze Systems, discussed how given the magnitude of today's application ...
Modern software design has fundamentally changed how we manage applications, causing many to turn to containers as the new virtual machine for resource management. As container adoption grows beyond stateless applications to stateful workloads, the need for persistent storage is foundational - something customers routinely cite as a top pain point. In his session at @DevOpsSummit at 21st Cloud Expo, Bill Borsari, Head of Systems Engineering at Datera, explored how organizations can reap the bene...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
You know you need the cloud, but you're hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You're looking at private cloud solutions based on hyperconverged infrastructure, but you're concerned with the limits inherent in those technologies. What do you do?
Recently, WebRTC has a lot of eyes from market. The use cases of WebRTC are expanding - video chat, online education, online health care etc. Not only for human-to-human communication, but also IoT use cases such as machine to human use cases can be seen recently. One of the typical use-case is remote camera monitoring. With WebRTC, people can have interoperability and flexibility for deploying monitoring service. However, the benefit of WebRTC for IoT is not only its convenience and interopera...
Sanjeev Sharma Joins June 5-7, 2018 @DevOpsSummit at @Cloud Expo New York Faculty. Sanjeev Sharma is an internationally known DevOps and Cloud Transformation thought leader, technology executive, and author. Sanjeev's industry experience includes tenures as CTO, Technical Sales leader, and Cloud Architect leader. As an IBM Distinguished Engineer, Sanjeev is recognized at the highest levels of IBM's core of technical leaders.
In his general session at 21st Cloud Expo, Greg Dumas, Calligo’s Vice President and G.M. of US operations, discussed the new Global Data Protection Regulation and how Calligo can help business stay compliant in digitally globalized world. Greg Dumas is Calligo's Vice President and G.M. of US operations. Calligo is an established service provider that provides an innovative platform for trusted cloud solutions. Calligo’s customers are typically most concerned about GDPR compliance, application p...
Mobile device usage has increased exponentially during the past several years, as consumers rely on handhelds for everything from news and weather to banking and purchases. What can we expect in the next few years? The way in which we interact with our devices will fundamentally change, as businesses leverage Artificial Intelligence. We already see this taking shape as businesses leverage AI for cost savings and customer responsiveness. This trend will continue, as AI is used for more sophistica...
The 22nd International Cloud Expo | 1st DXWorld Expo has announced that its Call for Papers is open. Cloud Expo | DXWorld Expo, to be held June 5-7, 2018, at the Javits Center in New York, NY, brings together Cloud Computing, Digital Transformation, Big Data, Internet of Things, DevOps, Machine Learning and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding busin...
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...