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
                                     Three months ended   Six months ended
                                           June 30             June 30
                                          2014      2013      2014      2013

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.


--  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.


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.

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 Coalfire 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. Coalfire is the trusted leader in cybersecurity risk management and compliance services. Coalfire integrates advisory and technical assessments and recommendations to the corporate directors, executives, boards, and IT organizations for global brands and organizations in the technology, cloud, health...
@ThingsExpo has been named the Top 5 Most Influential M2M Brand by Onalytica in the ‘Machine to Machine: Top 100 Influencers and Brands.' Onalytica analyzed the online debate on M2M by looking at over 85,000 tweets to provide the most influential individuals and brands that drive the discussion. According to Onalytica the "analysis showed a very engaged community with a lot of interactive tweets. The M2M discussion seems to be more fragmented and driven by some of the major brands present in the...
So you think you are a DevOps warrior, huh? Put your money (not really, it’s free) where your metrics are and prove it by taking The Ultimate DevOps Geek Quiz Challenge, sponsored by DevOps Summit. Battle through the set of tough questions created by industry thought leaders to earn your bragging rights and win some cool prizes.
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
SYS-CON Events announced today that Transparent Cloud Computing (T-Cloud) Consortium 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. The Transparent Cloud Computing Consortium (T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data proces...
The Internet of Things (IoT), in all its myriad manifestations, has great potential. Much of that potential comes from the evolving data management and analytic (DMA) technologies and processes that allow us to gain insight from all of the IoT data that can be generated and gathered. This potential may never be met as those data sets are tied to specific industry verticals and single markets, with no clear way to use IoT data and sensor analytics to fulfill the hype being given the IoT today.
SYS-CON Events announced today that MathFreeOn 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. MathFreeOn is Software as a Service (SaaS) used in Engineering and Math education. Write scripts and solve math problems online. MathFreeOn provides online courses for beginners or amateurs who have difficulties in writing scripts. In accordance with various mathematical topics, there are more tha...
Governments around the world are adopting Safe Harbor privacy provisions to protect customer data from leaving sovereign territories. Increasingly, global companies are required to create new instances of their server clusters in multiple countries to keep abreast of these new Safe Harbor laws. Is it worth it? In his session at 19th Cloud Expo, Adam Rogers, Managing Director of Anexia, Inc., will discuss how to keep your data legal and still stay in business.
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 smar...
@ThingsExpo has been named the Top 5 Most Influential Internet of Things Brand by Onalytica in the ‘The Internet of Things Landscape 2015: Top 100 Individuals and Brands.' Onalytica analyzed Twitter conversations around the #IoT debate to uncover the most influential brands and individuals driving the conversation. Onalytica captured data from 56,224 users. The PageRank based methodology they use to extract influencers on a particular topic (tweets mentioning #InternetofThings or #IoT in this ...
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect...
Successful transition from traditional IT to cloud computing requires three key ingredients: an IT architecture that allows companies to extend their internal best practices to the cloud, a cost point that allows economies of scale, and automated processes that manage risk exposure and maintain regulatory compliance with industry regulations (FFIEC, PCI-DSS, HIPAA, FISMA). The unique combination of VMware, the IBM Cloud, and Cloud Raxak, a 2016 Gartner Cool Vendor in IT Automation, provides a co...
SYS-CON Events announced today that SoftNet 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. SoftNet Solutions specializes in Enterprise Solutions for Hadoop and Big Data. It offers customers the most open, robust, and value-conscious portfolio of solutions, services, and tools for the shortest route to success with Big Data. The unique differentiator is the ability to architect and ...
SYS-CON Events announced today that Niagara Networks 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. Niagara Networks offers the highest port-density systems, and the most complete Next-Generation Network Visibility systems including Network Packet Brokers, Bypass Switches, and Network TAPs.
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and ...