Click here to close now.


News Feed Item

Leader Energy Services Reports Second Quarter 2014 Results

CALGARY, ALBERTA -- (Marketwired) -- 08/28/14 -- (TSX VENTURE: LEA) - Leader Energy Services Ltd. ("Leader" or the "Company") has released its financial and operating results for the three and six month periods ended June 30, 2014. Leader's second quarter condensed interim financial statements and MD&A will be filed to SEDAR on August 28, 2014. For further information please refer to these filings.

Performance Summary
(000's) (unaudited)

                                  June 30,   June 30,
Quarter ended                         2014       2013   $ Change  % Change

  Revenue                           $2,511     $2,673      $(162)       (6)%
  Operating Expenses                 3,244      3,137        107         3%
                                      (733)      (464)      (269)      n/a
  General and Administrative           870        989       (119)      (12)%
  Amortization                         989      1,002        (13)       (1)%
  Finance cost                         878        829         49         6%
  Asset impairment                   2,419          -      2,419       n/a
  Other                                 23          1         22       n/a
  Net loss                         $(5,912)   $(3,285)   $(2,627)      n/a
  Loss per share - Basic            $(0.20)    $(0.11)    $(0.09)      n/a
  Loss per share - Diluted          $(0.20)    $(0.11)    $(0.09)      n/a

  EBITDA(i)                        $(4,045)   $(1,454)   $(2,591)      n/a
Adjusted EBITDA(i)                 $(1,617)   $(1,427)     $(190)      n/a

                                  June 30,   June 30,
6 months ended                        2014       2013   $ Change  % Change

  Revenue                          $11,021    $10,940        $81         1%
  Operating Expenses                 8,787      8,756         31         0%
                                     2,234      2,184         50         2%
  General and Administrative         1,912      2,000        (88)       (4)%
  Amortization                       2,010      1,993         17         1%
  Finance cost                       1,867      2,019       (152)       (8)%
  Loss on settlement of loans
   and borrowings                        -        233       (233)      n/a
  Asset impairment                   2,419          -      2,419       n/a
  Other                                 43         60        (17)      n/a
  Net loss                         $(6,017)   $(4,121)   $(1,896)      n/a
  Loss per share - Basic            $(0.20)    $(0.14)    $(0.06)      n/a
  Loss per share - Diluted          $(0.20)    $(0.14)    $(0.06)      n/a

  EBITDA(i)                        $(2,140)     $(109)   $(2,031)      n/a
Adjusted EBITDA(i)                    $296       $183       $113       n/a

EBITDA refers to net income before finance costs, taxes, depreciation, and amortization. As the Company has not recorded any provision for income taxes, taxes have been excluded from the reconciliation. Adjusted EBITDA is calculated as EBITDA before non-cash losses on the settlement of loans and borrowings, asset impairment and share based payments. EBITDA and Adjusted EBITDA are not measures that have a standardized meaning and accordingly may not be comparable to similar measures used by other companies. Management believes that EBITDA and Adjusted EBITDA are useful measures of cash flow generated from operations as they eliminate non-cash items, non-recurring items and the effects of finance costs and financial restructuring.

In the second quarter of 2014, the Company reported revenues from well stimulation services of $2.5 million as compared to $2.7 million reported in the second quarter of 2013. Like prior second quarters, the Company was affected by the typical seasonality in the oil and gas industry in western Canada. Activity started strong in the second quarter of 2014 as customers completed work delayed in March due to an early spring break-up. The Company was able to coordinate the completion of this work around road restrictions through the second week of April. Activity in the month of May was slow with the exception of an influx of stand-alone fluid pumping work from one customer. In the month of June, the Company started to see a rebound in activity.

For the six month period ended June 30, 2014, revenue increased slightly to $11.0 million as compared to the same period in 2013. The change in revenue is attributed to a $0.2 million increase in revenue in the first quarter partially offset by the decrease in the second quarter as discussed above. The Company continues to see demand for its services where the Company concentrates its operations in north-central Alberta and northeast British Columbia.

Asset Sale

The Company is in the process of arranging certain pieces of equipment for sale. The Company expects the sale process to be completed in the fourth quarter of 2014. Upon the conclusion of the asset sale, the Company will still offer 1 1/2" - 2 3/8" coiled tubing and related services.

Brooks Facility

In June 2014, the Company discontinued paying its lease on a vacant facility in Brooks, Alberta with no effect on Leader's current operations. As a result of not making this payment, the landlord issued a notice of default to the Company in June 2014 and subsequently terminated the lease in July 2014. By terminating the lease, the landlord has ended Leader's right to use the Brooks facility on a go forward basis. As a result, the Company has written off the value of the leased facility in the amount of $2.4 million.

In August 2014, the landlord issued a Statement of Claim against the Company in the amount of $7.0 million. Leader intends to file a Statement of Defence defending the claim by disputing the amount owing to the landlord. While the final amount owing under the claim is not determinable at this time, the Company has reclassified the entire obligation under finance lease related to this facility amounting to $2.9 million as a current liability. The difference between the $2.9 million recorded as a current liability and the Statement of Claim of $7.0 million is a contingent liability.

Liquidity and Capital Resources

In May 2014, the Company and its lender finalized an amendment to the Asset-Based Credit Facility to combine the $1.0 million demand non-revolving single advance loan due April 30, 2014 with the demand non-revolving single advance term loan. As a result of combining these loans together, the entire Asset-Based Credit Facility is due September 6, 2014 and the balance outstanding on the demand non-revolving single advance term loan is $11.4 million.

In addition to the demand non-revolving single advance loans, the Company has a $5.0 million demand revolving facility which forms part of the Asset-Based Credit Facility. The borrowing limit under this facility is based on funds available as determined in reference to accounts and inventory. At June 30, 2014, the Company had a $1.0 million borrowing limit with $1.7 million drawn under the facility. As a result, the Company was $0.7 million over advanced on this facility. On the date of issue, the Company is over advanced on its demand revolving facility by approximately $0.85 million. The Company is working with its lender on a six-month extension to its Asset-Based Credit Facility of which there is no certainty and on eliminating the over advance.


Improving activity levels are anticipated for the remainder of 2014, supported by stable oil prices, rising natural gas prices and deeper, more complex wells being drilled. The Company continues to analyze its operating expenses. Cost reductions will be achieved through rightsizing initiatives including decreasing administrative personnel levels and lowering of salaries in certain departments. In addition, the Company is taking the initiative to sell underutilized assets and lower its debt levels. The effect will be higher utilization of remaining assets and lower interest costs, thereby improving cash flow for the Company. Management remains focused on revenue-generating and cost management initiatives, and continues to evaluate various alternatives to reduce its borrowing costs and overall debt levels.

Forward-looking information

This press release contains certain statements or disclosures relating to the Company that are based on the expectations of the Company as well as assumptions made by and information currently available to the Company which may constitute forward-looking information under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that the Company anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-looking information.

Neither the 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 news release.

Rod Hauser
President & CEO
(403) 265-5400
[email protected]

Jason Krueger, CFA
Executive VP & Director
(403) 265-5400
[email protected]

Graham Reid, CA
VP Finance & CFO
(403) 265-5400
[email protected]

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
Chris Van Tuin, Chief Technologist for the Western US at Red Hat, has over 20 years of experience in IT and Software. Since joining Red Hat in 2005, he has been architecting solutions for strategic customers and partners with a focus on emerging technologies including IaaS, PaaS, and DevOps. He started his career at Intel in IT and Managed Hosting followed by leadership roles in services and sales engineering at Loudcloud and Linux startups.
The cloud has reached mainstream IT. Those 18.7 million data centers out there (server closets to corporate data centers to colocation deployments) are moving to the cloud. In his session at 17th Cloud Expo, Achim Weiss, CEO & co-founder of ProfitBricks, will share how two companies – one in the U.S. and one in Germany – are achieving their goals with cloud infrastructure. More than a case study, he will share the details of how they prioritized their cloud computing infrastructure deployments ...
There are so many tools and techniques for data analytics that even for a data scientist the choices, possible systems, and even the types of data can be daunting. In his session at @ThingsExpo, Chris Harrold, Global CTO for Big Data Solutions for EMC Corporation, will show how to perform a simple, but meaningful analysis of social sentiment data using freely available tools that take only minutes to download and install. Participants will get the download information, scripts, and complete en...
WebRTC services have already permeated corporate communications in the form of videoconferencing solutions. However, WebRTC has the potential of going beyond and catalyzing a new class of services providing more than calls with capabilities such as mass-scale real-time media broadcasting, enriched and augmented video, person-to-machine and machine-to-machine communications. In his session at @ThingsExpo, Luis Lopez, CEO of Kurento, will introduce the technologies required for implementing thes...
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
The web app is agile. The REST API is agile. The testing and planning are agile. But alas, data infrastructures certainly are not. Once an application matures, changing the shape or indexing scheme of data often forces at best a top down planning exercise and at worst includes schema changes that force downtime. The time has come for a new approach that fundamentally advances the agility of distributed data infrastructures. Come learn about a new solution to the problems faced by software organ...
Between the compelling mockups and specs produced by analysts, and resulting applications built by developers, there exists a gulf where projects fail, costs spiral, and applications disappoint. Methodologies like Agile attempt to address this with intensified communication, with partial success but many limitations. In his session at DevOps Summit, Charles Kendrick, CTO and Chief Architect at Isomorphic Software, will present a revolutionary model enabled by new technologies. Learn how busine...
Interested in leveraging automation technologies and a cloud architecture to make developers more productive? Learn how PaaS can benefit your organization to help you streamline your application development, allow you to use existing infrastructure and improve operational efficiencies. Begin charting your path to PaaS with OpenShift Enterprise.
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of, and Fred Yatzeck, principal architect leading product development at, discussed how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at th...
Overgrown applications have given way to modular applications, driven by the need to break larger problems into smaller problems. Similarly large monolithic development processes have been forced to be broken into smaller agile development cycles. Looking at trends in software development, microservices architectures meet the same demands. Additional benefits of microservices architectures are compartmentalization and a limited impact of service failure versus a complete software malfunction....
Today’s connected world is moving from devices towards things, what this means is that by using increasingly low cost sensors embedded in devices we can create many new use cases. These span across use cases in cities, vehicles, home, offices, factories, retail environments, worksites, health, logistics, and health. These use cases rely on ubiquitous connectivity and generate massive amounts of data at scale. These technologies enable new business opportunities, ways to optimize and automate, al...
Data loss happens, even in the cloud. In fact, if your company has adopted a cloud application in the past three years, data loss has probably happened, whether you know it or not. In his session at 17th Cloud Expo, Bryan Forrester, Senior Vice President of Sales at eFolder, will present how common and costly cloud application data loss is and what measures you can take to protect your organization from data loss.
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
In his session at DevOps Summit, Bryan Cantrill, CTO at Joyent, will demonstrate a third path: containers on multi-tenant bare metal that maximizes performance, security, and networking connectivity.