Investors: 2007 Press Releases
HSE – First Quarter Results Reflect Continued Success in Business Diversification Strategy
NEWS RELEASE - May 10, 2007
HSE Integrated Ltd. (“HSE”, “Our”, or the “Company”) is pleased to announce its financial results for the quarter ended March 31, 2007. Financial and operating highlights are summarized below:
- Continued execution of HSE’s diversification strategy was demonstrated in the quarter, as revenue was comparable from the prior year at $27.9 million. Significant growth in Industrial and Environment Monitoring revenue offset declines in Oilfield revenues.
- Service revenue delivered to non-conventional upstream oil and gas, plants, facilities, training, and safety management services (the “Industrial” market) increased by 93%.
- Customer demand continues to increase for the Company’s air quality monitoring or “Environment” market which rose 129% in the quarter.
- Industrial safety services revenue and Environment monitoring revenue as a percentage of the total business mix have doubled – 42% in 2007 compared to 21% in the previous year.
- Achieved EBITDA of $4.8 million for the quarter (87% of first quarter of 2006) as the redeployment of personnel to Industrial safety services partially offset lower revenues in the Oilfield services market. As well, selling, general, and administrative expenses have increased to support the future growth of the Company.
- Cash from operations was $1.2 million in the quarter, as compared to a deficit of $3 million in the first quarter of 2006, mainly due to improved methods for the timely collection of outstanding trade receivables.
- Cash and short term investment balance of $6 million and no draw against the Company’s operating line or revolving credit facility at the end of the quarter.
David Yager, Chairman and CEO, offered the following comments for HSE’s first quarter financial results.
“The conventional oilfield service business proved challenging in the first quarter of 2007 and will likely continue to be challenging through the second and possibly third quarters. Fortunately, HSE’s diversification into new industries and geographic regions and the investment in state-of-the-art air quality monitoring technologies in 2005 and 2006 permitted our Company to perform much better financially than it would have had we not undertaken these initiatives. A distinct advantage we have at HSE is that our safety equipment, safety services and trained personnel can be employed in other industries and other markets. As Canada’s first national industrial safety services company, we will continue to explore new opportunities, invest in our people, and focus on internal operational efficiency to drive value for our three key stakeholders – employees, clients and capital providers.”
For further information and analysis please see the attached Management’s Discussion and Analysis and Financial Statements.
CONFERENCE CALL
HSE will be hosting a conference call to discuss their results at 11 AM (Eastern Standard Time), 9 AM (Mountain Standard Time) on Friday May 11, 2007. To participate call 416-640-1917 or 877-289-8525. Details on the webcast and conference call replay are contained in a separate News Release.
HSE is an integrated, national supplier of industrial Health, Safety and Environmental services. From its head office in Calgary, Alberta, it serves its clients from field service locations in Alberta, British Columbia, Ontario, Nova Scotia, New Brunswick and Michigan. HSE trades on the TSX Venture Exchange under the symbol “HSL”.
Forward-Looking Statements
This news release may contain forward-looking statements concerning, among other things, the Company’s prospects, expected revenues, expenses, profits, financial position, strategic direction, and growth initiatives, all of which are subject to risks, uncertainties and assumptions. These forward-looking statements are identified by their use of terms and phrases such as expect, anticipate, estimate, believe, may, will, intend, plan, continue, project, objective and other similar terms and phrases. These statements are based on certain assumptions and analyses made by the Company based on its experience and assessment of current conditions, known trends, expected future developments and other factors it believes are appropriate under the circumstances. Such statements are subject to numerous external variables, both known and unknown, such as changes in commodity prices for natural gas and oil, changes in drilling activity, weather conditions, industry-specific and general economic conditions and exchange rate fluctuations. If any of these risks and uncertainties materializes or if assumptions are incorrect, actual results may differ materially from those expressed or implied in the forwardlooking statements. The forward looking statements included in this news release are not guarantees of future performance and should not be unduly relied upon.
Non-GAAP Measures
This report makes reference to EBITDA, a measure that is not recognized under generally accepted accounting principles (GAAP). Management believes that, in addition to net earnings, EBITDA is a useful supplementary measure. EBITDA provides investors with an indication of earnings before provisions for interest, taxes, amortization, gains or losses on the disposal of property and equipment, and the non-cash effect of stock-based compensation expense. Investors should be cautioned that EBITDA should not be construed as an alternative to net earnings determined by GAAP as an indication of the Company’s performance. This method of calculating EBITDA may differ from that of other companies and accordingly may not be comparable to measures used by other companies.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the
adequacy or accuracy of this release.
For the full release please click here
For more information please contact:
David Yager, Chairman & CEO
Telephone: (403) 266-1833
E-Mail:
Tony Hidalgo, Chief Financial Officer
Telephone: (403) 266-1833
E-Mail: