SAExploration Announces First Quarter 2017 Consolidated Financial Results
First Quarter 2017 Summary
- Revenue of
$86.2 million , compared to$90.2 million in Q1 2016 - Gross profit of
$25.1 million , or 29.2% of revenues, compared to$26.4 million , or 29.3% of revenues, in Q1 2016 - Adjusted gross profit, a non-GAAP measure, of
$28.4 million , or 33.0% of revenues, compared to$30.6 million , or 34.0% of revenues, in Q1 2016 - Net income attributable to the Corporation of
$6.8 million , compared to$14.2 million in Q1 2016 - Operating cash flow of
$5.4 million , compared to$(2.0) million in Q1 2016 - Adjusted EBITDA, a non-GAAP measure,
of
$22.7 million , or 26.4% of revenues, compared to$24.1 million , or 26.7% of revenues, in Q1 2016 - Contracted backlog of
$53.1 million through 2017, which includes the recently announced$20.0 million of project awards, and$155.0 million of bids outstanding as ofMarch 31, 2017 - Signed three-year agreement with
Hocol S.A. to provide geophysical services inColombia
First Quarter 2017 Financial Results
Revenues decreased 4.4% to
Gross profit was
Selling, general and administrative ("SG&A") expenses during the quarter were
Income
before income taxes was
Provision for income taxes was
Net income attributable to the Corporation for the quarter was
- Lower revenue and corresponding decrease in gross profit;
- Higher interest expense due to the amortization of loan issuance costs for the senior loan facility; and
- Higher effective tax rate.
Adjusted EBITDA, which is defined and calculated below, was
Capital expenditures for the quarter were
On
Contracted Backlog
As of
SAE currently expects all of the projects in its backlog to be completed during 2017. The estimations of realization from the backlog can be impacted by a number of factors, however, including deteriorating industry conditions, customer delays or cancellations, permitting or project delays and environmental conditions.
Investor Conference Call
SAE will host a conference call on
To listen live via the company's website, please go to the website at least 15 minutes prior to the start of the call to register and download any necessary audio software. A replay of the webcast for the conference call will be archived on the company's website and can be accessed by visiting the Investors section of SAE's website.
About
SAE is an internationally-focused oilfield services company offering a full range of vertically-integrated seismic data acquisition and logistical support services in remote and complex environments throughout
The information in SAE's website is not, and shall not be deemed to be, a part of this notice or incorporated in filings SAE makes with the
Forward Looking Statements
This press release contains certain "forward-looking statements" within the meaning of the
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (In thousands, except share and per share amounts) | ||||||||
| Three Months Ended | ||||||||
| 2017 | 2016 | |||||||
| Revenue from services | $ | 86,169 | $ | 90,153 | ||||
| Costs of services excluding depreciation and amortization expense | 57,774 | 59,511 | ||||||
| Depreciation and amortization expense included in costs of services | 3,251 | 4,199 | ||||||
| Gross profit | 25,144 | 26,443 | ||||||
| Selling, general and administrative expenses | 6,517 | 6,746 | ||||||
| Income from operations | 18,627 | 19,697 | ||||||
| Other income (expense): | ||||||||
| Interest expense, net | (8,358) | (4,028) | ||||||
| Foreign exchange gain, net | 311 | 1,625 | ||||||
| Other expense, net | (13) | (5) | ||||||
| Total other expense, net | (8,060) | (2,408) | ||||||
| Income before income taxes | 10,567 | 17,289 | ||||||
| Provision for income taxes | 1,740 | 665 | ||||||
| Net income | 8,827 | 16,624 | ||||||
| Less: net income attributable to non-controlling interest | 1,982 | 2,384 | ||||||
| Net income attributable to the Corporation | $ | 6,845 | $ | 14,240 | ||||
| Basic and diluted earnings per share: | ||||||||
| Weighted average basic shares outstanding | 9,358,529 | 129,269 | ||||||
| Earnings per share - basic | $ | 0.73 | $ | 110.16 | ||||
| Weighted average diluted shares outstanding | 9,391,022 | 129,356 | ||||||
| Earnings per share - diluted | $ | 0.73 | $ | 110.08 | ||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
| (In thousands, except share and par value amounts) | ||||||||||
2017 | 2016 | |||||||||
| ASSETS | (Unaudited) | |||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 11,514 | $ | 11,460 | ||||||
| Restricted cash | 4,229 | 536 | ||||||||
| Accounts receivable, net of allowance for doubtful accounts of | 96,167 | 69,721 | ||||||||
| Deferred costs on contracts | 1,059 | 8,644 | ||||||||
| Prepaid expenses | 1,603 | 1,977 | ||||||||
| Deferred loan issuance costs, net | 15,590 | — | ||||||||
| Total current assets | 130,162 | 92,338 | ||||||||
| Property and equipment, net of accumulated depreciation of | 41,206 | 42,759 | ||||||||
| Intangible assets, net of accumulated amortization of | 703 | 721 | ||||||||
| 1,725 | 1,711 | |||||||||
| Deferred loan issuance costs, net | — | 20,856 | ||||||||
| Accounts receivable, noncurrent, net of allowance for doubtful accounts of | 37,984 | 37,984 | ||||||||
| Deferred income tax assets | 5,193 | 5,122 | ||||||||
| Other assets | 150 | 164 | ||||||||
| Total assets | $ | 217,123 | $ | 201,655 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 24,377 | $ | 9,301 | ||||||
| Accrued liabilities | 12,641 | 12,750 | ||||||||
| Income and other taxes payable | 13,388 | 15,605 | ||||||||
| Borrowings under revolving credit facility | 4,517 | 5,844 | ||||||||
| Borrowings under senior loan facility | 29,995 | — | ||||||||
| Current portion of capital leases | 42 | 56 | ||||||||
| Deferred revenue | 444 | 7,975 | ||||||||
| Total current liabilities | 85,404 | 51,531 | ||||||||
| Borrowings under senior loan facility | — | 29,995 | ||||||||
| Second lien notes, net of net unamortized premium of | 82,433 | 80,238 | ||||||||
| Senior secured notes, net of unamortized deferred loan issuance costs of | 1,834 | 1,830 | ||||||||
| Total liabilities | 169,671 | 163,594 | ||||||||
| Stockholders' equity: | ||||||||||
| Preferred stock, | — | — | ||||||||
| Common stock, | 1 | 1 | ||||||||
| Additional paid-in capital | 132,445 | 131,816 | ||||||||
| Accumulated deficit | (85,705) | (92,550) | ||||||||
| Accumulated other comprehensive loss | (4,887) | (4,822) | ||||||||
| Total stockholders' equity attributable to the Corporation | 41,854 | 34,445 | ||||||||
| Non-controlling interest | 5,598 | 3,616 | ||||||||
| Total stockholders' equity | 47,452 | 38,061 | ||||||||
| Total liabilities and stockholders' equity | $ | 217,123 | $ | 201,655 | ||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||
| (In thousands) | ||||||||
| Three Months Ended | ||||||||
| 2017 | 2016 | |||||||
| Net income | $ | 8,827 | $ | 16,624 | ||||
| Foreign currency translation loss | (65) | (613) | ||||||
| Total comprehensive income | 8,762 | 16,011 | ||||||
| Less: comprehensive income attributable to non-controlling interest | 1,982 | 2,384 | ||||||
| Total comprehensive income attributable to the Corporation | $ | 6,780 | $ | 13,627 | ||||
| UNAUDITED CONSOLIDATED REVENUES BY REGION (In thousands) | |||||||||||||
| Three Months Ended | |||||||||||||
| 2017 | % | 2016 | % | ||||||||||
| $ | 46,364 | 53.8 | % | $ | 65,657 | 72.8 | % | ||||||
| 1,771 | 2.1 | % | 23,639 | 26.2 | % | ||||||||
| 2,868 | 3.3 | % | 857 | 1.0 | % | ||||||||
| 35,166 | 40.8 | % | — | — | % | ||||||||
| Total revenue | $ | 86,169 | 100.0 | % | $ | 90,153 | 100.0 | % | |||||
UNAUDITED RECONCILIATION OF NET INCOME TO NON-GAAP ADJUSTED EBITDA
(In thousands)
We use an adjusted form of EBITDA to measure period over period performance, which is a non-GAAP measurement. Adjusted EBITDA is defined as net income (loss) plus depreciation and amortization, plus interest expense, plus income taxes, plus share-based compensation, plus loss (gain) on disposal of property and equipment, plus foreign exchange loss (gain), and plus non-recurring one-time expenses. Our management uses Adjusted EBITDA as a supplemental financial measure to assess: (i) the financial performance of our assets without regard to financing methods, capital structures, taxes, historical cost basis or non-recurring expenses; (ii) our liquidity and operating performance over time in relation to other companies that own similar assets and calculate Adjusted EBITDA in a similar manner; and (iii) the ability of our assets to generate cash sufficient to pay potential interest cost. We consider Adjusted EBITDA as presented below to be the primary measure of period-over-period changes in our operational cash flow performance.
The terms EBITDA and Adjusted EBITDA are not defined under GAAP, and we acknowledge that these are not measures of operating income, operating performance or liquidity presented in accordance with GAAP. When assessing our operating performance or liquidity, investors and others should not consider this data in isolation or as a substitute for net income, cash flow from operating activities or other cash flow data calculated in accordance with GAAP. In addition, our calculation of Adjusted EBITDA may not be comparable to EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA or similarly titled measures in the same manner. Further, the results presented by Adjusted EBITDA cannot be achieved without incurring the costs that the measure excludes.
The computation of our Adjusted EBITDA, a non-GAAP measure, from net income, the most directly comparable GAAP financial measure, is provided in the table below.
| Three Months Ended | |||||||||
|
2017 | 2016 | ||||||||
| Net income | $ | 8,827 | $ | 16,624 | |||||
| Depreciation and amortization (1) | 3,356 | 4,332 | |||||||
| Interest expense, net | 8,358 | 4,028 | |||||||
| Provision for income taxes | 1,740 | 665 | |||||||
| Share-based compensation (2) | 629 | 165 | |||||||
| Loss (gain) on disposal of property and equipment, net (3) | 4 | (342) | |||||||
| Foreign exchange gain, net (4) | (311) | (1,625) | |||||||
| Non-recurring expenses (5)(6) | 112 | 231 | |||||||
| Adjusted EBITDA | $ | 22,715 | $ | 24,078 | |||||
| (1) | Additional depreciation and amortization expenses not related to the cost of services were incurred during the three months ended | |
| (2) | Share-based compensation primarily relates to the non-cash value of stock options and restricted stock awards granted to our employees and directors. | |
| (3) | Loss (gain) on disposal of property and equipment, net is primarily the impact of sale of equipment. | |
| (4) | Foreign exchange gain, net, includes the effect of both realized and unrealized foreign exchange transactions. | |
| (5) | Non-recurring expenses in 2017 primarily consisted of severance payments in several locations as well as non-operating expenses incurred at the corporate location. | |
| (6) | Non-recurring expenses in 2016 primarily consisted of various non-operating expenses incurred at the corporate and | |
UNAUDITED RECONCILIATION OF GROSS PROFIT TO NON-GAAP ADJUSTED GROSS
PROFIT
(In thousands)
We use an adjusted form of gross profit to measure period over period performance, which is not derived in accordance with GAAP. Adjusted Gross Profit is defined as gross profit plus depreciation and amortization expense related to the cost of services. Our management uses Adjusted Gross Profit as a substantial financial measure to assess the cost management and performance of our projects. Within the seismic data services industry, gross profit is presented both with and without depreciation and amortization expense on equipment used in operations and, therefore, we also use this measure to assess our performance over time in relation to other companies that own similar assets and calculate gross profit in the same manner.
The term Adjusted Gross Profit is not defined under GAAP, and we acknowledge that it is not a measure of operating income, operating performance or liquidity presented in accordance with GAAP. When assessing our operating performance or liquidity, investors and others should not consider this data in isolation or as a substitute for gross profit calculated in accordance with GAAP. In addition, our calculation of Adjusted Gross Profit may not be comparable to gross profit or similarly titled measures utilized by other companies since such other companies may not calculate adjusted gross profit in the same manner. Further, the results presented by Adjusted Gross Profit cannot be achieved without incurring the costs that the measure excludes.
The computation of our Adjusted Gross Profit, a non-GAAP measure, from gross profit, the most directly comparable GAAP financial measure, is provided in the table below:
| Three Months Ended | ||||||||
| 2017 | 2016 | |||||||
| Gross profit as presented | $ | 25,144 | $ | 26,443 | ||||
| Depreciation and amortization expense included in cost of services (1) | 3,251 | 4,199 | ||||||
| Adjusted Gross Profit | $ | 28,395 | $ | 30,642 | ||||
| (1) | Depreciation and amortization expense included in cost of services includes depreciation and amortization on equipment used in operations. |
ContactSAExploration Holdings, Inc. Ryan Abney Vice President, Finance (281) 258-4409 rabney@saexploration.com
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