ProSep Reports 2012 Annual and 2013 First Quarter Financial Results
(firmenpresse) - MONTREAL, QUEBEC -- (Marketwired) -- 05/14/13 -- ProSep Inc. (TSX: PRP) ("ProSep" or the "Company"), dedicated to providing process solutions to the oil and gas industry, today announced its financial results for the twelve-month period ended December 31, 2012 and three-month period ended March 31, 2013. All amounts are reported in Canadian dollars unless otherwise stated.
Highlights and Subsequent Events
Financial Results for the First Quarter Ended March 31, 2013
Financial Results for the Year Ended December 31, 2012
Excluding goodwill and intangible impairment charges of $13.1 million, loss for the year was $8.5 million, an improvement over 2011 loss of $11.4 million which excludes impairment charges of $3.7 million during that period.
Financial Events of the First Quarter 2013
Financial Event of the Year Ended December 31, 2012
Commercial Events of the First Quarter 2013
Commercial Events of Year 2012
Operational Events of the First Quarter of 2013
Operational Events of Year 2012
(i) EBITDA is a non-IFRS measure, see above section for details.
First Quarter 2013 Selected Financial Highlights (in $ millions except for loss per share)
Year Ended December 31, 2012 Selected Financial Highlights (in $ millions except for loss per share)
"In 2012, we achieved over 20% revenue growth and increased the proportion of proprietary technologies to 30% of our year-end backlog, compared to a historical average of 5%. This has improved our 2013 first quarter gross margins and led to a neutral EBITDA excluding non-recurring items. Additionally, recent cost reductions and divestiture of our Korean joint venture are providing additional cash flows required for working capital purposes," said Jacques L. Drouin, President & CEO.
First Quarter Ended March 31, 2013 Financial Results
In the first quarter of 2013, ProSep reported consolidated revenues of $8.8 million, an increase of 7% over $8.3 million reported in the same period of 2012. Strong revenue growth at the US Operations offset declining revenues at the Asia Pacific Operations, in the context of a more competitive local market.
Gross Margin
Overall consolidated gross margin for the first quarter ended March 31, 2013 stood at $3.1 million (or 35% or revenues) compared to $2.6 million (or 32% of revenues) for the equivalent period of 2012. Gross margins improved on higher volume of business at the US operations and improved contribution from proprietary technologies for a Latin American customer. Gross margin at the Asia Pacific operations remain below target.
EBITDA and Loss
EBITDA for the first quarter ended March 31, 2013 was negative $0.6 million, an improvement over the negative EBITDA of $2.2 million reported in the first quarter of last year. Slightly higher revenues and the implementation of a cost reduction plan improved financial performance.
For the three-month period ended March 31, 2013 the Company reported a loss of $1.4 million ($0.07 per share) equivalent to last year's corresponding period. The implementation of a cost reduction plan significantly improved operating losses in the first quarter of 2013.
Basic and diluted loss per share was determined using the weighted average number of 21,019,258 Common Shares outstanding during the first three-month period of 2013. At March 31, 2013, 21,106,716 Common Shares were issued and outstanding compared to 20,978,721 Common Shares at the corresponding date of 2012.
At March 31, 2013, the Company had $3.6 million in cash compared to $2.8 million in cash at December 31, 2012.
Financial Results for the Year and Fourth Quarter Ended December 31, 2012
During the twelve-month period of 2012, ProSep reported consolidated revenues of $41.6 million, an increase of 23% over $33.7 million reported during the equivalent twelve-month period of 2011. Strong revenue growth at the Asia Pacific Operations (up more than 100%) is responsible for all of this year's revenue increase, while revenues dropped slightly at all other business units.
During the fourth quarter of 2012, ProSep reported consolidated revenues of $9.1 million, up 23% year-over-year. A shift in revenue growth occurred in the fourth quarter of 2012, where an increase of 66% occurred at the US Operations, offsetting declining revenues from the Asia Pacific and Europe & Middle East business units.
Gross Margin
Overall consolidated gross margin for the year ended December 31, 2012 stood at $7.5 million (or 18% or revenues) compared to $8.1 million (or 24% of revenues) for year 2011. In 2012 gross margins were mostly affected by execution issues at the Asia Pacific Operations on two large projects that experienced cost overruns and delays. With efforts dedicated to improving execution at all business centers and increased focus on proprietary technologies (which generate more interesting gross margin levels), management expects this situation to improve.
Fourth quarter consolidated gross margin, as a percentage of revenues, is down to 2.4% compared to 21% in the corresponding quarter of last year. Low margin at the US and Asia Pacific Operations explain most of this variance.
EBITDA and Loss
EBITDA for the year ended December 31, 2012 was negative $7.4 million, an improvement over the negative EBITDA of $7.9 million reported last year. Despite lower gross consolidated margins, higher revenues from the Asia Pacific Operations and close control of expenses throughout the Company contributed to alleviate losses in EBITDA. The Company's objective is to continue controlling its cost structure and accelerate the commercialization of its proprietary technologies to improve overall profitability.
At December 31, 2012, the Company recorded a $12.9 million write-down of goodwill, further to the performance of impairment tests, on goodwill valued at $13.2 million at December 31, 2011. After this write-down and currency fluctuations, there was no goodwill remaining on the Company's financial statements at December 31, 2012. Other intangible assets stood at $3.5 million at December 31, 2012, compared to $4.2 million in December 2011. At December 31, 2012, the Company recorded a $0.2 million write-down on other intangible assets further to the performance of impairment tests.
Excluding goodwill and intangible assets impairment charges of $13.1 million, loss for the year was $8.5 million, an improvement over 2011 loss of $12.5 million which excludes impairment charges of $3.7 million during that period.
Basic and diluted loss per share was determined using the weighted average number of 20,966,502 Common Shares outstanding during the twelve month period of 2012. At December 31, 2012, 20,989,721 Common Shares were issued and outstanding compared to 20,905,221 at the corresponding date of 2011. At December 31, 2012, ProSep held cash of $2.8 million compared with $4.1 million at December 31, 2011.
Covenant Waiver
At March 31, 2013 as well as at December 31, 2012, one of the Company's wholly-owned subsidiaries was in breach of a covenant of its credit facility agreement. A covenant waiver wherein the lender confirmed that the breached covenant is not deemed to constitute an event of default was obtained by the Company's subsidiary as at December 31, 2012, as well as for the most recent breach, at March 31, 2013. The Company also obtained an extension to August 1, 2013 of the obligation for its subsidiary to start a clean down (whereby the facility is to be undrawn for a pre-determined period of time).
Conference Call and Webcast Details
ProSep will host a conference call and webcast on Thursday May 16, 2013 at 8:00 a.m. (EST) to review the financial results and highlights of the first quarter of 2013 and year ended December 31, 2012. To access the conference call by telephone, dial 1-416-981-9000 or 1-800-735-5968. A live audio webcast of the conference call will also be available through ProSep's website under "Calendar of Events" in the "News and Investor Center" and on . For audio replay, dial 1-416-626-4100 or 1-800-558-5253 with the reservation code # 21657889.
Regulatory Filings
ProSep filed its Interim Condensed Consolidated Financial Statements for the three-month period ended March 31, 2013 and 2012 and Annual Audited Consolidated Financial Statements for the years ended December 31, 2012 and 2011 and related Management Discussion and Analysis and Annual Information Form with securities regulatory authorities. The material will be available through SEDAR at and on the Company's website at .
About ProSep
ProSep is a technology-focused process solutions provider to the upstream oil and gas industry. ProSep designs, develops, manufactures and commercializes technologies to separate oil, water and gas generated by oil and gas production. For more information, please visit .
Caution concerning forward-looking statements
This press release may contain forward-looking statements within the meaning of Canadian securities laws. Forward-looking statements can generally be identified by the use of the conditional tense, the words "may", "should", "would", "believe", "plan", "expect", "intend", "anticipate", "estimate", "foresee", "objective" or "continue" or the negative of these terms or variations of them or words and expressions of similar nature. In particular, forward-looking statements regarding ProSep's plans for its business development strategy, anticipated customer orders, sales and revenues, financial and operational projections and anticipated results, anticipated results of field testing with potential customers and expected benefits of ProSep's proprietary technologies; and anticipated impact on ProSep of the factors discussed under the heading "Selected Risks" in the latest management discussion and analysis document ("MD&A"). These forward-looking statements are based on, among other things, management's assumptions, expectations, estimates, objectives, plans and intentions as of the date hereof pertaining to, but not limited to demand for ProSep's solutions, projected revenues and expenses, the economic and industry environments in which the Company operates or which could affect its activities, the Company's ability to attract new customers, projected operating costs and cost of raw materials and energy supply, expected timing and amount of capital expenditures program of ProSep's potential customers, target market acceptance of ProSep's solutions, current and future solutions performance, evolving market conditions for oil & gas producers; and success of commercialization approach and strategic partnership initiatives. Although ProSep believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because ProSep can give no assurance that they will prove to be correct. Because forward-looking statements address future events and conditions, by their very nature they involve numerous inherent risks and uncertainties that contribute to the possibility that the forward-looking statements may prove to be incorrect. ProSep cannot assure investors that any of these forward-looking statements will prove to be accurate. Further, if any of these statements are inaccurate, the inaccuracy may be material.
Actual performance and results could differ materially from those currently anticipated in the forward-looking statements due to a number of factors and risks. Some of the factors that could cause such differences include, but are not limited to uncertainty as to market acceptance of new solutions and possible technological change, competition, economic environment and especially conditions in the oil & gas industry, legislative or regulatory developments, ProSep's ability to penetrate core markets, expand into new markets and manage future growth, the need for additional financing and uncertainties as to access to sufficient capital financing a timely basis and on acceptable terms, uncertainty as to achievement of profitability and ability to meet cash requirements, availability and retention of management and key personnel, the long sales and implementation cycles for ProSep's solutions, reliance on major customers, manufacturing, project execution, product defect and product liability risks, dependence on third party suppliers, exchange rate and currency fluctuations, protection of ProSep's intellectual property rights; and risks related to ProSep's foreign operations and compliance with anti-corruption and anti-bribery laws. Assumptions, expectations and estimates made in the preparation of forward-looking statements and risks that could cause actual results to differ materially from current expectations are further discussed under "Selected Risks" in the latest MD&A. In light of the significant risks and uncertainties in these forward-looking statements, investors should not place undue reliance on or regard these statements as a representation or warranty by the Company or any other person that the Company will achieve its objectives, strategies and plans in any specified time frame, if at all. The forward-looking statements contained or incorporated by reference in this management discussion and analysis relate only to events as of the date on which the statements are made. Except as required under applicable securities legislation, the Company does not undertake to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
Contacts:
ProSep Inc.
Investor Relations and Media:
Danielle Ste-Marie
VP Marketing & Corporate Development
(514) 522-5550 ext. 238
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Datum: 14.05.2013 - 21:00 Uhr
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News-ID 260012
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Oil & Gas
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