Pason Reports Fourth Quarter 2023 Results and Declares Increased Quarterly Dividend
Financial Highlights
|
Three Months Ended |
Twelve Months Ended |
||||
|
2023 |
2022 |
Change |
2023 |
2022 |
Change |
(CDN 000s, except per share data) |
($) |
($) |
( %) |
($) |
($) |
( %) |
North American Revenue |
70,507 |
77,687 |
(9) |
289,763 |
274,569 |
6 |
International Revenue |
17,941 |
14,391 |
25 |
63,824 |
53,222 |
20 |
Solar and Energy Storage Revenue |
4,847 |
2,342 |
107 |
15,722 |
7,207 |
118 |
Total Revenue |
93,295 |
94,420 |
(1) |
369,309 |
334,998 |
10 |
EBITDA (1) |
22,169 |
53,248 |
(58) |
154,713 |
170,266 |
(9) |
Adjusted EBITDA (1) |
38,888 |
48,944 |
(21) |
171,466 |
159,510 |
7 |
As a % of revenue |
41.7 |
51.8 |
(1,010) bps |
46.4 |
47.6 |
(120) bps |
Funds flow from operations |
37,455 |
45,971 |
(19) |
154,472 |
134,885 |
15 |
Per share – basic |
0.47 |
0.56 |
(17) |
1.92 |
1.65 |
17 |
Per share – diluted |
0.47 |
0.56 |
(17) |
1.92 |
1.63 |
18 |
Cash from operating activities |
27,412 |
19,942 |
37 |
135,033 |
104,414 |
29 |
Net capital expenditures (2) |
8,095 |
16,233 |
(50) |
38,002 |
33,941 |
12 |
Free cash flow (1) |
19,317 |
3,709 |
421 |
97,031 |
70,473 |
38 |
Cash dividends declared (per share) |
0.12 |
0.12 |
— |
0.48 |
0.36 |
33 |
Net income |
8,012 |
35,994 |
(78) |
95,827 |
105,726 |
(9) |
Net income attributable to |
8,495 |
36,257 |
(77) |
97,539 |
107,616 |
(9) |
Per share – basic |
0.11 |
0.44 |
(75) |
1.21 |
1.31 |
(8) |
Per share – diluted |
0.11 |
0.44 |
(75) |
1.21 |
1.30 |
(7) |
(1) |
Non-GAAP financial measures are defined under Non-GAAP Financial Measures section in this Press Release. |
(2) |
Includes additions to property, plant, and equipment and development costs, net of proceeds on disposal from |
As at |
|
44926 |
Change |
(CDN 000s) |
($) |
($) |
( %) |
Cash and cash equivalents |
171,773 |
132,057 |
30 |
Short-term investments |
— |
40,377 |
nmf |
Total Cash (3) |
171,773 |
172,434 |
nmf |
Working capital |
212,561 |
213,899 |
(1) |
Total interest bearing debt |
— |
— |
— |
Shares outstanding end of period (#) |
79,685,025 |
81,526,954 |
(2) |
(3) Total Cash is defined as total cash and cash equivalents and short-term investments from |
For the twelve months ended
The North American business unit generated
The International business unit generated
Revenue generated by the Solar and Energy Storage business unit was
Sequentially, Q4 2023 consolidated revenue of
President's Message
"
"
"Adjusted EBITDA of
"Consolidated revenue in the fourth quarter of
"Our approach to capital allocation remains focused on returning meaningful capital to shareholders, while pursuing attractive opportunities to strengthen our business through capital expenditures in oil and gas drilling and completions, and investing in the continued growth of Energy Toolbase. In 2023, we returned
"At
"While we expect to benefit from gradually increasing rig counts later in 2024 and beyond, we expect that in the short-term, drilling activity will remain near current levels. The US land rig count, as reported by
"
"We have demonstrated our ability to outpace underlying industry activity in our drilling-related business through increased Revenue per Industry Day in a flat or declining rig count environment. As customers continue to utilize increasing amounts of data to support their automation and analytics efforts, our position as the leading provider of high quality data will provide further opportunities for product adoption and new data delivery products. We have experienced a very positive market response as we have begun rolling out an innovative new drilling mud analyzer to provide continuous, real-time readings of critical drilling mud parameters."
"The acquisition of the remainder of IWS, which closed at the start of this year, was the largest acquisition in
"Our efforts to provide both automation and data aggregation technologies for the completions space are supported by a best-in-class field service and support organization. We will make the necessary operational, working capital and capital expenditure investments required to support IWS 's high growth rate. Over time, as IWS achieves greater scale, we anticipate that margins and returns on capital could approach similar levels to those of our drilling-related business."
"Energy Toolbase stands to benefit from growing demand for energy storage to support renewable energy projects. The strong revenue growth ETB posted in 2023 stemmed from focusing our efforts on growing subscription revenues from our economic modeling software tool, and executing on a growing pipeline of control system sales opportunities. We are expanding the functionality of our economic modeling tool to address the unique requirements of additional markets, and our pipeline of control systems opportunities has seen sizeable growth as regulatory changes provide additional incentives for solar project developers to incorporate energy storage in their proposals."
"With our increasing exposure to end markets not directly tied to drilling activity, we are more resilient to slowdowns in industry activity while remaining well positioned for much higher levels of growth as drilling and completions activity begins to increase" concluded
Quarterly Dividend
Fourth Quarter Conference Call
An archived audio webcast of the conference call will also be available on
Non-GAAP Financial Measures
A non-GAAP financial measure has the definition set out in National Instrument 52-112 "Non-GAAP and Other Financial Measures Disclosure".
The following non-GAAP measures may not be comparable to measures used by other companies. Management believes these non-GAAP measures provide readers with additional information regarding the Company's operating performance, and ability to generate funds to finance its operations, fund its research and development and capital expenditure program, and return capital to shareholders through dividends or share repurchases.
EBITDA and Adjusted EBITDA
EBITDA is defined as net income before interest income and expense, income taxes, stock-based compensation expense, and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA, adjusted for foreign exchange, impairment of property, plant, and equipment, restructuring costs, net monetary adjustments, government wage assistance, revaluation of put obligation, and other items, which the Company does not consider to be in the normal course of continuing operations.
Management believes that EBITDA and Adjusted EBITDA are useful supplemental measures as they provide an indication of the results generated by the Company's principal business activities prior to the consideration of how these results are taxed in multiple jurisdictions, how the results are impacted by foreign exchange or how the results are impacted by the Company's accounting policies for equity-based compensation plans.
Reconcile Net Income to EBITDA
Three Months Ended |
|
|
|
|
|
|
|
|
(000s) |
($) |
($) |
($) |
($) |
($) |
($) |
($) |
($) |
Net income |
18,001 |
17,992 |
33,739 |
35,994 |
35,454 |
24,962 |
27,399 |
8,012 |
Add: |
|
|
|
|
|
|
|
|
Income taxes |
5,329 |
7,189 |
11,482 |
9,405 |
12,374 |
7,906 |
7,356 |
6,710 |
Depreciation and amortization |
6,314 |
4,696 |
4,433 |
5,399 |
6,616 |
5,815 |
6,988 |
7,797 |
Stock-based compensation |
5,555 |
2,514 |
2,032 |
5,129 |
(82) |
1,986 |
5,082 |
4,732 |
Net interest (income) expense |
(513) |
(718) |
(1,027) |
(2,679) |
(2,607) |
(2,847) |
(3,858) |
(5,082) |
EBITDA |
34,686 |
31,673 |
50,659 |
53,248 |
51,755 |
37,822 |
42,967 |
22,169 |
Reconcile EBITDA to Adjusted EBITDA
Three Months Ended |
|
|
|
|
|
|
|
|
(000s) |
($) |
($) |
($) |
($) |
($) |
($) |
($) |
($) |
EBITDA |
34,686 |
31,673 |
50,659 |
53,248 |
51,755 |
37,822 |
42,967 |
22,169 |
Add: |
|
|
|
|
|
|
|
|
Foreign exchange loss (gain) |
403 |
(1,054) |
(3,332) |
1,959 |
233 |
1,597 |
681 |
14,247 |
Put option revaluation |
— |
— |
— |
(5,815) |
— |
— |
— |
(149) |
Net monetary (gain) loss |
(202) |
268 |
(1,380) |
(536) |
(159) |
(1,196) |
(1,477) |
— |
Other |
(1,514) |
75 |
284 |
88 |
581 |
(336) |
110 |
2,621 |
Adjusted EBITDA |
33,373 |
30,962 |
46,231 |
48,944 |
52,410 |
37,887 |
42,281 |
38,888 |
|
|
|
|
|
|
|
|
|
Free cash flow
Free cash flow is defined as cash from operating activities plus proceeds on disposal of property, plant, and equipment, less capital expenditures (including changes to non-cash working capital associated with capital expenditures), and deferred development costs. This metric provides a key measure on the Company's ability to generate cash from its principal business activities after funding capital expenditure programs, and provides an indication of the amount of cash available to finance, among other items, the Company's dividend and other investment opportunities.
Reconcile cash from operating activities to free cash flow
Three Months Ended |
|
|
|
|
|
|
|
|
(000s) |
($) |
($) |
($) |
($) |
($) |
($) |
($) |
($) |
Cash from operating activities |
28,050 |
25,679 |
30,743 |
19,942 |
46,265 |
29,658 |
31,698 |
27,412 |
Less: |
|
|
|
|
|
|
|
|
Net additions to property, plant and equipment |
(4,334) |
(6,412) |
(6,590) |
(16,112) |
(11,404) |
(11,303) |
(6,474) |
(7,720) |
Deferred development costs |
(134) |
(132) |
(106) |
(121) |
(151) |
(367) |
(208) |
(375) |
Free cash flow |
23,582 |
19,135 |
24,047 |
3,709 |
34,710 |
17,988 |
25,016 |
19,317 |
Forward Looking Information
Certain statements contained herein constitute "forward-looking statements" and/or "forward-looking information" under applicable securities laws (collectively referred to as "forward-looking statements"). Forward‐looking statements can generally be identified by the words "anticipate", "expect", "believe", "may", "could", "should", "will", "estimate", "project", "intend", "plan", "outlook", "forecast" or expressions of a similar nature suggesting a future outcome or outlook.
Without limiting the foregoing, this document includes, but is not limited to, the following forward‐looking statements: the Company's growth strategy and related schedules; divergence in activity levels between the geographic regions in which we operate; demand fluctuations for our products and services; the Company's ability to increase or maintain market share; projected future value, forecast operating and financial results; planned capital expenditures; expected product performance and adoption, including the timing, growth and profitability thereof; potential dividends and dividend growth strategy; future use and development of technology; our financial ability to meet long-term commitments not included in liabilities; the collectability of accounts receivable; the application of critical accounting estimates and judgements; treatment under governmental regulatory and taxation regimes; and projected increasing shareholder value.
These forward-looking statements reflect the current views of
Although we believe that these forward-looking statements are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to: the state of the economy; volatility in industry activity levels and resulting customer expenditures on exploration and production activities; customer demand for existing and new products; the industry shift towards more efficient drilling and completions activity and technology to assist in that efficiency; the impact of competition; the loss of key customers; the loss of key personnel; cybersecurity risks; reliance on proprietary technology and ability to protect the Company's proprietary technologies; changes to government regulations (including those related to safety, environmental, or taxation); the impact of extreme weather events and seasonality on our suppliers and on customer operations; and war, terrorism, pandemics, social or political unrest that disrupts global markets.
These risks, uncertainties and assumptions include but are not limited to those discussed in
Forward-looking statements contained in this document are expressly qualified by this cautionary statement. Except to the extent required by applicable law,
Additional information on risks and uncertainties and other factors that could affect
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