Mullen Group Ltd. Reports Record Third Quarter Financial Results
OKOTOKS, AB, Oct. 23, 2013
OKOTOKS, AB, Oct. 23, 2013 /PRNewswire/ - (TSX:MTL) Mullen Group Ltd.
("Mullen Group" and/or the "Corporation") is pleased to report its financial
and operating results for the period ended September 30, 2013, with
comparisons to the same period last year.
For the three month period ended September 30, 2013, Mullen Group generated
consolidated revenue of $374.0 million, operating income of $85.8 million and
earnings per share of $0.56, which are all record results when compared to any
previous third quarter. Mullen Group generated net cash from operating
activities of $54.3 million, which was used, among other things, to acquire
net property, plant and equipment of $30.0 million, pay dividends of $27.1
million and pay interest obligations of $3.5 million.
Mullen Group's consolidated revenue of $374.0 million was an increase of $38.6
million, or 11.5 percent, from the $335.4 million generated in 2012. The
majority of this increase in revenue was directly attributable to the Oilfield
Services segment that contributed revenue of $229.0 million, an increase of
$26.1 million from 2012, due to an increase in demand for services tied to the
build out of new pipeline capacity, other infrastructure related projects in
western Canada and the hauling of heavy crude oil in the Lloydminster region
as well as a moderate increase in services that support drilling activity in
the western Canada sedimentary basin. The Trucking/Logistics segment
contributed revenue of $145.6 million, which was an increase of $11.9 million
over the prior year period, which was primarily due to the incremental revenue
generated from the acquisition of Jay's Moving & Storage Ltd. ("Jay's").
Mullen Group's operating income increased by $15.4 million, or 21.9 percent,
to $85.8 million from the $70.4 million generated in 2012. Operating income
in the Oilfield Services segment accounted for $13.8 million of the increase,
the Trucking/Logistics segment accounted for $0.5 million and Corporate costs
declined by $1.1 million.
"Overall, we are very pleased with Mullen Group's performance for the three
month period ended September 30. As expected, Premay Pipeline Hauling L.P.
reported strong results for the quarter as did Canadian Dewatering L.P.
("Canadian Dewatering"), which is once again fully focused on its core
business of large industrial pump rentals and developing water management
solutions for the energy, industrial and municipal sectors. In addition, our
businesses that support drilling activity in northwest Alberta and northeast
British Columbia reported slight increases in revenue as activity levels
started to show signs of marginal improvement near the last half of the
quarter. Heavy Crude Hauling L.P. also reported increased revenue from the
major fluid hauling contract awarded earlier this year. The increase in
revenue within our Trucking/Logistics segment was primarily attributable to
the acquisition of Jay's earlier this year, while the combined effect of all
the other operating entities remained relatively flat, which is consistent
with a slow growth economy," stated Mr. Stephen H. Lockwood, President and
Co-Chief Executive Officer.
In the third quarter of 2013, Mullen Group generated net income of $51.2
million or $0.56 per share, an increase of $8.3 million, or 19.3 percent,
compared to $42.9 million or $0.52 per share in 2012. The $8.3 million
increase in net income was mainly attributable to Mullen Group's strong
operating performance, which contributed $15.4 million of additional operating
income. This increase was partially offset by a $3.1 million negative
variance in unrealized foreign exchange and a $1.1 million negative variance
in the fair value of investments. Adjusting Mullen Group's net income and
earnings per share to eliminate the impact of unrealized foreign exchange and
change in the fair value of investments results in adjusted net income of
$43.1 million and adjusted earnings per share of $0.47 for 2013 as compared to
$30.8 million and $0.37 per share in 2012, respectively. These adjustments
more clearly reflect earnings from an operating perspective.
Mullen Group's consolidated revenue in the first nine months of 2013 decreased
by $11.7 million, or 1.1 percent, to $1,069.8 million as compared to $1,081.5
million in 2012. The majority of this decrease in revenue, specifically $29.8
million, was directly attributable to the reduction in revenue from Canadian
Dewatering, as a result of its completion of the non-recurring Thin Fine
Tailings ("TFT") barge system project. On a comparative basis, after
adjusting for the non-recurring TFT barge system project revenue, Mullen
Group's revenue from its core business increased $18.1 million, or 1.7
percent. Operating income increased to $229.6 million, up 3.1 percent from
$222.6 million in 2012. Net income increased to $123.0 million, up 12.7
percent from $109.1 million in 2012.
"At the beginning of 2013 it was our view that the last half of 2013 would be
a little better than the first half of 2013 owing largely to what we saw as
improving industry fundamentals within the oil and natural gas sector as the
year progressed. Despite a slow growth economy, it would appear that our
projections are being validated as Mullen Group has been the benefactor of the
build out of Canada's transmission pipeline systems; the continued development
of Canada's oil sands and heavy oil resources; and the continued deployment of
capital by our customers to the Deep Basin, Montney and Duvernay resource
plays," stated Mr. Murray K. Mullen, Chairman and Chief Executive Officer.
"Moreover, Mullen Group's record operating results in the third quarter speak
to the continued execution of our strategy by operating a diverse group of
decentralized, self-managed business units; the continuous pursuit of
operational excellence; and a disciplined approach to the deployment of
capital. Specifically, over the past two years we have deployed roughly
$200.0 million of capital to ensure our existing operating businesses have the
best equipment available to operate in this very competitive environment and
it would seem that our strategy is paying off," added Mr. Mullen.
A summary of Mullen Group's results for the three and nine month periods ended
September 30, 2013,and 2012, along with revenue and operating results by
segment are as follows:
SUMMARY Three month periods ended Nine month periods
(unaudited) September 30 ended September 30
($ millions, except
per share amounts) 2013 2012 Change 2013 2012 Change
$ $ % $ $ %
Revenue 374.0 335.4 11.5 1,069.8 1,081.5 (1.1)
Operating 85.8 70.4 21.9 229.6 222.6 3.1
Unrealized foreign (5.1) (8.2) (37.8) 8.3 (7.9) (205.1)
Decrease (increase) (4.3) (5.4) (20.4) (25.1) 0.7 3,685.7
in fair value of
Net Income 51.2 42.9 19.3 123.0 109.1 12.7
Net Income - 43.1 30.8 39.9 109.5 103.3 6.0
Earnings per 0.56 0.52 7.7 1.37 1.34 2.2
Earnings per share 0.47 0.37 27.0 1.22 1.27 (3.9)
Net cash from 54.3 74.5 (27.1) 146.8 212.2 (30.8)
Net cash from 0.60 0.90 (33.3) 1.64 2.60 (36.9)
Cash dividends 0.30 0.25 20.0 0.90 0.75 20.0
declared per Common
(1)Operating income is defined as net income before depreciation on property,
plant and equipment, amortization on intangible assets,
finance costs, unrealized foreign exchange gains and losses, other (income)
expense and income taxes.
(2)Net income - adjusted and earnings per share - adjusted are calculated by
adjusting net income and basic earnings per share by the
amount of any unrealized foreign exchange gains and losses and the change in
fair value of investments.
(3)Earnings per share and net cash from operating activities per share are
calculated based on the weighted average number of
Common Shares outstanding for the period.
Operating income, net income - adjusted and earnings per share - adjusted are
not recognized terms under IFRS and do not have
standardized meanings prescribed by IFRS. Management believes these measures
are useful supplemental measures. Investors should
be cautioned that these indicators should not replace net income and earnings
per share as an indicator of performance.
SEGMENTED RESULTS Three month periods ended Nine month periods ended
(unaudited) September 30 September 30
($ millions) 2013 2012 Change 2013 2012 Change
$ $ % $ $ %
Oilfield Services 229.0 202.9 12.9 660.2 687.5 (4.0)
Trucking/Logistics 145.6 133.7 8.9 412.0 398.0 3.5
Corporate 0.3 0.3 - 0.6 0.8 -
Oilfield Services (0.2) (0.6) - (0.9) (1.5) -
Trucking/Logistics (0.7) (0.9) - (2.1) (3.3) -
Total 374.0 335.4 11.5 1,069.8 1,081.5 (1.1)
Oilfield Services 60.2 46.4 29.7 161.8 154.2 4.9
Trucking/Logistics 26.7 26.2 1.9 70.9 72.1 (1.7)
Corporate (1.1) (2.2) - (3.1) (3.7) -
Total 85.8 70.4 21.9 229.6 222.6 3.1
This news release may contain forward-looking statements that are subject to
risk factors associated with the oil and natural gas business and the overall
economy. Mullen Group believes that the expectations reflected in this news
release are reasonable, but results may be affected by a variety of
variables. Mullen Group relies on litigation protection for "forward-looking"
Mullen Group is a company that owns a network of independently operated
businesses. Today the Mullen Group is recognized as the largest provider of
specialized transportation and related services to the oil and natural gas
industry in western Canada and as one of the leading suppliers of trucking and
logistics services in Canada - two sectors of the economy in which Mullen
Group has strong business relationships and industry leadership. Mullen Group
provides management and financial expertise, technology and systems support to
its independent businesses.
Mullen Group is a publicly traded corporation listed on the Toronto Stock
Exchange under the symbol "MTL". Additional information is available on our
website at www.mullen-group.com or on SEDAR at www.sedar.com.
SOURCE Mullen Group Ltd.
Mr. Murray K. Mullen - Chairman of the Board and Chief Executive Officer
Mr. Stephen H. Lockwood - Co-Chief Executive Officer and President
Mr. P. Stephen Clark - Chief Financial Officer
121A - 31 Southridge Drive
Okotoks, Alberta, Canada T1S 2N3
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