Strad Energy Services Ltd., (“Strad” or the “Company”) is pleased to report record first quarter results. Henry van der Sloot, Chief Executive Officer of Strad, stated “Momentum for Strad continues as the Company capitalizes on organic opportunities across North America. The continuing trend to larger well pads, and higher standards for safety and environmental solutions, has driven demand for Strad products and services to new levels. Both our market and our market share continue to grow. We are pleased with the $32 million of new equipment allocated to strategic areas of focus in the first quarter of the year. Disciplined growth remains our priority.”
Effective January 1, 2011, Strad began reporting its financial results in accordance with International Financial Reporting Standards (“IFRS”). Prior year comparative amounts were changed to reflect results as if Strad had always prepared its financial results using IFRS. Please see additional discussion regarding IFRS later in this news release.
Highlights for the three months ended March 31, 2011, include:
- Record first quarter EBITDA of $8.4 million for 2011, a 30% increase compared to $6.5 million in the first quarter 2010;
- Notwithstanding the seasonal inactivity of the matting operation in Q1, annualized EBITDA return on average total Drilling Services assets for the three months ended March 31, 2011 of 30.0%;
- Capital expenditures of $31.9 million; $24.0 million allocated to the United States. Q1 capital additions are generally expected to be deployed in the field in Q2;
- Successful introduction of new products, including solids control, composite matting and satellite communications equipment, with $6.2 million spent on these initiatives in the quarter. Field deployment is expected to occur in the second quarter.
(1) Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is not a recognized measure under IFRS or previous GAAP; see “Non-GAAP Measures Reconciliation” in this press release.
Andy Pernal, President of Strad emphasized, “The Company is strategically adding new product lines to its fleet of drilling and completions rental equipment to better service our customers in North America. New product lines such as solids control, composite mats, and satellite communications systems help our customers become more efficient and decreases their logistical costs by providing a single source of supply for rental equipment. In addition, Strad is now supplying more rental equipment directly to our customers whereas previously, certain equipment was supplied by third party vendors. This enables the Company to increase its margin without impacting our customers.”