- Strad Changes Financial Reporting Segments to Industrial Matting and Equipment Rentals
CALGARY, Alberta, Oct. 02, 2018 (GLOBE NEWSWIRE) -- Strad Energy Services Ltd. (“Strad” or the “Company”) (TSX:SDY) today announces it will segment its operations into two new divisions in order to provide increased focus on the significant growth opportunity that exists in its Industrial Matting division. As such, beginning in the third quarter of 2018, the Company will begin reporting its financial results in two segments: Industrial Matting and Equipment Rentals.
The Opportunity for Strad
“Matting began as a small niche product in our traditional energy services company more than a decade ago. It has now become the dominant driver of our business, currently representing 48% of revenues and 70% of EBITDA over the past 18 months and close to 100% of our growth capital,” said Andy Pernal, President and Chief Executive Officer of Strad. “This growth, fueled in large part by our own “going beyond” culture, has also benefited from well-established macro trends, such as elevated standards for worker safety, higher priority for environmental stewardship, Indigenous community involvement and the growth in large-scale infrastructure projects across North America. To reflect this positive development in our business, and to clearly message to our customers and other stakeholders our commitment to lead this growth sector, we are undergoing a number of initiatives, including launching a new look and logo for Strad, while maintaining our strong reputation and goodwill.”
Strad estimates the North American industrial matting market has grown approximately five-fold in the last ten years. At its core, industrial matting supports two critical functions for construction-type projects in a cost effective and environmentally-friendly manner; first it provides temporary access to work areas, especially in remote and soft ground environments and secondly it provides durable platforms for staging or worksite areas. At the same time, matting has proven to be indispensable for ground protection, preventing soil or weed contamination in agriculture settings, protecting Indigenous lands, and accommodating enhanced worker safety requirements.
“Our strategic growth focus is underpinned by our considerable momentum in Industrial Matting. For instance, today we are the second largest matting provider in Canada, and are enjoying increasing success in targeted U.S. markets,” continued Andy. “With a fragmented competitive landscape, we are confident in our position to capitalize on this opportunity, leveraging our size, our expertise in the market, a strong balance sheet, and the strength and quality of our team on the ground.”
The Equipment Rentals Division
For more than a decade, our Equipment Rentals division has been recognized as a leader and innovator providing essential well-site equipment to many of North America’s largest oil and gas companies. This client base has been loyal through the recent commodity cycle and remains a key contributor to our growing cash-flow with strengthening commodity prices and a pro-investment political environment in the USA. Equipment Rentals is positioned well for an oil and gas sector recovery in North America. Although this division has limited growth capital allocated in the 2018 budget, Strad currently has access to approximately $40 million of unused credit facilities should the sector experience growth beyond its current capacity.
New Financial Segments
Beginning with its third quarter 2018 results, the Company will report segmented financial information to align with the two newly created divisions, Industrial Matting and Equipment Rentals.
Strad’s new investor presentation and additional financial information highlighting the Company’s 2017 and 2018 results in the new segmented format is available on the Company website at:
Strad specializes in industrial matting and equipment rentals for projects of any size, from a network of branches across Canada and the United States. Strad aims to exceed customer expectations in many industrial sectors, including Oil & Gas, Pipeline, Power Transmission, and Mining.
Strad is headquartered in Calgary, Alberta, Canada. Strad is listed on the Toronto Stock Exchange under the trading symbol “SDY”.
Forward Looking Information and Statements
This news release contains certain forward looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "estimate", "may", "will", "project", "should", "believe", "plan", "intends", "forecast" and similar expressions are intended to identify forward looking information or statements. In particular, but without limiting the foregoing, this news release contains forward looking information and statements pertaining to the following: Strad's plans to report its segmented financial information in a new fashion to align with two newly created divisions, industrial matting and equipment rentals, commencing with the filing of its financial statements and MD&A for the three and nine months ended September 30, 2018; the forecasted growth in the Company's industrial matting division and the Company's ability to capitalize on opportunities within the current marketplace. Forward looking information or statements are based on a number of expectations or assumptions of Strad which have been used to develop such information or statements but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward looking information or statements are reasonable, undue reliance should not be placed on forward looking information or statements because the Company can give no assurance that such expectations or assumptions will prove to be correct. The forward looking information and statements contained in this news release speak only as of the date hereof and Strad does not assume any obligation to publicly update or revise any of the included forward looking information or statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.