Gibson Energy Inc. Reports 2012 Third Quarter Financial Results
All financial figures are in Canadian dollars unless otherwise stated
CALGARY, Nov. 6, 2012 /PRNewswire/ - Gibson Energy Inc. ("Gibson" or the "Company"), TSX: GEI, announced today strong results for the third quarter of 2012 supported by increases in profit across four business segments1.
Adjusted EBITDA2 increased by 11% to $72.1 million for the three months ended September 30, 2012 compared to $64.9 million in the three months ended September 30, 2011. Adjusted EBITDA in the nine months ended September 30, 2012 increased by 26% to $205.9 million compared to $163.9 million in the nine months ended September 30, 2011. Pro Forma Adjusted EBITDA3 for the twelve months ended September 30, 2012 was $274.4 million.
Cash provided by operations for the three and nine months ended September 30, 2012 was $62.9 million and $183.7 million, respectively, compared to $84.3 million and $171.4 million in the three and nine months ended September 30, 2011, respectively.
"Our integrated midstream services model continues to deliver strong earnings across all business segments," said Stewart Hanlon, Gibson's President and Chief Executive Officer. "2012 is shaping up to be a very successful year for Gibson when you combine our strong year-to-date performance, the advancement of organic growth projects and the recently completed OMNI acquisition in the U.S."
For the three and nine months ended September 30, 2012, total segment profit increased by 26% to $84.7 million and 25% to $227.8 million, respectively, compared to the same periods in 2011 driven by significant increases in the Company's Marketing, Propane and NGL Marketing and Distribution, Terminals and Pipelines and Truck Transportation segments.
The majority of Gibson's operations experienced volume increases in the third quarter of 2012 versus the same period in 2011. Higher volumes were achieved at the Hardisty and Edmonton Terminals, at injection stations in the U.S., in Truck Transportation, in retail propane, in roofing flux and tops from the Moose Jaw Refinery; and for crude oil and diluents in the Company's Marketing segment.
Other Highlights for the Three and Nine Months Ended September 30, 2012:
- The Company declared a dividend of $0.25 per common share in each of the three month periods ended March 31, 2012, June 30, 2012 and September 30, 2012 for total dividends declared of $25.2 million in the three months ended September 30, 2012 and $74.8 million in the nine months ended September 30, 2012. For the twelve months ended September 30, 2012, distributable cash flow4 was $154.9 million resulting in a dividend payout ratio of 63%;
Capital expenditures, excluding acquisitions, were $135.4 million in the
nine months ended September 30, 2012, of which $92.3 million related to
internal growth projects. The internal growth project expenditures are
primarily related to the construction of tankage and pipeline
connections at the Company's facilities, the expansion of the custom
treating and terminals business and the growth of the Truck
Transportation and Canwest fleets;
In September 2012, the Company announced that it has received
sufficient, long-term, committed customer support to begin construction
of two 400,000 bbl oil storage tanks for an aggregate addition of
800,000 bbls of storage that will be located immediately adjacent to
the East boundary of Gibson's existing Hardisty Terminal. The two tanks
are expected to form the initial anchor for an expansion of the
facility, expected to be well-connected to third party receipt
pipelines and facilities and expected to have connectivity to all
current export pipelines from Hardisty. Commissioning is expected to
occur in early 2014;
The Company completed the acquisition of Jalbert Enterprises Ltd.,
effective September 1, 2012, for cash consideration of approximately
$2.2 million. The Company also completed the acquisition of Mobile
Propane Services Inc. effective July 24, 2012, for cash consideration
of approximately $5.3 million. These acquisitions expand the Company's
market presence in Saskatchewan, provide synergies with our current
propane business and provide the Company with an expanded client base
within the Propane and NGL Marketing and Distribution segment;
The Company completed the acquisition of Fricken Fracken Water Hauling
Ltd., effective May 1, 2012, for approximately $4.8 million, expanding
the Company's market presence in west central Saskatchewan and
providing synergies with the Company's custom treating and terminals
business by providing water transportation services; and
- Subsequent to quarter end, the following highlights occurred:
On November 6, 2012, the Board of Directors declared a quarterly
dividend of $0.26 per common share, representing a 4% increase from the
prior quarterly dividend and resulting in a new annualized dividend of
$1.04 per common share. The dividend is payable on January 17, 2013 to
shareholders of record at the close of business on December 31, 2012;
On October 31, 2012, the Company acquired of all of the issued and
outstanding common shares of the parent holding company of Omni Energy
Services Corporation ("OMNI") for US$445 million. The purchase price
assumes that, at the completion of the acquisition, OMNI had working
capital of US$43.5 million, no debt and no cash. OMNI is a privately
held provider of environmental and production services to the oil and
gas industry and is based in Carencro, Louisiana. OMNI has a strong
competitive position in most major oil and liquids focused areas in the
United States with a significant focus on environmental and
production-related activities. In connection with the acquisition of
OMNI, the Company issued 18,216,000 subscription receipts at a price of
$22.10 per subscription receipt for gross proceeds of approximately
$402.6 million. The subscription receipts converted into common shares
on October 31, 2012, upon the closing of the OMNI acquisition;
- On October 1, 2012, the Company acquired all of the issued and outstanding common shares of Northern Truck Services 1994 Ltd. and All-Clean Fluids & Filtration Services Ltd. (collectively "Northern Truck") for $18.0 million plus working capital. Northern Truck was a private company which provides fluid hauling, filtration and completion products to drilling and production companies in Northern Alberta and Northeastern British Columbia.
|(1)||Segment profit is defined as revenue minus (i) cost of sales; and (ii) operating costs. It excludes depreciation, amortization, impairment charges, stock based compensation and corporate expenses.|
|(2)||Adjusted EBITDA is defined as consolidated net income (loss) before interest expense, income taxes, depreciation, amortization, other non-cash expenses and charges deducted in determining consolidated net income (loss), including movement in the unrealized gains and losses on the Company's financial instruments, stock based compensation expense, impairment of goodwill and intangible assets, and non-cash inventory write-downs. It also takes into account the impact of foreign exchange movements in the Company's U.S. dollar denominated long-term debt, management fees, debt extinguishment costs and other adjustments that are considered non-recurring in nature.|
|(3)||Pro Forma Adjusted EBITDA differs from Adjusted EBITDA in that it also includes the pro forma effect of acquisitions that took place in the twelve month period as if the acquisitions took place at the beginning of the twelve month period in which such acquisitions occurred.|
|(4)||Distributable cash flow is defined as cash flow generated from operating activities excluding changes in non-cash working capital minus (i) upgrade and replacement capital; (ii) interest paid; and (iii) current income tax.|
Management's Discussion and Analysis and Financial Statements
The Company's Management's Discussion and Analysis and the Condensed Consolidated Financial Statements provide a more detailed explanation of Gibson's operating results for the three and nine months ended September 30, 2012, as compared to the three and nine months ended September 30, 2011. These documents are available at www.gibsons.com and at www.sedar.com.
2012 Third Quarter Results Conference Call
A conference call to discuss Gibson's third quarter results will be held at 7:00 a.m. MT (9:00 a.m. ET) on Wednesday, November 7, 2012 for interested investors, analysts and media representatives.
The conference call dial-in numbers are:
- 866-696-5910 from Canada and the US
- 416-340-2217 from Toronto and International
- Participant Pass Code: 7015666#
Shortly after the call, an audio archive will be posted on the Investor Relations and Media section at http://www.gibsons.com.
The call will also be recorded for playback 60 minutes after the meeting end time, until February 8, 2013, using the following dial in process:
- 905-694-9451 / 800-408-3053
- Pass code: 3806944#
Gibson is one of the largest independent midstream energy companies in Canada, and an integrated service provider to the oil and gas industry in the United States. Gibson is engaged in the movement, storage, blending, processing, marketing and distribution of crude oil, condensate, natural gas liquids, refined products, water and waste. Gibson transports energy products by utilizing its network of terminals and pipelines, storage tanks, and trucks located throughout western Canada and through its significant truck transportation and injection station network in the United States. Gibson also provides water disposal and oilfield waste management services in Canada and the United States and is the second largest retail propane distribution company in Canada.
Certain statements contained in this news release constitute forward-looking information and statements (collectively, "forward-looking statements"). These statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words ''anticipate'', ''plan'', ''contemplate'', ''continue'', ''estimate'', ''expect'', ''intend'', ''propose'', ''might'', ''may'', ''will'', ''shall'', ''project'', ''should'', ''could'', ''would'', ''believe'', ''predict'', ''forecast'', ''pursue'', ''potential'' and ''capable'' and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These statements speak only as of the date of this news release. In addition, this news release may contain forward-looking statements and forward-looking information attributed to third party industry sources. The Company does not undertake any obligations to publicly update or revise any forward looking statements except as required by securities law. Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks and uncertainties including, but not limited to, the risks and uncertainties described in "Forward-Looking Statements" and "Risk Factors" included in the Company's Annual Information Form dated March 6, 2012 as filed on SEDAR and available on the Gibson website at www.gibsons.com.
This news release refers to certain financial measures that are not determined in accordance with International Financial Reporting Standards ("IFRS"). Adjusted EBITDA and Pro Forma Adjusted EBITDA are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. Management considers these to be important supplemental measures of the Company's performance and believes these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in its industries with similar capital structures. See ''Summary of Quarterly Results" in the Company's MD&A for a reconciliation of EBITDA to net income (loss), the IFRS measure most directly comparable to EBITDA, and for a reconciliation of Adjusted EBITDA and Pro Forma Adjusted EBITDA to EBITDA. Distributable cash flow is used to assess the level of cash flow generated from ongoing operations and to evaluate the adequacy of internally generated cash flow to fund dividends. See ''Distributable Cash Flow" in the Company's MD&A for a reconciliation of distributable cash flow to cash flow from operations, the IFRS measure most directly comparable to distributable cash flow. Investors are encouraged to evaluate each adjustment and the reasons the Company considers it appropriate for supplemental analysis. Investors are cautioned, however, that these measures should not be construed as an alternative to net income (loss) determined in accordance with IFRS as an indication of the Company's performance.
Third Quarter- Selected Financial Highlights
|Three months ended Sept 30||Nine months ended Sept 30|
|Terminals and Pipelines ..................................||$21,381||$15,961||$64,404||$49,772|
|Truck Transportation ......................................||23,553||19,545||63,865||48,958|
Propane and NGL Marketing
|Processing and Wellsite Fluids.........................||17,470||22,393||29,936||37,298|
|Total Segment Profit ..........................................||84,724||67,339||227,809||182,003|
|Statement of Cash Flows Data:|
|Cash flows provided by (used in):|
|Operating Activities ............................................||$62,941||$84,302||$183,696||$171,405|
|Investing Activities ..............................................||(67,372)||(42,790)||(145,892)||(41,015)|
|Financing Activities .............................................||(9,053)||(12,149)||(61,684)||(30,918)|
|Other Financial Data:|
|Internal Growth Projects .......................................||$26,241||$39,916||$92,258||$77,334|
|Upgrade and Replacement Capital.........................||21,274||7,367||43,130||28,984|
|Adjusted EBITDA .....................................................||$72,109||$64,852||$205,942||$163,938|
Sept 30, 2012
|Pro Forma Adjusted EBITDA ....................................||$274,442|
SOURCE Gibson Energy Inc.