Winalta Announces Results for Second Quarter Ending June 30, 2012

    




 CALGARY, Aug. 22, 2012 /CNW/ - Winalta Inc.  ("Winalta" or  the "Company") announces results for the 3 months ending June 30, 2012  with revenue of $2.0 million and negative EBITDA of $151 thousand.   Revenue and EBITDA have decreased from the comparable 3 month period in  2011 by $600 thousand and $374 thousand, respectively. Seasonal  slowdown in drilling activity was compounded as the normal late second  quarter recovery in rig activity that follows spring break-up did not  occur due to very wet conditions in June, which negatively impacted  rental utilization. 

 The Company realized 53% utilization across its entire fleet of  equipment for the 6 months ending June 30, 2012, resulting in positive  consolidated EBITDA of $4.8 million as compared to $4.0 million for the  6 months ending June 30, 2011. Oilfield Rentals net income of $1.7  million or $0.04 per share compared favourably to net income of $13  thousand or $0.00 per share for the 6 months ended June 30, 2011. 

 During the first 6 months of 2012, Winalta continued to increase its  asset base, building $2.4 million in Wellsites and Dedicated Geo Lab  units to maintain its premier rental fleet. The Company will continue  to monitor both its fleet utilization and its capital expenditure  program for the remainder of 2012. 

  





                                                   

                              Three Months Ended      Six Months Ended

                           June 30, June 30, 2011 June 30, June 30, 2011
                             2012                   2012

    Revenue                   1,990         2,578   10,976         9,788

    Net Earnings            (1,654)       (1,553)    1,672            13

    Earnings per share and   (0.04)        (0.04)     0.04          0.00
    diluted earnings per
    share

    EBITDA                    (151)           223    4,750         3,951

    EBITDAper share          (0.00)          0.01     0.12          0.10

    Total assets             40,296        35,522   40,296        35,522

    Total liabilities        17,091        20,562   17,091        20,562

    Dividends Paid              801             -      801             -






  

 Revenue Winalta revenue decreased by $600 thousand, a decrease of 23% for the 3  months ended June 30, 2012 (the "Period") compared to the three months  ended June 30, 2011 (the "Comparative Period"). This 23% decrease in  revenue year over year is attributable to decreases in utilization and  third party revenue. 

  





     

    Revenue Drivers Q2 2012 versus Q2 2011                             

                                           % Increase Q2 2012 Q2 2011  

     

    Fleet size (# of units)                12%        304     272      

    Utilization (during quarter)           (40%)      21%     35%      






  

 Fleet Expansion Over the past 12 months, the Company has added 21 Wellsite units and 11  Dedicated Geo-Labs. The Company continues to expand its fleet.  For the  current Period, the fleet increased by five Wellsite units and two  Dedicated Geo-Lab units. 

  





     

    Fleet Growth Q2 2012 versus Q2 2011                             

                                        % Increase Q2 2012 Q2 2011  

     

    Wellsites                           10%        225     204      

    Drill Camps (5 and 6 units)         0%         11      11       

    Dedicated Geo Labs                  183%       17      6        






  

 Utilization Utilization for the Period was down across Wellsites, Drill Camps and  Dedicated Geo Lab units as continued wet weather negatively impacted  second quarter utilization. 

 Utilization for the whole fleet for the six months ending June 30, 2012  was 53% as compared to the 62% for the six months ending June 30,  2011.  The Company continues to maintain the daily charge out rate on  its units. The continued wet weather is expected to negatively impact  the third quarter utilization as demand has remained below  expectations. 

  





     

    Utilization Q2 2012 versus Q2 2011                             

                                       % Increase Q2 2012 Q2 2011  

     

    Wellsites                          (36%)      21%     33%      

    Drill Camps (5 and 6 units)        (30%)      16%     23%      

    Dedicated Geo Labs                 (41%)      30%     51%      






  

 General and Administrative For the Period, general and administrative expenses were $1,073  thousand.   The selling, general and administration expense were $1,273  thousand, for the Comparative Period. The 16% reduction in general and  administrative expenses was achieved by reductions in salaries and  benefits, stock based compensation, travel, meals, entertainment and  professional fees. 

 Depreciation and Amortization Depreciation and amortization was $1,247 thousand for the Period as  compared to $1,178 thousand for the Comparative Period.  The increase  in depreciation and amortization expense reflects the acquisition of  $4.6 million of equipment in the trailing 12 months. 

 Interest Expense 

 Interest expense for the Period was $256 thousand as compared to $598  thousand for the Comparable Period.  The decrease in interest expense  in the Period is due to a deferred financing fee of $250 thousand in  the Comparative Period that was expensed as the Company renegotiated  its financing facility to more favorable terms. 

 Outlook The second quarter of 2012 resulted in some challenges for the Company  due to adverse weather conditions and volatile market conditions  relating to gas and oil price fluctuations which impact drilling  activities.  Challenging weather conditions, volatile market  conditions, infrastructure and bottle-neck constraints continue to be  monitored by management as these factors could impact quarterly results  as changing conditions directly impact drilling activities and Company  asset utilizations.  The Company continues to be optimistic in regards  to the balance of 2012 and into 2013 for the winter drilling season.   This combined with the continued Western Canadian economic activity, in  both oil and gas exploration, should continue to provide opportunities  for the Company.  The Company believes the strong economy will continue  for the foreseeable future, as further supported by CAODC (Canadian  Association of Oilwell Drilling Contractors) forecast for the balance  of 2012, which should translate to improved utilization rates for  Winalta's equipment.   The additions to the fleet will allow the  Company to continue to support its customer base in meeting their needs  as well as expanding to new customers. 

 Winalta Inc., operating under the trade name, Winalta Oilfield Rentals,  is an oilfield service provider that specializes in portable industrial  rental accommodations, remote offices and Dedicated Geo Labs; servicing  the Western Canadian oil and gas Industry. 

 Neither the TSX Venture Exchange nor its Regulation Services Provider  (as that term is defined in the policies of the TSX Venture Exchange)  accepts responsibility for the adequacy or accuracy of this release. 

 Forward-looking information Certain information set forth in this press release, including  management's assessment of the potential for increased cash flows,  continued growth of the Company's rental fleet, demand for the  Company's rental units and the Company's expectation regarding the  status of the economy and its impact on the Company, may constitute  forward-looking statements. By their nature, forward-looking statements  involve material assumptions and are subject to numerous risks and  uncertainties, including with respect to market and economic conditions  and their impact on the Company's business, some of which, are beyond  our control. Readers are cautioned not to place undue reliance on the  forward-looking statements as the assumptions used in the preparation  of such information, although considered reasonable at the time of  preparation, may prove to be imprecise and actual results, performance  or outcomes could materially differ from those expressed or implied in  such forward-looking statements and accordingly, no assurance can be  given that any of the events anticipated by forward looking statements  will transpire or occur, or if any of them do so, what benefit Winalta  will derive therefrom. The Company does not assume the obligation to  revise or update this forward-looking information after the date of  this release or to revise such information to reflect the occurrence of  future unanticipated events, except as may be required under applicable  securities laws. 

   

Winalta Inc.


CONTACT:  David Hopley, CFOPhone: [phone]Austin Fraser, Senior Vice PresidentPhone: (403) [e-mail] 


    

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