/R E P E A T -- AKITA Drilling Ltd. Announces Third Quarter Results/
Oct 30, 2009
Earnings for the three months ended
Drilling activity remains at an all time low both for a third quarter and on a year-to-date basis since the inception of the Company. Operating statistics for the first nine months of 2009 and 2008 are as follows:
Operating Operating
Number of Days Days
Drilling Rigs (Third (Year-to-
Gross Net Quarter) Date)
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Canadian Operations 2009 39 36.225 808 2,875
2008 37 34.725 1,689 4,666
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U.S. Operations 2009 2 1.0 185 395
2008 3 1.5 62 122
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Total 2009 41 37.225 993 3,270
2008 40 36.225 1,751 4,788
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The reduction in drilling activity has had a significant impact on the financial performance of the Company. Additionally, the Company's financial results have been adversely affected by foreign exchange losses and a significant reduction in interest income due to low interest rates. Offsetting these factors, the Company recorded a one-time reduction of
The modest pace of improvement from the second quarter to the third quarter is expected to continue in the short-term. The price of natural gas improved compared to earlier in the year, although not to levels expected to stimulate a significant increase in demand for drilling services. Management expects the short-term outlook to remain difficult until underlying fundamentals improve.
It is with a great deal of sadness that we advise of the recent death of
Selected financial information for the Company is as follows:
Consolidated Balance Sheets
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Unaudited September 30 December 31
($000's) 2009 2008 2008
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ASSETS
Current assets
Cash and cash equivalents $ 56,547 $ 46,316 $ 42,168
Accounts receivable 19,351 35,808 41,534
Income taxes recoverable 1,219 - -
Other 1,126 1,498 1,123
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78,243 83,622 84,825
Restricted cash 5,000 5,000 5,000
Capital assets 150,401 147,642 153,044
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$ 233,644 $ 236,264 $ 242,869
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LIABILITIES
Current liabilities
Accounts payable and accrued
liabilities $ 9,082 $ 12,941 $ 20,061
Dividends payable 1,276 1,278 1,276
Income taxes payable - 2,290 399
Deferred revenue 1,148 1,888 -
Current portion of pension liability 157 - -
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11,663 18,397 21,736
Future income taxes 20,177 16,199 18,818
Pension liability 2,339 3,805 3,854
CLASS A AND CLASS B SHAREHOLDERS'
EQUITY
Class A and Class B shares 23,359 23,334 23,312
Contributed surplus 2,271 2,271 2,271
Accumulated other comprehensive income (430) - -
Retained earnings 174,265 172,258 172,878
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199,465 197,863 198,461
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$ 233,644 $ 236,264 $ 242,869
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Consolidated Statements of Earnings
and Retained Earnings
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Unaudited Three Months Nine Months
($000's) Ended Ended
September 30 September 30
2009 2008 2009 2008
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REVENUE $ 20,871 $ 33,747 $ 80,448 $ 101,407
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COSTS AND EXPENSES
Operating and maintenance 14,852 20,970 50,951 61,688
Depreciation 3,586 3,935 12,833 12,562
Selling and administrative 1,311 4,079 9,368 13,026
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19,749 28,984 73,152 87,276
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Revenue less costs and
expenses 1,122 4,763 7,296 14,131
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OTHER INCOME (EXPENSE)
Interest income 115 479 403 1,456
Gain on sale of joint
venture interests in
rigs and other assets - 32 79 696
Gain (loss) on foreign
currency translation (136) 52 (231) 94
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(21) 563 251 2,246
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EARNINGS BEFORE INCOME
TAXES 1,101 5,326 7,547 16,377
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INCOME TAXES
Current 44 1,612 710 4,268
Future 305 33 1,622 1,144
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349 1,645 2,332 5,412
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EARNINGS FROM CONTINUING
OPERATIONS 752 3,681 5,215 10,965
Gain on disposal from
discontinued operations,
net of tax - - - 1,941
Discontinued operations,
net of tax - - - (80)
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NET EARNINGS 752 3,681 5,215 12,826
Retained earnings, beginning
of period 174,789 170,146 172,878 163,559
Dividends declared (1,276) (1,277) (3,828) (3,835)
Adjustment on repurchase and
cancellation of share
capital - (292) - (292)
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RETAINED EARNINGS, END OF
PERIOD $ 174,265 $ 172,258 $ 174,265 $ 172,258
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Earnings per Class A and
Class B share from
continuing operations
Basic $ 0.04 $ 0.20 $ 0.29 $ 0.60
Diluted $ 0.04 $ 0.20 $ 0.29 $ 0.60
Earnings per Class A and
Class B share
Basic $ 0.04 $ 0.20 $ 0.29 $ 0.70
Diluted $ 0.04 $ 0.20 $ 0.29 $ 0.70
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Consolidated Statements of Cash Flows
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Unaudited Three Months Nine Months
($000's) Ended Ended
September 30 September 30
2009 2008 2009 2008
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OPERATING ACTIVITIES
Earnings from continuing
operations $ 752 $ 3,681 $ 5,215 $ 10,965
Non-cash items included in
earnings from continuing
operations
Depreciation 3,586 3,935 12,833 12,562
Future income taxes 225 33 1,359 1,144
Expense (recovery) for
defined benefit pension
plan (1,394) 65 (1,358) 196
Stock options charged to
expense - 41 - 1,161
Gain on sale of joint
venture interests in rigs
and other assets - (32) (79) (696)
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Funds flow from continuing
operations 3,169 7,723 17,970 25,332
Cash provided from (to)
discontinued operations - - - 24
Change in non-cash working
capital 1,755 (14,065) 10,731 (13,208)
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4,924 (6,342) 28,701 12,148
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INVESTING ACTIVITIES
Capital expenditures (1,955) (5,779) (10,301) (9,861)
Proceeds on sale of joint
venture interests in rigs
and other assets - 119 190 1,259
Proceeds on sale of
discontinued assets - - - 3,510
Change in non-cash working
capital - 211 - 243
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(1,955) (5,449) (10,111) (4,849)
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FINANCING ACTIVITIES
Dividends paid (1,276) (1,277) (3,828) (3,835)
Repurchase of share
capital - (327) - (327)
Proceeds received on
exercise of stock options - - 47 -
Change in non-cash working
capital - 13 - 13
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(1,276) (1,591) (3,781) (4,149)
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FOREIGN CURRENCY
TRANSLATION (178) - (430) -
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INCREASE (DECREASE) IN
CASH 1,515 (13,382) 14,379 3,150
Cash position, beginning
of period 55,032 59,698 42,168 43,166
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CASH POSITION, END OF
PERIOD $ 56,547 $ 46,316 $ 56,547 $ 46,316
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Interest paid during the
period $ 9 $ 8 $ 24 $ 15
Income taxes paid during
the period $ 439 $ 1,199 $ 4,126 $ 3,687
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Consolidated Statements of Comprehensive Income
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Unaudited Three Months Nine Months
($000's) Ended Ended
September 30 September 30
2009 2008 2009 2008
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NET EARNINGS $ 752 $ 3,681 $ 5,215 $ 12,826
OTHER COMPREHENSIVE INCOME
Foreign currency
translation adjustment (178) - (430) -
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COMPREHENSIVE INCOME $ 574 $ 3,681 $ 4,785 $ 12,826
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For further information: Mr. Murray Roth, Vice President, Finance and Chief Financial Officer, (403) 292-7950