Orbit Garant Drilling Inc. reports first quarter 2009 financial results
VAL-D’OR, QC, Nov. 14 /CNW/ – Orbit Garant Drilling Inc. (TSX OGD) (Orbit Garant or the company) today announced its financial results for the first quarter of fiscal 2009, ended September 30, 2008. All dollar amounts are in Canadian currency unless otherwise stated. Percentage calculations are based on numbers in the financial statements and may not correspond to rounded figures presented in this release.
“We are pleased to announce that, in continuing with our solid growth strategy of aligning ourselves with well financed major and intermediate mining companies, we have been awarded two significant contracts this quarter.” said Eric Alexandre, President and Chief Operating Officer.
“Given the current uncertainty and turbulence in the markets, we are particularly enthusiastic to be entering into two important contracts with such established and reputable companies. Our new contracts this quarter with Agnico Eagle, on its Meadowbank project, and Newmont Mining, on its Hope Bay project, are a perfect demonstration of Orbit Garant’s strategy for the growth of the Company.” added Mr. Alexandre
Drilling is scheduled to begin at Meadowbank in the current quarter, and Hope Bay in the third quarter of fiscal 2009.
Orbit Garant completed its Initial Public Offering (IPO) on June 26, 2008, created by the combination of Quebec-based drilling services providers Orbit and Garant on January 31, 2007 and the acquisition of Drift Exploration Drilling Inc. on April 16, 2007. Full Financial Statements and Management’s Discussion and Analysis are available on the Company website at www.orbitgarant.com and at www.sedar.com.
| CND$000 (except per shareor where indicated) | Fiscal 2009 | Fiscal 2008 |
| Quarter 1 | Quarter 1 | |
| Revenue | $23,116 | $17,378 |
| Gross Profit | $7,523 | $6,249 |
| Gross Margin | 32.5% | 36.0% |
| General & Administrative | $1,632 | $1,056 |
| Amortization | $1,876 | $1,640 |
| Interest & Bank Charges | $117 | $474 |
| Ebitda Normalized | $5,976 | $5,268 |
| Net Earnings | $2,649 | $2,164 |
| Net earnings per common share | ||
| – Basic | $0.08 | $0.09 |
| – Diluted | $0.08 | $0.09 |
In the first quarter ended September 30 2008, Orbit Garant generated total revenues of $23.1 million, an increase of 33% from Q1 2008. This total represents $21.7 million in Canadian underground and surface drilling and $1.2 million in International drilling. In the quarter, Soudure Royale, which is a 100% owned manufacturing subsidiary of Orbit Garant, produced eight drills and supplies for Orbit Garant for the Meadowbank and Hope Bay projects, contributing to the total revenue $0.2 million from manufacturing.
The gross margin for the first quarter ended September 30, 2008 was 32.5% compared to 36% for the Q1 period in 2008. The decrease is attributable to poor international weather conditions, as well as the limited revenue and gross margin from the sale of drills to external customers this quarter compared to the same period last year. In the quarter, all eight drills manufactured by Soudure Royal are to be used by Orbit Garant.
Total gross profit in fiscal Q1 2009 was $7.5 million compared to $6.2 million in the comparable period in 2008, representing an increase of 20.4%.
General and administrative expenses (G&A) totaled $1.6 million during the fiscal Q1 period 2009, compared to 1.1 million in fiscal Q1 2008, an increase attributable to public company costs. As a percent of sales, G&A was 7.1% during fiscal Q1 2009 and 6.1% during fiscal Q1 2008.
Consolidated normalized EBITDA in fiscal Q1 2009 was $6.0 million compared to $5.3 million in fiscal Q1 2008, representing an increase of 13.4%.
Net earnings for fiscal Q1 2009 totaled 2.6 million compared to 2.2 million in the comparable period, an increase of 22.3%, or $0.08 per common share in the quarter compared to $0.09 per common share in fiscal Q1 2008.
At September 30 2008, Orbit Garant’s interest expense was 0.1 million for the quarter compared to 0.5 million for the comparable period the prior year. The Company has significantly reduced its debt by the use of the proceeds from the IPO completed in June 2008. The Company further decreased its long-term debt by 0.5 million during the quarter.
Conference Call
A conference call for analysts and interested listeners will be held Tuesday, November 18 at 10:00 a.m. (ET). The call-in numbers for participants are 416-644-3418 and 800-731-5319. A live audio feed of the call will also be available on the Internet at:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2472360.
A replay of the call will be available from 12:00 p.m. (ET) on Tuesday, November 18, 2008 until 11:59 p.m. on Tuesday, November 25, 2008. To access the replay, call 416 640 1917 or 877 289 8525 enter pass code number 21288833, and then press the pound # key. The replay can also be accessed over the Internet at the above address.
About Orbit Garant
Orbit Garant is one of the largest Canadian-based drilling companies, providing both underground and surface drilling services in Canada and internationally, operating with 127 drills and more than 500 employees. Orbit Garant provides services to major, intermediate and junior mining companies, through each stage of mining exploration, development and production.
Forward-looking information
This press release may contain forward-looking statements (within the meaning of applicable securities laws) relating to business of Orbit Garant Drilling Inc. (the “Company”) and the environment in which it operates. Forward-looking statements are identified by words such as “believe”, “anticipate”, “expect”, “intend”, “plan”, “will”, “may” and other similar expressions. These statements are based on the Company’s expectations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. These risks and uncertainties are discussed in the Company’s regulatory filings available at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances.
%SEDAR: 00026932E
For further information:
| Eric Alexandre President and Chief Operating Officer (819) 824-2707 Ext. 233 | Derek Henderson Investor Relations (416) 447-4740 Ext. 232 |