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Last updated on April 20, 2014 at 17:20 EDT

/C O R R E C T I O N – Mullen Group Ltd./

April 24, 2013

In c8452, transmitted today at 17:30, an error occurred in the headline.
“Mullen Group Ltd. Reports Record First Quarter Financial Results”
should have read “Mullen Group Ltd. Reports First Quarter Financial
Results.” Full corrected copy follows:

Mullen Group Ltd. Reports First Quarter Financial Results

OKOTOKS, AB, April 24, 2013 /PRNewswire/ – (TSX: MTL)  Mullen Group Ltd. (“Mullen Group” and/or the “Corporation“) is pleased to report its financial and operating results for the
period ended March 31, 2013, with comparisons to the same period last
year.

For the three month period ended March 31, 2013, Mullen Group generated
consolidated revenue of $385.5 million and operating income of $87.8
million.  Mullen Group generated net cash from operating activities of
$17.4 million that was used, together with cash from other sources, to
pay dividends of $39.5 million, acquire net property, plant and
equipment of $13.7 million and pay interest obligations of $3.7
million.

Mullen Group’s consolidated revenue of $385.5 million was a decrease of
$40.5 million or 9.5 percent from the $426.0 million generated in
2012.  The decrease in consolidated revenue was largely attributable to
a $39.0 million decline in revenue experienced by the Oilfield Services
segment, of which $21.8 million related to the non-recurring revenue
generated by the design, build and commissioning of the Thin Fine
Tailings (“TFT“) barge system project for a large oil sands operator which was
completed in the second quarter of 2012, along with a marginal $1.5
million decline in revenue recorded by the Trucking/Logistics segment. 
When factoring out the non-recurring TFT barge system project revenue,
Mullen’s core business revenue was down $18.7 million, or 4.6 percent.

The Oilfield Services segment contributed revenue of $257.6 million, a
decrease of $39.0 million, or 13.1 percent, from the $296.6 million
generated in the prior year period. As previously noted, the majority
of the decrease in revenue occurred in Canadian Dewatering L.P., which
generated $21.8 million less revenue as a result of the completion of
the non-recurring TFT barge system project.  In addition, reduced
demand for services by those Operating Entities involved in the
transportation of fluids and well servicing, and the reduced demand for
rig relocation services contributed to the decline in revenue. These
decreases were partially offset by increased revenue recorded by those
Operating Entities servicing the pipeline construction industry along
with core drilling.  The Trucking/Logistics segment contributed revenue
of $129.1 million, which was a marginal decrease of $1.5 million over
the prior year period. This decrease was mainly attributable to
decreased demand for over-dimensional and heavy haul freight services.

Mullen Group generated operating income for the period ended March 31,
2013, of $87.8 million, a decrease of $11.3 million or 11.4 percent
over the $99.1 million generated in 2012. The decrease in operating
income was mainly attributable to the Oilfield Services segment,
particularly by those Operating Entities providing fluid hauling and
well servicing along with those tied to drilling activity. In addition,
the Trucking/Logistics segment recorded a $1.9 million decrease in
operating income which was generally attributable to those Operating
Entities providing over-dimensional and multi-modal transportation
services. As a percentage of consolidated revenue, operating income
decreased slightly to 22.7 percent as compared to 23.3 percent in 2012.

“We knew coming into this quarter that it would be difficult to top the
first quarter of 2012, which was a record in terms of revenue and
operating income.  Specifically, the completion of the TFT barge system
project in the second quarter of 2012 along with the expectation of
reduced drilling activity were both known going into the quarter. 
However, some extreme weather conditions in western Canada combined
with bottlenecks in takeaway capacity with some of our customers in the
heavy oil plays of Alberta were situations that we had little control
over.  As well, we witnessed some competitive pressures in businesses
tied to the servicing of wells as a result of decreased drilling and
completion activity in western Canada.  On a positive note, a number of
pipeline construction projects kicked off in the quarter which directly
benefited Premay Pipeline Hauling L.P. and should for the foreseeable
future, while Treo Drilling Services L.P. once again performed very
well recording improvements both in terms of productivity and safety
performance. All-in-all our results met our expectations,” stated Mr.
Stephen H. Lockwood, President and Co-Chief Executive Officer.

In the first quarter of 2013, Mullen Group generated net income of $44.4
million, or $0.50 per share, a decrease of $14.4 million, or 24.5
percent compared to $58.8 million, or $0.73 per share in 2012. The
$14.4 million decrease in net income was mainly attributable to the
$11.3 million decrease in operating income and a $9.6 million negative
variance in unrealized foreign exchange.  These decreases were somewhat
offset by a $3.5 million positive variance in the fair value of
investments and a $3.1 million decrease in income tax expense. 
Adjusting Mullen Group’s net income and earnings per share to eliminate
the impact of unrealized foreign exchange and the change in the fair
value of investments during the first quarter of 2013 results in
adjusted net income of $45.4 million and adjusted earnings per share of
$0.52, as compared to $54.0 million and $0.67 per share in 2012,
respectively.  These adjustments more clearly reflect earnings from an
operating perspective.

A summary of Mullen Group’s results for the three month periods ended
March 31, 2013, and 2012, along with revenue and operating results by
segment are as follows:


    SUMMARY

    (unaudited)                                  Three month periods ended
    ($ millions, except per share amounts)               March 31

                                                  2013  2012        Change

                                                     $     $             %

    Revenue                                      385.5 426.0         (9.5)

    Operating income(1)                           87.8  99.1        (11.4)

    Unrealized foreign exchange loss (gain)        5.0 (4.6)       (208.7)

    Decrease (increase) in fair value of         (4.5) (1.0)         350.0
    investments

    Net income                                    44.4  58.8        (24.5)

    Net Income - adjusted(2)                      45.4  54.0        (15.9)

    Earnings per share(3)                         0.50  0.73        (31.5)

    Earnings per share - adjusted(2)              0.52  0.67        (22.4)

    Net cash from operating activities            17.4  54.3        (68.0)

    Net cash from operating activities per share  0.20  0.67        (70.1)
    (3)

    Cash dividends declared per Common Share      0.30  0.25          20.0

    Notes:

    (1)  Operating income is defined as net income before depreciation on
         property, plant and equipment, amortization on intangible assets,
         finance costs, unrealized foreign exchange gains and losses,
         other (income) expense and income tax expense.

    (2)  Net income - adjusted and earnings per share - adjusted are
         calculated by adjusting net income and basic earnings per share
         by the amount of any unrealized foreign exchange gains and losses
         and by the change in fair value of investments.

    (3)  Earnings per share and net cash from operating activities per
         share are calculated based on the basic weighted average number
         of Common Shares outstanding for the period.

         Operating income, net income - adjusted and earnings per share -
         adjusted are not recognized terms under Canadian GAAP and do not
         have standardized meanings prescribed by Canadian GAAP.
         Management believes these measures are useful supplemental
         measures.  Investors should be cautioned that these indicators
         should not replace net income and earnings per share as
         indicators of performance.

    SEGMENTED RESULTS

                              Three month periods ended
                                      March 31
    (unaudited)
    ($ millions)               2013  2012        Change

                                  $     $             %

    Revenue                                            

         Oilfield Services    257.6 296.6        (13.1)

         Trucking/Logistics   129.1 130.6         (1.1)

         Corporate              0.1     -             -

    Intersegment eliminations                          

         Oilfield Services    (0.5) (0.2)             -

         Trucking/Logistics   (0.8) (1.0)             -

    Total                     385.5 426.0         (9.5)

    Operating Income                                   

         Oilfield Services     68.6  77.3        (11.3)

         Trucking/Logistics    20.1  22.0         (8.6)

         Corporate            (0.9) (0.2)             -

    Total                      87.8  99.1        (11.4)

This news release may contain forward-looking statements that are
subject to risk factors associated with the oil and natural gas
business and the overall economy.  Mullen Group believes that the
expectations reflected in this news release are reasonable, but results
may be affected by a variety of variables.  Mullen Group relies on
litigation protection for “forward-looking” statements.

Mullen Group is a company that owns a network of independently operated
businesses.  Today the Mullen Group is recognized as the largest
provider of specialized transportation and related services to the oil
and natural gas industry in western Canada and as one of the leading
suppliers of trucking and logistics services in Canada – two sectors of
the economy in which Mullen Group has strong business relationships and
industry leadership.  Mullen Group provides management and financial
expertise, technology and systems support to its independent
businesses.

Mullen Group is a publicly traded corporation listed on the Toronto
Stock Exchange under the symbol “MTL“.  Additional information is available on our website at www.mullen-group.com or on SEDAR at www.sedar.com.
 

 

 

 

 

 

SOURCE Mullen Group Ltd.


Source: PR Newswire