CE Franklin Announces First Quarter Growth in Earnings from Traditional Businesses and Continued Investment in New Initiatives.Business Editors CALGARY Calgary (kăl`gərē), city (1991 pop. 710,677), S Alta., Canada, at the confluence of the Bow and Elbow rivers. The largest city in Alberta and the fastest-growing major city in Canada, Calgary is a corporate, transportation, and financial , Alberta--(BUSINESS WIRE)--April 23, 2001 CE FRANKLIN Franklin, cities, United States Franklin. 1 City (1990 pop. 12,907), seat of Johnson co., S central Ind., inc. 1823. It is a farm trade center. Manufactures include auto parts, aluminum doors and windows, and copper panels. LTD LTD 1 Laron-type dwarfism 2 Leukotriene D 3 Long-term depression, see there 4. Long-term disability . (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :CFT CFT complement fixation test; see under fixation. CFT complement fixation test. ) (AMEX AMEX See: American Stock Exchange :CFK CFK Clausenengen Fotballklubb (Clausenengen Football Club; Norway) CFK Computer Forum KaHo (Computer Aiding Center) CFK Charles Foster Kane (movie, band, White Stripes lyric) ) announced today its results for the first quarter ended March 31, 2001. Sales for the first quarter were $120.2 million, an increase of $22.8 million or 23.4% compared to the first quarter of 2000. Sales from the Company's traditional businesses, consisting of general supplies and tubulars, increased by $10.0 million or 12.4% as compared to the same quarter ended March 31, 2000. The increase in sales was driven by the increase in drilling and completions activity in western Canada
Western Canada, commonly referred to as the West . Sales from new business initiatives, primarily the Company's Piping Resources, CEF CEF CAN (Controller Area Network) Extended Frame CEF Caixa Economica Federal (Brazil) CEF Cisco Express Forwarding CEF Common European Framework CEF Continuing Education Fund CEF Closed End Fund Technologies and Eastern Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. operations increased by 76.7% or $12.8 million. The increase in sales was mainly attributed to a large oil sands contract with a major international energy company in the Piping Resources division. Earnings before interest, tax, depreciation, amortization and other expenses (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) for the first quarters of both 2001 and 2000 were $4.1 million. EBITDA for the Company's traditional businesses increased $0.5 million or 19.3%. This was offset by continuing investments in selling, general and administrative expenses (SG&A) for new initiatives, primarily relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc CEF Technologies, Piping Resources and Eastern Canadian operations in order to grow future earnings through these initiatives. EBITDA from the new initiatives has grown from $0.4 million to $0.5 million to $1.1 million over the past three consecutive quarters while EBITDA from traditional businesses increased from $1.8 million to $2.4 million to $3.0 million over the same period. Net income for the first quarter 2001 was $1.3 million or $0.07 (diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ) per share, which is consistent with the first quarter 2000. "Our traditional businesses are benefiting from strong drilling for natural gas and, to a lesser extent, oil in western Canada and this has resulted in improved sales and earnings," commented John Gilbank, Chairman and Chief Executive Officer. "We are also seeing the early stages of the benefits of our new initiatives, mainly in the form of increased sales, and are progressing toward our goal of getting the benefits to the bottom line. As for eCommerce See e-commerce. , we are working closely with our pilot customers to make further improvements and will be rolling it out to more customers in the coming months." Future Outlook In the second quarter of 2001, the Company is expecting normal spring break-up break-up noun 1. separation, split, divorce, breakdown, ending, parting, breaking, splitting, wind-up, rift, disintegration, dissolution, termination noun 2. conditions. Spring break-up makes previously frozen roads soft and moving heavy drilling and service rigs is greatly restricted. As a result, fewer wells are drilled causing a reduction in demand for CE Franklin's supplies and services. About CE Franklin CE Franklin, is Canada's largest distributor of supplies for the drilling, production, processing and pipelining of hydrocarbons hydrocarbons (hīˈ·drō·kärˑ·b  nz),n. . In addition to its complete range of production equipment, including artificial lift technology, the Company sells pipe, valves, fittings fit·ting adj. Being in keeping with a situation; appropriate. n. 1. The act of trying on clothes whose fit is being adjusted. 2. A small detachable part for a machine or apparatus. 3. and maintenance supplies and provides complete customer inventory procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. and management services through its 41 locations across Canada Across Canada was an afternoon program that formerly aired on The Weather Network. The segment ran from early 1999 until mid 2002. The show ran from 3:00PM ET until 7:00 PM ET. . The Company also manufactures and packages specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. products for the energy industry and provides supply packages for projects in the hydrocarbon hydrocarbon (hī'drōkär`bən), any organic compound composed solely of the elements hydrogen and carbon. The hydrocarbons differ both in the total number of carbon and hydrogen atoms in their molecules and in the proportion of hydrogen processing industry through its Piping Resources Division. CE Franklin's common stock trades on The Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. under the symbol CFT and on the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. under the symbol CFK. For additional information visit the website at www.cefranklin.com. Conference Call and Webcast Information CE Franklin has scheduled a conference call for Tuesday Tuesday: see week. , April 24, at 11:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT (9:00 a.m. MDT MDT abbr. Mountain Daylight Time MDT (in the US and Canada) Mountain Daylight Time MDT n abbr (US) (= mountain daylight time) → ) during which the first quarter 2001 results will be discussed. Please phone the conference call operator at 1-800-446-4498. John Gilbank, Chairman and Chief Executive Officer will chair the call. Sam (1) (Security Accounts Manager) The part of Windows NT that manages the database of usernames, passwords and permissions. A SAM resides in each server as well as in each domain controller. See PDC and trust relationship. Secreti, Chief Financial Officer will also accompany To go along with; to go with or to attend as a companion or associate. A motor vehicle statute may require beginning drivers or drivers under a certain age to be accompanied by a licensed adult driver whenever operating an automobile. Mr. Gilbank. A question and answer session will be included in the call. A taped version of the call will be available until midnight on Monday Monday: see week. , April 30, by calling 1-888-509-0081. The call will also be webcast live at either www.ir-live.com or www.vcall.com. Annual and Special Meeting Shareholders are invited to attend CE Franklin's Annual and Special Meeting on Tuesday, May 1 in Calgary, Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. , at 2:30 p.m. at the Calgary Petroleum Club 319 - 5th Avenue S.W., in the Viking Viking Either of two unmanned U.S. spacecraft launched by NASA in 1975. After nearly yearlong journeys, Vikings 1 and 2 entered orbits around Mars and released landers that touched down on the planet and relayed measurements of properties of its atmosphere and soil, as well Room. This news release includes forward looking statements within the meaning of section 27A of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities Act of 1933 and Section 21E of the United States Securities Exchange Act of 1934. Although the Company believes that its expectations are based on reasonable assumptions, it can give no assurance that expected results will be achieved. Important factors that could cause actual results to differ materially from those in the forward looking statements herein include economic conditions, seasonality of drilling activity, commodity prices for oil and gas, currency fluctuations and government regulations, and other risks and uncertainties as described in the Company's 2000 Annual Report on Form 20-F as filed with the United States Securities and Exchange Commission.
(all results in Canadian Dollars)
CE Franklin Ltd.
Consolidated Statements of Operations
(Unaudited)
2001 2001 2000
Three Months Ended March 31 U.S. $ Cdn. $ Cdn. $
(in thousands of dollars) (note 2)
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Sales
General supplies 43,149 68,344 50,565
Tubulars 29,463 46,667 41,842
CEF Technologies 3,263 5,169 4,947
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75,875 120,180 97,354
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Gross profit
General supplies 6,323 10,015 8,586
Tubulars 1,575 2,495 2,392
CEF Technologies 1,033 1,636 1,653
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8,931 14,146 12,631
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Selling, general and administrative
expenses 6,320 10,011 8,528
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Earnings before interest, tax, depreciation,
amortization and other expenses
(EBITDA) 2,611 4,135 4,103
Other Expenses (Income)
Depreciation and amortization 749 1,186 1,054
Interest expense 465 737 841
Loss (gain) on disposal of capital
assets (25) (40) 37
Other 146 231 (113)
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Income before income taxes 1,276 2,021 2,284
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Income tax expense
Current 266 421 990
Future 221 350 -
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487 771 990
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Net income for the period 789 1,250 1,294
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Net income per share (note 1)
Basic 0.05 0.07 0.08
Diluted 0.05 0.07 0.07
Weighted average basic number of
shares outstanding 17,153,519 17,153,519 16,765,219
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CE Franklin Ltd.
Consolidated Balance Sheets
March 31, March 31, December 31,
2001 2001 2000
U.S. $ Cdn. $ Cdn. $
(unaudited)(unaudited)
(in thousands of dollars) (note 2)
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ASSETS
Current assets
Accounts receivable 42,407 67,169 63,805
Inventories 42,255 66,927 64,815
Income taxes recoverable - - 4,094
Other 223 354 2,337
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84,885 134,450 135,051
Capital assets 11,864 18,792 19,523
Goodwill 6,936 10,986 11,066
Other assets 323 512 512
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104,008 164,740 166,152
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LIABILITIES
Current liabilities
Bank overdraft 2,078 3,292 5,929
Bank operating loan 27,653 43,800 48,000
Accounts payable 26,202 41,501 41,395
Accrued liabilites 13,670 21,652 17,900
Current portion of long-term debt 203 322 322
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69,806 110,567 113,546
Long-term debt 125 198 280
Future income taxes 2,138 3,387 3,037
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72,069 114,152 116,863
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SHAREHOLDERS' EQUITY
Capital stock 12,113 19,186 19,137
Contributed surplus 8,565 13,566 13,566
Retained earnings 11,261 17,836 16,586
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31,939 50,588 49,289
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104,008 164,740 166,152
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CE Franklin Ltd.
Consolidated Statements of Cash Flows
(Unaudited)
2001 2001 2000
Three Months Ended March 31 U.S. $ Cdn. $ Cdn. $
(in thousands of dollars) (note 2)
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Cash flows from operating activities
Net income for the period 789 1,250 1,294
Items not affecting cash -
Depreciation and amortization 749 1,186 1,054
Loss (gain) on disposal of capital
assets (25) (40) 37
Future income taxes 221 350 -
Increase of inventory reserves 249 395 317
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1,983 3,141 2,702
Net change in non-cash working capital
balances related to operations -
Accounts receivable (2,124) (3,364) (8,920)
Income taxes recoverable 2,586 4,094 1,081
Inventories (1,583) (2,507) (5,060)
Other current assets 1,252 1,983 (245)
Accounts payable 67 106 2,814
Accrued liabilites 2,369 3,752 1,060
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4,550 7,205 (6,568)
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Cash flows from financing activities
Issuance of shares 31 49 199
Increase (decrease) in bank operating
loan (2,652) (4,200) 4,100
Increase (decrease) in bank
overdraft (1,665) (2,637) 3,153
Decrease in in long-term debt (52) (82) (75)
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(4,338) (6,870) 7,377
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Cash flows from investing activities
Purchase of capital assets (302) (478) (879)
Proceeds on disposal of capital
assets 90 143 70
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(212) (335) (809)
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Change in cash and cash equivalents
during the period - - -
Cash and cash equivalents - Beginning
of period - - -
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Cash and cash equivalents - End of
period - - -
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Cash paid during the period for:
Interest on bank operating loan 568 900 827
Interest on long-term debt 6 9 14
Income taxes 402 636 -
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CE Franklin Ltd.
Consolidated Statements of Changes in Shareholders' Equity
(Unaudited)
Capital Stock
------------- Contributed
Number of surplus
(in thousands of dollars) Shares Cdn. $ Cdn. $
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Balance - December 31,
1999 16,725,961 17,709 13,566
Issue of shares for cash 6,580 25 -
Stock options exercised 212,201 173 -
Net income - - -
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Balance - March 31, 2000 16,944,742 17,907 13,566
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Balance - December 31,
2000 17,149,153 19,137 13,566
Stock options exercised 8,938 49 -
Net income - - -
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Balance - March 31, 2001 17,158,091 19,186 13,566
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Retained Shareholders'
earnings equity
(in thousands of dollars) Cdn. $ Cdn. $
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Balance - December 31, 1999 15,086 46,361
Issue of shares for cash - 25
Stock options exercised - 173
Net income 1,294 1,294
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Balance - March 31, 2000 16,380 47,853
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Balance - December 31, 2000 16,586 49,289
Stock options exercised - 49
Net income 1,250 1,250
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Balance - March 31, 2001 17,836 50,588
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CE Franklin Ltd.
Notes to Consolidated Financial Statements (unaudited)
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Note 1 - U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income per share (Cdn. $) U.S. GAAP primary net income per share was $.08 and diluted $.07 for the three months ended March 31, 2001. Note 2 - United States dollar amounts The financial statements presented herein are expressed in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents , and, solely for the convenience of the reader, have been translated into United States dollars for the quarter ended March 31, 2001 at the rate of Cdn. $1.5839 equals U.S. $1.00, the prevailing rate on March 31, 2001. This translation should not be construed as a representation that the Canadian dollar amounts shown could be so converted into U.S. dollars at Cdn. $1.5838 equals U.S. $1.00 or at any other rate. Note 3 - Share data At March 31, 2001 the company had 17,158,091 common shares and 1,254,136 options to acquire common shares outstanding. 499,861 of those options were currently vested vested adj. referring to having an absolute right or title, when previously the holder of the right or title only had an expectation. Examples: after 20 years of employment Larry Loyal's pension rights are now vested. (See: vest, vested remainder) and exercisable.
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CE Franklin Ltd.
Supplemental 2001 Information - Quarterly Financial Data
(Unaudited)
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(IN MILLIONS OF CDN DOLLARS) Q1
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Sales
General Supplies 68.3
Tubulars 46.7
CEF Technologies 5.2
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Total Sales 120.2
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# of Oil Wells Drilled (excluding dry/service) 1,216 # of Gas Wells
Drilled (excluding dry/service) 2,002
Gross Profit
General Supplies 10.0
% of Sales 14.7%
Tubulars 2.5
% of Sales 5.3%
CEF Technologies 1.6
% of Sales 31.7%
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Total Gross Profit 14.1
% of Sales 11.8%
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Selling, General & Administrative 10.0
% of Gross Profit 70.8%
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Earnings before interest, tax, depreciation,
amortization and other expenses (income) EBITDA 4.1
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Net Income 1.3
% of Sales 1.0%
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EPS
Basic 0.07
Fully Diluted 0.07
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Total Assets 164.7
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Total Financed Debt 44.3
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Total Capitalization (Average)
Average Financed Debt 48.7
% to Total Capitalization 49.3%
Average Equity 50.1
% to Total Capitalization 50.7%
Total Capitalization 98.8
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Current Assets % of Total Assets (Average)
Average Current Assets 140.7
Average Total Assets 171.2
% 82.2%
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Days Sales Outstanding (DSO) (1)
Average Accounts Receivable - Trade 61.5
Sales - annualized 480.7
DSO 46.7
(1) (Average A/R/Sales)*365 days
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Bad Debt % to Accounts Receivable
Bad Debt 0.2
Average Accounts Receivable - Trade 61.5
% 0.3%
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Inventory Turns
Cost of Sales 106.0
Cost of Sales - annualized 424.1
Average Inventory 68.1
Inventory Turns 6.2
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Inventory Writeoff %
Inventory Writeoffs 0.2
Average Inventory 68.1
% 0.2%
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ROI (after tax) equals Return on Investment (2)
Interest after tax 0.5
Interest after tax - annualized 1.8
Net Income - annualized 5.0
ROI (after tax) 6.9%
(2) Net Income + Interest After Tax
------------------------ -------
Average (Equity + Financed Debt)
-----------------------------------------------------------
ROE (after tax) equals Return on Equity (3) 10.0%
(3) (Net Income/Average Equity)
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