CE Franklin First Quarter Sales Up 71%; Gross Profit Up 112% (Results are in Canadian Dollars).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 19, 2000 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. (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) ) Canada's Largest Energy Supply Company Announces Growth in Sales and Profitability CE Franklin LTD. (TSE:CFT.)(AMEX:CFK) today reported an increase in gross profit from $6.0 million in the first quarter of 1999 to $12.6 million in the first quarter of 2000 a 112% increase. Sales grew to $97.4 million from $56.8 million, a 71% increase from the same period last year. A recovery in the 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. energy industry was the main driver of both sales and earnings. Gross profit as a percentage of sales increased to 13.0% in the first quarter of 2000 from 10.5% in the first quarter of 1999. This improvement reflected an ongoing recovery from the unusually low level of activity in the company's markets in the previous year and a reduction in excess inventories in the oil and gas supply industry that had been hanging over the market. While sales and gross profits increased, selling, general and administrative expenses decreased by 7% as a result of cost cutting measures implemented in 1999. As a result, the company experienced a $5.5 million increase in cash flow in the quarter. Net income increased by $0.23 to $0.07 per share (fully 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. ) in the first quarter of 2000 compared to a net loss of $0.16 per share for the same period last year. "We are clearly starting to benefit from the recovery in the oil and gas industry and projects in the oil sands and related industries," commented John Gilbank, Chairman and Chief Executive Officer, "and that will enable us to continue to pursue improvement and growth initiatives. The successful implementation of our comprehensive information technology system in 1999 is now starting to increase our productivity. The system is an excellent platform for other enhancements such as much more efficient Mill Test Reports (a quality assurance document), bar coding, inventory management and eCommerce See e-commerce. ." FUTURE OUTLOOK In the second quarter of 2000, 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 40 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. ANNUAL GENERAL MEETING INFORMATION Shareholders are invited to attend CE Franklin Ltd.'s Annual General Meeting on Thursday Thursday: see week. , May 25, 2000, 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 2:00 p.m. in the Garden Patio patio In Spanish and Latin American architecture, a courtyard open to the sky within a building. A Spanish development of the Roman atrium, it is comparable to the Italian cortile but provides more seclusion, possibly due to Moorish custom. The patio of the contemporary U.S. Room of the Delta Bow Valley Bow Valley is a valley located along the upper Bow River in Alberta, Canada. It may be named for its resemblance to an archer's bow. Parks Bow Valley Provincial Park (part of the Kananaskis park system) is established east of the Canadian Rockies in the arch of the Hotel, 209 - 4th Avenue S.E. CONFERENCE CALL INFORMATION CE Franklin Ltd. has scheduled a conference call for Thursday, April 20, 2000, at 8:00 a.m. (Mountain Time) during which the first quarter results will be discussed. Please phone the conference call operator at 1-800-565-0813. The conference call will be chaired by John Gilbank, Chairman and Chief Executive Officer of CE Franklin. A question and answer session will be included in the call. A taped version of the call will be available until midnight Wednesday Wednesday: see week. , April 26, 2000 by calling 888/509-0081 reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. #ST195971-C. Detailed financials to follow. 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 1999 Annual Report on Form 20-F as filed with the United States Securities and Exchange Commission.
CE Franklin Ltd.
Consolidated Statements of Operations (Unaudited)
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Three Months Ended March 31, March 31, March 31,
(in thousands of dollars) 2000 2000 1999
U.S. $ Cdn $ Cdn $
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Sales
General supplies 34,788 50,565 34,654
Tubulars 28,787 41,842 19,477
CEF Technologies 3,404 4,947 2,643
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66,979 97,354 56,774
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Gross profit
General supplies 5,907 8,586 4,310
% 17.0% 17.0% 12.4%
Tubulars 1,646 2,392 1,000
% 5.7% 5.7% 5.1%
CEF Technologies 1,137 1,653 658
% 33.4% 33.4% 24.9%
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Total gross profit $ 8,690 12,631 5,968
Total gross profit % 13.0% 13.0% 10.5%
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Selling, general and
administrative expenses 5,867 8,528 9,152
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Earnings before interest, tax,
depreciation, amortization and
other expenses (income) (EBITDA) 2,823 4,103 (3,184)
Other Expenses (Income)
Depreciation and amortization 725 1,054 614
Interest expense 579 841 861
Loss (gain) on disposal
of capital assets 25 37 -
Other (78) (113) (113)
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Income before income taxes 1,572 2,284 (4,546)
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Income tax expense (recovery) 681 990 (1,812)
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Net income (loss) for the period 891 1,294 (2,734)
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Net income (loss) per share (note #1)
Basic 0.05 0.08 (0.17)
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Fully diluted 0.05 0.07 (0.16)
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Weighted average basic number of
shares outstanding 16,765,219 16,765,219 16,553,809
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CE Franklin Ltd.
Consolidated Balance Sheets (Unaudited)
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(in thousands of dollars) March 31, March 31, March 31,
2000 2000 1999
U.S. $ Cdn $ Cdn $
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ASSETS
Current assets
Accounts receivable 42,106 61,201 42,015
Inventories 36,989 53,763 41,061
Income tax recoverable 2,838 4,125 4,972
Other 432 628 675
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Total current assets 82,365 119,717 88,723
Capital assets 13,023 18,929 21,890
Goodwill 7,775 11,301 11,615
Other assets 486 706 34
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Total Assets 103,649 150,653 122,262
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LIABILITIES
Current liabilities
Bank overdraft 7,876 11,448 -
Accounts payable and
accrued liabilities 33,265 48,351 29,973
Bank operating loan 27,933 40,600 -
Current portion of long-term debt 206 299 299
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Total current liabilities 69,280 100,699 30,272
Bank operating loan - - 42,100
Long-term debt 363 527 1,081
Deferred income taxes 1,083 1,574 170
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Total liabilities 70,726 102,800 73,623
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SHAREHOLDERS' EQUITY
Capital stock and
contributed surplus 21,653 31,472 30,848
Retained earnings 11,270 16,381 17,791
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Total Shareholders' Equity 32,923 47,853 48,639
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Total Liabilities and
Shareholders' Equity 103,649 150,653 122,262
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CE Franklin Ltd.
Consolidated Statements of Cash Flows (Unaudited)
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Three Months Ended March 31, March 31, March 31,
(in thousands of dollars) 2000 2000 1999
U.S. $ Cdn $ Cdn $
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Operating activities
Net income (loss) for the period 890 1,294 (2,734)
Items not affecting cash -
Depreciation and amortization 725 1,054 614
Loss (gain) on disposal
of capital assets 25 37 -
Increase (decrease)
of inventory reserves 218 317 (688)
Net change in non-cash working
capital balances
related to operations (6,377) (9,270) 9,090
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(4,519) (6,568) 6,282
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Financing activities
Issuance of shares 137 199 1
Increase (decrease) in bank
operating loan 2,822 4,100 (4,700)
Increase (decrease) in bank
overdraft 2,169 3,153 (433)
Increase (decrease) in obligations
under capital lease (52) (75) 1,334
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5,076 7,377 (3,798)
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Investing activities
Decrease (increase) in
marketable securities 0 0 455
Purchase of capital assets (605) (879) (2,939)
Proceeds on disposal
of capital assets 48 70 -
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(557) (809) (2,484)
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Increase (decrease) in cash
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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CE Franklin Ltd. Notes to consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge (unaudited) 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 fully diluted $.07 for the three months ended March 31, 2000 (1999 - ($0.17) per share). Note #2 - U.S. 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, soley for the convienience of the reader, have been translated into United States dollars for the quarter ended March 31, 2000 at the rate of CDN $1.4535 = U.S. $1.00, the prevailing rate on March 31, 2000. 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 $1.4535 = U.S. $1.00 or at any other rate. Note #3 - Share data At March 31, 2000 the company had 16,944,742 common shares and 1,028,553 options to acquire common shares outstanding. 458,773 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. Supplemental Information - Quarterly Financial Data ------------------------------------------------------------- (IN MILLIONS OF CDN DOLLARS) Q1 ------------------------------------------------------------- Sales General Supplies 50.6 Tubulars 41.8 CEF Technologies 4.9 ------------------------------------------------------------- Total Sales 97.4 ------------------------------------------------------------- ------------------------------------------------------------- # of Oil Wells Drilled (excluding dry/service) 1,264 # of Gas Wells Drilled (excluding dry/service) 1,774 Gross Profit General Supplies 8.6 % of Sales 17.0% Tubulars 2.4 % of Sales 5.7% CEF Technologies 1.7 % of Sales 33.4% ------------------------------------------------------------- Total Gross Profit 12.6 ------------------------------------------------------------- ------------------------------------------------------------- % of Sales 13.0% Selling, General & Administrative 8.5 % of Gross Profit 67.5% ------------------------------------------------------------- Earnings before interest, tax, depreciation, amortization and other expenses (income) EBITDA 4.1 ------------------------------------------------------------- Net Income 1.3 % of Sales 1.3% ------------------------------------------------------------- EPS Basic 0.08 Fully Diluted 0.07 ------------------------------------------------------------- Total Assets 150.7 ------------------------------------------------------------- Total Financed Debt 41.4 ------------------------------------------------------------- Total Capitalization (Average) Average Financed Debt 43.7 % to Total Capitalization 48.1% Average Equity 47.0 % to Total Capitalization 51.9% Total Capitalization 90.7 ------------------------------------------------------------- Supplemental Information - Quarterly Financial Data ------------------------------------------------------------- (IN MILLIONS OF CDN DOLLARS) Q1 ------------------------------------------------------------- Current Assets % of Total Assets (Average) Average Current Assets 116.8 Average Total Assets 147.7 % 79.0% ------------------------------------------------------------- Days Sales Outstanding (DSO) (1) Average Accounts Receivable - Trade 53.0 Sales - annualized 389.4 DSO 49.6 (1) (Average A/R/Sales)*365 days ------------------------------------------------------------- Bad Debt % to Accounts Receivable Bad Debt 0.1 Average Accounts Receivable - Trade 53.0 % 0.3% ------------------------------------------------------------- Inventory Turns Cost of Sales 84.7 Cost of Sales - annualized 338.9 Average Inventory 52.7 Inventory Turns 6.4 ------------------------------------------------------------- Inventory Writeoff % Inventory Writeoffs 0.1 Average Inventory 52.7 % 0.3% ------------------------------------------------------------- ROI (after tax) = Return on Investment (2) Interest after tax 0.5 Interest after tax - annualized 1.9 Net Income - annualized 5.2 ROI (after tax) 7.8% (2) Net Income + Interest After Tax ------------------------------------ Average (Equity + Financed Debt) ------------------------------------------------------------- ROE (after tax) = Return on Equity (3) 11.0% (3) (Net Income/Average Equity) ------------------------------------------------------------- Economic Value Added (EVA) (4) Weighted Average Cost of Capital 9.7% EVA (1.9%) (4) (ROI - Weighted Average Cost of Capital ((% financing from debt x cost of debt) + (% financing from equity x cost of equity))) ------------------------------------------------------------- ------------------------------------------------------------- |
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