CE Franklin Ltd. Announces First Quarter Results; Results are in Canadian Dollars.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 28, 1999-- 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) ) CE FRANKLIN LTD. (TSE.CFT, AMEX.CFK) today reported results for the first quarter ended March 31, 1999. Sales for the first quarter were $56.8 million, a decrease of $58.5 million or 51 percent from March 31, 1998. The decrease is due mainly to a 79 percent reduction in oil well drilling Well drilling is the process of drilling a hole in the ground for the extraction of a natural resource such as ground water, natural gas, or petroleum. Drilling for the exploration of the nature of the material underground (for instance in search of metallic ore) is best described activity in western Canada
Western Canada, commonly referred to as the West offset partially by a 25 percent increase in gas well drilling activity in western Canada. CE Franklin's sales per oil well are greater than sales per gas well making the company's sales more sensitive to changes in oil drilling activity. Gross profit as a percentage of sales decreased from 14.2 percent in the first quarter of 1998 to 10.5 percent in the first quarter of 1999. This is due mainly to reduced demand for oilfield products resulting from low oil prices and write-offs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc unreconciled accounts payable that were discovered during the conversion to new software in the company. Selling, general and administrative expenses in the first quarter of 1999, excluding severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and related costs and bad debt write-offs, decreased 25 percent from $9.7 million in the first quarter of 1998 to $7.3 million in the first quarter of 1999. This was achieved through ongoing expense reductions. Further expense reductions started in March and will finish in May 1999. These expense reductions include approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. , but are not limited to, the following: a 20 percent decrease in employees, a 25 percent decrease in the number of vehicles, the closure of three service center locations, the consolidation of two distribution centers and a further reduction in discretionary spending. The company had a net loss of $0.16 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 1999 compared to net income of $0.18 per share (fully diluted) for the same period last year. Subsequent to the end of the quarter, the company began operation of a comprehensive new "enterprise resource management" information technology system which has been in development for almost two years. This new state-of-the-art platform includes electronic commerce capability, product bar coding, enhanced inventory management systems, increased software flexibility, improved business processes and scalability How much a system can be expanded. See scalable. scalability - How well a solution to some problem will work when the size of the problem increases. For example, a central server of some kind with ten clients may perform adequately but with a thousand clients it for growth. "We are excited that we have implemented this leading edge software," commented John Gilbank, Chairman, President and Chief Executive Officer. "It will continue to increase the efficiency of the over all supply chain that links our customers with our suppliers." In the second quarter of 1999, 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. CE Franklin is Canada's largest distributor of supplies to the oil and gas drilling and production industry. 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. For more information visit our Web Site at http://www.cefranklin.com. Shareholders are invited to attend CE Franklin Ltd.'s Annual General Meeting on Thursday Thursday: see week. , April 29, 1999, 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 3:00 p.m. 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 of the Calgary Petroleum Club. 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. 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 1998 Annual Report on Form 20-F as filed with the United States Securities and Exchange Commission.
CE Franklin Ltd.
Consolidated Statements of Operations (Unaudited)
--------------------------------------------------------------
Three Months Ended March 31, March 31, March 31,
(in thousands of dollars) 1999 1999 1998
U.S. $ Cdn $ Cdn $
--------------------------------------------------------------
Sales
General supplies 22,962 34,654 59,103
Tubulars 12,906 19,477 52,609
CEF Technologies 1,751 2,643 3,547
--------------------------------------------------------------
37,619 56,774 115,259
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Gross profit
General supplies 2,856 4,310 11,619
Percent 12.4 12.4 19.7
Tubulars 663 1,000 3,540
Percent 5.1 5.1 6.7
CEF Technologies 436 658 1,250
Percent 24.9 24.9 35.2
--------------------------------------------------------------
Total gross profit $ 3,955 5,968 16,409
Total gross profit (percent) 10.5 10.5 14.2
--------------------------------------------------------------
Selling, general and
administrative expenses (SG&A) 4,806 7,253 9,715
Severance and related expenses 949 1,432 -
Bad debt write off 309 467 -
--------------------------------------------------------------
Total SG&A 6,064 9,152 9,715
--------------------------------------------------------------
Earnings (loss) before interest, tax,
depreciation, amortization and
other expenses (income)(EBITDA) (2,109) (3,184) 6,694
Other expenses (income)
Depreciation and amortization 407 614 573
Interest expense 571 861 731
Other (75) (113) (66)
--------------------------------------------------------------
Income before income taxes (3,012) (4,546) 5,456
--------------------------------------------------------------
Income tax expense (recovery) (1,201) (1,812) 2,396
--------------------------------------------------------------
Net income (loss) for the period (1,811) (2,734) 3,060
--------------------------------------------------------------
Net income (loss) per share
(note #1)
Basic (0.11) (0.17) 0.19
--------------------------------------------------------------
Fully diluted (0.10) (0.16) 0.18
--------------------------------------------------------------
Weighted average basic number
of shares outstanding 16,553,809 16,553,809 16,424,363
--------------------------------------------------------------
CE Franklin Ltd.
Consolidated Balance Sheets (Unaudited)
--------------------------------------------------------------
(in thousands of dollars) March 31, March 31, March 31,
1999 1999 1998
U.S. $ Cdn $ Cdn $
--------------------------------------------------------------
ASSETS
Current assets
Marketable securities - - 450
Accounts receivable 27,839 42,015 76,868
Inventories 27,207 41,061 57,312
Income tax recoverable 3,294 4,972 -
Other 447 675 619
--------------------------------------------------------------
Total current assets 58,787 88,723 135,249
Capital assets 14,504 21,890 13,211
Goodwill 7,696 11,615 12,072
Other assets 23 34 63
--------------------------------------------------------------
Total Assets 81,010 122,262 160,595
--------------------------------------------------------------
--------------------------------------------------------------
LIABILITIES
Current liabilities
Accounts payable and
accrued liabilities 19,859 29,973 62,325
Current portion of long-term debt 198 299 25
--------------------------------------------------------------
Total current liabilities 20,057 30,272 62,350
Bank operating loan 27,896 42,100 46,400
Long-term debt 716 1,081 38
Deferred income taxes 113 170 -
--------------------------------------------------------------
Total liabilities 48,782 73,623 108,788
--------------------------------------------------------------
SHAREHOLDERS' EQUITY
Capital stock and
contributed surplus 20,440 30,848 30,457
Retained earnings 11,788 17,791 21,350
--------------------------------------------------------------
Total Shareholders' Equity 32,228 48,639 51,807
--------------------------------------------------------------
Total Liabilities and
Shareholders' Equity 81,010 122,262 160,595
--------------------------------------------------------------
--------------------------------------------------------------
CE Franklin Ltd.
Consolidated Statements of Cash Flows (Unaudited)
--------------------------------------------------------------
Three Months Ended March 31, March 31, March 31,
(in thousands of dollars) 1999 1999 1998
U.S. $ Cdn $ Cdn $
--------------------------------------------------------------
Operating activities
Net income (loss) for
the period (1,811) (2,734) 3,060
Items not affecting cash -
Depreciation and amortization 407 614 573
Increase (decrease) of
inventory reserves (456) (688) 315
Net change in non-cash working
capital balances related
to operations 6,022 9,090 2,308
--------------------------------------------------------------
4,162 6,282 6,256
--------------------------------------------------------------
Financing activities
Issuance of shares 1 1 150
(Decrease) in bank
operating loan (3,114) (4,700) (4,900)
(Decrease) in bank overdraft (287) (433) (626)
Increase (decrease) in obligations
under capital lease 884 1,334 (8)
--------------------------------------------------------------
(2,516) (3,798) (5,384)
--------------------------------------------------------------
Investing activities
Decrease (increase) in
marketable securities 301 455 (4)
Purchase of capital assets (1,947) (2,939) (912)
Reduction of other assets - - 44
--------------------------------------------------------------
(1,646) (2,484) (872)
--------------------------------------------------------------
Increase (decrease) in cash
during the period - - -
Cash and Cash equivalents
- beginning of period - - -
--------------------------------------------------------------
Cash and Cash equivalents
- end of period - - -
--------------------------------------------------------------
--------------------------------------------------------------
CE Franklin Ltd. Notes to consolidated financial statements
(unaudited)
Note no. 1 - U.S. GAAP earnings per share (Cdn $) U.S. GAAP
earnings per share was ($0.17) for the three months ended March 31,
1999 (1998 - $0.19 per share).
Note no. 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, 1999 at the rate of CDN (Content Delivery Network) A system of distributed content on a large intranet or the public Internet in which copies of content are replicated and cached throughout the network. $1.5092 = U.S. $1.00, the prevailing rate on March 31, 1999. 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 $1.5092 = U.S. $1.00 or at any other rate. |
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