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Tornado Global Hydrovacs Reports First Quarter 2018 Results

CALGARY, Alberta, May 22, 2018 (GLOBE NEWSWIRE) -- Tornado Global Hydrovacs Ltd. (“Tornado” or the “Company”) (TSX-V:TGH) today reported its unaudited condensed consolidated financial results for the Three Months ended March 31, 2018. The unaudited condensed consolidated financial statements and MD&A have been filed on SEDAR and can be reviewed at www.sedar.com


Financial and Operating Highlights (in CAD $000’s except per share data)

         
       Three Months ended March 31   
        2018     2017    
           
  Revenue   $4,831   $5,989    
  Cost of sales       3,943       5,092    
  Gross Profit       888       897    
           
  Selling and general administrative expenses       1,244       973    
  Depreciation and amortization       256       256    
  Stock-based compensation       68       -     
  Net finance income and other       (1 )     (10 )  
           
  Loss before tax       (679 )     (322 )  
  Income tax recovery       44       -     
           
  Net loss   ($635 ) ($322 )  
  Net loss per share - basic and diluted     $ -   $(0.01 )  
           
  EBITDAS (1)   ($356 ) ($76 )  
  EBIT (1)   ($684 ) ($332 )  
           
  Total assets   $23,049   $19,014    
  Shareholders Equity   $17,573   $13,037    
                   

/EIN News/ --  

Three months ended March 31, 2018

  • Revenue of $4,831 decreased 19.3% compared to $5,989 in Q1/2017. The decrease in revenue was due to a delay in completion and delivery of hydrovac trucks during the quarter. Three completed trucks held in inventory as at March 31, 2018 were delivered and sold in early Q2 2018.
     
  • Despite the decreased revenue, Gross Profit of $888 was comparable to $897 in the same period of 2017 due to production efficiencies at the company’s Stettler plant.
     
  • Selling and general and administrative expenses of $1,244 increased by $271 compared to $973 in the same period of 2017. The increase is principally due to increased employee costs of the North America operation and increased overhead costs of the China operation and corporate.
     
  • EBITDAS (1) of negative $356, comprising North America ($96), China (negative $287) and Corporate (negative $165), decreased by $280 compared to negative $76 in Q1/2017, due to increased selling and general and administrative expenses. For the North America segment, EDITDAS during the quarter of $96 decreased significantly compared to Q4 2017, due to decreased activity levels. For China, negative EDITDA during the quarter was ($287) and is expected to stay at this level until there is an increase in the scope of operations.    
     
  • Net loss of $635 increased by $313 compared to a loss of $322 in Q1/2017. This is due to the factors discussed above, together with stock-based compensation expense of $68.

1 Earnings (loss) before interest, tax, depreciation, amortization and stock-based compensation (EBITDAS) and Earnings (loss) before interest and tax (EBIT) are not defined by IFRS. The definition of EBITDAS does not consider gains and losses on the disposal of assets, fair value changes in foreign currency forward contracts and non-cash components of stock-based compensation. While not an IFRS measure, EBITDAS is used by management, creditors, analysts, investors and other financial stakeholders to assess the Group’s performance and management from a financial and operational perspective.

Segmented information (in CAD $000’s)

           
Three Months ended March 31, 2018 North America
China
  Corporate
  Total
   
Revenue $4,831   $ -     $ -   $4,831    
Cost of sales      3,943     -       -     3,943    
Selling and general administrative      792     287       165     1,244    
EBITDAS $96 ($287 ) ($165 ) ($356 )  
           
           
Three Months ended March 31, 2017 North America
China
  Corporate
  Total
   
Revenue $5,989   $ -     $ -   $5,989    
Cost of sales      5,092     -       -     5,092    
Selling and general administrative      560     223       190     973    
EBITDAS $337 ($223 ) ($190 ) ($76 )  
 

Outlook

The market demand in North America from the municipal sectors in both Canada and United States is expected to stay strong during 2018. The Company is also benefiting from increased demand because of the significant design improvements of its hydrovac trucks. The Company continues to develop its relationship with its US partner and expects revenue growth in the 2nd half of 2018. As a result, the Company expects strong financial performance in North America.

In China, the Company continues to execute its business plan to capitalize on this significant market opportunity. By the end of Q2 2018, the Company expects to have four unique products for demonstration and potential future revenue. As a result of these factors management believes the Company’s medium and long-term outlook is positive in China.

About Tornado Global Hydrovacs Ltd.

The Company designs and manufactures hydrovac trucks in Canada and sells hydrovac trucks for excavation service providers to the oil and gas industry and the municipal markets in Canada and the USA. Hydrovac trucks use high pressure water to pulverize soil and turn it into mud, and then vacuum up the resulting mud into its tank. Tornado currently operates in North America. The Company intends to expand its hydrovac business into China and has established a wholly owned operation in China with a head office in Beijing. 

For more information about Tornado Global Hydrovacs Ltd., visit www.tornadotrucks.com or contact:

Bill Rollins
Chief Executive Officer
Phone: (403) 204-6333
Email:  brollins@tghl.ca

Al Robertson
Chief Financial Officer
Phone: (403) 204 -6363
Email: arobertson@tghl.ca

Advisory

Neither the Exchange nor its Regulation Service Provider (as that term is defined in policies of the Exchange) accepts responsibility for the adequacy or accuracy of this news release

Certain statements contained in this news release constitute forward-looking statements. These statements relate to future events. All statements other than statements of historical fact are forward-looking statements. The use of the words ‘‘may”, “expects”, “expected”, “believes”, “anticipates” and other words of a similar nature are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although the Company believes these statements to be reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. Such statements include statements regarding the Company’s outlook for the rest of the year and the anticipated demand for the Company’s newly designed hydrovac truck.   Actual results could differ materially from those anticipated in these forward-looking statements as a result of prevailing economic conditions, receipt of requisite regulatory approvals, and other factors, many of which are beyond the control of the Company.  The forward-looking statements contained in this news release represent the Company’s expectations as of the date hereof, and are subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by applicable securities regulations.

 

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