CALGARY, AB,
March 16, 2022 /CNW/
- Calfrac Well Services Ltd. ("Calfrac" or "the
Company") (TSX: CFW) announces its financial and operating
results for the three months and years ended December 31, 2021.
HIGHLIGHTS
|
Three Months Ended
December 31,
|
Years Ended December
31,
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
(C$000s, except per
share and unit data)
|
($)
|
($)
|
(%)
|
($)
|
($)
|
(%)
|
(unaudited)
|
|
|
|
|
|
|
Revenue
|
257,755
|
180,722
|
43
|
1,002,395
|
705,436
|
42
|
Operating income
(1)
|
9,098
|
15,597
|
(42)
|
63,704
|
21,997
|
190
|
Per share –
basic(2)
|
0.24
|
1.91
|
(87)
|
1.70
|
5.21
|
(67)
|
Per share –
diluted(2)
|
0.11
|
0.27
|
(59)
|
0.76
|
0.41
|
85
|
Adjusted
EBITDA(1)
|
9,469
|
13,715
|
(31)
|
61,379
|
23,809
|
158
|
Per share –
basic(2)
|
0.25
|
1.68
|
(85)
|
1.63
|
5.64
|
(71)
|
Per share –
diluted(2)
|
0.11
|
0.24
|
(54)
|
0.73
|
0.44
|
66
|
Net (loss)
income
|
(28,318)
|
125,897
|
NM
|
(82,812)
|
(324,235)
|
(74)
|
Per share –
basic(2)
|
(0.75)
|
15.43
|
NM
|
(2.21)
|
(76.78)
|
(97)
|
Per share –
diluted(2)
|
(0.75)
|
2.19
|
NM
|
(2.21)
|
(76.78)
|
(97)
|
Working capital (end of
period)
|
|
|
|
170,737
|
161,448
|
6
|
Total equity (end of
period)
|
|
|
|
328,840
|
410,234
|
(20)
|
Weighted average common
shares outstanding (000s)
|
|
|
|
|
|
|
Basic(2)
|
37,680
|
8,158
|
362
|
37,544
|
4,223
|
789
|
Diluted(2)
|
84,495
|
57,598
|
47
|
83,687
|
54,234
|
54
|
(1)
|
Refer to "Non-GAAP
Measures" on pages 12 and 13 for further
information.
|
(2)
|
Comparative amounts
were adjusted to reflect the Company's fifty-to-one common share
consolidation that occurred on December 18, 2020.
|
PRESIDENT'S MESSAGE
Calfrac's President and Chief Operating Officer, Lindsay Link commented: "The dedicated Calfrac
team responded to the challenges in 2021 by focusing on service
quality and safety. As a result, the Company continued to maintain
its strong safety performance in 2021 while rehiring a significant
number of employees following the Covid-19 downturn, and achieved
one of the lowest total recordable incident rate in the Company's
history. The outlook for the Company continues to progress,
especially in North America,
and Calfrac anticipates significant year-over-year
improvement in its consolidated financial performance."
FOURTH QUARTER 2021 OVERVIEW
In the fourth quarter of 2021, the Company:
- generated revenue of $257.8
million, an increase of 43 percent from the fourth quarter
in 2020 resulting primarily from improved activity in North America and Argentina;
- increased the Company's total revolving credit facility
capacity from $225.0 million to
$250.0 million;
- reported adjusted EBITDA of $9.5
million versus $13.7 million
in the fourth quarter of 2020;
- reported a net loss of $28.3
million or $0.75 per share
diluted, compared to a net income of $125.9
million or $2.19 per share
diluted in 2020, which included a gain on the settlement of debt of
$226.3 million and a deferred income
tax expense of $54.2 million;
- reported period-end working capital of $170.7 million versus $161.4 million at December
31, 2020; and
- incurred capital expenditures of $15.8
million primarily to support the Company's United States fracturing operations.
Subsequent to the end of 2021, the Company negotiated additional
waivers and amendments to its revolving credit facilities in order
to fund expected future working capital requirements in North
America. The waivers and amendments included the
following:
i.
|
The Company's Funded
Debt to Adjusted EBITDA covenant was waived for the quarter ended
December 31, 2021, and has been increased to 3.75x for the quarter
ended March 31, 2022;
|
|
|
ii.
|
The minimum $15.0
million liquidity requirement was temporarily waived until March
15, 2022 and reinstated through to June 30, 2022;
|
|
|
iii.
|
G2S2 Capital Inc.
(G2S2) was added as a lender to permit the incurrence of a secured
bridge loan from G2S2 under the credit agreement, with such debt
being excluded from the definitions of Funded Debt, Total Debt and
Current Liabilities for the purposes of financial covenant
calculations; and
|
|
|
iv.
|
The eligible portion of
the net book value of property, plant and equipment (PP&E) for
the purposes of the borrowing base calculation was increased from
25 percent to 35 percent, subject to a maximum contribution of
$150.0 million.
|
Additionally, the Company executed a secured bridge loan with
G2S2, a company controlled by George
Armoyan, in order to fund its short-term working capital
requirements. As of March 15, 2022,
the Company had drawn $15.0 million
on the loan and can request further draws up to an additional
$10.0 million, for maximum proceeds
of $25.0 million, at an interest rate
of 8.0 percent. The loan is repayable on April 29, 2022, with the option to extend the
loan for a period of 60 days upon the consent of G2S2.
CONSOLIDATED HIGHLIGHTS
Three Months Ended
December 31,
|
2021
|
2020
|
Change
|
(C$000s, except
operational information)
|
($)
|
($)
|
(%)
|
(unaudited)
|
|
|
|
Revenue
|
257,755
|
180,722
|
43
|
Expenses
|
|
|
|
Operating
|
235,232
|
154,582
|
52
|
Selling, general and
administrative (SG&A)
|
13,425
|
10,543
|
27
|
|
248,657
|
165,125
|
51
|
Operating income
(1)
|
9,098
|
15,597
|
(42)
|
Operating income
(%)
|
3.5
|
8.6
|
(59)
|
Adjusted
EBITDA(1)
|
9,469
|
13,715
|
(31)
|
Adjusted EBITDA
(%)
|
3.7
|
7.6
|
(51)
|
Fracturing revenue per
job ($)
|
34,826
|
33,022
|
5
|
Number of fracturing
jobs
|
6,548
|
4,887
|
34
|
Active pumping
horsepower, end of period (000s)
|
1,020
|
902
|
13
|
Idle pumping
horsepower, end of period (000s)
|
337
|
443
|
(24)
|
Total pumping
horsepower, end of period (000s)
|
1,357
|
1,345
|
1
|
Coiled tubing revenue
per job ($)
|
18,237
|
33,754
|
(46)
|
Number of coiled tubing
jobs
|
782
|
354
|
121
|
Active coiled tubing
units, end of period (#)
|
17
|
17
|
—
|
Idle coiled tubing
units, end of period (#)
|
10
|
10
|
—
|
Total coiled tubing
units, end of period (#)
|
27
|
27
|
—
|
Cementing revenue per
job ($)
|
83,848
|
43,697
|
92
|
Number of cementing
jobs
|
123
|
85
|
45
|
Active cementing units,
end of period (#)
|
10
|
12
|
(17)
|
Idle cementing units,
end of period (#)
|
5
|
4
|
25
|
Total cementing units,
end of period (#)
|
15
|
16
|
(6)
|
(1)
Refer to "Non-GAAP Measures" on pages 12 and 13 for further
information.
|
Revenue in the fourth quarter of 2021 was $257.8 million, an increase of 43 percent from
the same period in 2020. The improved revenue was mainly due to the
fracturing job count increasing by 34 percent, resulting primarily
from higher activity in all operating divisions. Fracturing revenue
per job was consistent with the comparable quarter in 2020. Coiled
tubing activity increased by 121 percent partially due to the type
of work being completed in Canada,
Russia and Argentina, which was at a lower revenue per
job. Cementing activity in Argentina improved significantly as activity
and job sizes increased from the comparable period in 2020.
Calfrac reported Adjusted EBITDA of $9.5
million for the fourth quarter of 2021, a decrease from
$13.7 million in the comparable
period in 2020. The decrease was primarily due to lower utilization
in Russia during the quarter
resulting from unplanned downtime for 11 days in December and lower
operating margins in Canada
due in part, to reactivation costs that were incurred during
the quarter in advance of an expected active first quarter in 2022
combined with higher fuel and product costs.This decrease was
offset partially by higher equipment utilization in the United States and Argentina as compared to the prior year.
The net loss was $28.3 million or
$0.75 per share diluted compared to
net income of $125.9 million or
$2.19 per share diluted in the same
period last year, which included a gain on the settlement of
debt of $226.3 million and a deferred
income tax expense of $54.2
million.
Three Months
Ended
|
December
31,
|
September
30,
|
Change
|
|
2021
|
2021
|
|
(C$000s, except
operational information)
|
($)
|
($)
|
(%)
|
(unaudited)
|
|
|
|
Revenue
|
257,755
|
295,754
|
(13)
|
Expenses
|
|
|
|
Operating
|
235,232
|
249,196
|
(6)
|
SG&A
|
13,425
|
10,935
|
23
|
|
248,657
|
260,131
|
(4)
|
Operating
income(1)
|
9,098
|
35,623
|
(74)
|
Operating income
(%)
|
3.5
|
12.0
|
(71)
|
Adjusted
EBITDA(1)
|
9,469
|
35,581
|
(73)
|
Adjusted EBITDA
(%)
|
3.7
|
12.0
|
(69)
|
Fracturing revenue per
job ($)
|
34,826
|
32,885
|
6
|
Number of fracturing
jobs
|
6,548
|
8,174
|
(20)
|
Active pumping
horsepower, end of period (000s)
|
1,020
|
976
|
5
|
Idle pumping
horsepower, end of period (000s)
|
337
|
383
|
(12)
|
Total pumping
horsepower, end of period (000s)
|
1,357
|
1,359
|
—
|
Coiled tubing revenue
per job ($)
|
18,237
|
23,629
|
(23)
|
Number of coiled tubing
jobs
|
782
|
653
|
20
|
Active coiled tubing
units, end of period (#)
|
17
|
16
|
6
|
Idle coiled tubing
units, end of period (#)
|
10
|
11
|
(9)
|
Total coiled tubing
units, end of period (#)
|
27
|
27
|
—
|
Cementing revenue per
job ($)
|
83,848
|
52,203
|
61
|
Number of cementing
jobs
|
123
|
113
|
9
|
Active cementing units,
end of period (#)
|
10
|
10
|
—
|
Idle cementing units,
end of period (#)
|
5
|
6
|
(17)
|
Total cementing units,
end of period (#)
|
15
|
16
|
(6)
|
(1)
Refer to "Non-GAAP Measures" on pages 12 and 13 for further
information.
|
Fourth-quarter revenue in 2021 of $257.8
million represented an decrease of 13 percent from the third
quarter of 2021, primarily due to lower fracturing activity in
North America and Russia. Revenue per fracturing job was 6
percent higher than the third quarter of 2021 due to pricing
increases in the United States and
the completion of larger jobs in Argentina.
In Canada, revenue decreased by
12 percent from the third quarter to $67.3
million in the fourth quarter due to lower activity in
December as customers exhausted their capital budgets. Calfrac also
increased its marketed asset base to four large fracturing
fleets and activated a fifth coiled tubing unit in advance of
activity in the first quarter in 2022. These activations resulted
in $0.8 million of additional
costs during the fourth quarter. Operating income as a
percentage of revenue was 7 percent, compared to 20 percent in the
third quarter.
In the United States, revenue
in the fourth quarter of 2021 was $110.6
million, a 20 percent decline from the third quarter of
2021. The fourth quarter began strong with consistent activity and
the benefit of pricing increases that were implemented during the
third quarter, however, activity with key customers slowed in late
November and December, resulting in reduced utilization for its
fleets. Operating income was $2.1
million in the fourth quarter compared to $13.8 million in the third quarter of 2021.
In Russia, revenue of
$28.1 million in the fourth quarter
of 2021 was 15 percent lower on a sequential basis due to lower
than expected fracturing equipment utilization as operations were
suspended for 11 days in December due to the inability of the
customer to supply proppant during that time period. Operating
income decreased by $4.3 million
primarily due to the lower utilization in December.
In Argentina, revenue in the
fourth quarter of 2021 increased to $51.7
million from $48.0 million in
the third quarter. The ongoing improvement in operating conditions
resulted in a sequential increase in overall activity particularly
for the Company's cementing operations. Operating income increased
from $6.4 million in the third
quarter of 2021 to $6.9 million in
the fourth quarter.
On a consolidated basis, Adjusted EBITDA of $9.5 million for the fourth quarter of 2021
decreased from $35.6 million in the
third quarter of 2021, primarily due to lower utilization in
North America due to an early
shutdown of operations prior to the end of the year and unexpected
operational delays in Russia.
BUSINESS UPDATE AND OUTLOOK
A prolonged period of underinvestment in the upstream sector, in
combination with a rebound in demand as Covid-19 related
restrictions have been reduced, has resulted in a
significant increase in crude oil and natural gas prices.
This stronger commodity price environment provides the foundation
for higher demand for Calfrac's services moving forward. The
Company's positive momentum from the third quarter continued into
the fourth quarter of 2021 but paused towards year-end due to
normal seasonality combined with customer budget exhaustion.
Calfrac expects to utilize its industry expertise to drive improved
financial results on a sequential basis while positioning the
Company to capitalize on a tightening oilfield services
market and meaningfully increase its
overall financial performance in 2022.
CANADA
Calfrac's Canadian division anticipates a strong first quarter
for its four large fracturing fleets. The high level of activity is
expected to continue into the second half of the year, after the
seasonal break-up, leading to improved year-over-year financial
performance. This strength in demand highlights the need for
E&P companies to align with quality service providers that can
safely and efficiently execute on their capital programs. In recent
years, the pricing for the pressure pumping sector has been
unsustainably low and did not generate a sufficient return on
capital employed. Calfrac anticipates that a tightening services
market in Canada will provide the
opportunity to significantly increase its prices in order to
reflect the appropriate value of its services. The Company achieved
modest price improvements during 2021, but upward pricing pressures
for trucking, fuel, chemicals, and sand were significant and
continue to persist. Calfrac believes the pressure pumping sector
in 2022 willincrease service prices that outpace cost inflation and
enable the industry to begin delivering acceptable returns on
investment.
UNITED STATES
As expected, the Company's United
States operations experienced a delayed start to 2022 in one
of its operating districts, but still expects to deliver improved
sequential performance during the first quarter. As momentum
continues to build, Calfrac anticipates a significant increase in
financial performance during 2022 driven by high utilization for
its nine operating fracturing fleets combined with the continuation
of service price appreciation that commenced in the second half of
2021. While the Company continues to pass along inflationary cost
increases, Calfrac has been successful in improving utilization as
well as net service pricing during the past few
months. Calfrac is committed to partnering with customers to
combine safe and efficient operations with optimal scheduling
management in order to produce sustainable full cycle returns to
the benefit of its customers and Calfrac's stakeholders.
RUSSIA
The ongoing conflict between Russia and Ukraine has added a level of risk and
uncertainty around the Company's operations in Russia.
As a result of this dynamic situation, Calfrac is currently
evaluating the options for its Russian operations. The Company
expects that it will have more to discuss in conjunction with the
reporting of its first-quarter results in early May.
ARGENTINA
Calfrac's operations in Argentina delivered a significant
year-over-year increase in profitability mainly due to strong
equipment utilization in the Vaca Muerta shale play. The Company
expects the operating cadence that was achieved in the second half
of 2021 to continue throughout 2022 and drive strong levels of
financial performance.
CORPORATE
Given the expected growth in activity in North America during 2022, the Company amended
its credit facility agreement with its lending syndicate in order
to provide the necessary liquidity to fund increasing working
capital requirements for its operations. Calfrac's continued focus
is to optimize capital allocation and operating efficiencies
in order to maximize its operating cash flow, and dedicate any
excess free cash flow to debt repayment. The Company will not
consider any additional fleet reactivation or growth investments
until financial returns exceed internal benchmarks that properly
account for macroeconomic, industry and operation-specific risk
factors.
LIQUIDITY AND CAPITAL RESOURCES
|
Years Ended Dec.
31,
|
|
2021
|
2020
|
(C$000s)
|
($)
|
($)
|
(unaudited)
|
|
|
Cash provided by (used
in):
|
|
|
Operating
activities
|
(15,337)
|
24,520
|
Financing
activities
|
45,852
|
8,602
|
Investing
activities
|
(61,294)
|
(42,518)
|
Effect of exchange rate
changes on cash and cash equivalents
|
(402)
|
(3,336)
|
Decrease in cash and
cash equivalents
|
(31,181)
|
(12,732)
|
OPERATING ACTIVITIES
The Company's cash used in operating activities for
the year ended December 31, 2021 was $15.3 million versus cash provided of
$24.5 million in 2020. The decrease
in cash from operations was primarily due to a larger outflow of
cash from working capital during the period. In 2021, $50.1 million of cash was used to fund the
Company's working capital requirements versus providing
$4.6 million of cash in 2020. At
December 31, 2021, Calfrac's working capital was $170.7 million compared to $161.4 million at December
31, 2020.
FINANCING ACTIVITIES
Net cash provided by financing activities for the year
ended December 31, 2021 was $45.9
million compared to net cash provided of $8.6 million in 2020. During 2021, the Company
borrowed $53.5 million on a net basis under its credit
facilities, paid lease principal payments of $7.8 million and received proceeds of
$0.2 million from the exercise of a
portion of the Company's outstanding warrants.
On June 30, 2021, the Company
amended its revolving credit facility agreement, which is available
on SEDAR, to reduce its total facility capacity from $290.0 million to $225.0 million and extended the maturity date to
July 1, 2023. On November 25, 2021, the Company further amended
its revolving credit facility agreement to increase its total
facility capacity to $250.0
million.
The facilities consist of an operating facility of $45.0 million and a syndicated facility of
$205.0 million. The Company's credit
facilities mature on July 1, 2023,
and can be extended by one or more years at the Company's request
and lenders' acceptance. The Company may also prepay principal
without penalty. The interest rates are based on the parameters of
certain bank covenants. For prime-based loans and U.S. base-rate
loans, the rate ranges from prime or U.S. base rate plus 1.00
percent to prime plus 3.50 percent. For LIBOR-based loans and
bankers' acceptance-based loans, the margin thereon ranges from
2.00 percent to 4.50 percent above the respective base rates. The
Company incurs interest at the high end of the ranges outlined
above during the Covenant Relief Period or if its net Total Debt to
Adjusted EBITDA ratio is above 4.00:1.00. Additionally, in the
event that the Company's net Total Debt to Adjusted EBITDA ratio is
above 5.00:1.00 and also during the Covenant Relief Period, certain
restrictions apply including the following, among others: (a)
acquisitions are subject to consent of the lenders; (b)
distributions are restricted other than those relating to the
Company's equity compensation plans; (c) no increase in the rate of
dividends are permitted; and (d) additional permitted debt is
restricted to $5.0 million, subject to certain exceptions. As
at December 31, 2021, the Company's net Total Debt to Adjusted
EBITDA ratio exceeded the 5.00:1.00 threshold.
At December 31, 2021, the Company had used $0.9 million of its credit facilities for letters
of credit and had $190.0 million of
borrowings under its credit facilities, and $1.4 million of bank
overdraft. The Company's credit facilities are subject to a
monthly borrowing base, which at December
31, 2021 was $217.1 million.
Under the terms of the Company's amended credit facility agreement,
Calfrac must maintain a minimum liquidity amount of $15.0 million during the Covenant Relief
Period.
The Company's credit facilities contain certain financial
covenants. As per the amended credit facility agreement, the
Company's Funded Debt to Adjusted EBITDA covenant was waived for
the quarter ended December 31,
2021, and is 3.75x for the quarter ended March 31, 2022 and 3.00x for each quarter end
thereafter. As shown in the table below, the Company was in full
compliance with its financial covenants associated with its credit
facilities as at December 31, 2021.
|
Covenant
|
Actual
|
As at December
31,
|
2021
|
2021
|
Working capital ratio
not to fall below
|
1.15x
|
2.40x
|
Funded Debt to Adjusted
EBITDA not to exceed(1)(2)
|
N/A
|
3.83x
|
Funded Debt to
Capitalization not to exceed(1)(3)
|
0.30x
|
0.27x
|
(1)
|
Funded Debt is
defined as Total Debt excluding all outstanding 10.875% second lien
senior notes due 2026 (Second Lien Notes), 1.5 lien senior secured
convertible PIK notes due 2023 (1.5 Lien Notes), the G2S2 Loan and
lease obligations. Total Debt includes bank loans and long-term
debt (before unamortized debt issuance costs and debt discount)
plus outstanding letters of credit. For the purposes of the Total
Debt to Adjusted EBITDA ratio, the Funded Debt to Capitalization
Ratio and the Funded Debt to Adjusted EBITDA ratio, the amount of
Total Debt or Funded Debt, as applicable, is reduced by the amount
of cash on hand with lenders (excluding any cash held in a
segregated account for a specified purpose, including a
potential equity cure).
|
(2)
|
Adjusted EBITDA is
defined as net income or loss for the period adjusted for interest,
taxes, depreciation and amortization, non-cash stock-based
compensation, and gains and losses that are extraordinary or
non-recurring.
|
(3)
|
Capitalization is
Total Debt plus equity.
|
INVESTING ACTIVITIES
Calfrac's net cash used for investing activities was
$61.3 million for the year ended
December 31, 2021 versus $42.5
million in 2020. Cash outflows relating to capital
expenditures were $63.4 million for
the year ended December 31, 2021 compared to $46.2 million in 2020.
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS
The effect of changes in foreign exchange rates on the Company's
cash and cash equivalents during the year ended December 31,
2021 was a loss of $0.4 million
versus a loss of $3.3 million in
2020. These losses relate to movements of cash and cash equivalents
held by the Company in a foreign currency during the period.
With its working capital position, available credit facilities,
remaining availability under the G2S2, access to capital
markets and anticipated funds provided by operations, the Company
expects to have adequate resources to fund its financial
obligations and planned capital expenditures for 2022 and
beyond.
At December 31, 2021, the Company had a bank overdraft
position of $1.4 million.
FINANCIAL OVERVIEW – THREE MONTHS ENDED DECEMBER 31,
2021 VERSUS 2020
CANADA
Three Months Ended
December 31,
|
2021
|
2020
|
Change
|
(C$000s, except
operational information)
|
($)
|
($)
|
(%)
|
(unaudited)
|
|
|
|
Revenue
|
67,334
|
53,347
|
26
|
Expenses
|
|
|
|
Operating
|
60,755
|
42,403
|
43
|
SG&A
|
1,809
|
1,870
|
(3)
|
|
62,564
|
44,273
|
41
|
Operating
income(1)
|
4,770
|
9,074
|
(47)
|
Operating income
(%)
|
7.1
|
17.0
|
(58)
|
Fracturing revenue per
job ($)
|
23,259
|
28,525
|
(18)
|
Number of fracturing
jobs
|
2,630
|
1,697
|
55
|
Active pumping
horsepower, end of period (000s)
|
227
|
202
|
12
|
Idle pumping
horsepower, end of period (000s)
|
43
|
73
|
(41)
|
Total pumping
horsepower, end of period (000s)
|
270
|
275
|
(2)
|
Coiled tubing revenue
per job ($)
|
16,009
|
19,894
|
(20)
|
Number of coiled tubing
jobs
|
382
|
242
|
58
|
Active coiled tubing
units, end of period (#)
|
8
|
8
|
—
|
Idle coiled tubing
units, end of period (#)
|
5
|
5
|
—
|
Total coiled tubing
units, end of period (#)
|
13
|
13
|
—
|
(1)
Refer to "Non-GAAP Measures" on pages 12 and 13 for further
information.
|
REVENUE
Revenue from Calfrac's Canadian operations during the fourth
quarter of 2021 was $67.3 million
compared to $53.3 million in the same
period of 2020 primarily due to higher activity in the Montney basin. The number of fracturing jobs
increased by 55 percent from the comparable period in 2020 as a
significantly improved commodity price environment resulted in an
increase in drilling and completions activity in western
Canada. Revenue per fracturing job
was 18 percent lower than the comparable quarter due to job mix.
The number of coiled tubing jobs increased by 58 percent from the
fourth quarter in 2020 as more pump-down and annular work was
performed. The change in job type also contributed to the 20
percent decrease in revenue per job, as the comparable quarter
included a greater proportion of milling work, which generate
higher margins.
OPERATING INCOME
Operating income in Canada
during the fourth quarter of 2021 was $4.8
million compared to $9.1
million in the same period of 2020. The Canadian division's
operating income as a percentage of revenue was 7 percent compared
to 17 percent in the fourth quarter of 2020 as the Company incurred
additional costs to prepare for an active first quarter in 2022.
This included approximately $0.8
million of reactivation costs to increase its fracturing
footprint to four large fleets and five coiled tubing units
beginning in 2022. The Company also incurred additional hiring and
personnel costs in advance of these additional units generating
revenue. The benefit from the Canadian Emergency Wage Subsidy
(CEWS) of $0.7 million was
$2.1 million lower as compared to the
fourth quarter of 2020 as the Company's revenue continued to
improve. SG&A expense in the fourth quarter of 2021 included a
$0.1 million bad debt expense while
the same period in 2020 included a $0.7
million bad debt provision. Excluding these items, operating
income for the fourth quarter of 2021 would have been $4.9 million or 7.3 percent versus $7.0 million or 13.1 percent in the comparable
period in 2020. The decrease in operating income for the quarter,
both on a total basis and as a percentage of revenue, was mainly
due to higher fuel costs associated with extremely cold weather in
December and higher product costs due to job mix during the
quarter, combined with increased personnel costs resulting from the
reinstatement of previously reduced employee salaries and
benefits.
UNITED STATES
Three Months Ended
December 31,
|
2021
|
2020
|
Change
|
(C$000s, except
operational and exchange rate information)
|
($)
|
($)
|
(%)
|
(unaudited)
|
|
|
|
Revenue
|
110,581
|
67,283
|
64
|
Expenses
|
|
|
|
Operating
|
105,395
|
63,689
|
65
|
SG&A
|
3,127
|
2,590
|
21
|
|
108,522
|
66,279
|
64
|
Operating
income(1)
|
2,059
|
1,004
|
105
|
Operating income
(%)
|
1.9
|
1.5
|
27
|
Fracturing revenue per
job ($)
|
36,709
|
26,838
|
37
|
Number of fracturing
jobs
|
3,013
|
2,507
|
20
|
Active pumping
horsepower, end of period (000s)
|
579
|
516
|
12
|
Idle pumping
horsepower, end of period (000s)
|
294
|
354
|
(17)
|
Total pumping
horsepower, end of period (000s)
|
873
|
870
|
—
|
Active coiled tubing
units, end of period (#)
|
—
|
—
|
—
|
Idle coiled tubing
units, end of period (#)
|
1
|
1
|
—
|
Total coiled tubing
units, end of period (#)
|
1
|
1
|
—
|
Active cementing units,
end of period (#)
|
—
|
—
|
—
|
Idle cementing units,
end of period (#)
|
2
|
3
|
(33)
|
Total cementing units,
end of period (#)
|
2
|
3
|
(33)
|
US$/C$ average exchange
rate(2)
|
1.2603
|
1.3030
|
(3)
|
(1)
Refer to "Non-GAAP Measures" on pages 12 and 13 for further
information.
|
(2)
Source: Bank of Canada.
|
REVENUE
Revenue from Calfrac's United
States operations increased to $110.6
million during the fourth quarter of 2021 from $67.3 million in the comparable quarter of 2020.
The 64 percent increase in revenue can be attributed to a
combination of a 37 percent increase in revenue per job
period-over-period and a 20 percent increase in the number of
fracturing jobs completed. The higher revenue per job was the
result of pricing increases, mainly to pass through higher input
costs to its customers, and job mix. Activity increased in all of
the remaining areas where the Company operates with no activity in
Texas and New Mexico as the
Company exited those markets earlier in 2021.
OPERATING INCOME
The Company's United States
operations generated operating income of $2.1 million during the fourth quarter of 2021
compared to $1.0 million in the same
period in 2020. The slight improvement in operating income on
a dollar basis was largely driven by better utilization in
Colorado, offset partially by
lower utilization in North Dakota
as most of its customers reduced operations in December due to
capital budget exhaustion. During the quarter, there were
inflationary pressures experienced across most operating cost
drivers that were effectively offset by pricing increases. SG&A
expenses increased by 21 percent primarily due to the reinstatement
of previously reduced salaries and benefits during the quarter.
RUSSIA
Three Months Ended
December 31,
|
2021
|
2020
|
Change
|
(C$000s, except
operational and exchange rate information)
|
($)
|
($)
|
(%)
|
(unaudited)
|
|
|
|
Revenue
|
28,094
|
26,949
|
4
|
Expenses
|
|
|
|
Operating
|
25,821
|
21,843
|
18
|
SG&A
|
640
|
660
|
(3)
|
|
26,461
|
22,503
|
18
|
Operating income
(1)
|
1,633
|
4,446
|
(63)
|
Operating income
(%)
|
5.8
|
16.5
|
(65)
|
Fracturing revenue per
job ($)
|
60,778
|
74,317
|
(18)
|
Number of fracturing
jobs
|
437
|
324
|
35
|
Active pumping
horsepower, end of period (000s)
|
77
|
65
|
18
|
Idle pumping
horsepower, end of period (000s)
|
—
|
12
|
(100)
|
Total pumping
horsepower, end of period (000s)
|
77
|
77
|
—
|
Coiled tubing revenue
per job ($)
|
29,509
|
47,838
|
(38)
|
Number of coiled tubing
jobs
|
52
|
60
|
(13)
|
Active coiled tubing
units, end of period (#)
|
4
|
4
|
—
|
Idle coiled tubing
units, end of period (#)
|
3
|
3
|
—
|
Total coiled tubing
units, end of period (#)
|
7
|
7
|
—
|
Rouble/C$ average
exchange rate(2)
|
0.0173
|
0.0171
|
1
|
(1)
Refer to "Non-GAAP Measures" on pages 12 and 13 for further
information.
|
(2)
Source: Bank of Canada.
|
REVENUE
Revenue from Calfrac's Russian operations increased by 4 percent
during the fourth quarter of 2021 to $28.1
million from $26.9 million in
the corresponding period of 2020. The increase in revenue was
attributable to a 35 percent increase in fracturing activity as the
Company increased its operating footprint from four fleets in 2020
to six fleets in 2021, combined with changes in job mix as a higher
percentage of multi-stage work was completed resulting in a higher
number of stages completed at a lower average job size. Revenue per
fracturing job decreased by 18 percent primarily due to the impact
of job mix. Coiled tubing activity decreased by 13 percent as
activity was concentrated on port openings rather than cleanouts
during the quarter, which also resulted in a lower revenue per
job.
OPERATING INCOME
The Company's Russian division generated operating income of
$1.6 million during the fourth
quarter of 2021 or 6 percent of revenue versus $4.4 million or 16 percent of revenue in the
comparable quarter in 2020. The lower operating margin performance
was primarily due to lower than expected fracturing equipment
utilization as operations were suspended for 11 days in December
due to the inability of the customer to supply proppant during that
time period. Coiled tubing activity was comprised of lower margin
work during the quarter, which had a negative impact on overall
margins as a percentage of revenue.
ARGENTINA
Three Months Ended
December 31,
|
2021
|
2020
|
Change
|
(C$000s, except
operational and exchange rate information)
|
($)
|
($)
|
(%)
|
(unaudited)
|
|
|
|
Revenue
|
51,746
|
33,143
|
56
|
Expenses
|
|
|
|
Operating
|
42,964
|
26,344
|
63
|
SG&A
|
1,884
|
1,323
|
42
|
|
44,848
|
27,667
|
62
|
Operating income
(loss)(1)
|
6,898
|
5,476
|
26
|
Operating income (loss)
(%)
|
13.3
|
16.5
|
(19)
|
Fracturing revenue per
job ($)
|
63,476
|
60,188
|
5
|
Number of fracturing
jobs
|
468
|
359
|
30
|
Active pumping
horsepower, end of period (000s)
|
137
|
118
|
16
|
Idle pumping
horsepower, end of period (000s)
|
—
|
5
|
NM
|
Total pumping
horsepower, end of period (000s)
|
137
|
123
|
11
|
Coiled tubing revenue
per job ($)
|
18,999
|
82,005
|
(77)
|
Number of coiled tubing
jobs
|
348
|
52
|
569
|
Active coiled tubing
units, end of period (#)
|
5
|
5
|
—
|
Idle coiled tubing
units, end of period (#)
|
1
|
1
|
—
|
Total coiled tubing
units, end of period (#)
|
6
|
6
|
—
|
Cementing revenue per
job ($)
|
83,848
|
43,697
|
92
|
Number of cementing
jobs
|
123
|
85
|
45
|
Active cementing units,
end of period (#)
|
10
|
12
|
(17)
|
Idle cementing units,
end of period (#)
|
3
|
1
|
200
|
Total cementing units,
end of period (#)
|
13
|
13
|
—
|
US$/C$ average exchange
rate(2)
|
1.2603
|
1.3030
|
(3)
|
(1)
Refer to "Non-GAAP Measures" on pages 12 and 13 for further
information.
|
(2)
Source: Bank of Canada.
|
REVENUE
Calfrac's Argentinean operations generated revenue of
$51.7 million during the fourth
quarter of 2021 compared to $33.1
million in the comparable quarter in 2020. Activity in the
fourth quarter of 2021 improved year-over-year across all service
lines and operating regions. Activity in the Vaca Muerta shale play
continued to increase along with activity in southern Argentina. Fracturing revenue per job
increased by 5 percent compared to the comparable quarter despite
the impact of a 3 percent depreciation in the U.S. dollar,
primarily due to job mix. The largest revenue improvement was
achieved in the Company's cementing operations as activity
increased by 45 percent and revenue per job increased by 92 percent
due to changes in job mix as a greater number of pre-fracturing
projects were completed in the fourth quarter of 2021. Coiled
tubing revenue was comprised of contracted work with a different
customer than the same period in 2020, which resulted in a larger
number of jobs completed at a significantly lower revenue per
job.
OPERATING INCOME
The Company's operations in Argentina generated an operating income of
$6.9 million during the fourth
quarter of 2021 compared to operating income of $5.5 million in the comparable quarter of 2020.
Utilization of the Company's equipment improved compared to
the same period in 2020 as the prior year included a government
mandated shutdown of oilfield activity in response to the Covid-19
pandemic. The Company's operating margins as a percentage of
revenue decreased from 16.5 percent to 13.3 percent as its fixed
cost structure increased to scale up for additional activity.
Operating income was also negatively affected by inflationary
salary increases in December that were not immediately offset by
local currency devaluation and higher equipment repair costs
related to the start-up of equipment purchased from a third party
earlier in the year.
CORPORATE
Three Months Ended
December 31,
|
2021
|
2020
|
Change
|
(C$000s)
|
($)
|
($)
|
(%)
|
(unaudited)
|
|
|
|
Expenses
|
|
|
|
Operating
|
297
|
303
|
(2)
|
SG&A
|
5,965
|
4,100
|
45
|
|
6,262
|
4,403
|
42
|
Operating
loss(1)
|
(6,262)
|
(4,403)
|
42
|
% of Revenue
|
2.4
|
2.4
|
—
|
(1)
Refer to "Non-GAAP Measures" on pages 12 and 13 for further
information.
|
OPERATING LOSS
Corporate expenses for the fourth quarter of 2021 were
$6.3 million compared to $4.4 million in the fourth quarter of 2020. The
increase was due in part to an increase in stock-based compensation
expense of $0.7 million in the fourth
quarter in 2021 compared to the same period in 2020, primarily due
to the issuance of new equity-based awards under the omnibus
incentive plan during the second quarter in 2021, combined with a
higher share price. In addition, higher professional fees and
personnel costs also contributed to the increase in SG&A
expense during the quarter.
NON-GAAP MEASURES
Certain supplementary measures presented in this press release
do not have any standardized meaning under IFRS and, because IFRS
have been incorporated as Canadian generally accepted accounting
principles (GAAP), these supplementary measures are also non-GAAP
measures. These measures have been described and presented in order
to provide shareholders and potential investors with additional
information regarding the Company's financial results, liquidity
and ability to generate funds to finance its operations. These
measures may not be comparable to similar measures presented by
other entities, and are explained below.
Operating income (loss) is defined as net income (loss) before
depreciation, foreign exchange gains or losses, gains or losses on
disposal of property, plant and equipment, gains or losses on
exchange or settlement of debt, impairment of property, plant and
equipment, impairment of other assets, interest, and income taxes.
Management believes that operating income is a useful supplemental
measure as it provides an indication of the financial results
generated by Calfrac's business segments prior to consideration of
how these segments are financed or taxed. Operating income for the
period was calculated as follows:
|
Three Months
Ended Dec. 31,
|
Years Ended Dec.
31,
|
|
2021
|
2020
|
2021
|
2020
|
(C$000s)
|
($)
|
($)
|
($)
|
($)
|
(unaudited)
|
|
|
|
|
Net loss
|
(28,318)
|
125,897
|
(82,812)
|
(324,235)
|
Add back
(deduct):
|
|
|
|
|
Depreciation
|
31,638
|
30,843
|
127,925
|
172,021
|
Foreign exchange
(gains) losses
|
1,885
|
5,733
|
5,288
|
15,477
|
Loss (gain) on disposal
of property, plant and equipment
|
(110)
|
(260)
|
403
|
24
|
Impairment of property,
plant and equipment
|
—
|
—
|
—
|
227,208
|
Impairment of
inventory
|
—
|
—
|
—
|
27,868
|
Impairment of other
assets
|
705,000
|
—
|
705
|
507
|
Gain on exchange of
debt
|
—
|
—
|
—
|
(130,444)
|
Provision for
settlement of litigation
|
|
|
|
|
Interest
|
9,662
|
24,913
|
37,737
|
91,267
|
Income taxes
|
(6,364)
|
54,790
|
(25,542)
|
168,623
|
Operating
income
|
9,098
|
15,597
|
63,704
|
21,997
|
Adjusted EBITDA is defined in the Company's credit facilities
for covenant purposes as net income or loss for the period adjusted
for interest, income taxes, depreciation and amortization,
unrealized foreign exchange losses (gains), non-cash stock-based
compensation, and gains and losses that are extraordinary or
non-recurring. Adjusted EBITDA is presented because it is used in
the calculation of the Company's bank covenants. Adjusted EBITDA
for the period was calculated as follows:
|
Three Months
Ended Dec. 31,
|
Years Ended Dec.
31,
|
|
2021
|
2020
|
2021
|
2020
|
(C$000s)
|
|
|
($)
|
($)
|
(unaudited)
|
|
|
|
|
Net loss
|
(28,318)
|
125,897
|
(82,812)
|
(324,235)
|
Add back
(deduct):
|
|
|
|
|
Depreciation
|
31,638
|
30,843
|
127,925
|
172,021
|
Unrealized foreign
exchange (gains) losses
|
1,338
|
3,435
|
718
|
8,319
|
Loss (gain) on disposal
of property, plant and equipment
|
(110)
|
(260)
|
403
|
24
|
Impairment of property,
plant and equipment
|
—
|
—
|
—
|
227,208
|
Impairment of
inventory
|
—
|
—
|
—
|
27,868
|
Impairment of other
assets
|
705
|
—
|
705
|
507
|
Gain on exchange of
debt
|
—
|
—
|
—
|
(130,444)
|
Litigation
settlements
|
—
|
—
|
(700)
|
—
|
Restructuring
charges
|
2
|
4
|
673
|
5,377
|
Stock-based
compensation
|
916
|
412
|
2,272
|
1,511
|
Interest
|
9,662
|
24,913
|
37,737
|
91,267
|
Income taxes
|
(6,364)
|
54,790
|
(25,542)
|
168,623
|
Adjusted
EBITDA(1)
|
9,469
|
13,715
|
61,379
|
23,809
|
(1) For bank covenant
purposes, EBITDA includes the deduction of an additional $9.0
million for the year ended December 31, 2021 (year ended December
31, 2020 - $15.6 million) of lease payments that would have been
recorded as operating expenses prior to the adoption of IFRS
16.
|
ADVISORIES
FORWARD-LOOKING STATEMENTS
In order to provide Calfrac shareholders and potential investors
with information regarding the Company and its subsidiaries,
including management's assessment of Calfrac's plans and future
operations, certain statements contained in this press release,
including statements that contain words such as "seek",
"anticipate", "plan", "continue", "estimate", "expect", "may",
"will", "project", "predict", "potential", "targeting", "intend",
"could", "might", "should", "believe", "forecast" or similar words
suggesting future outcomes, are forward-looking statements.
In particular, forward-looking statements in this press release
include, but are not limited to, statements with respect to the
Company's debt, liquidity and financial position, expected
operating strategies and targets, capital expenditure programs,
future financial resources, anticipated equipment utilization
levels, future oil and natural gas well activity in each of the
Company's operating jurisdictions, impacts of the Russian-Ukraine
conflict, future costs or potential liabilities, projections of
market prices and costs, supply and demand for oilfield services,
expectations regarding the Company's ability to maintain its
competitive position, anticipated benefits of the Company's
competitive position, expectations regarding the Company's
financing activities and restrictions, including with regard to its
credit agreement and the indentures pursuant to which its 1.5 Lien
Notes and Second Lien Notes were issued, and its ability to raise
capital, treatment under government regulatory regimes, commodity
prices, anticipated outcomes of specific events expectations
regarding trends in, and the growth prospects of, the global oil
and natural gas industry, the Company's growth strategy and
prospects, and the impact of changes in accounting policies and
standards on the Company and its financial statements, and the
Company's expectations and intentions with respect to the
foregoing.These statements are derived from certain assumptions and
analyses made by the Company based on its experience and perception
of historical trends, current conditions, expected future
developments and other factors that it believes are appropriate in
the circumstances, including, but not limited to, the economic
and political environment in which the Company operates, the
Company's expectations for its current and prospective customers'
capital budgets and geographical areas of focus, the Company's
existing contracts and the status of current negotiations with key
customers and suppliers, the effectiveness of cost reduction
measures instituted by the Company and the likelihood that the
current tax and regulatory regime will remain substantially
unchanged.
Forward-looking statements are subject to a number of known and
unknown risks and uncertainties that could cause actual results to
differ materially from the Company's expectations. Such risk
factors include: sanctions and/or other restrictive
measures against Russia by the
governments of Canada,
the United States and other
countries in response to Russia's
invasion of Ukraine;
counter-actions taken by Russia in
response to the sanctions and other restrictive measures taken by
the governments of Canada,
the United States and other
countries; the impacts of the Russia - Ukraine conflict on the supply and demand for
oil and gas produced in Russia and
globally; price escalation and availability of raw
materials and component parts; restrictions resulting from
compliance with or breach of debt covenants and risk of
acceleration of indebtedness, including under the Company's credit
facilities, the G2S2 Loan, 1.5 Lien Notes indenture and/or Second
Lien Notes indenture; failure to reach any additional agreements
with the Company's lenders; the impact of events of defaults in
respect of other material contracts of the Company, including but
not limited to, cross-defaults resulting in acceleration of amounts
payable thereunder or the termination of such agreements; the
Company's ability to continue to manage the effect of the COVID-19
pandemic on its operations; global economic conditions, the level
of exploration, development and production for oil and natural gas
in Canada, the United States, Argentina and Russia; the demand for fracturing and other
stimulation services for the completion of oil and natural gas
wells; volatility in market prices for oil and natural gas and the
effect of this volatility on the demand for oilfield services
generally; the availability of capital on satisfactory terms;
direct and indirect exposure to volatile credit markets, including
credit rating risk; sourcing, pricing and availability
of trucking, equipment, suppliers, facilities and skilled
personnel; excess oilfield equipment levels; regional competition;
currency exchange rate risk; other risks associated with
foreign operations not previously identified herein; dependence on,
and concentration of, major customers; liabilities and risks,
including environmental liabilities and risks, inherent in oil and
natural gas operations; uncertainties in weather and temperature
affecting the duration of the service periods and the activities
that can be completed; operating restrictions and compliance
costs associated with legislative and regulatory initiatives
relating to hydraulic fracturing and the protection of workers and
the environment; changes in legislation and the regulatory
environment; failure to maintain the Company's safety standards and
record; liabilities and risks associated with prior operations;
and third party credit risk. Further information about
these and other risks and uncertainties may be found under
"Business Risks" below.
Consequently, all of the forward-looking statements made in this
press release are qualified by these cautionary statements and
there can be no assurance that actual results or developments
anticipated by the Company will be realized, or that they will have
the expected consequences or effects on the Company or its business
or operations. These statements speak only as of the respective
date of this press release or the document incorporated by
reference herein. The Company assumes no obligation to update
publicly any such forward-looking statements, whether as a result
of new information, future events or otherwise, except as required
pursuant to applicable securities laws. As a condition of the
TSX allowing the rescission of the purchase of a subscription of
1.5 Lien Notes acquired by an institutional shareholder as a
corrective measure, as further described in the Company's interim
financial statements for the nine months ending September 30, 2021, Calfrac is subject to
enhanced review by the TSX until at least March 2022.
BUSINESS RISKS
The business of Calfrac is subject to certain risks and
uncertainties. Prior to making any investment decision regarding
Calfrac, investors should carefully consider, among other things,
the risk factors set forth in the Company's most recently filed
Annual Information Form, which is specifically incorporated by
reference herein. The Annual Information Form is available through
the Internet on the Canadian System for Electronic Document
Analysis and Retrieval (SEDAR), which can be accessed at
www.sedar.com. Copies of the Annual Information Form may also be
obtained on request without charge from Calfrac at Suite 500, 407 -
8th Avenue S.W., Calgary, Alberta,
Canada, T2P 1E5, or at www.calfrac.com, or by facsimile at
403-266-7381.
ADDITIONAL INFORMATION
Further information regarding Calfrac Well Services Ltd.,
including the most recently filed Annual Information Form, can be
accessed on the Company's website at www.calfrac.com or under the
Company's public filings found at www.sedar.com.
FOURTH QUARTER CONFERENCE CALL
Calfrac will be conducting a conference call for interested
analysts, brokers, investors and news media representatives to
review its 2021 fourth-quarter results at 10:00 a.m. (Mountain Time) on Wednesday, March
16, 2022. The conference call dial-in number is 1-800-437-2398 or
647-792-1240. The seven-day replay numbers are 1-888-203-1112 or
647-436-0148 (once connected, enter 1873070). A webcast of the
conference call may be accessed via the Company's website at
www.calfrac.com.
CONSOLIDATED BALANCE SHEETS
As at December
31,
|
2021
|
2020
|
(C$000s)
|
($)
|
($)
|
ASSETS
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
—
|
29,830
|
Accounts
receivable
|
189,835
|
139,486
|
Income taxes
recoverable
|
2,859
|
1,530
|
Inventories
|
101,840
|
83,294
|
Prepaid expenses and
deposits
|
12,999
|
17,050
|
|
307,533
|
271,190
|
Non-current
assets
|
|
|
Property, plant and
equipment
|
563,423
|
618,488
|
Right-of-use
assets
|
22,005
|
22,785
|
Total assets
|
892,961
|
912,463
|
LIABILITIES AND
EQUITY
|
|
|
Current
liabilities
|
|
|
Bank
overdraft
|
1,351
|
—
|
Accounts payable and
accrued liabilities
|
127,441
|
101,784
|
Current portion of
lease obligations
|
8,004
|
7,958
|
|
136,796
|
109,742
|
Non-current
liabilities
|
|
|
Long-term
debt
|
388,479
|
324,633
|
Lease
obligations
|
12,560
|
14,013
|
Deferred income tax
liabilities
|
26,286
|
53,841
|
Total
liabilities
|
564,121
|
502,229
|
Capital
stock
|
801,178
|
800,184
|
Conversion rights on
convertible notes
|
4,764
|
4,873
|
Contributed
surplus
|
68,258
|
65,986
|
Warrants
|
40,282
|
40,797
|
Loan receivable for
purchase of common shares
|
(2,500)
|
(2,500)
|
Accumulated
deficit
|
(592,221)
|
(509,409)
|
Accumulated other
comprehensive income
|
9,079
|
10,303
|
Total equity
|
328,840
|
410,234
|
Total liabilities and
equity
|
892,961
|
912,463
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
Three Months Ended
Dec. 31,
|
Years Ended Dec.
31,
|
|
2021
|
2020
|
2021
|
2020
|
(C$000s, except per
share data)
|
($)
|
($)
|
($)
|
($)
|
Revenue
|
257,755
|
180,722
|
1,002,395
|
705,436
|
Cost of
sales
|
266,869
|
185,423
|
1,021,018
|
806,577
|
Gross loss
|
(9,114)
|
(4,701)
|
(18,623)
|
(101,141)
|
Expenses
|
|
|
|
|
Selling, general and
administrative
|
13,426
|
10,545
|
45,598
|
48,883
|
Foreign exchange
losses
|
1,885
|
5,733
|
5,288
|
15,477
|
(Gain) loss on disposal
of property, plant and equipment
|
(110)
|
(260)
|
403
|
24
|
Impairment of property,
plant and equipment
|
—
|
—
|
—
|
227,208
|
Impairment of
inventory
|
—
|
—
|
—
|
27,868
|
Impairment of other
assets
|
705
|
—
|
705
|
507
|
Gain on settlement of
debt
|
—
|
(226,319)
|
—
|
(226,319)
|
Gain on exchange of
debt
|
—
|
—
|
—
|
(130,444)
|
Interest
|
9,662
|
24,913
|
37,737
|
91,267
|
|
25,568
|
(185,388)
|
89,731
|
54,471
|
(Loss) income before
income tax
|
(34,682)
|
180,687
|
(108,354)
|
(155,612)
|
Income tax expense
(recovery)
|
|
|
|
|
Current
|
(47)
|
627
|
1,491
|
855
|
Deferred
|
(6,317)
|
54,163
|
(27,033)
|
167,768
|
|
(6,364)
|
54,790
|
(25,542)
|
168,623
|
Net (loss)
income
|
(28,318)
|
125,897
|
(82,812)
|
(324,235)
|
|
|
|
|
|
(Loss) income per
share
|
|
|
|
|
Basic
|
(0.75)
|
15.43
|
(2.21)
|
(76.78)
|
Diluted
|
(0.75)
|
2.19
|
(2.21)
|
(76.78)
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Three Months Ended
Dec. 31,
|
Years Ended Dec.
31,
|
|
2021
|
2020
|
2021
|
2020
|
(C$000s)
|
($)
|
($)
|
($)
|
($)
|
CASH FLOWS PROVIDED
BY (USED IN)
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net (loss)
income
|
(28,318)
|
125,897
|
(82,812)
|
(324,235)
|
Adjusted for the
following:
|
|
|
|
|
Depreciation
|
31,638
|
30,843
|
127,925
|
172,021
|
Stock-based
compensation
|
916
|
412
|
2,272
|
1,511
|
Unrealized foreign
exchange losses
|
1,338
|
3,435
|
718
|
8,319
|
(Gain) loss on disposal
of property, plant and equipment
|
(110)
|
(260)
|
403
|
24
|
Impairment of property,
plant and equipment
|
—
|
—
|
—
|
227,208
|
Impairment of
inventory
|
—
|
—
|
—
|
27,868
|
Impairment of other
assets
|
705
|
—
|
705
|
507
|
Non-cash gain on
settlement of debt
|
—
|
(198,847)
|
—
|
(198,847)
|
Non-cash gain on
exchange of debt
|
—
|
—
|
—
|
(130,444)
|
Interest
|
9,662
|
24,913
|
37,737
|
91,267
|
Interest
paid
|
(1,074)
|
(3,127)
|
(25,127)
|
(23,004)
|
Deferred income
taxes
|
(6,317)
|
54,163
|
(27,033)
|
167,768
|
Changes in items of
working capital
|
(4,808)
|
(52,327)
|
(50,125)
|
4,557
|
Cash flows provided by
(used in) operating activities
|
3,632
|
(14,898)
|
(15,337)
|
24,520
|
FINANCING
ACTIVITIES
|
|
|
|
|
Issuance of long-term
debt, net of debt issuance costs
|
8,648
|
84,979
|
59,555
|
142,319
|
Long-term debt
repayments
|
—
|
(70,000)
|
(6,050)
|
(118,727)
|
Lease obligation
principal repayments
|
(2,162)
|
(2,291)
|
(7,836)
|
(14,064)
|
Shares
repurchased
|
—
|
(926)
|
—
|
(926)
|
Proceeds on issuance of
common shares from the exercising of warrants
|
93
|
—
|
183
|
—
|
Cash flows provided by
financing activities
|
6,579
|
11,762
|
45,852
|
8,602
|
INVESTING
ACTIVITIES
|
|
|
|
|
Purchase of property,
plant and equipment
|
(16,446)
|
(7,038)
|
(63,434)
|
(46,189)
|
Proceeds on disposal of
property, plant and equipment
|
15
|
110
|
938
|
1,701
|
Proceeds on disposal of
right-of-use assets
|
177
|
634
|
1,202
|
1,970
|
Cash flows used in
investing activities
|
(16,254)
|
(6,294)
|
(61,294)
|
(42,518)
|
Effect of exchange rate
changes on cash and cash equivalents
|
(1,351)
|
(872)
|
(402)
|
(3,336)
|
Decrease in cash and
cash equivalents
|
(7,394)
|
(10,302)
|
(31,181)
|
(12,732)
|
Cash and cash
equivalents, beginning of period
|
6,043
|
40,132
|
29,830
|
42,562
|
(Bank overdraft) cash
and cash equivalents, end of period
|
(1,351)
|
29,830
|
(1,351)
|
29,830
|
SOURCE Calfrac Well Services Ltd.