(TSX VENTURE:DVT) - Divestco Inc. ("Divestco" or the "Company") announces its
operating results for the three and six months ended June 30, 2013.
Three Months Ended June 30, 2013
Divestco had a net loss of $2.2 million for the second quarter of 2013 ($0.03
per share - basic and diluted) compared to net income of $0.9 million ($0.01 per
share - basic and diluted) for the same period in 2012. The loss in Q2 2013 was
primarily due to the Company recognizing a $1 million accounting loss from the
disposal of certain data library assets and a $0.7 million impairment of
leasehold improvements (net of tenant inducements) associated with the surrender
of office space in the quarter. Excluding the non-cash loss and impairment, the
net loss for Q1 2013 would have been $0.5 million.
The Company generated revenue of $7.1 million in Q1 2013 compared to $11.5
million in Q2 2012, a decrease of $4.4 million (38%). Revenue in the Software
and Data segment increased by $1 million (48%) related to a significant software
license sale. Revenue in the Seismic Data segment decreased by $4 million (79%)
due to lower industry activities and corresponding revenue in the Services
segment also decreased by $1.3 million (32%) with geomatics, processing and land
management services all experiencing weaker than normal demand as compared to Q2
2012.
Operating expenses (excluding depreciation and amortization) decreased by $1.3
million (17%) to $5.9 million in Q2 2013 from $7.2 million in Q2 2012. Salaries
and wages were down $0.5 million (12%). G&A expenses were down $0.6 million
(22%) due to lower occupancy costs as the Company surrendered a floor of office
space effective January 1, 2013 and another floor effective June 1, 2013. In
addition, stock-based compensation, professional fees, and bad debt expenses
were lower than 2012. Depreciation and amortization decreased by $1.6 million
(52%) mainly due to lower depreciation on seismic data as the Company completed
a seismic program in Q2 2012 but did not acquire any new data in Q2 2013.
Excluding the non-cash accounting loss and impairment of $1.7 million, EBITDA
was $1.1 million in Q2 2013, a $3.2 million (74%) decrease from $4.3 million for
the same period in 2012. The Company generated funds from operations of $1.2
million ($0.02 per share - basic and diluted) for the second quarter of 2013,
compared to $4.3 million ($0.06 per share - basic and diluted) for the same
period in 2012, a decrease of $3.1 million (73%) primarily due to a lower volume
of services and seismic data activities.
Six Months Ended June 30, 2013
Divestco had a net loss of $0.1 million for the first six months of 2013 ($nil
per share - basic and diluted) compared to net income of $3.6 million ($0.05 per
share - basic and diluted) for the same period in 2012. Excluding the loss and
impairment, the Company would have had net income of $1.5 million ($0.02 per
share - basic and diluted) for the six months ended June 30, 2013.
The Company generated revenue of $18.7 million compared to $25.9 million in
2012, a decrease of $7.2 million (26%). Revenue in the Software and Data segment
increased by $1.1 million (28%) related to a significant software license sale.
Revenue in the Seismic Data segment decreased by $4.6 million (39%) which was
primarily due to lower speculative survey revenue and seismic data management
revenue. Revenue in the Services segment decreased by $3.7 million (38%) with
geomatics, processing and land management services all experiencing weaker
demand as compared to 2012.
Operating expenses (excluding depreciation and amortization) decreased by $1.6
million (11%) to $12.6 million in for the first six months of 2013 from $14.2
million during the same period in 2012. Salaries and wages were down $1 million
(11%) and G&A expenses were down $0.6 million (14%) due to lower occupancy costs
as the Company surrendered a floor of office space effective January 1, 2013 and
another floor effective June 1, 2013. In addition, stock-based compensation,
professional fees, and bad debt expenses were lower than 2012. Depreciation and
amortization decreased by $4.1 million (50%) mainly due to lower depreciation on
seismic data as the Company acquired more data in 2012 as compared to 2013.
Excluding the non-cash accounting loss and impairment of $1.7 million, EBITDA
was $6.1 million in the first six months of 2013, a $5.6 million (48%) decrease
from $11.7 million for the same period in 2012. The Company generated funds from
operations of $6.4 million ($0.10 per share - basic and diluted) in the first
half of 2013, compared to $11.5 million ($0.17 per share - basic and diluted)
for the same period in 2012, a decrease of $5.1 million (44%) primarily due to a
lower volume of services and seismic data activities.
Liquidity and Working Capital
On May 9, 2013, the Company announced it had closed a new senior credit facility
of up to $11 million. The Company also received $1 million in new shareholder
loans just prior to the closing of the new facility. The proceeds were used to
retire bank and subordinated debt totaling approximately $6 million. The
facility has an expanded operating line ($8 million as compared to $5 million
under its previous facility) based on receivables aged less than 90 days and $3
million in term debt as well as a financial covenant that is better suited to
the Company's business.
Management ensures that Divestco's credit facilities, combined with its working
capital and funds from operations, will be sufficient in the short-term and
long-term to meet planned growth and to fund future capital expenditures.
Divestco ended Q2 2013 with positive working capital of $0.7 million (December
31, 2012: $7.5 million deficit), excluding deferred revenue of $3.4 million
(December 31, 2012 - $2.4 million). The improvement in working capital from the
end of 2012 was primarily due to a number of data transactions completed in the
first six months of 2013 offset by an unpredictably slow period for the services
segment. As a result of closing these data deals, the Company has significantly
reduced its payables since the end of 2012. The Company's funded debt to equity
ratio was 0.66:1 at June 30, 2013 compared to 0.64:1 at December 31, 2012.
Financial Position (Thousands) Balance as at
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Jun 30 Dec 31 Dec 31
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2013 2012 2011
----------------------------------------------------------------------------
Total Assets $ 35,174 $ 41,945 $ 43,761
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Working Capital (Deficit) (1) 676 (7,483) 297
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Long-Term Financial Liabilities (2 ) 9,512 7,622 8,610
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1. Excludes the current portion of deferred revenue of $3.4 million
(December 31, 2012: $2.4 million; December 31, 2011: $4.6 million).
2. Includes long-term debt obligations, deferred rent obligations, sublease
loss provision and other long-term liabilities. The long-term debt
obligations are comprised of the Company's subordinated debt,
shareholder loans and finance leases.
Operations Update
In June, 2013, the Company subscribed for 500,000 shares of a newly incorporated
entity in exchange for $0.2 million in cash and a portion of its well data
library that was transferred to the new entity with a fair value of $0.3 million
for a total investment of $0.5 million. Concurrently, two private companies
(dealing at arm's length with the Company) subscribed for 1 million shares for
$1 million in cash. As a result each company became a 1/3 shareholder of the new
entity. Immediately thereafter, the Company granted a software license to the
new entity for $1.2 million. The Company recognized $0.8 million of revenue on
this transaction after eliminating the Company's share in the new entity. The
new entity has granted each shareholder a data licence for $250,000 per annum
payable on a monthly basis. As a result of the non-monetary contribution made by
the Company, an accounting loss on disposal of $1 million was recognized for the
difference between the net book value and fair value of the assets contributed.
During the first six months of 2013, the Company completed a 3D seismic
participation survey, covering an area of approximately 93 square kilometers.
Mr. Stephen Popadynetz, CEO commented: "Divestco returned to positive working
capital in Q2 2013 through the restructuring of its debt, commitment to cost
control and realizing the value of its assets. Despite a weak industry in the
first half of 2013, our seismic inventory sales and software sales in the first
six months of 2013 remained strong. As well, despite the softness in our
Services group as we entered 2013, we are seeing increased activity levels which
should result in improved results going forward. Our efforts to expand into
international markets are expected to result in increased revenue in 2013.
Additionally, our Software group is rapidly developing new products which are
about to hit the marketplace and we believe will lead to significant growth
later this year. With all of these positive growth catalysts, we remain
optimistic that Divestco will continue to strengthen its balance sheet."
Non-GAAP Measures
The Company's condensed consolidated interim financial statements have been
prepared in accordance with IFRS. Certain measures in this document do not have
any standardized meaning as prescribed by IFRS and are considered additional
GAAP measures. While these measures may not be comparable to similar measures
presented by other issuers, they are described and presented in this MD&A to
provide shareholders and potential investors with additional information
regarding the Company's results, liquidity, and its ability to generate funds to
finance its operations. These measures include:
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
Divestco uses EBITDA as a key measure to evaluate the performance of its
segments and divisions as well as the Company overall, with the closest IFRS
measure being net income or loss. EBITDA is a measure commonly reported and
widely used by investors as indicators of the Company's operating performance
and ability to incur and service debt, and as a valuation metric. The Company
believes EBITDA assists investors in comparing the Company's performance on a
consistent basis without regard to financing decisions and depreciation and
amortization, which are non-cash in nature and can vary significantly depending
upon accounting methods or non-operating factors such as historical cost.
EBITDA is not a calculation based on IFRS and should not be considered an
alternative to net income or loss in measuring the Company's performance. As
well, EBITDA should not be used as an exclusive measure of cash flow, because it
does not consider the impact of working capital growth, capital expenditures,
debt principal reductions and other sources and uses of cash, which are
disclosed in the consolidated statements of cash flows. While EBITDA has been
disclosed herein to permit a more complete comparative analysis of the Company's
operating performance and debt servicing ability relative to other companies,
investors should be cautioned that EBITDA as reported by Divestco may not be
comparable in all instances to EBITDA as reported by other companies. Investors
should also carefully consider the specific items included in Divestco's
computation of EBITDA.
The following is a reconciliation of EBITDA with net income (loss):
Three months ended Six months ended
June 30 June 30
----------------------------------------------------------------------------
(Thousands) 2013 2012 2013 2012
----------------------------------------------------------------------------
Net Income (Loss) $ (2,230) $ 940 $ (146) $ 3,585
----------------------------------------------------------------------------
Finance Costs (Income) 221 331 491 (29)
----------------------------------------------------------------------------
Depreciation and Amortization 1,450 3,011 4,063 8,176
----------------------------------------------------------------------------
EBITDA $ (559) $ 4,282 $ 4,408 $ 11,732
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Working capital
Working Capital is calculated as current assets minus current liabilities
(excluding deferred revenue). Working capital provides a measure that can be
used to gauge Divestco's ability to meet its current obligations.
Additional GAAP Measure
Funds from operations
Divestco reports funds from operations because it is a key measure used by
management to evaluate its performance and to assess the ability of the Company
to finance operating and investing activities. Funds from operations excludes
certain working capital changes and other sources and uses of cash, which are
disclosed in the consolidated statements of cash flows.
Funds from operations is not a calculation based on IFRS and should not be
considered an alternative to the consolidated statements of cash flows. Funds
from operations is a measure that can be used to gauge Divestco's capacity to
generate discretionary cash flow. Investors should be cautioned that funds from
operations as reported by Divestco may not be comparable in all instances to
funds from operations as reported by other companies. While the closest IFRS
measure is cash from operating activities, funds from operations is considered
relevant because it provides an indication of how much cash generated by
operations is available before proceeds from divested assets and changes in
certain working capital items.
The following reconciles funds from operations with cash from operating activities:
Three months ended Six months ended
June 30 June 30
----------------------------------------------------------------------------
(Thousands) 2013 2012 2013 2012
----------------------------------------------------------------------------
Cash from Operating Activities $ 137 $ 124 $ 4,125 $ 12,885
Changes in Non-Cash Working Capital
Balances Related to Operating
Activities 849 3,831 1,829 (1,316)
Interest Paid (Received) 187 289 430 (118)
----------------------------------------------------------------------------
Funds from Operations $ 1,173 $ 4,266 $ 6,384 $ 11,473
----------------------------------------------------------------------------
Financial Highlights
Financial Results (Thousands, Except Per Share Amounts)
----------------------------------------------------------------------------
Three months ended June 30
----------------------------------------------------------------------------
2013 2012 $ Change % Change
----------------------------------------------------------------------------
Revenue $ 7,083 $ 11,483 $ (4,400) -38%
Operating Expenses 5,948 7,201 (1,253) -17%
Other Loss 1,694 - 1,694 N/A
----------------------------------------------------------------------------
EBITDA (559) 4,282 (4,841) N/A
Finance Costs (Income) 221 331 (110) -33%
Depreciation and Amortization 1,450 3,011 (1,561) -52%
----------------------------------------------------------------------------
Income (Loss) before Income Taxes (2,230) 940 (3,170) N/A
Income Tax Expense - - - N/A
----------------------------------------------------------------------------
Net Income (Loss) $ (2,230) $ 940 $ (3,170) N/A
Per Share - Basic and Diluted (0.03) 0.01 (0.04) N/A
----------------------------------------------------------------------------
Funds from Operations $ 1,173 $ 4,266 $ (3,093) -73%
Per Share - Basic and Diluted 0.02 0.06 (0.04) -67%
----------------------------------------------------------------------------
Shares Outstanding 66,903 66,713 N/A N/A
Weighted Average Shares
Outstanding
Basic 66,885 66,641 N/A N/A
Diluted 66,885 66,694 N/A N/A
----------------------------------------------------------------------------
Financial Highlights
Financial Results (Thousands, Except Per Share Amounts)
----------------------------------------------------------------------------
Six months ended June 30
----------------------------------------------------------------------------
2013 2012 $ Change % Change
----------------------------------------------------------------------------
Revenue $ 18,701 $ 25,949 $ (7,248) -28%
Operating Expenses 12,603 14,216 (1,613) -11%
Other Loss 1,690 1 1,689 168900%
----------------------------------------------------------------------------
EBITDA 4,408 11,732 (7,324) -62%
Finance Costs (Income) 491 (29) 520 N/A
Depreciation and Amortization 4,063 8,176 (4,113) -50%
----------------------------------------------------------------------------
Income (Loss) before Income Taxes (146) 3,585 (3,731) N/A
Income Tax Expense - - - N/A
----------------------------------------------------------------------------
Net Income (Loss) $ (146) $ 3,585 $ (3,731) N/A
Per Share - Basic and Diluted - 0.05 (0.05) -100%
----------------------------------------------------------------------------
Funds from Operations $ 6,384 $ 11,473 $ (5,089) -44%
Per Share - Basic and Diluted 0.10 0.17 (0.07) -41%
----------------------------------------------------------------------------
Shares Outstanding 66,903 66,713 N/A N/A
Weighted Average Shares
Outstanding
Basic 66,830 66,627 N/A N/A
Diluted 66,830 66,627 N/A N/A
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Segment Review Summary
----------------------------------------------------------------------------
Three months ended June 30, 2013 (Thousands)
Software
and Seismic Corporate &
Data Services Data Other Total
----------------------------------------------------------------------------
Revenue $ 3,101 $ 2,879 $ 1,103 $ - $ 7,083
EBITDA 662 148 387 (1,756) (559)
Finance costs (income) 68 35 118 - 221
Depreciation and
amortization 669 162 470 149 1,450
Income (loss) before
income taxes (75) (49) (201) (1,905) (2,230)
----------------------------------------------------------------------------
Loss on Disposal of
Intangibles and
Impairment of Property
and Equipment (1,005) - - (678) (1,683)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended June
30, 2012 (Thousands)
----------------------------------------------------------------------------
Corporate
&
Software Services Data Other Total
----------------------------------------------------------------------------
Revenue $ 2,090 $ 4,219 $ 5,174 $ - $11,483
EBITDA 466 971 4,021 (1,176) 4,282
Finance costs (income) 102 72 157 - 331
Depreciation and
amortization 791 219 1,881 120 3,011
Income (loss) before
income taxes (427) 680 1,983 (1,296) 940
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Six months ended June
30, 2013 (Thousands)
----------------------------------------------------------------------------
Corporate
&
Software Services Data Other Total
----------------------------------------------------------------------------
Revenue $ 5,333 $ 6,062 $ 7,306 $ - $18,701
EBITDA 1,279 409 5,788 (3,068) 4,408
Finance costs (income) 152 76 263 - 491
Depreciation and
amortization 1,371 317 2,108 267 4,063
Income (loss) before
income taxes (244) 16 3,417 (3,335) (146)
----------------------------------------------------------------------------
Loss on Disposal of
Intangibles and
Impairment of Property
and Equipment (1,005) - - (678) (1,683)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Six months ended June
30, 2012 (Thousands)
----------------------------------------------------------------------------
Corporate
&
Software Services Data Other Total
----------------------------------------------------------------------------
Revenue $ 4,220 $ 9,804 $ 11,925 $ - $25,949
EBITDA 953 2,919 10,011 (2,151) 11,732
Finance costs (income) 180 126 (335) - (29)
Depreciation and
amortization 1,591 450 5,816 319 8,176
Income (loss) before
income taxes (818) 2,343 4,530 (2,470) 3,585
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Divestco Inc.
Condensed Consolidated Interim Statements of Financial Position
At Jun 30 At Dec 31
----------------------------------------------------------------------------
(Thousands - Unaudited) 2013 2012
----------------------------------------------------------------------------
Assets
Current Assets
Cash $ 388 $ 1,320
Funds held in trust 33 18
Accounts receivable 6,600 7,134
Prepaid expenses, supplies and deposits 263 357
Income taxes receivable 364 196
----------------------------------------------------------------------------
Total current assets 7,648 9,025
Investment in affiliated company 230 137
Participation surveys in progress - 3,508
Property and equipment 3,021 4,607
Intangible assets 24,275 24,668
----------------------------------------------------------------------------
Total assets $ 35,174 $ 41,945
----------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current Liabilities
Bank indebtedness $ 2,779 $ 4,450
Accounts payable and accrued liabilities 2,386 9,624
Deferred revenue 3,351 2,420
Current loss on sublease loss provision 326 326
Current portion of long-term debt
obligations 1,409 1,986
Current portion of tenant inducement 72 122
----------------------------------------------------------------------------
Total current liabilities 10,323 18,928
Deferred rent obligations 416 189
Long-term debt obligations 6,518 4,115
Sublease loss provision 843 1,006
Tenant Inducements 778 1,389
----------------------------------------------------------------------------
Total liabilities 18,878 25,627
----------------------------------------------------------------------------
Shareholders' Equity
Equity instruments 7,241 7,216
Contributed surplus 7,928 7,829
Retained earnings (deficit) 1,127 1,273
----------------------------------------------------------------------------
Total shareholders' equity 16,296 16,318
----------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 35,174 $ 41,945
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Divestco Inc.
Condensed Consolidated Interim Statements of Income and Comprehensive Income
Three months ended Six months ended
June 30 June 30
----------------------------------------------------------------------------
(Thousands, Except Per Share
Amounts - Unaudited) 2013 2012 2013 2012
----------------------------------------------------------------------------
Revenue $ 7,083 $ 11,483 $ 18,701 $ 25,949
----------------------------------------------------------------------------
Operating expenses
Salaries and benefits 3,907 4,452 8,238 9,260
General and administrative 1,991 2,544 4,266 4,710
Depreciation and amortization 1,450 3,011 4,063 8,176
Other loss 1,694 - 1,690 1
Stock compensation expense 50 205 99 246
----------------------------------------------------------------------------
Total operating expenses 9,092 10,212 18,356 22,393
----------------------------------------------------------------------------
Finance costs 221 331 491 (29)
---------------------------------------------------------------------------
Net income (loss) and
comprehensive income (loss) for
the period (2,230) 940 $ (146) $ 3,585
----------------------------------------------------------------------------
Net income (loss) per share
Basic and Diluted $ (0.03) $ 0.01 $ - $ 0.05
Weighted average number of shares
Basic and Diluted 66,885 66,694 66,830 66,627
Divestco Inc.
Condensed Consolidated Interim Statements of Changes in Equity
Number of Number of
(Thousands - Shares Share Warrants
Unaudited) Issued Capital Issued
------------------------------------------------------------
Balance as at
January 1, 2012 66,610 $ 74,571 16,280 $
------------------------------------------------------------
Reduction of stated
capital and deficit $ (67,383)
------------------------------------------------------------
Net income (loss)
and comprehensive
income (loss) for
the period
------------------------------------------------------------
Transactions with
owners, recorded in
equity
contributions by
and distributions
to owners:
------------------------------------------------------------
Issuance of Class
A common shares
as service
awards 83 17
------------------------------------------------------------
Issuance of Class
A common shares
on exercise of
PSUs 20 3
------------------------------------------------------------
Reclassification
on exercise of
PSUs
------------------------------------------------------------
Share-based
payments
------------------------------------------------------------
Balance as at June
30, 2012 66,713 $ 7,208 16,280 $
------------------------------------------------------------
Balance as at
January 1, 2013 66,758 $ 7,216 - $
------------------------------------------------------------
Net income (loss)
and comprehensive
income (loss) for
the period
------------------------------------------------------------
Transactions with
owners, recorded in
equity
contributions by
and distributions
to owners:
------------------------------------------------------------
Issuance of Class
A common shares
as service awards 145 25
------------------------------------------------------------
Share-based
payments
------------------------------------------------------------
Balance as at June
30, 2013 66,903 $ 7,241 - $
------------------------------------------------------------
Retained
(Thousands - Equity Contributed Earnings Total
Unaudited) Warrants Instruments Surplus (Deficit) Equity
----------------------------------------------------------------------------
Balance as at
January 1, 2012 1,860 $ 76,431 $ 5,663 $ (67,383) $ 14,711
----------------------------------------------------------------------------
Reduction of stated
capital and deficit $ (67,383) $ 67,383 $ -
----------------------------------------------------------------------------
Net income (loss)
and comprehensive
income (loss) for
the period 3,585 3,585
----------------------------------------------------------------------------
Transactions with
owners, recorded in
equity
contributions by
and distributions
to owners:
----------------------------------------------------------------------------
Issuance of Class
A common shares
as service
awards 17 17
----------------------------------------------------------------------------
Issuance of Class
A common shares
on exercise of
PSUs 3 3
----------------------------------------------------------------------------
Reclassification
on exercise of
PSUs (3) (3)
----------------------------------------------------------------------------
Share-based
payments 246 246
----------------------------------------------------------------------------
Balance as at June
30, 2012 1,860 $ 9,068 $ 5,906 $ 3,585 $ 18,559
----------------------------------------------------------------------------
Balance as at
January 1, 2013 - $ 7,216 $ 7,829 $ 1,273 $ 16,318
----------------------------------------------------------------------------
Net income (loss)
and comprehensive
income (loss) for
the period (146) (146)
----------------------------------------------------------------------------
Transactions with
owners, recorded in
equity
contributions by
and distributions
to owners:
----------------------------------------------------------------------------
Issuance of Class
A common shares
as service awards 25 25
----------------------------------------------------------------------------
Share-based
payments 99 99
----------------------------------------------------------------------------
Balance as at June
30, 2013 - $ 7,241 $ 7,928 $ 1,127 $ 16,296
----------------------------------------------------------------------------
Divestco Inc.
Condensed Consolidated Interim Statements of Cash Flows
Six months ended June 30
----------------------------------------------------------------------------
(Thousands - Unaudited) 2013 2012
----------------------------------------------------------------------------
Cash from (used in) operating activities
Net income (loss) for the period $ (146) $ 3,585
Items not affecting cash:
Equity investment income 7 5
Depreciation and amortization 4,063 8,176
Amortization of tenant inducements (65) (57)
Deferred rent obligations 227 (471)
Loss on disposal of intangibles 1,005 -
Impairment of property and equipment 678 -
Unrealized foreign exchange loss - 1
Non-cash employment benefits 25 17
Share-based payments 99 246
Finance costs (income) 491 (29)
----------------------------------------------------------------------------
Funds from operations 6,384 11,473
Changes in non-cash working capital balances (1,829) 1,316
Interest received (paid) (430) 118
Income taxes paid - (22)
----------------------------------------------------------------------------
Net cash from operating activities 4,125 12,885
----------------------------------------------------------------------------
Cash from (used in) financing activities
Bank indebtedness (1,671) 500
Repayment of long-term debt obligations (2,061) (646)
Deferred financing costs (298) -
Proceeds received from long-term debt
obligations (net of committed
revolver repayments) 4,025 1,000
----------------------------------------------------------------------------
Net cash from (used in) financing activities (5) 854
----------------------------------------------------------------------------
Cash from (used in) investing activities
Additions to intangible assets (3,575) (14,401)
Decrease in participation surveys in progress 3,508 5,100
Purchase of property and equipment (118) (538)
Lease incentive 144 -
Payments towards sublease loss provision (178) (179)
Investment in affiliates (200) -
Advances from equity-accounted investees 400 14
Deferred development costs (1,168) (1,190)
Changes in non-cash working capital balances (3,865) (1,186)
----------------------------------------------------------------------------
Net cash from (used in) investing activities (5,052) (12,380)
----------------------------------------------------------------------------
Increase (decrease) in cash (932) 1,359
Cash, beginning of period 1,320 1,547
----------------------------------------------------------------------------
Cash, end of period $ 388 $ 2,906
----------------------------------------------------------------------------
About the Company
Divestco is an exploration services company that provides a comprehensive and
integrated portfolio of data, software, and services to the oil and gas
industry. Through continued commitment to align and bundle products and services
to generate value for customers, Divestco is creating an unparalleled set of
integrated solutions and unique benefits for the marketplace. Divestco's breadth
of data, software and services offers customers the ability to access and
analyze the information required to make business decisions and to optimize
their success in the upstream oil and gas industry. Divestco is headquartered in
Calgary, Alberta, Canada and trades on the TSX Venture Exchange under the symbol
"DVT".
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this news release.
This press release contains forward-looking information related to the Company's
capital expenditures, projected growth, view and outlook with respect to future
oil and gas prices and market conditions, and demand for its products and
services. Statements that contain words such as "could', "should", "can",
"anticipate", "expect", "believe", "will", "may" and similar expressions and
statements relating to matters that are not historical facts constitute
"forward-looking information" within the meaning applicable by Canadian
securities legislation. Although management of the Company believes that the
expectations reflected in such forward-looking information are reasonable, there
can be no assurance that such expectations will prove to have been correct
because, should one or more of the risks materialize, or should the assumptions
underlying forward-looking statements or forward-looking information prove
incorrect, actual results may vary materially from those described in this press
release as intended, planned, anticipated, believed, estimated or expected.
Readers should not place undue reliance on forward-looking statements or
forward-looking information. All of the forward-looking statements and
forward-looking information of the Company contained in this press release are
expressly qualified, in their entirety, by this cautionary statement. Except
where required by law, the Company does not assume any obligation to update
these forward-looking statements or forward-looking information if conditions or
opinions should change.
In particular, this press release contains forward-looking statements pertaining
to the following: Company's ability to keep debt and liquidity at acceptable
levels, improve/maintain its working capital position and maintain profitability
in the current economy; availability of external and internal funding for future
operations; relative future competitive position of the Company; nature and
timing of growth; oil and natural gas production levels; planned capital
expenditure programs; supply and demand for oil and natural gas; future demand
for products/services; commodity prices; impact of Canadian federal and
provincial governmental regulation on the Company; expected levels of operating
costs, finance costs and other costs and expenses; future ability to execute
acquisitions and dispositions of assets or businesses; expectations regarding
the Company's ability to raise capital and to add to seismic data through new
seismic shoots and acquisition of existing seismic data; treatment under tax
laws; and new accounting pronouncements.
These forward-looking statements are based upon assumptions including: future
prices for crude oil and natural gas; future interest rates and future
availability of debt and equity financing will be at levels and costs that allow
the Company to manage, operate and finance its business and develop its software
products and various oil and gas datasets including its seismic data library,
and meet its future obligations; the regulatory framework in respect of
royalties, taxes and environmental matters applicable to the Company and its
customers will not become so onerous on both the Company and its customers as to
preclude the Company and its customers from viably managing, operating and
financing its business and the development of its software and data; and that
the Company will continue to be able to identify, attract and employ qualified
staff and obtain the outside expertise as well as specialized and other
equipment it requires to manage, operate and finance its business and develop
its properties.
These forward-looking statements are subject to numerous risks and
uncertainties, certain of which are beyond the Company's control, including:
general economic, market and business conditions; volatility in market prices
for crude oil and natural gas; ability of Divestco's clients to explore for,
develop and produce oil and gas; availability of financing and capital;
fluctuations in interest rates; demand for the Company's product and services;
weather and climate conditions; competitive actions by other companies;
availability of skilled labour; failure to obtain regulatory approvals in a
timely manner; adverse conditions in the debt and equity markets; and government
actions including changes in environment and other regulation.
FOR FURTHER INFORMATION PLEASE CONTACT:
Divestco Inc.
Mr. Stephen Popadynetz
CEO, President and CFO
587-952-8152
Divestco Inc.
Mr. Danny Chiarastella
Vice President, Finance
587-952-8027
www.divestco.com
Divestco Inc. (TSXV:DVT)
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Divestco Inc. (TSXV:DVT)
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