SAN FRANCISCO, CALIFORNIA--(Marketwired - Aug. 29, 2016) - Noble Iron Inc. ("Noble Iron" or the "Company") (TSX VENTURE:NIR) announced its interim unaudited consolidated financial results for the three and six month periods ended June 30, 2016 (the "second quarter" or "Q2").
Financial Highlights and Significant Events
- Revenue of $12.3 million during first six months of 2016, compared to revenue of $12.2 million during the same period in 2015. Second quarter revenue of $5.8 million, compared to $6.6 million during the same period in 2015
- First six months Adjusted EBITDA loss of ($0.6) million, compared to $0.1 million gain during the same period in 2015. Second quarter EBITDA loss of ($0.4) million, compared to $0.2 million gain during the same period in 2015
- During the second quarter, the Company launched "FleetLogic", a mobile and desktop software application for equipment technicians, operators and managers. The Company booked $0.4 million in deferred SaaS revenue for FleetLogic in Q2, and will recognize the revenue during Q3.
Consolidated Financial Highlights:
| Six Months Ended | Three Months Ended | |||||||||||||||||||||
| Comparative Financial Results (000's) - | ||||||||||||||||||||||
| Consolidated Company | June 30, 2016 | June 30, 2015 | Percentage | June 30, 2016 | June 30, 2015 | Percentage | ||||||||||||||||
| Change | Change | |||||||||||||||||||||
| Revenue | $ | 12,298 | $ | 12,241 | 0 | % | 5,811 | 6,591 | (12 | %) | ||||||||||||
| Cost of Revenue | (5,804 | ) | (5,538 | ) | 5 | % | (2,702 | ) | (2,918 | ) | (7 | %) | ||||||||||
| Expenses | ||||||||||||||||||||||
| Support, Maintenance and Delivery | (4,694 | ) | (4,968 | ) | (6 | %) | (2,219 | ) | (2,610 | ) | (15 | %) | ||||||||||
| Research and Development | (501 | ) | (449 | ) | 12 | % | (272 | ) | (212 | ) | 28 | % | ||||||||||
| Sales and Marketing | (1,150 | ) | (1,105 | ) | 4 | % | (540 | ) | (612 | ) | (12 | %) | ||||||||||
| General and Administration | (5,513 | ) | (4,547 | ) | 21 | % | (2,817 | ) | (2,289 | ) | 23 | % | ||||||||||
| Income Tax Expense | (133 | ) | (164 | ) | (19 | %) | (66 | ) | (143 | ) | (54 | %) | ||||||||||
| Gain on Fair Value Increment | 0 | 0 | - | - | ! | |||||||||||||||||
| Interest Expense | (679 | ) | (488 | ) | 39 | % | (272 | ) | (257 | ) | 6 | % | ||||||||||
| Foreign Exchange (Loss) | (22 | ) | (141 | ) | (84 | %) | (42 | ) | 4 | (1,150 | %) | |||||||||||
| Net Loss | (6,198 | ) | (5,159 | ) | 20 | % | (3,119 | ) | (2,446 | ) | 28 | % | ||||||||||
| Add: | ||||||||||||||||||||||
| Depreciation / Amortization | 4,545 | 4,324 | 5 | % | 2,180 | 2,188 | (0 | %) | ||||||||||||||
| Income Tax Expense | 133 | 164 | (19 | %) | 66 | 143 | (54 | %) | ||||||||||||||
| Stock Based Compensation | 243 | 155 | 57 | % | 130 | 74 | 76 | % | ||||||||||||||
| Interest Expense | 679 | 488 | 39 | % | 272 | 257 | 6 | % | ||||||||||||||
| Severance | - | 24 | - | - | 24 | 0 | % | |||||||||||||||
| Foreign Exchange Loss | 22 | 141 | (84 | %) | 42 | (4 | ) | (1,150 | %) | |||||||||||||
| Lease Terminations | - | - | - | - | - | - | ||||||||||||||||
| Adjusted EBITDA1 | $ | (576 | ) | $ | 136 | (523 | %) | $ | (429 | ) | $ | 236 | (282 | %) | ||||||||
| Loss per share - basic and diluted | $ | (0.23 | ) | $ | (0.19 | ) | 21 | % | $ | (0.11 | ) | $ | (0.09 | ) | 22 | % | ||||||
| 1 Adjusted EBITDA is a non-IFRS measure and is defined within the "Introduction – Non-IFRS Measures" section of the MD&A. See also "Non-IFRS Measures" below. |
| Quarterly Results (000's) | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||
| Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q31 | |||||||||||||||||||||||
| Revenue | $ | 5,811 | $ | 6,487 | $ | 7,394 | $ | 7,270 | $ | 6,591 | $ | 5,651 | $ | 4,964 | $ | 5,762 | ||||||||||||||
| Cost of Revenue | (2,702 | ) | (3,101 | ) | (3,385 | ) | (3,143 | ) | (2,918 | ) | (2,619 | ) | (3,079 | ) | (2,427 | ) | ||||||||||||||
| Net earnings (loss) for the period | (3,119 | ) | (3,080 | ) | (2,794 | ) | (2,278 | ) | (2,446 | ) | (2,714 | ) | (3,775 | ) | (1,588 | ) | ||||||||||||||
| Add Back: | ||||||||||||||||||||||||||||||
| Depreciation/Amortization expense | 2,180 | 2,364 | 2,257 | 2,242 | 2,188 | 2,135 | 2,555 | 1,745 | ||||||||||||||||||||||
| Income Tax (Recovery) Expense | 66 | 67 | 10 | 23 | 143 | 21 | 66 | (94 | ) | |||||||||||||||||||||
| Stock Based Compensation | 130 | 113 | 191 | 111 | 74 | 82 | 67 | 2 | ||||||||||||||||||||||
| Interest Expense | 272 | 407 | 277 | 265 | 257 | 231 | 223 | 244 | ||||||||||||||||||||||
| Default Judgement Reversal | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
| Gain on Fair Value Increment | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
| Severance and Other | - | - | 3 | - | 24 | - | - | - | ||||||||||||||||||||||
| Foreign Exchange (Gain) / Loss | 42 | (20 | ) | 36 | 148 | (4 | ) | 145 | (139 | ) | 91 | |||||||||||||||||||
| Other non-recurring item | - | - | 226 | - | - | - | - | - | ||||||||||||||||||||||
| Lease Termination Payments | - | - | 201 | - | - | - | - | - | ||||||||||||||||||||||
| Adjusted EBITDA (loss) | (429 | ) | $ | (149 | ) | $ | 405 | $ | 511 | $ | 236 | $ | (100 | ) | $ | (1,003 | ) | $ | 400 | |||||||||||
| Earnings (loss) per share - basic and diluted | $ | (0.11 | ) | $ | (0.11 | ) | $ | (0.09 | ) | $ | (0.08 | ) | $ | (0.09 | ) | $ | (0.10 | ) | $ | (0.15 | ) | $ | (0.07 | ) | ||||||
| Weighted Avg. Shares Outstanding (Basic) | 27,417,479 | 27,417,479 | 27,417,479 | 27,417,479 | 27,417,479 | 27,417,479 | 26,085,039 | 21,415,479 | ||||||||||||||||||||||
| Weighted Avg. Shares Outstanding (Diluted) | 27,417,479 | 27,417,479 | 27,417,479 | 27,417,479 | 27,417,479 | 27,417,479 | 26,085,039 | 21,415,479 | ||||||||||||||||||||||
| ¹ Cost of Revenue, Net earnings (loss) Loss per share –basic and diluted amounts have been restated. |
Financial Results
Noble Iron recorded revenues of $12.3 million and $12.2 million for the six months ended June 30, 2016 and 2015, respectively, resulting in a year over year increase of $0.1 million. The increase is attributed to the strengthening of the US dollar versus the Canadian dollar, and was offset by lower equipment rental and distribution revenue. The lower equipment revenues were due to the sluggish economic climate in Texas and lower equipment utilization in California following the Company's activities to consolidate its real estate holdings and fulfillment center operations.
For the second quarter of 2016, the Company recorded revenues of $5.8 million compared to $6.6 million for the three months ended June 30, 2015, resulting in a decrease of $0.8 million. The decrease can be primarily attributed to lower rental revenues. Software deferred revenues associated with the Company's launch of FleetLogic will be recorded in the third quarter.
The Company recorded cost of revenue of $5.8 million and $5.5 million for the six months ended June 30, 2016 and 2015, respectively, resulting in a year over year increase of $0.3 million. This increase can be primarily attributed to the strengthening of the US dollar versus the Canadian dollar totaling $0.4 million. For the second quarter of 2016, Noble Iron recorded cost of revenues of $2.7 million compared to $2.9 million for the three months ended June 30, 2016 and June 30, 2015, respectively, resulting in a decrease of $0.2 million. Variable cost of goods sold were lower due to lower revenues.
The Company recorded expenses of $12.7 million and $11.9 million for the six months ended June 30, 2016 and 2015, respectively, resulting in an increase of $0.8 million. These increases can be primarily attributed to the strengthening of the US dollar versus the Canadian dollar totaling $0.7 million, with the remaining increase of $0.1 million due to general and administration expense.
For the second quarter of 2016, the Company recorded expenses of $6.2 million compared to $6.1 million for the three months ended June 30, 2015, resulting in an increase of $0.1 million. This increase was primarily due to strengthening of the US dollar versus the Canadian dollar.
The Company recorded a net loss of $6.2 million and $5.2 million for the six months ended June 30, 2016 and 2015, respectively, resulting in a year over year decline of $1.0 million. For the second quarter of 2016, Noble Iron recorded net loss of $3.1 million, compared to a net loss of $2.4 million for the three months ended June 30, 2015, resulting in a year over year decline in profit of $0.7 million.
The Company recorded Adjusted EBITDA of loss of ($0.6) million and gain of $0.1 million for the six months ended June 30, 2016 and 2015, respectively, resulting in a decline of Adjusted EBITDA of $0.7 million. For the second quarter of 2016 Noble Iron recorded Adjusted EBITDA of negative $0.4 million compared to a positive $0.2 million for the three months ended June 30, 2015, resulting in a decrease in Adjusted EBITDA of $0.7 million.
Noble Iron is committed to becoming the technology driven partner of choice for regional construction professionals and equipment owners. As such, the Company's software group remains focused on rolling out new applications such as "Fleet Logic" and "Insight". Within the Company's equipment group, the focus remains on optimizing the rental utilization of both company and third party owned fleet, and on strengthening its asset sharing platform and its market share.
Financial information set out in this news release is presented on a basis consistent with the accounting principles used to prepare Noble Iron's most recently filed financial statements. The consolidated financial statements are prepared by management in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board. Readers are advised that the Company faces various risk factors with respect to its business and operations: for further information please see the Management Discussion and Analysis of Noble Iron Inc. at www.SEDAR.com.
About Noble Iron Inc. (TSX VENTURE:NIR)
Noble Iron Inc. is a technology company that offers On-Demand construction equipment, and software applications to equipment owners and users to manage their equipment's lifecycle. The company operates in equipment rental, equipment sales, and software for construction and industrial equipment users and owners.
Noble Iron Inc.'s equipment rental and dealership operations do business under the name, "Noble Iron", and currently serve customers in California and Texas. Noble Iron offers construction and industrial equipment and accessories for rent and for sale, and is an exclusive distributor of LiuGong Construction Machinery equipment and Allied Construction Products in Southeast Texas.
Texada Software, a wholly owned subsidiary of Noble Iron Inc., offers cloud or client-based software applications for equipment rental companies, equipment dealerships, construction companies, general contractors, and construction or industrial equipment operators, including mechanics, and logistics and service technicians. Texada's software applications manage the entire equipment lifecycle, including equipment purchasing; rental and sales transactions; inventory location, utilization, maintenance and depreciation tracking; used equipment sales and disposals analysis; and inventory replenishment analysis. Texada's software products include, SRM (Systematic Rental Management), FleetLogic, Insight and Gateway. For more information, visit www.texadasoftware.com or call (800) 361-1233.
Non-IFRS Measures
References in this press release to "Adjusted EBITDA" are to earnings before interest expense, deferred income taxes, depreciation, amortization, share based compensation, gain on fair value increment on acquisition (net of deferred income taxes), acquisition expenses, accretion on convertible debt, interest on convertible debentures, severances and foreign exchange. Adjusted EBITDA is a measure used by investors to compare issuers on the basis of ability to generate cash flow from operations. Adjusted EBITDA is not an earnings measure recognized by International Financial Reporting Standards (IFRS), does not have standardized meanings as prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other issuers. Noble Iron's management believes that Adjusted EBITDA is an important supplemental measure in evaluating Noble Iron's performance and in determining whether to invest in its common shares. Readers of this information are cautioned that Adjusted EBITDA should not be construed as an alternative to net income or loss determined in accordance with IFRS as an indicator of Noble Iron's performance, or cash flows from operating, investing and financing activities as measures of Noble Iron's liquidity and cash flows. Noble Iron's method of calculating Adjusted EBITDA may differ from the methods used by other issuers and, accordingly, Noble Iron's Adjusted EBITDA may not be comparable to similar measures presented by other issuers.
This news release may contain forward-looking statements which reflect the Company's current expectations regarding future events. The forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "estimate", "expect", "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. These forward-looking statements involve risk and uncertainties, including the difficulty in predicting acceptance of and demands for new products, the impact of the products and pricing strategies of competitors, delays in developing and launching new products, fluctuations in operating results and other risks, any of which could cause results, performance, or achievements to differ materially from the results discussed or implied in the forward-looking statements. Many risks are inherent in the industries in which the Company participates; others are more specific to the Company. The Company's ongoing quarterly filings should be consulted for additional information on risks and uncertainties relating to these forward-looking statements. Investors should not place undue reliance on any forward-looking statements. Management assumes no obligation to update or alter any forward-looking statements whether as a result of new information, further events or otherwise.
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 release.
Contact Information:
1-832-767-4424
www.nobleiron.com
Corporate communications contacts:
Holly Cravey
(832) 767.4424
holly.cravey@nobleiron.com
Nabil Kassam
(650) 766-9177
nabil@nobleiron.com