CALGARY, AB, Feb. 28, 2024 /CNW/ – Pason Systems Inc. (“Pason” or the “Company”) (TSX:PSI) announced today its 2023 fourth quarter and annual results and the declaration of an increased quarterly dividend. The following news release should be read in conjunction with the Company’s Management Discussion and Analysis (“MD&A”), the Consolidated Financial Statements and related notes for the three and twelve months ended December 31, 2023, as well as the Annual Information Form for the year ended December 31, 2022. All of these documents are available on SEDAR+ at www.sedar.com.
Financial Highlights
Three Months Ended December 31,
Twelve Months Ended December 31,
2023
2022
Change
2023
2022
Change
(CDN 000s, except per share data)
($)
($)
( %)
($)
($)
( %)
North American Revenue
70,507
77,687
(9)
289,763
274,569
6
International Revenue
17,941
14,391
25
63,824
53,222
20
Solar and Energy Storage Revenue
4,847
2,342
107
15,722
7,207
118
Total Revenue
93,295
94,420
(1)
369,309
334,998
10
EBITDA (1)
22,169
53,248
(58)
154,713
170,266
(9)
Adjusted EBITDA (1)
38,888
48,944
(21)
171,466
159,510
7
As a % of revenue
41.7
51.8
(1,010) bps
46.4
47.6
(120) bps
Funds flow from operations
37,455
45,971
(19)
154,472
134,885
15
Per share – basic
0.47
0.56
(17)
1.92
1.65
17
Per share – diluted
0.47
0.56
(17)
1.92
1.63
18
Cash from operating activities
27,412
19,942
37
135,033
104,414
29
Net capital expenditures (2)
8,095
16,233
(50)
38,002
33,941
12
Free cash flow (1)
19,317
3,709
421
97,031
70,473
38
Cash dividends declared (per share)
0.12
0.12
—
0.48
0.36
33
Net income
8,012
35,994
(78)
95,827
105,726
(9)
Net income attributable to Pason
8,495
36,257
(77)
97,539
107,616
(9)
Per share – basic
0.11
0.44
(75)
1.21
1.31
(8)
Per share – diluted
0.11
0.44
(75)
1.21
1.30
(7)
(1)
Non-GAAP financial measures are defined under Non-GAAP Financial Measures section in this Press Release.
(2)
Includes additions to property, plant, and equipment and development costs, net of proceeds on disposal from Pason’s Consolidated Statement of Cash Flows.
As at
December 31, 2023
44926
Change
(CDN 000s)
($)
($)
( %)
Cash and cash equivalents
171,773
132,057
30
Short-term investments
—
40,377
nmf
Total Cash (3)
171,773
172,434
nmf
Working capital
212,561
213,899
(1)
Total interest bearing debt
—
—
—
Shares outstanding end of period (#)
79,685,025
81,526,954
(2)
(3) Total Cash is defined as total cash and cash equivalents and short-term investments from Pason’s Consolidated Balance Sheets.
Pason’s financial results for the three and twelve months ended December 31, 2023, reflect the Company’s strong competitive positioning, prudent balance sheet, and ability to outpace underlying industry activity.
Pason generated $93.3 million in consolidated revenue in the fourth quarter of 2023, representing a 1% decrease from the $94.4 million generated in the comparative period of 2022. While industry activity levels in North America, the Company’s largest end market, decreased by 19% year over year, the Company was able to grow Revenue per Industry Day by 12% in that same period to $998, posting a new record quarterly level. With this revenue, Pason generated $38.9 million in Adjusted EBITDA, or 41.7% of revenue in the fourth quarter of 2023, compared to $48.9 million in the fourth quarter of 2022, or 51.8% of revenue. A comparison of Adjusted EBITDA margin year over year reflects inflationary effects on the Company’s mostly fixed cost base for its drilling related business units, higher levels of lower margin sales from its solar and energy storage segment, and the inclusion of equity accounted losses related to supporting the rapid growth of Intelligent Wellhead Systems (IWS). Excluding these equity accounted losses, Pason’s Adjusted EBITDA margin in the fourth quarter of 2023 would have been 44%. Free Cash Flow increased significantly from $3.7 million in the fourth quarter of 2022 to $19.3 million in the fourth quarter of 2023 with lower levels of working capital investments and capital expenditures year over year. Net income attributable to Pason of $8.5 million ($0.11 per share) in the fourth quarter of 2023, compared to net income attributable to Pason of $36.3 million ($0.44 per share) recorded in the corresponding period in 2022 and included a $14.2 million foreign exchange loss recognized in the fourth quarter of 2023, primarily attributable to the revaluation of cash and working capital balances in the Company’s Argentinian subsidiary and the significant devaluation of the Argentinian Peso seen in December 2023.
For the twelve months ended December 31, 2023, Pason generated $369.3 million of revenue, a 10% increase from $335.0 million recorded in 2022 despite a 5% reduction in North American land drilling activity. Adjusted EBITDA for the twelve months ended December 31, 2023 was $171.5 million or 46.4% of revenue, compared to $159.5 million, or 47.6% of revenue for the year ended December 31, 2022. Net income attributable to Pason in the twelve months ended December 31, 2023 of $97.5 million ($1.21 per share) was impacted by the foreign exchange loss recognized in the fourth quarter from the devaluation of the Argentinian Peso, and compared to $107.6 million ($1.31 per share) in the comparative 2022 period. Free Cash Flow generated in 2023 was $97.0 million, a 38% increase from $70.5 million generated in 2022. A comparison of annual results clearly reflects Pason’s ability to outpace declining industry conditions with higher levels of revenue generated per day, while continuing to make required investments in meeting …