Pulse Seismic Inc. Reports 2022 Third Quarter Results and Declares Quarterly Dividend
CALGARY, Alberta, Oct. 25, 2022 (GLOBE NEWSWIRE) -- Pulse Seismic Inc. (TSX:PSD) (OTCQX:PLSDF) (“Pulse” or the “Company”) is pleased to report its financial and operating results for the three and nine months ended September 30, 2022. The unaudited condensed consolidated interim financial statements, accompanying notes and MD&A are being filed on SEDAR () and will be available on Pulse’s website at .
Pulse’s Board of Directors today approved a quarterly dividend of $0.0125 per share. The total of the regular dividend will be approximately $670,000 based on Pulse’s 53,634,317 common shares outstanding as of October 25, 2022, to be paid on November 22, 2022 to shareholders of record on November 14, 2022. This dividend is designated as an eligible dividend for Canadian income tax purposes. For non-resident shareholders, Pulse’s dividends are subject to Canadian withholding tax.
HIGHLIGHTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022
- Total revenue was $2.2 million for the three months ended September 30, 2022 compared to $8.9 million for the three months ended September 30, 2021. For the nine months ended September 30, 2022, total revenue was $7.1 million compared to $32.8 million for the nine months ended September 30, 2021. The period-over-period revenue decreases are a result of the significant difference in the number and value of transaction-based data library sales related to mergers and acquisitions in the comparative periods. Transaction-based data library sales for the first nine months of 2022 were $217,000 compared to $26.0 million for the same period in 2021. Traditional data library sales however, were similar in both nine-month periods, at $6.7 million for 2022 and $6.6 million for 2021;
- Net loss for the three months ended September 30, 2022 was $1.7 million ($0.03 per share basic and diluted) compared to net earnings of $3.2 million ($0.06 per share basic and diluted) for the three months ended September 30, 2021. Net loss for the nine months ended September 30, 2022 was $6.0 million ($0.11 per share basic and diluted) compared to net earnings of $13.4 million ($0.25 per share basic and diluted) for the nine months ended September 30, 2021;
- EBITDA(a) was $741,000 ($0.01 per share basic and diluted) for the three months ended September 30, 2022, compared to $7.5 million ($0.14 per share basic and diluted) for the three months ended September 30, 2021. EBITDA was $1.6 million ($0.03 per share basic and diluted) for the nine months ended September 30, 2022 compared to $28.8 million ($0.54 per share basic and diluted) for the nine months ended September 30, 2021;
- Shareholder free cash flow(a) was $880,000 ($0.02 per share basic and diluted) for the third quarter of 2022 compared to $5.9 million ($0.11 per share basic and diluted) for the comparable period in 2021. Shareholder free cash flow was $2.3 million ($0.04 per share basic and diluted) for the nine months ended September 30, 2022 compared to $21.3 million ($0.40 per share basic and diluted) for the nine months ended September 30, 2021;
- In the nine-month period ended September 30, 2022 Pulse purchased and cancelled, through its normal course issuer bid, a total of 150,400 common shares at a total cost of approximately $296,000 (at an average cost of $1.97 per common share including commissions);
- At September 30, 2022 Pulse was debt-free and held cash of $5.8 million. The $25.0 million revolving credit facility remains undrawn and fully available to the Company; and
- To acknowledge that Pulse is evolving with the needs of the energy sector - supporting Canada’s vital oil and gas sector, while building relationships with new industries in the energy transition, Pulse has undertaken a rebranding initiative. The new logo and wordmark represent Pulse’s primary focus and key commitment: to deliver Canada’s largest 2D and 3D seismic data library to western Canada’s energy sector.
| SELECTED FINANCIAL AND OPERATING INFORMATION | |||||||
| (thousands of dollars except per share data, | Three months ended September 30, | Nine months ended September 30, | Year ended | ||||
| numbers of shares and kilometres of seismic data) | 2022 | 2021 | 2022 | 2021 | December 31, | ||
| (unaudited) | (unaudited) | 2021 | |||||
| Revenue | |||||||
| Data library sales | 2,163 | 8,832 | 6,934 | 32,545 | 48,717 | ||
| Other revenue | 15 | 100 | 197 | 300 | 433 | ||
| Total revenue | 2,178 | 8,932 | 7,131 | 32,845 | 49,150 | ||
| Amortization of seismic data library | 2,444 | 2,509 | 7,402 | 7,510 | 10,010 | ||
| Net earnings (loss) | (1,675 | ) | 3,164 | (5,959 | ) | 13,356 | 21,514 |
| Per share basic and diluted | (0.03 | ) | 0.06 | (0.11 | ) | 0.25 | 0.40 |
| Cash provided by operating activities | 829 | 7,572 | 11,231 | 25,787 | 29,799 | ||
| Per share basic and diluted | 0.02 | 0.14 | 0.21 | 0.48 | 0.55 | ||
| EBITDA (a) | 741 | 7,458 | 1,568 | 28,797 | 42,632 | ||
| Per share basic and diluted (a) | 0.01 | 0.14 | 0.03 | 0.54 | 0.79 | ||
| Shareholder free cash flow (a) | 880 | 5,867 | 2,292 | 21,254 | 32,082 | ||
| Per share basic and diluted (a) | 0.02 | 0.11 | 0.04 | 0.40 | 0.60 | ||
| Capital expenditures | |||||||
| Seismic data digitization and related costs | - | 96 | - | 287 | 350 | ||
| Property and equipment | - | 5 | 12 | 8 | 8 | ||
| Total capital expenditures | - | 101 | 12 | 295 | 358 | ||
| Weighted average shares outstanding | |||||||
| Basic and diluted | 53,699,692 | 53,793,317 | 53,726,390 | 53,793,317 | 53,792,984 | ||
| Shares outstanding at period-end | 53,634,317 | 53,793,317 | 53,784,717 | ||||
| Seismic library | |||||||
| 2D in kilometres | 829,207 | 829,207 | 829,207 | ||||
| 3D in square kilometres | 65,310 | 65,310 | 65,310 | ||||
| FINANCIAL POSITION AND RATIOS | |||||||
| September 30, | September 30, | December 31, | |||||
| (thousands of dollars except ratios) | 2022 | 2021 | 2021 | ||||
| Working capital | 6,597 | 2,708 | 9,749 | ||||
| Working capital ratio | 7.5:1 | 1.8:1 | 2.7:1 | ||||
| Cash and cash equivalents | 5,811 | - | - | ||||
| Total assets | 37,552 | 46,036 | 52,899 | ||||
| Long-term debt | - | 3,117 | 2,265 | ||||
| Trailing 12-month (TTM) EBITDA (b) | 15,403 | 33,033 | 42,632 | ||||
| Shareholders’ equity | 35,964 | 38,710 | 44,141 | ||||
| Long-term debt to TTM EBITDA ratio | 0.00 | 0.09 | 0.05 | ||||
| Long-term debt to equity ratio | 0.00 | 0.08 | 0.05 | ||||
(a) The Company’s continuous disclosure documents provide discussion and analysis of “EBITDA”, “EBITDA per share”, “shareholder free cash flow” and “shareholder free cash flow per share”. These financial measures do not have standard definitions prescribed by IFRS and, therefore, may not be comparable to similar measures disclosed by other companies. The Company has included these non-GAAP financial measures because management, investors, analysts and others use them as measures of the Company’s financial performance. The Company’s definition of EBITDA is cash available to invest in growing the Company’s seismic data library, pay interest and principal on its long-term debt, purchase its common shares, pay taxes and the payment of dividends. EBITDA is calculated as earnings (loss) from operations before interest, taxes, depreciation and amortization. EBITDA per share is defined as EBITDA divided by the weighted average number of shares outstanding for the period. The Company believes EBITDA assists investors in comparing Pulse’s results on a consistent basis without regard to non-cash items, such as depreciation and amortization, which can vary significantly depending on accounting methods or non-operating factors such as historical cost. Shareholder free cash flow further refines the calculation by adding back non-cash expenses, net restructuring costs and deducting net financing costs and current income tax expense from EBITDA. Shareholder free cash flow per share is defined as shareholder free cash flow divided by the weighted average number of shares outstanding for the period.
(b) TTM EBITDA is defined as the sum of EBITDA generated over the previous 12 months and is used to provide a comparable annualized measure.
These non-GAAP financial measures are defined, calculated and reconciled to the nearest GAAP financial measures in the Management's Discussion and Analysis.
OUTLOOK
Significant quarterly and annual fluctuations in both traditional and transaction-based sales are intrinsic to the seismic data business. The variance in Pulse’s sales revenue between 2021 and so far in 2022 is higher than usual, due to the significant impact of transaction-based sales which are often of much higher value. While the value of transaction-based sales in 2021 led to Pulse’s second highest revenue year, annual revenue for 2022 will be lower.
Despite weak results in the first three quarters of 2022, the Company continues to regard overall trends in Western Canada as positive and conditions as favourable for both types of seismic data sales. Numerous producing oil and natural gas asset packages are on the market, while industry capital investment, drilling rates and mineral lease auctions or “land sales” are continuing to rebound in response to higher commodity prices and robust global demand. There is widespread recognition that security of energy supply – including crude oil and natural gas – is critical to sustain national economies and manage geopolitical risks.
Pulse is strongly positioned to weather additional quarters of weak sales and to benefit from an industry growth cycle. The Company’s strengths include: zero debt, a low-cost structure, high cash margin, no capital spending commitments, access to credit on favourable terms, Canada’s largest licensable seismic data library providing coverage in all major non-oil-sands oil and natural gas plays across western Canada, strong customer relations, and the Company’s ongoing initiative to enhance the attractiveness of its data for broader application in new-energy as well as traditional projects.
A transaction-based data library sale of any size can occur at any time, and sales in any quarter can be higher or lower than in the previous quarter or in the comparable quarter of a previous year. Pulse also cautions that there is no direct linkage between industry field conditions and demand for seismic data, resulting in innately poor visibility as to Pulse’s future traditional sales. The Company remains focused on maintaining a strong balance sheet, a low-cost structure, a disciplined and rigorous approach to growth opportunities, an experienced and capable management team, excellent customer care, and carefully managed cash resources, including distributing cash to shareholders when prudent.
CORPORATE PROFILE
Pulse is a market leader in the acquisition, marketing and licensing of 2D and 3D seismic data to the western Canadian energy sector. Pulse owns the largest licensable seismic data library in Canada, currently consisting of approximately 65,310 square kilometres of 3D seismic and 829,207 kilometres of 2D seismic. The library extensively covers the Western Canada Sedimentary Basin, where most of Canada’s oil and natural gas exploration and development occur.
For further information, please contact:
Neal Coleman, President and CEO
Or
Pamela Wicks, Vice President Finance and CFO
Tel.: 403-237-5559
Toll-free: 1-877-460-5559
E-mail:
Please visit our website at
This document contains information that constitutes “forward-looking information” or “forward-looking statements” (collectively, “forward-looking information”) within the meaning of applicable securities legislation. Forward-looking information is often, but not always, identified by the use of words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “forecast”, “target”, “project”, “guidance”, “may”, “will”, “should”, “could”, “estimate”, “predict” or similar words suggesting future outcomes or language suggesting an outlook.
The Outlook section herein contain forward-looking information which includes, but is not limited to, statements regarding:
| > | The outlook of the Company for the year ahead, including future operating costs and expected revenues; |
| > | Recent events on the political, economic, regulatory, public health and legal fronts affecting the industry’s medium- to longer-term prospects, including progression and completion of contemplated pipeline projects; |
| > | The Company’s capital resources and sufficiency thereof to finance future operations, meet its obligations associated with financial liabilities and carry out the necessary capital expenditures through 2022; |
| > | Pulse’s capital allocation strategy; |
| > | Pulse’s dividend policy; |
| > | Oil and natural gas prices and forecast trends; |
| > | Oil and natural gas drilling activity and land sales activity; |
| > | Oil and natural gas company capital budgets; |
| > | Future demand for seismic data; |
| > | Future seismic data sales; |
| > | Pulse’s business and growth strategy; and |
| > | Other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions, results and performance, as they relate to the Company or to the oil and natural gas industry as a whole. |
By its very nature, forward-looking information involves inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking statements will not be achieved. Pulse does not publish specific financial goals or otherwise provide guidance, due to the inherently poor visibility of seismic revenue. The Company cautions readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking information. These factors include, but are not limited to:
| > | Uncertainty of the timing and volume of data sales; |
| > | Volatility of oil and natural gas prices; |
| > | Risks associated with the oil and natural gas industry in general; |
| > | The Company’s ability to access external sources of debt and equity capital; |
| > | Credit, liquidity and commodity price risks; |
| > | The demand for seismic data and; |
| > | The pricing of data library licence sales; |
| > | Cybersecurity; |
| > | Relicensing (change-of-control) fees and partner copy sales; |
| > | Environmental, health and safety risks, including those related to the COVID-19 pandemic; |
| > | Federal and provincial government laws and regulations, including those pertaining to taxation, royalty rates, environmental protection, public health and safety; |
| > | Competition; |
| > | Dependence on key management, operations and marketing personnel; |
| > | The loss of seismic data; |
| > | Protection of intellectual property rights; |
| > | The introduction of new products; and |
| > | Climate change. |
Pulse cautions that the foregoing list of factors that may affect future results is not exhaustive. Additional information on these risks and other factors which could affect the Company’s operations and financial results is included under “Risk Factors” in the Company’s most recent annual information form, and in the Company’s most recent audited annual financial statements, most recent MD&A, management information circular, quarterly reports, material change reports and news releases. Copies of the Company’s public filings are available on SEDAR at .
When relying on forward-looking information to make decisions with respect to Pulse, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Furthermore, the forward-looking information contained in this document is provided as of the date of this document and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking information, except as required by law. The forward-looking information in this document is provided for the limited purpose of enabling current and potential investors to evaluate an investment in Pulse. Readers are cautioned that such forward-looking information may not be appropriate, and should not be used, for other purposes.
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