AKITA Drilling Ltd. Announces Record 2005 Earnings and Cash Flow
CALGARY, ALBERTA, March 17, 2006 –Record earnings and cash flow as well as strategic enhancements to the rig fleet highlighted AKITA’s achievements for 2005.
Earnings for the year ended December 31, 2005 were $29,264,000 or $1.57 per share on revenue of $162,110,000. Comparative figures for 2004 were $20,875,000 or $1.15 per share on revenue of $135,747,000. Per share amounts have been retroactively restated to reflect the impact of the Company’s two-for-one share split implemented on June 8, 2005.
Cash flow from operations for the current year was $42,421,000 as compared to $33,947,000 in 2004.
Overall, 2005 was a record year for AKITA and the Canadian drilling industry. AKITA’s results were positively affected by record high oil and natural gas prices. Demand for all rig sizes was strong throughout the year, although drilling was somewhat constrained during the summer, mainly due to wet weather. Although all rig categories are impacted by wet weather, utilization of shallow capacity rigs is typically affected more than other rig sizes because more frequent moves are required.
In 2005, the Company expanded its market area to include Alaska. The Doyon Akita Joint Venture is operating a newly constructed rig under a four-year contract on the north slope of Alaska. With this addition, AKITA’s fleet now stands at 38 rigs (34.575 net).
AKITA has three rigs under construction, two to expand the Company’s penetration into the heavy oil market and one that is suited to shallow drilling including coal bed methane wells.
In November 2005, the Board of Directors approved the payment of an increased quarterly dividend that equates to $0.24 per share annualized. This represented an increase of 9.1% calculated on an annual basis.
Selected financial information for the Company is as follows:
Statement of Earnings and
Retained Earnings
Unaudited ($000's except per share amounts)
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Three Months
Ended
March 31
2005 2004
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REVENUE $ 49,889 $ 44,300
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COSTS AND EXPENSES
Operating and maintenance 29,005 25,335
Depreciation 4,182 3,635
Selling and administrative 3,677 3,927
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36,864 32,897
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OPERATING INCOME 13,025 11,403
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OTHER INCOME (EXPENSE)
Interest on long-term debt (65) (140)
Interest income 213 145
Gain on sale of joint venture interests in rigs 187 122
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335 127
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EARNINGS BEFORE INCOME TAXES 13,360 11,530
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INCOME TAXES
Current 3,911 3,396
Future 764 697
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4,675 4,093
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NET EARNINGS 8,685 7,437
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Retained earnings, beginning of period 100,871 84,602
Dividends (1,025) (904)
Adjustment on repurchase and
cancellation of share capital (364) -
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RETAINED EARNINGS, END OF PERIOD $ 108,167 $ 91,135
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EARNINGS PER CLASS A & CLASS B SHARE
Basic $ 0.93 $ 0.82
Diluted $ 0.93 $ 0.80
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Statement of Cash Flows
Unaudited ($000's)
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Three Months
Ended
March 31
2005 2004
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OPERATING ACTIVITIES
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Net earnings $ 8,685 $ 7,437
Non-cash items included in earnings
Depreciation 4,182 3,635
Future income taxes 764 697
Expense for defined benefit pension plan 63 60
Amortization of preferred share discount - 19
Stock options charged to expense 23 21
Gain on sale of joint venture interests in rigs (187) (122)
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Cash flow from operations 13,530 11,747
Change in non-cash working capital (7,790) (11,363)
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5,740 384
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INVESTING ACTIVITIES
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Capital expenditures (1,127) (1,309)
Proceeds on sale of joint venture interests in rigs 349 231
Change in non-cash working capital 177 (1,365)
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(601) (2,443)
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FINANCING ACTIVITIES
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Repayment of long-term debt (1,395) (1,311)
Dividends (1,025) (902)
Proceeds received on exercise of stock options - 70
Repurchase of share capital (397) -
Change in non-cash working capital 92 (86)
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(2,725) (2,229)
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INCREASE (DECREASE) IN CASH 2,414 (4,288)
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Cash position, beginning of period 27,452 27,906
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CASH POSITION, END OF PERIOD $ 29,866 $ 23,618
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Interest paid during the period $ 57 $ 192
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Income taxes paid during the period $ 3,015 $ 4,990
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Balance Sheet
($000's)
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March 31 December 31
2005 2004 2004
Unaudited Audited
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ASSETS
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Current assets
Cash $ 29,867 $ 23,618 $ 27,452
Accounts receivable 43,041 37,562 34,926
Other 942 525 104
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73,850 61,705 62,482
Investments 55 55 55
Capital assets 97,203 94,566 100,420
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$ 171,108 $ 156,326 $ 162,957
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LIABILITIES
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Current liabilities
Accounts payable and accrued
liabilities $ 17,106 $ 16,353 $ 16,570
Income tax payable 2,421 2,225 1,525
Current portion of long-term debt 2,578 5,450 3,973
Current portion of series preferred
shares - 4,937 -
---------- ---------- ----------
22,105 28,965 22,068
Long-term debt - 2,578 -
Future income taxes 13,877 11,899 13,113
Pension liability 2,913 2,670 2,850
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CLASS A AND CLASS B SHAREHOLDERS' EQUITY
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Series preferred shares - 228 -
Class A and Class B shares 23,636 18,757 23,669
Contributed surplus 410 94 386
Retained earnings 108,167 91,135 100,871
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132,213 110,214 124,926
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$ 171,108 $ 156,326 $ 162,957
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AKITA is an Alberta company engaged in the contract drilling business. AKITA's Class A Non-Voting Shares and Class B Common Shares are listed on the Toronto Stock Exchange under the symbol "AKT.NV.A." and "AKT.B"; respectively.
For further information please contact Murray Roth, Vice President of Finance,
(403)292-7950. Web site: http://www.akita-drilling.com |
