Tornado Global Hydrovacs Reports Third Quarter 2017 Results
CALGARY, November 16, 2017 – Tornado Global Hydrovacs Ltd. (“Tornado” or the “Company”) (TGH: TSX-V) today reported its unaudited condensed consolidated financial results for the Three and Nine Months ended September 30, 2017. The unaudited condensed consolidated financial statements and MD&A have been filed on SEDAR and can be reviewed at www.sedar.com.
Financial and Operating Highlights (in CAD $000’s except per share data)
Segmented information (in CAD $000’s)
Three months ended September 30, 2017
- Revenue of $7,619 increased 13.2% compared to $6,733 in Q2/2017 and increased 160.2% compared to $2,928 in the comparable period in 2016. The increase in revenue was attributed to the recent improvement in the hydrovac market equipment purchase demand with increased interest coming out of the municipal sector in both Canada and United States.
- As a result of increased revenue, Gross Profit of $1,222 increased by $331 compared to $891 in Q2/2017. Gross Profit increased 407.1% compared to $241 in the comparable period in 2016.
- EBITDA of $74, comprising North America $561, China ($272) and Corporate ($215), improved by $365 compared to ($291) in Q2/2017, due to increased revenues and Gross profit. For the North America segment, EDITDA during the quarter of $561 increased significantly compared to Q2, due increased activity levels. For China, negative EDITDA during the quarter was ($272) and is expected to stay at this level until there is an increase in the scope of operations.
- Net income of $79 increased by $616 compared to a loss of $537 in Q2/2017 and improved by $1,078 compared to a loss of $999 in the comparable period in 2016. This is due to the factors discussed above, together with a gain of $151 on the conversion of debt through the issuance of shares.
- On September 15, 2017, the Company completed three financing transactions. Under a Private Placement, the Company issued 27,777,778 Class “A” Common shares (“Common Shares”) at a price of $0.09 per Common Share for gross proceeds of $2.5 million. Under a Unit Private Placement, the Company issued 3,100,000 units at a price of $0.09 per Unit for aggregate gross proceeds of $279. Under a Shares for Debt transaction, principal and accrued interest totaling $2.7 million owed to the Company’s former parent company, Empire Industries Ltd, was converted into 30,185,544 Common Shares at a price of $0.09 per Common Share.
1Earnings (loss) before interest, tax, depreciation and amortization (EBITDA) and Earnings (loss) before interest and tax (EBIT) are not defined by IFRS. The definition of EBITDA does not consider gains and losses on the disposal of assets, fair value changes in foreign currency forward contracts and non-cash components of stock based compensation. While not an IFRS measure, EBITDA is used by management, creditors, analysts, investors and other financial stakeholders to assess the Group’s performance and management from a financial and operational perspective.
On October 31, 2017 the Company closed a Rights Offering by issuing 6,172,354 Common Share at a price of $0.085 per share for gross proceeds of $ 525. The Company issued to shareholders one right for each issued and outstanding Common Share. Each Right entitled the holder to subscribe for one Common Share. The intention of the Rights Offering was to permit shareholders to purchase additional Common Shares at a similar price to those issued in the September 15, 2017 transactions.
Proceeds from September 15, 2017 transactions and the Rights Offering have strengthened the Company’s financial position and will be used to fund the Company’s expansion on China and for general working capital purposes.
In North America, the market demand from the municipal sector in both Canada and United States has contributed to improved financial performance. With the expected continuation of this increasing demand, the Company will also focus on marketing its newly improved designed trucks. In China, the Company continues to develop its business and this significant market.
As a result of these factors management believes the Company’s medium and long-term outlook is positive and improving.
About Tornado Global Hydrovacs Ltd.
The Company designs and manufactures hydrovac trucks in Canada and sells hydrovac trucks for excavation service providers to the oil and gas industry and the municipal markets in Canada and the USA. Hydrovac trucks use high pressure water to pulverize soil and turn it into mud, and then vacuum up the resulting mud into its tank. Tornado currently operates in North America. The Company intends to expand its hydrovac business into China and has established a wholly owned operation in China with a head office in Beijing.
For more information about Tornado Global Hydrovacs Ltd., visit www.tornadotrucks.com or contact:
Chief Executive Officer
Phone: (403) 204-6333
Chief Financial Officer
Phone: (403) 204-6363
The Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Neither the Exchange nor its Regulation Service Provider (as that term is defined in policies of the Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Certain statements contained in this news release constitute forward-looking statements. These statements relate to future events. All statements other than statements of historical fact are forward-looking statements. The use of the words ‘‘may”, “expected”, “believes”, “anticipates” and other words of a similar nature are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although the Company believes these statements to be reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. Such statements include statements regarding the Company’s outlook for the rest of the year and expectations on reducing production costs and anticipated effect of the Company’s newly designed hydrovac truck. Actual results could differ materially from those anticipated in these forward-looking statements as a result of prevailing economic conditions, receipt of requisite regulatory approvals, and other factors, many of which are beyond the control of the Company. The forward-looking statements contained in this news release represent the Company’s expectations as of the date hereof, and are subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by applicable securities regulations.