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North Vancouver, BC - Cabo Drilling Corp. ("Cabo" or the "Company") (TSX-V: CBE) reports results for its fourth quarter and fiscal year ended June 30, 2008.
"Cabo recorded its highest revenues and net income ever in fiscal 2008," Mr. Versfelt stated. "Record revenues for the fiscal year of 2008 were $58.64 million compared to $38.44 million for the fiscal year ending 2007, that's a 53% increase. In addition to the revenue growth internationally, we also had substantial growth at our Ontario division and continued strong results from our Atlantic division."
"Cabo's expansion in 2007 and 2008 was fuelled by an increased number of drills in the international market and an increased number of employees worldwide," stated Mr. Versfelt. "Cabo added eight drills to the international market during the fiscal year 2008 resulting in international revenue growth of 19% of consolidated revenues for the year, compared to 5% in fiscal 2007. This expansion was carried out evenly between the divisions in Spain, Panama, Mexico and the United States."
"The Company recorded net income, after taxes, of $3.20 million and earnings per share of $0.07," Mr. Versfelt said. "We also improved our EBITDA (earnings before interest, taxes, amortization, stock-based compensation and other items) by 73% from $3.92 million in fiscal 2007 to $6.76 million in fiscal 2008. The growth within Cabo over the last four years has created a solid foundation for the years ahead."
"Cabo had gross margin performance of 20.0% for the 4th quarter fiscal 2008 (26.5% 4th quarter fiscal 2007) and 23.4% for the fiscal year 2008 (24.6% for 2007)," Mr. Versfelt stated. "We recorded gross margins in excess of 27% internationally, but this was offset by lower margins earned from our Ontario and Pacific division."
"During the first four months of fiscal 2009, seven more drills were added to the Company's international fleet, now totaling 24 of 111 drills owned by the Company. With the dramatic downturn in the financial and commodity markets, the Company does not expect to increase its fleet, nor make any significant capital expenditures," Mr. Versfelt said. "On the other hand, it is likely that our drills will be moving between divisions, taking advantage of new contracts in areas that need more drills."
"In order to improve on profitability in an environment of decreasing demand and volatile commodity prices, we must be relentless on cost control and reducing our spending, while at the same time maintaining our experienced workforce, enforcing our high safety standards, and remaining focused on high employee and customer relations," Mr. Versfelt stated. "Within in the last year Cabo has employed five general managers with extensive experience in expanding as well as retracting markets. This along with the foundation we built over the last three years will assist us in working through these changing times."
Year ended June 30, 2008
Revenue for the year ending June 30, 2008 was $58.64 million, compared to $38.44 million in 2007. This represents a 53% increase in revenues year over year. The increase can be attributed primarily to significant growth from our international, Ontario and Atlantic divisions. Revenues from our international divisions represent 19% of fiscal 2008 revenues as compared to 5% in fiscal 2007. With an increase in the number of drills at our international divisions, management expects international operations to contribute a growing percentage of the Company's total revenue stream.
Direct costs for the year ended June 30, 2008 were $44.90 million compared to $28.98 million in fiscal 2007. The increase is a direct result of higher activity, which resulted in higher revenue in fiscal 2008. Gross margins for the year ended June 30, 2008 were 23.4% compared to 24.6% during the fiscal year ending June 30, 2007. The Company recorded gross margins in excess of 27% internationally, but this was offset by lower margins earned from our Ontario and Pacific divisions.
General and administrative expenses increased to $7.28 million in fiscal 2008 as compared to $5.52 million last year. At 12.4% as a percentage of revenue in fiscal 2008, general and administration costs have decreased pro-rata year over year from the 14.4% recorded in fiscal 2007. Increased costs can be attributed to additional administration personnel in our international operations, higher travel, higher insurance and professional fees.
EBITDA (earnings before interest, tax, amortization, stock-based compensation and other items) for fiscal 2008 increased 73% to $6.76 million ($0.15 per share basic dilution) as compared to $3.92 million ($0.11 per share basic dilution) in fiscal 2007. Net income, after taxes, increased to $3.20 million for the fiscal year ending June 30, 2008 as compared to a net income of $926,498 recorded in fiscal 2007.
To view the Company's complete news release, MD&A, and financial statements please visit the company's website at www.cabo.ca or SEDAR (www.sedar.com).
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, potential mineral recovery processes and other business transactions timing. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. Cabo Drilling Corp. was recognized as a TSX Venture 50(TM) company in 2008. TSX Venture 50 is a trademark of TSX Inc. and is used under license.
CONTACT: John A. Versfelt, Chairman, President and CEO
