Sylvan Lake, Alberta, (TSX.V: LSI) – Lonestar West Inc. today announced the financial results for the year ended December 31, 2016. Key points for the year ended December 31, 2016 include: ? Revenues decreased by 15.2% to $42,641,196 for the year ended December 31, 2016 from $50,304,204 in the prior year comparable period.
- Gross margin1 was 15.8% for the year ended December 31, 2016, compared to 20.2% for the prior year comparable period.
- Normalized EBITDAC2 was $1,191,588 or 2.8% for the year ended December 31, 2016, compared to $4,400,657 or 8.7% for the prior year comparable period.
- Normalized EBITDAC3 per basic share decreased to $0.04 for the year ended December 31, 2016, compared to $0.15 in the prior year comparable period.
- A contingent loss of $450,000 US was recorded as the result of an Excise Tax audit.
- Loss before taxes was $7,104,217 for the year ended December 31, 2016, compared to a loss before taxes of $6,372,370 in the prior year comparable period.
- Net loss for the year ended December 31, 2016 was $8,350,844, compared to a net loss of $6,372,370 in the prior year comparable period.
The Company reported normalized EBITDAC2 of $1,191,588 for the year ended December 31, 2016, which is a decrease from $4,400,657 for the prior year comparable period. The decrease in normalized EBITDAC is due primarily to a significant decrease in revenue offset by a marginal decrease in operating expenses. Other factors directly impacted the revenues were a delay in contract negotiations with a major account in the United States, and the continued impact of the wildfires in Fort McMurray, Alberta that occurred in the second quarter of the year. Key points for the three months ended December 31, 2016 include: The Company reported negative normalized EBITDAC2 of $(1,042,388) for the three month period ended December 31, 2016, which is a decrease from $11,107 for the prior year equivalent period. The decrease in normalized EBITDAC for the three month period ended December 31, 2016 is related primarily to a lower gross margin resulting from a more competitive operating environment. In addition, there were costs associated with the closure and reorganization of bases that were not performing.
“Results for the fourth quarter were disappointing. Significant cost cutting was partially completed but the additional selling, general and administration expenses and the continued decline of the revenue offset the impact of the cuts we made.” commented James Horvath, President of Lonestar.
“We are focused on working towards our goal of returning the business to its historical operating and profit margins. This includes continued cost cutting into Q1 of 2017. The Company has also reduced the number of bases in the US, and we will continue to direct our business development activities on expanding in our most profitable locations”.
About Lonestar West Based in Sylvan Lake, Alberta, Lonestar West Inc. operates a fleet of 140 Hydrovac, Vacuum and Auxiliary units throughout Western Canada, Ontario, California, and the South Eastern United States. It is focused on profitably growing its HVAC services to become a major competitor in the North American market.
For more information please visit the Lonestar West website at www.lonestarwest.com
For further information please contact:
James Horvath President & CEO Phone: 403-887-2074 – [email protected]