CALGARY, March 20 /CNW/ - Earnings for the year ended December 31, 2007 were $20,752,000 or $1.14 per share on revenue of $142,945,000. Comparative figures for 2006 were $33,755,000 or $1.83 per share on revenue of $174,543,000. Funds flow from operations for the current year was $36,992,000 as compared to $47,199,000 in 2006.
Overall, 2007 was the weakest year in terms of rig utilization rates for the Canadian drilling industry since 2002 and AKITA's results were affected by that weakness. The Company's rig utilization in 2007 was 40.9% compared to the industry average of 37.0% and AKITA's utilization of 56.6% in 2006.
During 2007, AKITA deployed three new drilling rigs into the market. The first rig was a 1,200 metre single that incorporated several features that were new to AKITA's fleet, but which will be incorporated into any additional rigs that the Company may add in the future in a similar depth capacity. Although operations for this rig are not governed under a long-term contract arrangement, it was able to generate 29% more operating days than the average AKITA rig in its depth range.
In addition to the new concept single rig noted above, AKITA completed the construction of two new 3,000 metre pad-style drilling rigs suitable for drilling heavy oil. The first pad-style drilling rig commenced its multi-year term contract midway through the second quarter, while the other pad-style drilling rig, which does not have a term contract associated with it, commenced drilling operations in late August.
In light of current weaker market conditions, the Company does not have immediate plans to increase its fleet size. AKITA remains poised, with the financial and other resources it has at its disposal, to respond to market opportunities, as they arise. At December 31, 2007 the Company had $49 Million in working capital, including $43 Million of cash and no long-term debt.
For the second year in a row, AKITA benefited from a reduction in future income taxes as a result of government announcements for future income tax rates. The positive impact to earnings was $2,099,000 in 2007 compared to $1,943,000 in 2006.
Selected financial information for the Company is as follows:
Consolidated Balance Sheets
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December 31 (Dollars in thousands) 2007 2006
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Assets
Current assets
Cash and cash equivalents $ 43,166 $ 49,927
Accounts receivable 22,505 38,529
Other 272 206
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65,943 88,662
Restricted cash 5,000 -
Capital assets 152,579 133,575
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$ 223,522 $ 222,237
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Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 13,051 $ 24,772
Dividends payable 1,279 1,285
Income taxes payable 873 5,924
Deferred revenue 1,617 -
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16,820 31,981
Future income taxes 15,055 14,016
Pension liability 3,609 3,367
Class A and Class B Shareholders' Equity
Class A and Class B shares 23,369 23,440
Contributed surplus 1,110 652
Retained earnings 163,559 148,781
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188,038 172,873
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$ 223,522 $ 222,237
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Consolidated Statements of Earnings,
Comprehensive Income and Retained Earnings
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Year ended December 31
(Dollars in thousands, except per share) 2007 2006
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Revenue $ 142,945 $ 174,543
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Costs and expenses
Operating and maintenance 85,108 99,970
Depreciation 15,403 14,211
Selling and administrative 15,774 15,187
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116,285 129,368
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Operating income 26,660 45,175
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Other income (expense)
Interest income 1,392 1,937
Gain on sale of joint venture interests
in rigs and other assets 902 1,057
Gain (loss) on foreign currency translation (814) (40)
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1,480 2,954
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Earnings before income taxes 28,140 48,129
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Income taxes
Current 6,349 14,558
Future 1,039 (184)
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7,388 14,374
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Net earnings and Comprehensive Income 20,752 33,755
Retained earnings, beginning of year 148,781 124,343
Dividends declared (5,117) (4,613)
Adjustment on repurchase and
cancellation of share capital (857) (4,704)
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Retained earnings, end of year $ 163,559 $ 148,781
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Earnings per Class A and Class B share
Basic $ 1.14 $ 1.83
Diluted $ 1.13 $ 1.81
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Consolidated Statements of Cash Flows
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Year ended December 31 (Dollars in thousands) 2007 2006
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Operating activities
Net earnings $ 20,752 $ 33,755
Non-cash items included in earnings
Depreciation 15,403 14,211
Future income taxes 1,039 (184)
Expense for defined benefit pension plan 242 265
Stock options charged to expense 458 169
Gain on sale of joint venture interests
in rigs and other assets (902) (1,017)
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Funds flow from operations 36,992 47,199
Change in non-cash working capital 1,884 13,953
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38,876 61,152
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Investing activities
Capital expenditures (40,948) (49,698)
Proceeds on sales of joint venture interests
in rigs and other assets 7,443 9,043
Cash restricted for loan guarantees (5,000) -
Reduction in investments - 55
Change in non-cash working capital (1,081) 514
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(39,586) (40,086)
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Financing activities
Dividends paid (5,117) (4,448)
Repurchase of share capital (928) (5,009)
Increase (decrease) in bank indebtedness - (4,400)
Proceeds received on exercise of stock options - 205
Change in non-cash working capital (6) (172)
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(6,051) (13,824)
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Increase (decrease) in cash (6,761) 7,242
Cash position, beginning of year 49,927 42,685
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Cash position, end of year $ 43,166 $ 49,927
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Interest paid during the year $ 376 $ 72
Income taxes paid during the year $ 11,400 $ 14,495
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