CALGARY, ALBERTA — (Marketwired) — 05/16/16 — Critical Control Energy Services Corp. (TSX: CCZ) today reported its financial results for the three months ended March 31, 2016.
“Despite lost revenue due to bankruptcies, shut in wells and price concessions, we have maintained our strong recurring revenue base,” said Alykhan Mamdani, President and CEO of Critical Control. “Our efforts to reengineer our operations to be competitive in the current landscape has begun to bear fruit on a sequential quarter by quarter comparison and this improvement is expected to continue through 2016.”
Revenue
Gross margin
Earnings and net earnings
Outlook and Guidance
The decline in the price of oil and gas since late 2014 has materially impacted the Corporation–s revenue. Current industry conditions and the resulting lack of liquidity amongst producers has led to a material drop in non recurring revenue which is expected to continue through 2016.
These same conditions have impacted the Corporation–s recurring revenue base with bankruptcies, shut in wells and competitive price concessions. Notwithstanding the forgoing, the Corporation has further penetrated its client base with its software solutions to keep recurring revenue in line with 2015 levels and expects to continue this trend through 2016.
The Corporation expects recurring revenue from its Services division to continue being impacted for the remainder of 2016, given the lack of well site activity.
The Corporation–s internal business process reengineering and reorganization, commenced in 2015, continued into 2016. As of May 2016, the material portion of the Corporation–s planned changes have been completed. While some benefit is evident in Q1 2016, the Corporation expects a greater benefit from these changes in the second half of 2016. This expectation is based on the current state of the industry and the continued success the Corporation has had in maintaining and growing its revenue base. Commodity prices are unpredictable and a material change will affect management–s expectations for profitability.
About Critical Control
Critical Control provides solutions for the collection, control and analysis of measurement and operational data related to oil and gas wells across North America. We provide services to capture the data, cloud based software to visualize and manage it and the business intelligence to make quicker and more informed operational decisions.
Contacts:
Alykhan Mamdani
President & CEO
(403) 705-7500
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