Lonestar West Announces 2016 Year End Financial Results

SYLVAN LAKE, ALBERTA--(Marketwired - April 24, 2017) - Lonestar West Inc. (TSX VENTURE:LSI) 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 margin⁽¹⁾ was 15.8% for the year ended December 31, 2016, compared to 20.2% for the prior year comparable period.
• Normalized EBITDAC⁽²⁾ 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 EBITDAC⁽³⁾ 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 EBITDAC⁽²⁾ 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 EBITDAC⁽²⁾ 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.