Shawcor Provides Business and Financial Update

TORONTO, April 21, 2020 (GLOBE NEWSWIRE) -- Shawcor Ltd. (TSX: SCL) provided an update today on its mobilization of resources to protect its employees and customers from the public health threat caused by the COVID-19 pandemic, maintain critical operations and services and advance the measures announced on March 16, 2020 to further strengthen its financial position.

With employee health and safety as our top priority, the vast majority of our businesses have continued operations with COVID-19 amended work standards and policies, despite experiencing significant supply chain disruptions and unstable customer demand. 

In addition, the recent changes in oil and gas supply and demand have resulted in reduced capital spending by operators, decreased demand for our products and services and increased uncertainty in project sanctioning.

Q1 2020 Update

Shawcor’s Q1 2020 results are scheduled to be released on May 13, 2020.  The following provides a preliminary update on certain items and is not intended to be a full summary as Q1 results are not yet final, and actual Q1 2020 results may differ, in some cases materially, from those included below.

• Q1 revenue was approximately $320 million and Adjusted EBITDA⁽¹⁾ is estimated to be in the range of $5.0-7.0 million. 
   
• Cash and short-term investments at the end of Q1 were approximately $86 million after payment of the first-quarter dividend of approximately $10.5 million.  Long-term debt was approximately $435 million and we were in compliance with our debt covenants as of March 31, 2020. 
   
• Order backlog at the end of the quarter was approximately $575 million as compared to $513 million at the end of 2019.
   
• Given the material decline in industry activity, an impairment charge during Q1 2020 is likely.  The magnitude of the charge is expected to be in range of $200 to $250 million. The final amount will not be known until the relevant valuation is completed as part of the closing of the Q1 financial results.

¹Adjusted EBITDA is a non-GAAP measure.  Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation and amortization and Argentina hyperinflationary adjustments.  Adjusted EBITDA does not have a standardized meaning under GAAP and is not necessarily comparable to similar measures provided by other companies.