Bri-Chem (BRY) Q1 2023 earnings summary

Executive summary

• Q1 2023 sales rose 16% YoY to $27.2M, while adjusted EBITDA fell 34% to $1.6M amid lower gross margins and higher input costs.

• Operating earnings were $1.3M, down 57% YoY; net earnings were $265K versus $7.8M, with the prior-year comparison affected by a deferred tax credit and impairment reversal.

Financial highlights

• Sales increased $3.7M YoY to $27.2M, supported by drilling activity across most Canadian and U.S. operating regions.

• Gross margin dollars declined $1.3M YoY; Q1 2022 included an $893K impairment reversal that lifted consolidated margins by ~5.1%.

• Adjusted net earnings were $391K versus $1.7M; adjusted diluted EPS was $0.01 versus $0.06 YoY.

• Working capital increased 138% YoY to $15.7M, alongside total assets of $75.7M versus $58.4M.

Outlook and guidance

• The oilfield service sector is generally expected to see a modest activity increase in 2023 versus 2022.

• Growth priorities include organic initiatives, broader product offerings, and expansion of the warehouse distribution network; fixed-cost control and balance-sheet strength remain priorities.