Bri-Chem (BRY) Q1 2024 earnings summary

Executive summary

• Q1 sales fell 21% YoY to $21.4M as lower U.S. drilling activity reduced demand; Adjusted EBITDA was negative $443K versus $1.6M a year earlier.

• A first-quarter fixed charge coverage covenant breach was addressed through amended senior lending terms with CIBC.

Financial highlights

• Revenue was $21.371M, down $5.830M or 21% YoY; consolidated gross margin dollars declined $715K, primarily due to lower sales.

• Operating loss was $144K versus operating earnings of $1.296M in Q1 2023; Adjusted EBITDA decreased $2.1M YoY.

• Net loss was $1.506M versus net earnings of $265K; adjusted net loss was $1.767M versus adjusted net earnings of $391K.

Outlook and guidance

• U.S. oilfield activity is expected to remain relatively flat for the balance of 2024 unless natural gas prices improve enough to support expanded gas-region drilling.

• Expense management and inventory reduction initiatives are underway to align operations with current market conditions; new business development and organic growth are set to receive more focus.

• The Trans Mountain expansion was expected to be completed in mid-2024, while the LNG pipeline was expected to enter service by mid-2025.