Bri-Chem Announces 2024 First Quarter Financial Results and Senior Banking Facility Amendments

Core Viewpoint - Bri-Chem Corp. reported a significant decline in financial performance for Q1 2024, primarily due to reduced US drilling activity and a lower average rig count, leading to decreased sales and increased net losses compared to the same period in 2023 [1][3][10]. Financial Performance - Consolidated sales for Q1 2024 were $21.4 million, a decrease of 21% from $27.2 million in Q1 2023, attributed to a 19% drop in US drilling activity [2][5]. - Adjusted EBITDA for Q1 2024 was negative $443 thousand, down from $1.6 million in Q1 2023, reflecting a decrease of $2.1 million [2][8]. - The net loss for Q1 2024 was $1.5 million, compared to a net earnings of $265 thousand in Q1 2023, marking a decline of $1.8 million [2][3]. Financial Position - Total assets decreased to $66.2 million from $75.7 million, a reduction of 12% year-over-year [2]. - Working capital as of March 31, 2024, was $14.7 million, down 8% from $15.9 million in the previous year [4]. - Long-term debt slightly decreased to $6.7 million from $6.9 million, a 3% reduction [2]. Segment Performance - Canadian drilling fluids distribution sales were $2.8 million, down from $3.6 million in Q1 2023, due to slowing sales of select commodity items [6]. - US drilling fluids distribution sales fell to $12.6 million from $16.8 million, a 25% decrease, linked to a drop in the average rig count [6]. - Canadian blending and packaging division saw a slight increase in sales to $4.6 million from $4.3 million, while US blending and packaging sales dropped to $1.4 million from $2.5 million [7]. Outlook - North American drilling activity is expected to remain low, with a 19% decrease in US oil and gas rig counts due to falling gas prices [10]. - The Canadian market outlook is more positive, with the completion of the Trans Mountain pipeline expansion anticipated to enhance capacity and access to global markets [10]. - The company plans to implement expense management strategies and focus on new business development and organic growth in response to current market conditions [10]. Banking Facility Amendments - Bri-Chem finalized an amendment with CIBC regarding its senior lending facility due to a covenant breach, which now includes a cumulative budgeted EBITDA covenant tested monthly [9].