SYS-CON MEDIA Authors: Yeshim Deniz, Elizabeth White, Sean Houghton, Glenn Rossman, Ignacio M. Llorente

News Feed Item

Divestco Reports Q4 2013 Results

CALGARY, ALBERTA -- (Marketwired) -- 04/29/14 -- Divestco Inc. ("Divestco" or the "Company") (TSX VENTURE:DVT) announces its operating results for the three months and year ended December 31, 2013.

Three months ended December 31, 2013

Divestco had a net profit of $3.5 million for the fourth quarter of 2013 ($0.05 per share - basic and diluted) compared to a net loss of $1.2 million ($0.02 per share - basic and diluted) for the same period in 2012.

The Company generated revenue of $10.4 million in Q4 2013 compared to $7.3 million in Q4 2012, an increase of $3.1 million (43%). This was mainly due to a revenue increase in both Seismic Data segment of $5.1 million (616%) and Services segment of $0.3 million (16%) which was offset by a decrease in revenue in Software and Data segment of $2.3 million (54%). Seismic Data segment Q4 2013 revenue in addition to traditional activity level included one large proprietary data sale. The reduction in Software and Data segment Q4 2013 revenue was primarily due to a significant log data sale recognized in Q4 2012.

Operating expenses (excluding depreciation and amortization) decreased by $1.7 million (25%) to $5.3 million in Q4 2013 from $7 million in Q4 2012. Salaries and wages were down $1.2 million (27%) due to lower headcount. Occupancy costs were lower by $0.5 million (42%) as the Company surrendered a floor of office space effective January 1, 2013 and another floor effective June 1, 2013. There was also a decrease in bad debt expense and bank charges partially offset by an increase in digital map/information expense. Depreciation and amortization increased by $0.2 million (13%) mainly due to a higher depreciation on seismic data offset by a lower amortization of deferred development costs and research and development expense of Geomatics and Processing divisions.

EBITDA was $5.1 million in Q4 2013, a $4.8 million increase from the same period in 2012. Funds from operations were $5.2 million ($0.08 per share - basic and diluted) for Q4 2013, compared to $10,000 ($nil per share - basic and diluted) for the same period in 2012, an increase of $5.2 million primarily due to higher Seismic Data sales activity as well as savings in salaries and wages expense and occupancy costs.

Year ended December 31, 2013

Divestco had net income of $1.3 million for the year ended December 31, 2013 ($0.02 per share - basic and diluted) which was consistent with the net income for the year ended December 31, 2012. However, the income in 2013 was partially offset by the recognition of a $1 million accounting loss (non-cash) from the disposal of certain data library assets and a $0.7 million impairment (non-cash) of leasehold improvements (net of tenant inducements) associated with the surrender of office space in the period. Excluding the loss and impairment, the Company would have had a total net income of $3.0 million ($0.05 per share - basic and diluted) for the year ended December 31, 2013.

The Company generated revenue of $34.0 million in 2013 compared to $39.6 million in 2012, a decrease of $5.6 million (14%). Revenue in the Software and Data segment decreased by $3.3 million (26%) related to a significant log data sale in 2012. Revenues in Geomatics and Processing divisions of Services segment were lower by $1.0 million (22%) and $0.9 million (16%) respectively as clients continued to spend less on exploration activities.

Operating expenses (excluding depreciation and amortization) decreased by $4.1 million (15%) to $23.1 million for the year ended December 31, 2013 from $27.2 million during the same period in 2012. Salaries and wages were down $2.9 million (16%) due to lower headcount and profit-share accrual. Occupancy costs were also lower as the Company surrendered a floor of office space effective January 1, 2013 and another floor effective June 1, 2013. In addition, stock-based compensation, professional fees, and bad debt expenses were lower than in 2012. They were partially offset by an increase in software licenses/maintenance and digital/map information expenses. Depreciation and amortization decreased by $3.8 million (35%) mainly due to a lower depreciation on seismic data as the Company acquired more data in 2012 as compared to 2013.

Excluding the (non-cash) accounting loss and impairment of $1.7 million, EBITDA was $10.9 million for the year ended December 31, 2013, a $1.5 million (14%) decrease from $12.4 million for the same period in 2012. The Company generated funds from operations of $11.3 million ($0.17 per share - basic and diluted) in 2013, compared to $11.7 million ($0.18 per share - basic and diluted) for the same period in 2012, a decrease of $0.4 million (3%) primarily due to lower log data revenue.

Working Capital

As at December 31, 2013, Divestco had a working capital deficit of $2.3 million (excluding deferred revenue of $2.8 million), compared to a working capital deficit of $7.5 million (excluding deferred revenue of $2.4 million) as at December 31, 2012. The improvement in working capital from the end of 2012 was a direct result of debt restructuring, strong seismic cash sales and significant reductions in operating costs. However, the industry continued to experience lower than anticipated activity levels with respect to exploration which had a negative impact on the Company's services divisions: Geomatics, Processing and Land management services for the year ended December 31, 2013.

Divestco had a funded debt to equity ratio of 0.61:1 as at December 31, 2013 (0.65:1 as at December 31, 2012). The Company's practice is to utilize an appropriate mix of debt and equity to finance its current capital expenditures and growth initiatives. Consistent with the year ended December 31, 2012, the strategy of the Board of Directors and management is to operate the Company with the lowest possible debt load in reaction to the volatility of the industry. This is to ensure adequate financial flexibility to meet the financial obligations, both current and long-term and as part of the Company's effort to maintain a healthy statement of financial position. The Company's strategy is to maintain a funded debt to equity ratio of less than 1:1.

Operations Update

During 2013, Divestco completed two 3D seismic programs in adding a total of 93 square kilometers to our proprietary database. At the end of Q4, the company was in the process of acquiring another 3D seismic program in the Alder region of Alberta. Software has successfully restructured its division with the hiring of new key personnel and has major releases planned throughout 2014. Divestco's Services division made a determined push into international markets which has resulted in several new processing contracts in South America, Europe and Africa.

Mr. Stephen Popadynetz, CEO commented: "Q4 of 2013 was a substantial turning point for Divestco. Despite the lack of new seismic programs, Divestco was able to replace much of its lost revenues from acquisitions with library sales. As the database continues to expand, and the library sales associated with it will also expand. As well, the Software and Data Division had decreased one time revenues, but our overall recurring revenues saw a modest increase and, despite the low industry activity, our Services Division has implemented an aggressive expansion plan into international markets which has started to show significant return. As I have stated before, we can't increase the industry activity levels, but we can diversify and control our costs. All the measures taken by Divestco are starting to show positive results and as we simplify and concentrate our businesses, we are generating additional positive returns. The outlook for 2014 is stronger than 2013 and with all the cost controls now firmly in place, we can increase our profitability on any new revenue increases. As well, we must continue to innovate rather than waiting for the environment to improve. This is why our Software group has produced a new slate of applications to be unveiled this year and this is why our Processing group has moved so aggressively into international markets. We also must manage the cash flows from our operations and despite the challenging and changing economic environment; Divestco's working capital position is substantially improved from the end of fiscal 2012. As we look forward to 2014, Divestco has improved virtually every aspect of the Company and is well positioned to finally start focusing on growth again."

Non-GAAP Measures

The Company's consolidated financial statements have been prepared in accordance with IFRS as issued by the IASB. Certain measures in this document do not have any standardized meaning as prescribed by IFRS and are considered non-GAAP measures. While these measures may not be comparable to similar measures presented by other issuers, they are described and presented to provide shareholders, potential investors and other users with additional information regarding the Company's results, liquidity, and its ability to generate funds to finance its operations. These measures include:

Earnings before interest, taxes, depreciation and amortization ("EBITDA")

Divestco uses EBITDA as a key measure to evaluate the performance of its segments and divisions, as well as the Company overall, with the closest IFRS measure being net income or net loss. EBITDA is a measure commonly reported and widely used by investors as an indicator of the Company's operating performance and ability to incur and service debt, and as a valuation metric. The Company believes EBITDA assists investors in comparing the Company's performance on a consistent basis, without regard to financing decisions and depreciation and amortization, which are non-cash in nature and can vary significantly depending upon accounting methods or non-operating factors such as historical cost.

EBITDA is not a calculation based on IFRS and should not be considered an alternative to net income or loss in measuring the Company's performance. As well, EBITDA should not be used as an exclusive measure of cash flow, because it does not consider the impact of working capital growth, capital expenditures, debt principal reductions and other sources and uses of cash, which are disclosed in the consolidated statements of cash flows. While EBITDA has been disclosed herein to permit a more complete comparative analysis of the Company's operating performance and debt servicing ability relative to other companies, investors should be cautioned that EBITDA as reported by Divestco may not be comparable in all instances to EBITDA as reported by other companies. Investors should also carefully consider the specific items included in Divestco's computation of EBITDA.

The following is a reconciliation of EBITDA with net income (loss):


----------------------------------------------------------------------------
                                    Three months ended           Year ended 
                                           December 31          December 31 
----------------------------------------------------------------------------
(Thousands)                             2013      2012       2013      2012 
----------------------------------------------------------------------------
Net Income (Loss)                   $  3,458  $ (1,232)  $  1,327  $  1,273 
Income Tax Expense                         -         -          -       (51)
Finance Costs                            215       251      1,007       531 
Depreciation and Amortization          1,454     1,292      6,889    10,646 
----------------------------------------------------------------------------
EBITDA                              $  5,127  $    311   $  9,223  $ 12,399 
----------------------------------------------------------------------------

Working capital

Working Capital is calculated as current assets minus current liabilities (excluding deferred revenue). Working capital provides a measure that can be used to gauge Divestco's ability to meet its current obligations.

Additional GAAP Measure

Funds from operations

Divestco reports funds from operations because it is a key measure used by management to evaluate its performance and to assess the ability of the Company to finance operating and investing activities. Funds from operations exclude certain working capital changes and other sources and uses of cash, which are disclosed in the consolidated statements of cash flows.

Funds from operations is not a calculation based on IFRS and should not be considered an alternative to the consolidated statements of cash flows. Funds from operations is a measure that can be used to gauge Divestco's capacity to generate discretionary cash flow. Investors should be cautioned that funds from operations as reported by Divestco may not be comparable in all instances to funds from operations as reported by other companies. While the closest IFRS measure is cash from operating activities, funds from operations is considered relevant because it provides an indication of how much cash generated by operations is available before proceeds from divested assets and changes in certain working capital items.

The following reconciles funds from operations with cash from operating activities:


----------------------------------------------------------------------------
                                    Three months ended           Year ended 
                                           December 31          December 31 
----------------------------------------------------------------------------
(Thousands)                             2013      2012       2013      2012 
----------------------------------------------------------------------------
Cash from Operating Activities      $  3,684  $   (155)  $  8,498  $ 14,892 
Changes in Non-Cash Working                                                 
 Capital Balances Related to                                                
 Operating Activities                  1,337       (85)     1,938    (3,408)
Interest Paid                            168       219        846       374 
----------------------------------------------------------------------------
Income Taxes Paid (Refunded)               -        31          -      (184)
----------------------------------------------------------------------------
Funds from (used in) Operations     $  5,189  $     10   $ 11,282  $ 11,674 
----------------------------------------------------------------------------

Financial Highlights


----------------------------------------------------------------------------
Summary Financial Results (Thousands, Except Per Share Amounts)             
----------------------------------------------------------------------------
                                             Three months ended December 31 
----------------------------------------------------------------------------
                                        2013      2012   $ Change  % Change 
----------------------------------------------------------------------------
Revenue                            $  10,395 $   7,270  $   3,125        43%
                                                                            
Operating Expenses                     5,251     6,960     (1,709)      -25%
                                                                            
Other Loss (Income)                       17        (1)        18       N/A 
----------------------------------------------------------------------------
                                                                            
EBITDA (1)                             5,127       311      4,816      1549%
                                                                            
Finance Costs                            215       251        (36)      -14%
                                                                            
Depreciation and Amortization          1,454     1,292        162        13%
----------------------------------------------------------------------------
                                                                            
Income (Loss) before Income Taxes      3,458    (1,232)     4,690       N/A 
                                                                            
Income Tax Expense (Reduction)             -         -          -       N/A 
----------------------------------------------------------------------------
                                                                            
Net Income (Loss)                  $   3,458 $  (1,232) $   4,690       N/A 
 Per Share - Basic and Diluted          0.05     (0.02)      0.07       N/A 
----------------------------------------------------------------------------
                                                                            
Funds from (used in) Operations                                             
 (2)                               $   5,189 $      10  $   5,179       N/A 
 Per Share - Basic and Diluted          0.08         -       0.08       N/A 
----------------------------------------------------------------------------
                                                                            
Shares Outstanding                    67,050    66,758        N/A       N/A 
                                                                            
Weighted Average Shares                                                     
 Outstanding                                                                
 Basic and Diluted                    67,004    66,735        N/A       N/A 
----------------------------------------------------------------------------
                                                                            
                                                                            

----------------------------------------------------------------------------
Summary Financial Results (Thousands, Except Per Share Amounts)             
----------------------------------------------------------------------------
                                                     Year ended December 31 
----------------------------------------------------------------------------
                                        2013      2012   $ Change  % Change 
----------------------------------------------------------------------------
Revenue                            $  33,979 $  39,628  $  (5,649)      -14%
                                                                            
Operating Expenses                    23,073    27,189     (4,116)      -15%
                                                                            
Other Loss (Income)                    1,683        40      1,643      4108%
----------------------------------------------------------------------------
                                                                            
EBITDA (1)                             9,223    12,399     (3,176)      -26%
                                                                            
Finance Costs                          1,007       531        476        90%
                                                                            
Depreciation and Amortization          6,889    10,646     (3,757)      -35%
----------------------------------------------------------------------------
                                                                            
Income (Loss) before Income Taxes      1,327     1,222        105         9%
                                                                            
Income Tax Expense (Reduction)             -       (51)        51       N/A 
----------------------------------------------------------------------------
                                                                            
Net Income (Loss)                  $   1,327 $   1,273  $      54         4%
 Per Share - Basic and Diluted          0.02      0.02          -         0%
----------------------------------------------------------------------------
                                                                            
Funds from (used in) Operations                                             
 (2)                               $  11,282 $  11,674  $    (392)       -3%
 Per Share - Basic and Diluted          0.17      0.18      (0.01)       -6%
----------------------------------------------------------------------------
                                                                            
Shares Outstanding                    67,050    66,758        N/A       N/A 
                                                                            
Weighted Average Shares                                                     
 Outstanding                                                                
 Basic and Diluted                    67,000    66,676        N/A       N/A 
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
Financial Position (Thousands)                      Balance as at           
----------------------------------------------------------------------------
                                              Dec 31      Dec 31      Dec 31
----------------------------------------------------------------------------
                                                2013        2012        2011
----------------------------------------------------------------------------
Total Assets                               $  40,721   $  41,945   $  43,761
Working Capital (Deficit) (1)                 (2,295)     (7,483)        297
Long-Term Financial Liabilities (2)            9,357       7,622       8,610
----------------------------------------------------------------------------

1.  Excludes the current portion of deferred revenue of $2.8 million
    (December 31, 2012: $2.4 million; December 31, 2011: $4.6 million) 
2.  Includes long-term debt obligations, deferred rent obligations, sublease
    loss provision and other long-term liabilities. The long-term debt
    obligations are comprised of the Company's subordinated debt,
    shareholder loans and finance leases. 

Segment Review Summary


----------------------------------------------------------------------------
Three months ended December 31, 2013 (Thousands)                            
----------------------------------------------------------------------------
                        Software               Seismic Corporate            
                        and Data   Services       Data   & Other      Total 
----------------------------------------------------------------------------
Revenue                $   1,996  $   2,501  $   5,898  $      -  $  10,395 
EBITDA                       844        119      5,231    (1,067)     5,127 
Finance costs (income)        36         10        169         -        215 
Depreciation and                                                            
 Amortization                624        145        579       106      1,454 
Income (loss) before                                                        
 income taxes                184        (36)     4,483    (1,173)     3,458 
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
Three months ended December 31, 2012 (Thousands)                            
----------------------------------------------------------------------------
                                                       Corporate            
                        Software   Services       Data   & Other      Total 
----------------------------------------------------------------------------
Revenue                $   4,319  $   2,121  $     830  $      -  $   7,270 
EBITDA                     2,523       (760)      (165)   (1,287)       311 
Finance costs (income)        68         22        161         -        251 
Depreciation and                                                            
 Amortization                788        221        156       127      1,292 
Income (loss) before                                                        
 income taxes              1,667     (1,003)      (482)   (1,414)    (1,232)
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
Year ended December 31, 2013 (Thousands)                                    
----------------------------------------------------------------------------
                                                       Corporate            
                        Software   Services       Data   & Other      Total 
----------------------------------------------------------------------------
Revenue                $   9,427  $  10,946  $  13,606  $      -  $  33,979 
EBITDA                     2,972        423     10,813    (4,985)     9,223 
Finance costs (income)       292        137        578         -      1,007 
Depreciation and                                                            
 Amortization              2,526        614      3,270       479      6,889 
Income (loss) before                                                        
 income taxes                154       (328)     6,965    (5,464)     1,327 
----------------------------------------------------------------------------
Loss on sale of                                                             
 intangibles and                                                            
 property and                                                               
 equipment                (1,005)         -          -      (678)    (1,683)
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
Year ended December 31, 2012 (Thousands)                                    
----------------------------------------------------------------------------
                                                       Corporate            
                        Software   Services       Data   & Other      Total 
----------------------------------------------------------------------------
Revenue                $   9,414  $  17,266  $  13,784  $      -  $  40,464 
EBITDA                     3,541      3,620     10,651   (11,673)     6,139 
Finance costs (income)         -         (3)        (6)      768        759 
Depreciation and                                                            
 Amortization              3,453      1,098      3,632     1,721      9,904 
Income (loss) before                                                        
 income taxes                 88      2,525      7,025   (14,162)    (4,524)
----------------------------------------------------------------------------
                                                                            
                                                                            
Divestco Inc.                                                               
Condensed Consolidated Interim Statements of Financial Position             
                                                                            
----------------------------------------------------------------------------
                                                              At December 31
----------------------------------------------------------------------------
(Thousands - Audited)                                        2013       2012
----------------------------------------------------------------------------
Assets                                                                      
                                                                            
Current Assets                                                              
  Cash                                                  $     417  $   1,320
  Funds held in trust                                           -         18
  Accounts receivable                                       9,136      7,134
  Prepaid expenses, supplies and deposits                     300        357
  Income taxes receivable                                     502        196
----------------------------------------------------------------------------
  Total current assets                                     10,355      9,025
                                                                            
Equity-accounted investees                                    133        137
Participation surveys in progress                           4,733      3,508
Property and equipment                                      2,869      4,607
Intangible assets                                          22,631     24,668
----------------------------------------------------------------------------
                                                                            
Total assets                                            $  40,721  $  41,945
----------------------------------------------------------------------------
                                                                            
Liabilities and Shareholders' Equity                                        
                                                                            
Current Liabilities                                                         
  Bank indebtedness                                     $   2,996  $   4,450
  Accounts payable and accrued liabilities                  6,935      9,624
  Deferred revenue                                          2,756      2,420
  Current loss on sublease loss provision                     336        326
  Current portion of long-term debt obligations             2,311      1,986
  Current portion of tenant inducements                        72        122
----------------------------------------------------------------------------
  Total current liabilities                                15,406     18,928
                                                                            
Deferred rent obligations                                     451        189
Long-term debt obligations                                  5,591      4,115
Sublease loss provision                                       668      1,006
Tenant Inducements                                            750      1,389
----------------------------------------------------------------------------
Total liabilities                                          22,866     25,627
----------------------------------------------------------------------------
                                                                            
Shareholders' Equity                                                        
  Equity instruments                                        7,266      7,216
  Contributed surplus                                       7,989      7,829
  Retained earnings                                         2,600      1,273
----------------------------------------------------------------------------
  Total shareholders' equity                               17,855     16,318
----------------------------------------------------------------------------
                                                                            
Total liabilities and shareholders' equity              $  40,721  $  41,945
----------------------------------------------------------------------------
                                                                            
                                                                            
Divestco Inc.                                                               
Condensed Consolidated Interim Statements of Income and Comprehensive Income
                                                                            
----------------------------------------------------------------------------
                                                     Year ended December 31 
----------------------------------------------------------------------------
(Thousands, Except Per Share Amounts - Audited)             2013       2012 
----------------------------------------------------------------------------
Revenue                                                $  33,979  $  39,628 
----------------------------------------------------------------------------
                                                                            
Operating expenses                                                          
  Salaries and benefits                                   14,775     17,667 
  General and administrative                               8,138      9,213 
  Depreciation and amortization                            6,889     10,646 
  Other loss                                               1,683         40 
  Share-based payments                                       160        309 
----------------------------------------------------------------------------
  Total operating expenses                                31,645     37,875 
----------------------------------------------------------------------------
                                                                            
Finance costs                                              1,007        531 
                                                                            
----------------------------------------------------------------------------
                                                                            
Income before income taxes                                 1,327      1,222 
----------------------------------------------------------------------------
                                                                            
Income taxes                                                                
  Current                                                      -        (51)
----------------------------------------------------------------------------
                                                                            
Net income and comprehensive income for the year       $   1,327  $   1,273 
                                                                            
Net income per share                                                        
  Basic and Diluted                                    $    0.02  $    0.02 
                                                                            
Weighted average number of shares                                           
  Basic and Diluted                                       66,989     66,676 
----------------------------------------------------------------------------
                                                                            
                                                                            
Divestco Inc.                                                               
Condensed Consolidated Interim Statements of Changes in Equity              
                                                                            
----------------------------------------------------------------------------
                                Number                 Number               
                                    of                     of               
                                Shares       Share   Warrants               
(Thousands - Audited)           Issued     Capital     Issued      Warrants 
----------------------------------------------------------------------------
Balance as at January 1,                                                    
 2012                           66,610 $    74,571     16,280  $      1,860 
                                                                            
Reduction of stated capital                                                 
 and deficit                               (67,383)                         
                                                                            
Net income and comprehensive                                                
 income for the year                                                        
                                                                            
Transactions with owners,                                                   
 recorded in equity                                                         
 contributions by and                                                       
 distributions to owners:                                                   
  Issuance of Class A common                                                
   shares as service awards        128          25                          
  Issuance of Class A common                                                
   shares on exercise of                                                    
   PSUs                             20           3                          
  Reclassification on                                                       
   exercise of PSUs                                                         
  Reclassification on expiry                                                
   of warrants                                        (16,280)       (1,860)
  Share-based payments                                                      
                                                                            
----------------------------------------------------------------------------
Balance as at December 31,                                                  
 2012                           66,758 $     7,216          -  $          - 
                                                                            
Net income and comprehensive                                                
 income for the year                                                        
                                                                            
Transactions with owners,                                                   
 recorded in equity                                                         
 contributions by and                                                       
 distributions to owners:                                                   
  Issuance of Class A common                                                
   shares as service awards        292          50                          
  Share-based payments                                                      
----------------------------------------------------------------------------
Balance as at December 31,                                                  
 2013                           67,050 $     7,266          -  $          - 
----------------------------------------------------------------------------
                                                                            
                                                                            

----------------------------------------------------------------------------
                                  Equity  Contributed   Retained      Total 
(Thousands - Audited)        Instruments      Surplus   Earnings     Equity 
----------------------------------------------------------------------------
Balance as at January 1,                                                    
 2012                        $    76,431  $     5,663  $ (67,383) $  14,711 
                                                                            
Reduction of stated capital                                                 
 and deficit                     (67,383)                 67,383          - 
                                                                            
Net income and comprehensive                                                
 income for the year                                       1,273      1,273 
                                                                            
Transactions with owners,                                                   
 recorded in equity                                                         
 contributions by and                                                       
 distributions to owners:                                                   
  Issuance of Class A common                                                
   shares as service awards           25                                 25 
  Issuance of Class A common                                                
   shares on exercise of                                                    
   PSUs                                3                                  3 
  Reclassification on                                                       
   exercise of PSUs                                (3)                   (3)
  Reclassification on expiry                                                
   of warrants                    (1,860)       1,860                     - 
  Share-based payments                            309                   309 
                                                                            
----------------------------------------------------------------------------
Balance as at December 31,                                                  
 2012                        $     7,216  $     7,829  $   1,273  $  16,318 
                                                                            
Net income and comprehensive                                                
 income for the year                                       1,327      1,327 
                                                                            
Transactions with owners,                                                   
 recorded in equity                                                         
 contributions by and                                                       
 distributions to owners:                                                   
  Issuance of Class A common                                                
   shares as service awards           50                                 50 
  Share-based payments                            160                   160 
----------------------------------------------------------------------------
Balance as at December 31,                                                  
 2013                        $     7,266  $     7,989  $   2,600  $  17,855 
----------------------------------------------------------------------------
                                                                            
                                                                            
Divestco Inc.                                                               
Condensed Consolidated Interim Statements of Cash Flows                     
                                                                            
----------------------------------------------------------------------------
                                                     Year ended December 31 
----------------------------------------------------------------------------
(Thousands - Audited)                                     2013         2012 
----------------------------------------------------------------------------
Cash from (used in) operating activities                                    
Net income (loss) for the year                     $     1,327  $     1,273 
Items not affecting cash:                                                   
Equity investment loss                                      (3)         (10)
Depreciation and amortization                            6,889       10,646 
Amortization of tenant inducements                         (93)        (117)
Deferred rent obligations                                  262         (936)
Income taxes                                                 -          (51)
Loss on disposal of intangibles                          1,005            - 
Impairment of property and equipment                       678            - 
Unrealized foreign exchange loss                             -            4 
Non-cash employment benefits                                50           25 
Share-based payments                                       160          309 
Finance costs                                            1,007          531 
----------------------------------------------------------------------------
Funds from operations                                   11,282       11,674 
                                                                            
Changes in non-cash working capital balances            (1,938)       3,408 
Interest paid                                             (846)        (374)
Income taxes paid                                            -          184 
----------------------------------------------------------------------------
Net cash from operating activities                       8,498       14,892 
----------------------------------------------------------------------------
                                                                            
Cash from (used in) financing activities                                    
Bank indebtedness                                       (1,454)         750 
Repayment of long-term debt obligations                 (2,617)      (1,965)
Deferred financing costs                                  (298)           - 
Proceeds received from long-term debt obligations                           
 (net of committed revolver repayments)                  4,325        2,210 
----------------------------------------------------------------------------
Net cash from (used in) financing activities               (44)         995 
----------------------------------------------------------------------------
                                                                            
Cash from (used in) investing activities                                    
Additions to intangible assets                          (3,604)     (14,197)
Decrease in participation surveys in progress           (1,225)       1,600 
Purchase of property and equipment                        (408)      (1,320)
Additions to tenant inducements                              -          118 
Lease incentive                                            144            - 
Payments towards sublease loss provision                  (356)        (357)
Investment in equity-accounted investees                  (200)           - 
Advances from equity-accounted investees                   458           14 
Deferred development costs                              (1,824)      (2,353)
Changes in non-cash working capital balances            (2,342)         381 
----------------------------------------------------------------------------
Net cash used in investing activities                   (9,357)     (16,114)
----------------------------------------------------------------------------
                                                                            
Decrease in cash                                          (903)        (227)
                                                                            
Cash, beginning of year                                  1,320        1,547 
----------------------------------------------------------------------------
                                                                            
Cash, end of year                                  $       417  $     1,320 
----------------------------------------------------------------------------

About the Company

Divestco provides innovative geoscience solutions to Energy and Service companies worldwide. Our customers predominantly operate in geology, geophysics, land and engineering and we work with our clients to ensure they have the right solutions, at the right time, to help them make more informed decisions. Commitment, innovation, accountability and agility form the cornerstone of our values and enable us to consistently provide reliable solutions and exceptional, personalized service in all of the core areas in which we operate. Divestco provides Software & Data, Seismic Processing, Geomatics Services, Seismic Data & Brokerage, and Land Services. Divestco is headquartered in Calgary and trades on the TSX Venture Exchange under the symbol "DVT".

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

This press release contains forward-looking information related to the Company's capital expenditures, projected growth, view and outlook with respect to future oil and gas prices and market conditions, and demand for its products and services. Statements that contain words such as "could', "should", "can", "anticipate", "expect", "believe", "will", "may" and similar expressions and statements relating to matters that are not historical facts constitute "forward-looking information" within the meaning applicable by Canadian securities legislation. Although management of the Company believes that the expectations reflected in such forward-looking information are reasonable, there can be no assurance that such expectations will prove to have been correct because, should one or more of the risks materialize, or should the assumptions underlying forward-looking statements or forward-looking information prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated or expected. Readers should not place undue reliance on forward-looking statements or forward-looking information. All of the forward-looking statements and forward-looking information of the Company contained in this press release are expressly qualified, in their entirety, by this cautionary statement. Except where required by law, the Company does not assume any obligation to update these forward-looking statements or forward-looking information if conditions or opinions should change.

In particular, this press release contains forward-looking statements pertaining to the following: Company's ability to keep debt and liquidity at acceptable levels, improve/maintain its working capital position and maintain profitability in the current economy; availability of external and internal funding for future operations; relative future competitive position of the Company; nature and timing of growth; oil and natural gas production levels; planned capital expenditure programs; supply and demand for oil and natural gas; future demand for products/services; commodity prices; impact of Canadian federal and provincial governmental regulation on the Company; expected levels of operating costs, finance costs and other costs and expenses; future ability to execute acquisitions and dispositions of assets or businesses; expectations regarding the Company's ability to raise capital and to add to seismic data through new seismic shoots and acquisition of existing seismic data; treatment under tax laws; and new accounting pronouncements.

These forward-looking statements are based upon assumptions including: future prices for crude oil and natural gas; future interest rates and future availability of debt and equity financing will be at levels and costs that allow the Company to manage, operate and finance its business and develop its software products and various oil and gas datasets including its seismic data library, and meet its future obligations; the regulatory framework in respect of royalties, taxes and environmental matters applicable to the Company and its customers will not become so onerous on both the Company and its customers as to preclude the Company and its customers from viably managing, operating and financing its business and the development of its software and data; and that the Company will continue to be able to identify, attract and employ qualified staff and obtain the outside expertise as well as specialized and other equipment it requires to manage, operate and finance its business and develop its properties.

These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including: general economic, market and business conditions; volatility in market prices for crude oil and natural gas; ability of Divestco's clients to explore for, develop and produce oil and gas; availability of financing and capital; fluctuations in interest rates; demand for the Company's product and services; weather and climate conditions; competitive actions by other companies; availability of skilled labour; failure to obtain regulatory approvals in a timely manner; adverse conditions in the debt and equity markets; and government actions including changes in environment and other regulation.

Contacts:
Divestco Inc.
Mr. Stephen Popadynetz
CEO, President and CFO
587-952-8152

Divestco Inc.
Mr. Danny Chiarastella
Vice President, Finance
587-952-8027
www.divestco.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.
"SAP had made a big transition into the cloud as we believe it has significant value for our customers, drives innovation and is easy to consume. When you look at the SAP portfolio, SAP HANA is the underlying platform and it powers all of our platforms and all of our analytics," explained Thorsten Leiduck, VP ISVs & Digital Commerce at SAP, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, discussed how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP HANA...
There's Big Data, then there's really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at Big Data Expo®, Hannah Smalltree, Director at Treasure Data, discussed how IoT, Big D...
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective ...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using ...
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Ar...
The term culture has had a polarizing effect among DevOps supporters. Some propose that culture change is critical for success with DevOps, but are remiss to define culture. Some talk about a DevOps culture but then reference activities that could lead to culture change and there are those that talk about culture change as a set of behaviors that need to be adopted by those in IT. There is no question that businesses successful in adopting a DevOps mindset have seen departmental culture change, ...
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
The 4th International DevOps Summit, co-located with16th International Cloud Expo – being held June 9-11, 2015, at the Javits Center in New York City, NY – announces that its Call for Papers is now open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's large...
SYS-CON Media announced today that Skytap blog on "DevOps Journal" exceeded 84,000 story reads. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Noel Wurst is the managing content editor at Skytap. Skytap provides SaaS-based dev/test environments to the enterprise. Skytap solution removes the inefficiencies and constraints that comp...
SYS-CON Events announced today Isomorphic Software, the global leader in high-end, web-based business applications, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software ...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
Fundamentally, SDN is still mostly about network plumbing. While plumbing may be useful to tinker with, what you can do with your plumbing is far more intriguing. A rigid interpretation of SDN confines it to Layers 2 and 3, and that's reasonable. But SDN opens opportunities for novel constructions in Layers 4 to 7 that solve real operational problems in data centers. "Data center," in fact, might become anachronistic - data is everywhere, constantly on the move, seemingly always overflowing. Net...