Logan International Reports 2012 Third Quarter Financial Results

CALGARY, ALBERTA--(Marketwire - Nov. 14, 2012) - Logan International Inc. (TSX:LII) ("Logan" or the "Company") today announced the results of its third quarter ended September 30, 2012. Revenue in the third quarter was $44.6 million as compared to $37.5 million in the prior year quarter. Net earnings from continuing operations were $15.5 million, $.46 per diluted share, in this year's third quarter as compared to $2.1 million, $.06 per diluted share, in last year's third quarter. This year's third quarter Modified EBITDA (a non-GAAP measure) increased to $10.7 million from $9.3 million in last year's third quarter. The increases in revenue, net earnings from continuing operations and in Modified EBITDA are attributable to the improved operating performance of Logan Oil Tools and to contributions from Kline Oilfield Equipment, Scope Production Development and Xtend Energy Services Inc., all of which were acquired after last year's third quarter. Further, in this year's third quarter, the Company recorded a gain of approximately $11 million, $.33 per diluted share, from the change in the fair value of the contingent consideration relating to the acquisition of Xtend Energy Services Inc.

Logan recorded year to date revenue of $125.7 million in 2012 as compared to $98.2 million in the corresponding period of last year and reported net earnings from continuing operations in the current year period of $20.7 million, $.61 per diluted share, as compared to $7.3 million, $.22 per diluted share, in the corresponding period last year. Current year-to-date Modified EBITDA was $27.6 million as compared to prior year-to-date Modified EBITDA of $22.4 million.

This year's third quarter report includes the operating results of Kline Oilfield Equipment ("Kline") and Scope Production Developments ("Scope"), which were both acquired in last year's fourth quarter, for the full quarter and year to date period and, in addition, includes the results of Xtend Energy Services ("Xtend") since March 1, 2012 (acquisition date). The prior year's reports do not include the operating results of these entities. Effective July 29, 2011, the Company completed the sale of substantially all of the assets and operations of its front-end seismic services business and has classified the corresponding operating results as discontinued operations.

Logan's Chief Executive Officer David Barr stated, "We are pleased to report a 15% increase in our quarterly Modified EBITDA, despite a 26% decline in active drill rigs operating in Canada and a 2% decline in drill rigs operating in the United States. Logan Oil Tools' operating results were strong throughout the quarter, as its order flow and backlog remained near all-time highs. However, both softened slightly during the quarter compared to the record levels achieved earlier in the year. Dennis Tool's sales lagged the prior year's sales due to a temporary slowdown in Canadian sales and service work, both of which have rebounded since the quarter end. Logan Completion continued to show progress in its recovery despite slower industry activity in Canada. The slowdown in Canadian drilling and completion activity caused a significant decrease in Logan Completion's revenue. During the quarter, Logan Completion successfully completed projects in New Mexico and Mexico and made inroads into China where we expect to record sales in the fourth quarter. Xtend Energy's quarterly financial performance was also negatively impacted by the weakness in Canada. However, on a positive note, our U.S. reach for the Xciter tool has now extended to the Eagle Ford, Bakken and Permian plays. These operations should recover in the fourth quarter of 2012 and first quarter of 2013 as U.S. acceptance increases. Kline Oilfield Equipment and Scope Production Development each reported solid and consistent operating results, which we believe will continue for the remainder of the year."

As previously announced, effective December 1, 2012, David Barr will resign as Logan International's President and Chief Executive Officer, but will remain as a director and assist in the transition and with certain other assignments. Gerald Hage, the current Chairman of the Board of Directors and former President and Chief Executive Officer, has been appointed to replace Mr. Barr. Paul McDermott, a current director of Logan International, has been appointed Chairman of the Board of Directors. In addition, David Jones will resign as the Company's Senior Vice President and Chief Operating Officer effective December 1, 2012.

Logan manufactures and sells a comprehensive line of quality fishing and intervention tools, including retrieving, surface, stroking and remedial tools for a variety of well workover, intervention, drilling, and completion activities (Logan Oil Tools, Inc.); manufactures and sells high-performance poly-crystalline diamond compact (PDC) cutters and bearings (Dennis Tool Company); manufactures and sells packers, bridge plugs, and other completion products (Kline Oilfield Equipment, Inc.); provides proprietary multi-zonal completion technology and conventional completion production products and services (Logan Completion Systems Inc.); provides proprietary and patented products and services that are focused on production optimization in sand-laden heavy oil wells (Scope Production Development Ltd.); and provides proprietary tools that enhance the effectiveness of horizontal drilling (Xtend Energy Services Inc.). Common shares of Logan are traded on the Toronto Stock Exchange (TSX) under the ticker symbol "LII".


Selected Consolidated Financial Information

(in thousands of US dollars, except per share data)

Three month periods ended Nine month periods ended

September 30, September 30,


2012 2011 2012 2011


Revenue $ 44,647 $ 37,508 $ 125,717 $ 98,230

Net earnings from

continuing operations 15,529 2,135 20,709 7,307

Earnings per share from

continuing operations:

Basic $ 0.46 $ 0.06 $ 0.62 $ 0.22

Diluted $ 0.46 $ 0.06 $ 0.61 $ 0.22

EBITDA (1) $ 21,313 $ 6,528 $ 35,282 $ 18,606

Modified EBITDA (1) $ 10,747 $ 9,335 $ 27,562 $ 22,423


September December

30, 31,

2012 2011


Working Capital $ 65,571 $ 40,188

Total Assets $ 276,168 $ 213,557

Debt (2) $ 61,081 $ 25,335

Shareholders' Equity $ 167,136 $ 143,625

Note: The purchase of Xtend Energy Services Inc. ("Xtend") was completed on

March 1, 2012, and, accordingly, the Company's nine month period ended

September 30, 2012 operating results included seven months of Xtend.

(1) The Management's Discussion and Analysis ("MD&A") presents: (a) EBITDA

as earnings before net finance cost, taxes, depreciation and

amortization ("EBITDA"), and (b) Modified EBITDA as EBITDA before

acquisition accounting adjustments, transaction fees, share-based

compensation payments and severance costs. Neither of these measurements

should be considered an alternative to, or more meaningful than, "net

earnings from continuing operations" or "cash flow from operating

activities" as determined in accordance with International Financial

Reporting Standards ("IFRS") as an indicator of the Company's financial

performance. EBITDA and Modified EBITDA do not have standardized

definitions as prescribed by IFRS; therefore, the Company's presentation

of these measurements may not conform to similar presentations by other

companies. Management calculates EBITDA and Modified EBITDA each period

and evaluates the Company's operating performance based on these

measurements. Management believes that Modified EBITDA, which eliminates

significant non-cash or non-recurring items of revenue or cost, more

accurately presents the results of the Company's ongoing operations and

its ability to generate the cash required to fund or finance future

growth, acquisitions and capital investments.

Three month periods Nine month periods

ended ended

September 30, September 30,


2012 2011 2012 2011


Net earnings from continuing

operations $ 15,529 $ 2,135 $ 20,709 $ 7,307


Depreciation and amortization 2,578 2,236 7,646 6,049

Finance cost, net 900 620 2,207 1,035

Income tax expense 2,306 1,537 4,720 4,215


EBITDA 21,313 6,528 35,282 18,606


Contingent consideration expense -

Source Energy Tool Services

acquisition - 1,994 - 1,994

Contingent consideration gain -

Xtend Energy Services acquisition (11,064) - (11,064) -

Acquisition accounting adjustments - - 354 -

Transaction fees 63 75 1,272 75

Share-based compensation payments 435 738 1,718 1,748


Modified EBITDA $ 10,747 $ 9,335 $ 27,562 $22,423



EBITDA and Modified EBITDA are provided as measures of the Company's

operating performance without regard to financing decisions, share-based

compensation payments, age and cost of equipment used and income tax

impacts, all of which are factors that are not controlled at the operating

management level. The contingent consideration expense is earnout payments

made to former shareholders of Source Energy Tool Services, which were

contingent on continued employment with Logan International Inc. The

contingent consideration gain is the change in fair value of expected

earnout payments to the former owners of Xtend Energy Services based on

expected post -closing operating results. The acquisition accounting

adjustments reverse the effect related to the increase or step-up in cost

basis of inventories acquired in a business combination. The transaction

fees include the professional and other fees incurred in connection with the

acquisitions in 2011 and 2012. The share-based compensation payments relate

to non-cash share-based compensation expense related to the Company's stock

option and restricted share unit plans.

(2) Includes bank and other borrowed debt and capital leases.


Forward-Looking Statements

This press release contains forward-looking statements. These statements relate to future events or future performance of Logan. When used in this press release, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "propose", "expect", "potential", "continue", and similar expressions, are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such statements reflect Logan's current views with respect to certain events and are subject to certain risks, uncertainties and assumptions. Although Logan believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because we can give no assurance that they will prove to be correct. Many factors could cause Logan's actual results, performance, or achievements to materially differ from those described in this press release. Readers are referred to Logan's Annual Information Form filed on http://www.sedar.comwww.sedar.com which identifies significant risk factors which could cause actual results to differ from those contained in the forward-looking statements. Should one or more risks or uncertainties materialize or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this press release. The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. These statements speak only as of the date of this press release. Logan does not intend and does not assume any obligation, to update these forward-looking statements to reflect new information, subsequent events or otherwise, except as required by law. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities described herein in any jurisdiction.

For more information about Logan International Inc., please visit our website at www.loganinternationalinc.com.


Logan International Inc.

David Barr

Chief Executive Officer

281-617-5300 Houston

Logan International Inc.

Larry Keister

Chief Financial Officer

832-386-2534 Houston


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