|HRG GROUP, INC. filed this Form 8-K on 05/09/2016|
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Note: Adjusted EBITDA-Energy is a non-U.S. GAAP measure that excludes interest expense, depreciation, amortization and depletion, accretion of discount on asset retirement obligations, non-cash write-downs of assets, gain on remeasurement of investment to fair value, gain on sale of oil and gas properties, non-recurring other operating items, non-cash changes in the fair value of derivatives, cash settlements on derivative financial instruments and stock-based compensation - see “Non-U.S. GAAP Measures” and a reconciliation of Adjusted EBITDA-Energy to the Energy segment's operating income in the tables accompanying this release.
Oil and natural gas revenues of $9.5 million for the Fiscal 2016 Quarter reflected a decrease of $16.5 million, or 63.5%, from the $26.0 million of revenues reported in the Fiscal 2015 Quarter. The decline was due primarily to lower prices for oil, natural gas and natural gas liquids, as the average sales price per barrel for oil and natural gas liquids declined by 36% and 31%, respectively, in Fiscal 2016 as compared to Fiscal 2015 Quarter. Revenue was further affected by natural declines in production as well as the disposition of the Holly, Waskom and Danville assets as of December 1, 2015.
Operating loss for the Fiscal 2016 Quarter was $26.7 million, an improvement of $134.6 million from the operating loss of $161.3 million recorded in the Fiscal 2015 Quarter. The improvement was due primarily to a lesser amount of ceiling test impairment in the current quarter as discussed in the "Additional Items" section. Excluding impairments, the operating loss of $5.5 million in the Fiscal 2016 Quarter compared to an operating loss of $14.7 million in the Fiscal 2015 Quarter, with the improvement due primarily to a 67% reduction in selling, acquisition, operating and general expenses.
Energy segment adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA-Energy") was a loss of $0.6 million for the Fiscal 2016 Quarter, a decrease of $6.1 million from the $5.5 million of income recorded in the Fiscal 2015 Quarter due primarily to the impact of the lower pricing.
For the Fiscal 2016 Quarter, the Energy segment's production was 73 Mbbl of oil, 94 Mbbl of natural gas liquids and 3,420 Mmcf of natural gas. In the Fiscal 2016 Quarter, average daily production at Compass was 49 Mmcfe as compared to 90 Mmcfe in the Fiscal 2015 Quarter, with the decrease due primarily to the disposition of the Holly, Waskom and Danville assets as of December 1, 2015, as well as the impact of natural production declines.
The Asset Management segment reported revenues of $1.6 million for the Fiscal 2016 Quarter, a decrease of $3.5 million, or 68.6%, from the $5.1 million reported in the Fiscal 2015 Quarter. The decrease was due primarily to a lower amount of interest income generated at Salus, which is in the process of winding down its operations and maximizing the recovery of capital from its existing loan portfolio. As of March 31, 2016, Salus, together with its affiliated co-lender Front Street Re, had $136.8 million of loans outstanding, net of allowance for credit losses of $47.8 million. This compares to $226.7 million of loans outstanding, net of allowance for credit losses of $47.9 million, as of September 30, 2015.
The Asset Management segment reported an operating loss of $9.2 million for the Fiscal 2016 Quarter, an improvement of $58.1 million as compared to the operating loss of $67.3 million reported in the Fiscal 2015 Quarter. The reduction in the operating loss was due primarily to a lower amount of impairments and bad debt expense in the current period, as described in the Additional Items section. Excluding the impact of impairments and bad debt expense from both periods, operating loss of $2.5 million in the Fiscal 2016 Quarter improved $1.8 million from for the Fiscal 2015 Quarter, due primarily to a reduction in operating expenses at Salus.
HRG Group, Inc. will host a live conference call to discuss its results on Monday, May 9, 2016 at 10:00 a.m. Eastern Daylight Time. To join the event, participants may call 1.844.856.8663 (U.S. callers) or 1.779.232.4737 (international callers), using conference ID number 79310346. Alternatively, a live webcast of the conference call can be accessed by interested parties through the Investor Relations section of the HRG Website, www.HRGgroup.com.
For those unable to listen to the live broadcast of the conference call, a telephonic replay of the call will be available through midnight May 12, 2016 by dialing 1.855.859.2056 (U.S. callers) or 1.404.537.3406 (international callers), ID number 79310346. A replay will also be available on the Company's website.
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