CALGARY, AB, May 2, 2024 /CNW/ - Pason Systems Inc. ("Pason" or the "Company") (TSX:PSI) announced today its 2024 first quarter results and the declaration of a quarterly dividend. The following news release should be read in conjunction with the Company's Management Discussion and Analysis ("MD&A"), the unaudited Condensed Consolidated Interim Financial Statements and related notes for the three months ended March 31, 2024, as well as the Annual Information Form for the year ended December 31, 2023. All of these documents are available on SEDAR+ at www.sedarplus.ca. Financial Highlights Three Months Ended March 31, 2024 2023 Change (CDN 000s, except per share data) ($) ($) ( %) North American Drilling Revenue   73,604 79,775 (8) International Drilling Revenue 14,632 15,590 (6) Completions Revenue3 12,785 — nmf Solar and Energy Storage Revenue 3,738 2,864 31 Total Revenue 104,759 98,229 7 EBITDA (1) 91,510 51,755 77 Adjusted EBITDA (1) 42,425 52,410 (19) As a % of revenue 40.5 53.4           (1,290) bps Funds flow from operations 34,846 43,673 (20) Per share – basic 0.44 0.54 (18) Per share – diluted 0.44 0.53 (18) Cash from operating activities 31,014 46,265 (33) Net capital expenditures (2) 19,281 11,555 67 Free cash flow (1) 11,733 34,710 (66) Cash dividends declared (per share) 0.13 0.12 8 Net income 69,123 35,454 95 Net income attributable to Pason 69,529 35,842 94 Per share – basic 0.87 0.44 98 Per share – diluted 0.87 0.44 98 As at March 31, 2024 December 31, 2023 Change (CDN 000s) ($) ($) ( %) Cash and cash equivalents 70,050 171,773 (59) Short-term investments 4,187 — nmf Total Cash (1) 74,237 171,773 (57) Working capital 119,641 212,561 (44) Total interest bearing debt — — — Shares outstanding end of period (#) 79,493,854 79,685,025 nmf (1) Non-GAAP and supplementary financial measures are defined under Non-GAAP Financial Measures in this press release. (2) Includes additions to property, plant, and equipment and development costs, net of proceeds on disposal from Pason's Condensed Consolidated Interim Statements of Cash Flows (3) The Completions segment includes results generated by IWS, which were not part of the Company's consolidated reporting group until January 1, 2024 following the IWS Acquisition Pason generated $104.8 million in consolidated revenue in the first quarter of 2024, representing a 7% increase from the $98.2 million generated in the comparative period of 2023 and a result that continues to outpace the changes in underlying North American industry drilling activity. The North American Drilling business unit generated $73.6 million of reported revenue in the first quarter of 2024, an 8% decrease over the comparative period of 2023 despite a 15% decline in North American industry drilling activity. Pason's Revenue per Industry Day in the first quarter of 2024 of $1,000 increased by 8% from the comparative 2023 period and was a new record level for the Company. Revenue per Industry Day in the current quarter continues to represent strong product adoption and improved pricing for the Company's products and technologies. Segment gross profit was $44.4 million during the first quarter of 2024 compared to $52.7 million in the comparative period of 2023, which reflects lower industry activity levels over the business unit's mostly fixed cost base. The International Drilling business unit generated $14.6 million of reported revenue in the first quarter of 2024, a 6% decrease over the comparative period of 2023, with a weaker Argentinian Peso contributing to the decline. Operating expenses were similarly impacted by the changes in foreign currency rates, and while segment gross profit declined from $8.4 million during the first quarter of 2023 to $7.8 million in Q1 2024, segment gross profit as a percentage of revenue remained stable. The Company's new Completions business unit, formed after the acquisition of IWS on January 1, 2024, generated $12.8 million in revenue while averaging 28 IWS Active Jobs with Revenue per IWS day of $5,026 in the first quarter. Segment gross profit of $1.2 million in the quarter includes $4.4 million of depreciation and amortization expense, of which $2.2 million relates to amortization expense on intangible assets acquired through the IWS Acquisition. Revenue generated by the Solar and Energy Storage business unit was $3.7 million, an increase of 31% from the comparative period in 2023, primarily due to increased sales of control system projects. Resulting segment gross profit was $0.2 million for the first quarter of 2024 compared to a segment gross loss of $0.1 million in the comparable period in 2023. Pason generated $42.4 million in Adjusted EBITDA, or 40.5% of revenue in the first quarter of 2024, compared to $52.4 million or 53.4% of revenue in the fourth quarter of 2023. A comparison of Adjusted EBITDA margin year over year reflects the 15% reduction in North American drilling activity on a mostly fixed cost base, along with the inclusion of IWS financial results at lower margins, reflecting the Completions segment's investments made for its current stage of growth. The Company recorded net income attributable to Pason of $69.5 million ($0.87 per share) in the first quarter of 2024, compared to net income attributable to Pason of $35.8 million ($0.44 per share) recorded in the corresponding period in 2023. The year over year increase is primarily driven by a $50.8 million non-cash accounting gain realized in the first quarter on the revaluation of the Company's previously held equity investment in IWS following the acquisition of all remaining outstanding common shares not held by Pason. Partially offsetting this gain, Pason's depreciation and amortization expense increased from $6.6 million in the first quarter of 2023 to $11.7 million in the first quarter of 2024 as a result of increased capital expenditures in recent quarters, along with the depreciation and amortization expense recognized on IWS' recently acquired fixed and intangible assets. Sequentially, Q1 2024 consolidated revenue of $104.8 million was a 12% increase from consolidated revenue of $93.3 million generated in the fourth quarter of 2023 through improved activity levels during the Canadian winter drilling season, along with the first time inclusion of IWS' results as a fully consolidated subsidiary. Adjusted EBITDA was $42.4 million in the first quarter of 2024 compared to $38.9 million in the fourth quarter of 2024. Adjusted EBITDA margin in the first quarter of 2024 reflects the inclusion of IWS financial results, which are at lower margin levels than Pason's drilling segments given the earlier stage of the business and the investments being made to support rapid growth. The Company recorded net income attributable to Pason in the first quarter of 2024 of $69.5 million ($0.87 per share) compared to net income attributable to Pason of $8.5 million ($0.11 per share) in the fourth quarter of 2023. The increase quarter over quarter is primarily driven by the $50.8 million accounting gain recognized in the quarter on the revaluation of the Company's previously held equity interest in IWS. Pason's balance sheet remains strong, with no interest bearing debt, and $74.2 million in Total Cash as at March 31, 2024, compared to $171.8 million as at December 31, 2023. The decrease in the period is the result of funding the IWS Acquisition with a total of $88.2 million in cash and the repayment of $13.3 million in interest bearing debt assumed through the acquisition. Pason generated cash from operating ...