Production Petrochemical 2014 First Quarter Sales Increased 53.2% From 2013 First Quarter Sales and 18.6% From the 2013 Fourth Quarter
Adjusted EBITDA Swings to Profit of $50,606 in the First Quarter
Quarterly Net Loss Decreases 41.3%
LAFAYETTE, La., May 16, 2014 (GLOBE NEWSWIRE) -- ESP Resources, Inc. (OTCQB:ESPI), an oil and gas services company, announced unaudited financial results for the three months ended March 31, 2014.
First Quarter 2014 Highlights
First quarter 2014 financial results, compared to first quarter 2013, were as follows:
- Total revenues from production petrochemicals were $2,866,790 at the three months ended March 31, 2014, compared to $1,870,840 in the first quarter of 2013, a 53.2% increase; and an 18.6% increase from $2,416,805 in the fourth quarter of 2013.
- Adjusted EBITDA, a non-GAAP measure, swung into the positive at $50,606, as compared to a loss of ($503,477) in the first quarter of 2013.
- Gross profit margin increased by 4.3% to 53.4% in the first quarter of 2014 due to the higher margins on sales of production petrochemical products, which constituted 91% of sales in the quarter.
- Operating loss from continuing operations decreased 61.6% to ($371,851), as compared to a loss of ($970,754) for the comparable 2013 period. Excluding a loss on disposal of certain assets of $16,169, stock-based compensation of $233,069 and depreciation and amortization of $180,000, pro forma operating profit was $57,687 for the first quarter of 2014.
- Net loss for the quarter decreased 41.3% to ($756,309), as compared to ($1,288,393) for the comparable 2013 period.
- While total revenues for the quarter decreased by $302,192 compared to the respective 2013 period, first quarter 2013 revenues included sales from divisions that were non-core to the Company's business and have since been discontinued.
"The results of our decision in early 2013 to discontinue certain non-core divisions and focus on our core production petrochemical business continue to bear fruit. We expect the same positive trends in the coming quarters as well as our operating cash flows and gross margins to continue to improve," said David Dugas, President and Chief Executive Officer. "As we pursue opportunities in completion petrochemical work for our customers and focus on our growing production petrochemical business, we anticipate announcing some new customer growth in the coming weeks and months."
Quarterly Financial Results
Sales were $3,152,765 for the three months ended March 31, 2014, compared to $3,454,957 for the same period in 2013, a decrease of $302,192, or 9%. The decrease was mainly due to a $1,357,000 decreased sales volume from completion petrochemical sales and services to customers engaged in the hydraulic fracturing of oil and gas wells. This decrease occurred as a result of a slowdown in fracking activity by certain of the Company's customers and closure of the Company's district office in Arkansas. In addition, as the Company's customers shifted their hydraulic fracturing activity to other shale regions where the Company did not have any district offices, the Company was not able to recapture that fracking activity. This decrease in completion petrochemical sales was offset by an increase in production chemical sales of $995,950.
Cost of goods was $1,470,343, or 46.6% of net sales, for the three months ended March 31, 2014, compared to $1,756,871 or 50.6% of net sales, for the same period in 2013. Gross profit was $1,682,422, or 53.4% of net sales, for the three months ended March 31, 2014, compared to $1,698,086, or 49.4% of net sales, for the same period in 2013. The 4.3% increase in gross profit for the three month period in 2014 is the result of a decline in completion petrochemical sales from customers engaged in the hydraulic fracturing of oil and gas wells that has a lower gross profit margin than production petrochemical product sales.
General and administrative expenses decreased by $578,936 for the three months ended March 31, 2014, as compared to the same period in 2013. The decrease in general and administrative expenses was primarily due to a reduction in legal costs related to an intellectual property suit that was settled in the fourth quarter of 2012, the closure of the Houston office in June 2013 and approximately $165,000 reduction in stock compensation expenses.
The Company's net loss from continued operations decreased to $756,309 for the three months ended March 31, 2014, as compared to a net loss from continued operations of $1,115,481 for the same period in 2013. The primary reason for the decrease in the net loss was due to a cost reduction initiated by the Company in the second half of 2013.
About ESP Resources, Inc.
ESP Resources, Inc. is a publicly traded oil and gas services company headquartered in Lafayette, Louisiana. The Company manufactures, blends, distributes and markets specialty chemicals and analytical services to the oil and gas industry. The Company's senior management has over 100 years of combined operating experience in the oil and gas services industry. More information is available on the Company's Website at www.espchem.com.
Legal Notice Regarding Forward-Looking Statements
This press release contains "forward looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements in this news release that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined and assumptions of management. Forward looking statements are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "aims", "potential", "goal", "objective", "prospective", and similar expressions or that events or conditions "will", "would", "may", "can", "could" or "should" occur. Information concerning oil or natural gas reserve estimates may also be deemed to be forward looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed. Actual results may differ materially from those currently anticipated due to a number of factors beyond the reasonable control of the Company. It is important to note that actual outcomes and actual results could differ materially from those in such forward-looking statements.
Readers are cautioned not to place undue reliance on the forward-looking statements made in this press release. In evaluating these statements, you should consider the risks discussed, from time to time, in the reports we file with the U.S. Securities & Exchange Commission. For a discussion of some of the risks and important factors that could affect the Company's future results and financial condition, see the Company's Form 10-Ks and 10-Qs on file with the U.S. Securities & Exchange Commission.
CONTACT: David Dugas President and Chief Executive Officer ESP Resources, Inc. email@example.com (337) 706-7056Source:ESP Resources, Inc.