COEUR D'ALENE, Idaho, Aug. 15, 2008 (PRIME NEWSWIRE) -- Timberline Resources Corporation (AMEX:TLR) today announced consolidated financial results for its third fiscal quarter of 2008 which ended on June 30, 2008.
Timberline's contract drilling subsidiaries, Kettle Drilling, Inc. ("Kettle") and World Wide Exploration, S.A. de C.V. ("World Wide"), reported combined gross revenues of $9.70-million for the quarter, a 102-percent increase over the $4.80-million in revenue reported in the same period last year, and a pre-tax net loss of $1.06-million after one-time expenses incurred during the quarter.
Timberline's U.S. operations at Kettle generated revenues of $7.32-million, a gross profit of $1.27-million, and a pre-tax net loss of $1.75-million after one-time expenses incurred during the quarter. Timberline's Mexican operations at World Wide generated revenues of $2.39-million, a gross profit of $1.75-million, a pre-tax net profit of $0.68-million, and an after-tax net profit of $0.46-million. Both Kettle and World Wide specialize in underground core drilling services in support of active mining operations and advanced exploration projects.
During the second half of the quarter, Timberline implemented a management transition at Kettle, which included severance payments to prior management, resulting in a one-time charge of $1.88-million. As a part of the transition, the Company undertook a detailed inventory analysis, determining that a charge to net income of $0.54-million was appropriate to reflect the net realizable value of materials and supplies. Without the one-time severance payments and adjustment to inventory, Kettle would have reported net income before taxes of $0.67-million for the quarter, in addition to the net income before taxes of $0.68-million realized by World Wide. In addition, the Company obtained a loan to repurchase and retire the majority of the outstanding Series A Preferred shares held by the previous owners of Kettle Drilling.
Timberline CEO Randal Hardy stated, "Following the transition, we have a new management team at Kettle which is refocusing the corporate culture with an emphasis on improving U.S. operational performance. Kettle's new President, Martin Lanphere, brings a hands-on management and banking background to the Company. Kettle's new General Manager, Reggie Montgomery, was most recently Newmont Mining's Manager of Drilling Services and is in charge of all of Timberline's drilling operations. We are pleased to welcome Martin, Reggie and several other recent hires to the Timberline team."
Mr. Hardy continued, "In addition to our new management team at Kettle, we are particularly satisfied with the results generated by Paul Elloway and his team at our Mexican operations and based on the contract drilling revenues reported for our first three quarters, we are confident that barring any unforeseen events, our 2008 drilling revenue will meet or exceed our target of $30-million."
Overall, for the quarter ended June 30, 2008, Timberline reported revenue of $9.70-million compared to revenue of $4.80-million in the same period in 2007. Inclusive of the non-cash, severance and inventory charges, the net loss for the period was $2.62-million compared to a net loss of $0.92-million for the same period a year ago.
Timberline's corporate office and exploration division reported a net loss of $1.33-million for the second quarter, compared to a net loss of $0.66-million in the same period last year. The loss includes $0.49-million in non-cash charges, $0.17-million in exploration expenses, and the remainder in general and administrative expenses.
As announced in May, drilling is currently underway at the Butte Highlands property with permitting and planning ongoing for additional drilling and exploration.
Timberline recently announced the filing of its Definitive Proxy and the announcement of its Annual Meeting. The Proxy includes, among other items, the Company's proposal to acquire Small Mine Development, LLC ("SMD"), one of the largest underground mine contractors in the United States. Management believes that receipt of shareholder approval and completion of the SMD acquisition will provide Timberline with the foundation to be a significant player in the North American mining services industry and is likely to provide excellent returns to our shareholders over the long term.
Timberline Resources Corporation has taken the complementary businesses of mining services and mineral exploration and combined them into a unique, forward-thinking investment vehicle that provides investors exposure to both the "picks and shovels" and "blue sky" aspects of the mining industry.
Timberline has contract drilling subsidiaries in the western United States and Mexico and an exploration division focused on high-potential, district-scale gold projects. With its anticipated acquisition of a premier American underground mine contractor, Small Mine Development, Timberline will strengthen its position as an emerging, vertically-integrated resource company. Timberline is listed on the American Stock Exchange and trades under the symbol "TLR".
Statements contained herein that are not based upon current or historical fact are forward-looking in nature. Such forward-looking statements reflect the Company's expectations about its future operating results, performance and opportunities that involve substantial risks and uncertainties. When used herein, the words "anticipate," "believe," "estimate," "plan," "intend" and "expect" and similar expressions, as they relate to Timberline Resources Corporation, or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause the Company's actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, such factors, including the risk that the acquisition will not be completed or the anticipated benefits from the acquisition will not be realized, and the risk factors, discussed in the Company's Annual Report on Form 10-KSB for the year ended September 30, 2007. Except as required by the Federal Securities law, the Company does not undertake any obligation to release publicly any revisions to any forward-looking statements.
Additional Information About The SMD Acquisition
In connection with the proposed acquisition, Timberline has filed a proxy statement with the Securities and Exchange Commission. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE FINAL PROXY STATEMENT, BECAUSE IT CONTAINS IMPORTANT INFORMATION ABOUT THE ACQUISITION AND THE PARTIES THERETO. Investors and security holders may obtain a free copy of the proxy statement and other documents filed by Timberline at the Securities and Exchange Commission's Web site at http://www.sec.gov. The proxy statement and such other documents may also be obtained for free from Timberline by directing such request to Timberline Resources Corporation, 101 E. Lakeside Ave., Coeur d'Alene, ID 83814, Attention: Chief Financial Officer.
Participants in the Solicitation
Timberline and its directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the proposed acquisition. Information concerning the interests of Timberline's participants in the solicitation, which may be different than those of Timberline stockholders generally, is set forth in Timberline's proxy statements and Annual Reports on Form 10-KSB, both previously filed with the Securities and Exchange Commission, and in the proxy statement relating to the acquisition.