Production Petrochemical Sales Increase 60% for Quarter, 30% for Year
Adjusted EBITDA Swings to Profit of $465,000 in the Quarter
Quarterly Net Loss Decreases 81%
LAFAYETTE, La., April 25, 2014 (GLOBE NEWSWIRE) -- ESP Resources, Inc. (OTCBB:ESPI), an oil and gas services company, announced audited financial results for the three and twelve months ended December 31, 2013.
Fourth Quarter 2013 Highlights
Fourth quarter 2013 financial results, as compared to fourth quarter 2012, were as follows:
"In the fourth quarter, our operating cash flows and gross margins represented a positive trend. This past year was certainly challenging, but our decision in early 2013 to discontinue certain non-core divisions and focus on our core production petrochemical business has proven to be a very successful strategy," said David Dugas, President and Chief Executive Officer. "Our gross margins were impacted by the significant increase in production petrochemical sales, as compared to completion petrochemicals. While we continue to pursue opportunities in completion petrochemical work for our customers, we are now focusing most of our efforts on growing our production business."
"We expect this positive trend in sales to continue in 2014 as we seek out capital to fund our growth. We remain confident in our ability to attract financing as we continue to show positive results. In the meantime, opportunities for new business have grown due to our ability to achieve better performance from our products and services over our competitors when deploying our chemical programs on new wells."
Full-Year 2013 Financial Results
Revenue for the year-ended December 31, 2013 was $10,591,111, compared to $16,987,213 for the same period in 2012, a decrease of $6,396,102, or 38%. The decrease was primarily due to a reduction in the completion petrochemical sales and services to customers engaged in hydraulic fracturing. This decrease totaled $8,605,000 for 2013, as compared to 2012, but was offset by an increase in production petrochemical sales of 30%, or $1,966,970. The increase in production petrochemical sales represents higher revenue from both new and existing customers through sales of additional production petrochemical products at existing customers' well-sites.
The Company's gross profit from continuing operations, as a percentage of revenue for the year, was 51% compared to 45% for the same period in 2012, an increase of 6%. The increase in gross margin reflects an increased portion of business from production petrochemical sales. These have a higher gross profit margin of 54% compared to the 40% gross profit margin of completion chemicals.
General and administrative expenses decreased by $2,760,666, or 26% for the year. The decrease in expenses for the year is primarily due to the reduction of the company's operating personnel from 52 to 39 employees and to a decrease in business development costs for international opportunities from $1,167,000 in 2012 to $714,000 in 2013. In addition, the company incurred $700,000 in legal fees as a result of litigation in 2012, namely the trade secret infringement lawsuit initiated in March 2012 to protect the company's trade secrets. There were no comparable amounts in the 2013 calendar year.
The stock-based compensation included in the general and administrative expenses was $1,177,697 and $2,482,678 for the years ended December 31, 2013 and 2012, respectively, a decrease of 52.6%.
The company recognized a loss on disposal of assets in 2013 of $327,174 and an impairment loss on assets held for sale of $133,556, representing the closure cost of the former corporate offices in The Woodlands, Texas and anticipated loss on assets held for sale. There were no comparable amounts in the prior fiscal year.
Net loss for the year ended December 31, 2013 was $(5,237,777), an increase of $156,045 compared to a loss of $(5,081,732) for the same period in 2012. The primary reason for the increase was due to the loss from discontinued operations of $365,421 compared to $103,221 for the comparable period in 2012.
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.
David Dugas, President ESP Resources, Inc. (337) 706-7056