SCOTT, La., March 21, 2012 (GLOBE NEWSWIRE) -- ESP Resources, Inc. (OTCBB:ESPI) (the "Company" or "ESP Resources"), an oil and gas services company offering analytical services and essential custom-blended oil and gas well chemicals which improve production yields and overall efficiencies, today announced the Company's financial results for the year and three months ended December 31, 2011.
Mr. David Dugas, President of ESP Resources, Inc., commented, "2011 was marked by an expansion in our sales coverage and a significant increase in our sales growth, coupled with continued focus on improving margins and building out our infrastructure to accommodate our current and future customers. We effectively doubled our sales volume for both the full year and fourth quarter of 2011 as well as modestly increased margins, as compared to 2010 periods. We saw increased demand for our beneficial and cost-saving petrochemical products and services and anticipate that demand will continue to grow."
Mr. Dugas continued, "While we are not providing financial guidance at this time, we are confident that we will continue to grow sales, reduce cost, improve efficiencies and overall, bring a greater value to our shareholders. We look forward to updating the investment community on our progress throughout 2012."
Year Ended December 31, 2011
Revenue was $11,132,243, as compared to $5,477,359 for the same period in 2010, representing an increase of $5,654,884, or 103%. The increase was due to several factors including an expanded customer base in the Southern Louisiana, South Texas, Southeastern Texas and Arkansas regions and an increase in sales volume as a result of heightened demand for petrochemical sales and services to customers engaged in the hydraulic fracturing of oil and gas wells. In addition, the Company increased revenue to several of its existing customers through supply of additional production petrochemical products at its existing customer well-sites.
Gross profit as a percentage of revenue, or gross margin, was 52%, as compared to 51% for the same period in 2010, representing an increase of 1%. The slight increase in gross margin was a result of an increase in purchases of certain raw materials used in the Company's operations which reduced cost on a per unit basis, resulting in an overall reduction in the Company's service delivery cost. In addition, gross margin was higher for certain petrochemical components used to service the Company's customers engaged in the hydraulic fracturing of oil and gas wells, as compared to other products. These certain petrochemical components made up a greater percentage of sales in 2011, as compared to the same period in 2010.
Operating expenses, net of amortization and depreciation and other impairment charges, increased by $4,505,839, or 102% for the year, as compared to the same period in 2010. The increase in expenses for the year is primarily due to non-cash stock and stock-based compensation, as well as the expansion of the Company's operating personnel from 22 to 43 employees and the cost of international business development of $377,600 that the Company spent on evaluating and developing certain international opportunities. In addition, the Company opened one new district operating office in Victoria, TX.
Net loss increased to ($4,325,514), as compared to ($2,271,780) in 2010. Aside from the Company's operational expenses, also contributing to the loss for the year were impairment charges relating to certain non-core assets totaling approximately $189,000 and certain interest and financing costs totaling approximately $400,000. Modified Earnings before interest, taxes, depreciation, amortization and stock-based compensation ("Modified EBITDA") are a non-GAAP financial measure. On a Modified EBITDA basis, the Company's loss was ($381,901), as compared to ($440,696) for the respective period in 2010.
Three Months Ended December 31, 2011
Revenue was $3,596,504, as compared to $1,849,387 for the same period in 2010, an increase of $1,747,117, or 94%. The increase was due to expanded sales coverage in each of the Company's districts as well as increased sales volume from the addition of petrochemical sales and services to customers engaged in the hydraulic fracturing of oil and gas wells. In addition, the Company increased revenue to several of its existing customers through supply of additional production petrochemical products at its existing customer well-sites.
Gross profit as a percentage of revenue, or gross margin, was 52%, as compared to 46% for the same period in 2010, representing an increase of 6%. The increase in gross margin was a result of increased sales for certain petrochemical components used to service the Company's customers engaged in the hydraulic fracturing of oil and gas wells, which have a higher gross margin than other petrochemical products. This service was not offered in the same period in 2010.
Operating expenses, net of amortization and depreciation and other impairment charges, increased by $1,716,763, or 136% for the quarter, as compared to the same period in 2010. The increase was primarily due to certain non-cash stock and stock-based compensation for the quarter. In addition, the Company incurred additional operating expenses from the expansion in the Company's operating personnel from 35 to 43 employees and for the cost of international business development of $151,331 in evaluating and developing certain international opportunities.
Net loss increased to ($1,575,214), as compared to ($534,407) for the same period of 2010. Aside from the Company's operational expenses, also contributing to the loss for the quarter were impairment charges relating to certain non-core assets totaling approximately $189,000 and certain interest and financing costs totaling approximately $131,000. On a Modified EBITDA basis, the Company earned $60,944, as compared to $190,029 for the respective period in 2010.
About www.espchem.com/">ESP Resources, Inc.:
ESP Resources, Inc. is a publicly-traded (OTCBB:ESPI) oil and gas services company offering analytical services and essential custom-blended oil and gas well chemicals which improve production yields and overall efficiencies. Through its wholly owned subsidiary, ESP Petrochemicals, Inc., the Company distributes its product line throughout the oil and gas producing regions of Louisiana, Texas, Mississippi, Alabama, Arkansas and Oklahoma. The Company's senior management has over 100 years of combined operating experience in the petrochemical industry. Any reference herein to "ESP Resources", the "Company", "we", "our" or "us" is intended to mean ESP Resources, Inc., including the wholly-owned subsidiary indicated above, unless otherwise indicated. 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. 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.