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TEXAS GULF ENERGY, INC. REPORTS A 17.5% INCREASE IN REVENUES FOR 2012 AT APPROXIMATELY $36.3 MILLION
Houston, TX – February 14, 2013. Texas Gulf Energy, Incorporated (OTCQX:TXGE) (www.tgnrg.com) Chairman and CEO David Mathews announced today: “Texas Gulf Energy, Incorporated is pleased to report that the unaudited and preliminary results for the year ending December 31, 2012 will be approximately $36.3 million in revenues constituting an increase of over 17.5% from the $30.9 million in revenues reported for the year ending December 31, 2011. The preliminary and unaudited gross profits increased from $5.5 Million (17.8% of revenue) in the year ending 2011 to approximately $8.5 million (23.6% of revenue) for the year ending December 31, 2012. The preliminary and unaudited net income decreased from $1.1 million for the year ending December 31, 2011 to approximately $300,000 for the year ending December 31, 2012. There were significant legal fees of approximately $825,000 in 2012 related to the defense of lawsuits that we do not expect to be repeated in 2013 and non-cash compensation expense in excess of approximately $214,000. We continue to be pleased with our progress in building Texas Gulf Energy and have exceeded our business plan to date for 2013”. Please see management’s discussion of the results of operations, summarized below, and the Company’s last Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission and available online.
PRELIMINARY AND UNAUDITED RESULTS OF OPERATIONS
Full Year Ended December 31, 2012
Consolidated revenues were approximately $36.3 million for the year ended December 31, 2012, an increase of $5.4 million, or 17.5%, from consolidated revenues of $30.9 million in the same period in the prior fiscal year. The increase in consolidated revenues was a result of an increase in utilization at International Plant Services, L.L.C., improved billing rates at Fishbone Services, Inc., and the underlying business environment. Consolidated gross profit increased from $5.5 million in the year ended December 31, 2011 to approximately $8.5 million in the year ended December 31, 2012. The increase of approximately $3.1 million, or 55%, was primarily due to higher gross revenues, improved billing rates and better utilization in 2012. The Company also improved rates we charge to our customers and have negotiated better rates from our vendors. Revenues for our subsidiary, International Plant Services, LLC. (IPS), have been reduced by a change in U.S. Government Policy on Visas for guest workers, we have not added any new craftsmen Visas or craft workers since January of 2012. This change has reduced revenues from IPS by over 40% in 2012 and, if not changed, will continue to lower IPS revenues in 2013. Consolidated selling, general and administrative expenses (“SG&A”) were approximately $8.6 million in the year ended December 31, 2012 compared to $3.8 million in the same period a year earlier. The increase of approximately $4.8 million, or 125%, was primarily related to higher operating costs in the first quarter of fiscal 2012 due to the addition of new operating units that did not generate revenue in the first quarter, additional finance and legal expenses related to becoming a fully reporting public company, acquisitions, increased business volumes, significant legal fees and strategic initiatives. We expect SG&A as a percent of revenue in future quarters to drop as new business units bring on projects and associated revenues in accordance with our 2013 plan.
The following information was filed by Texas Gulf Energy Inc (TXGE) on Thursday, February 14, 2013 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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