Texas Gulf Energy, Inc. Reports Record Earnings In 2011 10K
HOUSTON, April 11, 2012 /PRNewswire/ -- Texas Gulf Energy, Inc. (OTCQX: TXGE) Chairman and CEO David Mathews announced today "Texas Gulf Energy, Inc. is pleased to report that the company reported record audited basic earnings per share of $.04 cents per common share versus a loss of ($.09) per common share in 2010. Our cash on hand at December 31, 2011 totaled $2,747,880, with $4.4 million in accounts receivable and a receivables financing line available of up to $5 million. Texas Gulf Energy is well positioned to pursue our continuing vertical expansion into the energy markets in 2012. However, we could not have accomplished these excellent results without the financial support of our investors in conjunction with an outstanding performance by the entire Texas Gulf Energy team. Texas Gulf Energy looks forward to reporting another excellent year in 2012; investors should read our 10K in its entirety, but selected excerpts from the 10K discussing our 2011 audited results of operations are shown below."
Results of Operations
OverviewThe primary services of our Construction Services segment are capital construction for the downstream petroleum industry and specialty construction for various industries. These services, including project planners, welding, fitters, millwrighting, and fabrication, are provided for projects of varying complexities, schedule durations, and budgets. Our project experience includes renovations, retrofits, modifications and expansions to existing facilities as well as construction of new facilities. Significant fluctuations in revenues, gross profits and operating results are discussed below on a consolidated basis and for this segment. FISCAL YEAR ENDED DECEMBER 31, 2011 COMPARED TO FISCAL YEAR ENDED DECEMBER 31, 2010. Revenues. Consolidated revenues were $30,884,305 in 2011, an increase of $6,902,752 or 29% from consolidated revenues of $23,981,553 in 2010. The increase in consolidated revenues was a result of improvement in the overall market for construction services. The Company added clients and increased billable hours along with increasing our reimbursable rates for our services. Cost of Sales. During fiscal year ended December 31, 2011, we incurred Cost of Sales of $25,413,044 compared to $22,493,029 incurred during the fiscal year ended December 31, 2010 (an increase of $2,920,015 or 13%). Costs increased at a lesser percentage than sales due to the implementation of additional systems and cost controls, as well as a better pricing environment for our services. Gross Profits. Consolidated gross profit increased from $1,488,524 in 2010 to $5,471,261 in 2011. The increase of $3,982,737 was largely due to the effect of higher revenues associated margin. The gross margin was 18% in 2011 up from 6% in 2010. The Company increased margins by increasing hourly rates in the improving market environment and by negotiating increased reimbursement from our clients for mobilization costs. General/Administrative. During fiscal year ended December 31, 2011, we incurred General and Administrative expenses of $3,764,205 compared to $5,105,241 incurred during the fiscal year ended December 31, 2010 (a decrease of $1,341,036 or 26%). General and administrative expenses include corporate overhead, financial and administrative contracted services, marketing, legal, and consulting costs. The decrease was due to increased operating efficiencies and $989,000 in one time legal expenses related to a settlement with a previous executive incurred in 2010. SG&A expense as a percentage of revenue in 2011 were 12% and 21% in 2010. Interest Expense. Net interest expense was $10,883 in 2011 and $2,540 in 2010. The increase in net interest expense in 2011 was due to an increase of amortization of debt costs associated with financing our insurance. Other Income. Other income in 2011 and 2010 was $45,163 and $-0-, respectively. Taxes. The effective tax rates for 2011 and 2010 were 38.0% and (28%), respectively. The 2010 effective negative tax rate was due to a net operating loss in 2010 that was carried back to prior tax years. A $1,452,242 refund was received in early 2011. Income. Our net income for the fiscal year ended December 31, 2011 was $1,077,394 compared to a net loss of $2,609,744 during the fiscal year ended December 31, 2010 (an increase of $3,687,138). The increase in net income is attributable to the improved market environment, improved utilization rates, and a new executive management team that added processes and controls to monitor and reduce costs. Weekly income and cost reports have been implemented as a key operating metric for the Company.
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