Streicher Mobile Fueling Announces Financial Results for the Fourth Quarter and Year Ended June 30, 2005 and Conference Call for Tuesday, October 11.FT. LAUDERDALE Lauderdale is the name of various places:
Antonym: dec. . (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : FUEL and FUELW) (the "Company"), a leading provider of petroleum product distribution services, transportation logistics and emergency response services to the trucking, construction, utility, energy, chemical, manufacturing and government service industries today announced results for the fourth quarter and fiscal year ended June June: see month. 30, 2005. FOURTH QUARTER RESULTS For the quarter, revenues and gallons delivered increased 64% and 41%, respectively, to $43,527,000 on 20.1 million gallons of fuel delivered, compared to $26,539,000 on 14.3 million gallons of fuel delivered in the comparable period in 2004. Revenues and gallons increased in the quarter primarily due to the growth of our business, the acquisition of Shank shank (shangk) 1. leg (1). 2. crus ( 2). shank n. The part of the human leg between the knee and ankle. Services on February February: see month. 18, 2005 and higher prices for fuel. Gross profit for the fourth quarter was $2,302,000, a $1,260,000 or 121% increase over the prior quarter and a $876,000, or 61% increase, over the comparable quarter in 2004, and is the highest quarterly gross profit since the Company became a public company in 1996. In addition, during the fourth quarter from April through June 2005, gross profit increased an average of 14% each month. Gross profit was positively impacted by a continuing focus on improving the profitability of existing business, the mix of higher margin services delivered to our customers and the recent Shank Services acquisition. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $384,000 was a $1,214,000 improvement over the prior quarter, in which the Company experienced expenses related to the Shank Services acquisition, and 22% better than the comparable period in 2004. Net margin of 13.1 cents per gallon gallon: see English units of measurement. was a 30% improvement over the prior quarter and 10% higher than the comparable quarter in 2004. The net margin increase for the quarter was primarily due to the increase in gross profit which, in part, relates to improved pricing from the services delivered. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (earnings before interest, taxes, depreciation and amortization- a non-GAAP financial measure) was $766,000 a $768,000 improvement over the prior quarter and a $131,000 or 21% improvement over the comparable quarter in 2004. In addition, EBITDA continuously improved an average of 76% per month during each of the months from April through June 2005. For the quarter, the Company incurred a net loss of $225,000, or $0.03 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, vs. a net loss of $57,000, or $0.01 per basic and diluted share, in the comparable quarter in 2004. The higher net loss was due to increases in selling, general and administrative expenses of $792,000; interest expense of $239,000; and depreciation of $60,000 over the prior year quarter offset by an $876,000 increase in gross profit. The $792,000 increase in the selling, general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. over the comparable quarter in the prior year resulted from: (1) the inclusion of $453,000 of expenses related to the operation of Shank Services; (2) $93,000 of additional costs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc public company reporting requirements; (3) $148,000 of higher credit card fees; and (4) $123,000 of higher administrative payroll costs related to personnel additions required to support our acquisition and diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. strategy. The net loss incurred in the fourth quarter ended June 2005 was a $1,124,000 improvement over the prior quarter. In addition, the current quarter net loss reflected month-to-month month-to-month adj. referring to a tenancy in which the tenant pays monthly rent and has no lease, and the tenancy can be terminated by the landlord at any time on thirty-days notice. (See: tenancy, landlord and tenant) reductions in the net loss in April and May 2005 and net income of $57,000 in the month of June 2005. FULL YEAR RESULTS For the year ended June 30, 2005, revenues were $135,166,000 on 66.4 million gallons of fuel delivered, compared to $89,997,000 on 54.6 million gallons of fuel delivered in the prior year. The 50% increase in revenues in the current year relates primarily to an increase in volumes delivered and higher fuel prices as well as revenues from the Shank Services acquisition. Because the Shank Services acquisition was not effective until late February 2005, the full extent of its continuing impact on the Company's total revenues is not reflected in the current year revenues. Gross profit of $6,588,000 for the current year increased by $2,290,000, a 53% improvement compared to the prior year. Of the increase in gross profit, $1,787,000 resulted from higher margins generated from the services provided, including the emergency response services related to the four hurricanes impacting parts of Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and and the southeastern United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. in 2004. Another $800,000 can be attributed to the Shank Services acquisition in February of 2005. The increase in gross profit was partially offset by $297,000 in accelerated depreciation Accelerated Depreciation Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years of the life of an asset. Notes: The straight-line depreciation method spreads the cost evenly over the life of an asset. expense related to the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. for excess equipment abandoned after reevaluating fleet utilization requirements following the Shank Services acquisition. Operating income for the current year decreased by $218,000 compared to the prior year primarily due to increased expenses, including: (1) Shank Services operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. since the acquisition of $703,000; (2) increased credit card fees of $367,000; (3) higher accounting and legal fees associated with public company reporting requirements of $220,000; (4) the write down of certain computer software of $164,000; and (5) depreciation of $351,000. These increased expenses were partially offset by an increase in net margin of $2,627,000. When eliminating the $757,000 gain from the extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt in the prior year, the current year operating income would have been $539,000 higher than the prior year. Net margin per gallon improved to 12.1 cents per gallon from 9.9 cents per gallon, or a 22% increase compared to the prior year. This increase resulted from the continued acceptance in the marketplace of higher prices for the services provided by the Company and the increase in the total gallons sold during the current year which decreased the net operating expenses on a per gallon basis. For the current year, EBITDA improved by $295,000 to $2,278,000 from $1,983,000, or a 15% increase, compared to the prior year. The prior year EBITDA also included the $757,000 gain on the extinguishment of debt and, when excluding this gain, EBITDA for the current year improved by $1,052,000 or 86%. The net loss for the current year was $1,460,000, or $0.19 per basic and diluted share, compared to a $698,000 net loss, or $0.10 per basic and diluted share, in the prior year, including the $757,000 gain on the extinguishment of debt, or an increase of $762,000. The current year net loss included: (1) $297,000 in accelerated depreciation for the abandonment write-down of 12 units of excess equipment related to the reevaluation Noun 1. reevaluation - the evaluation of something a second time (or more) rating, valuation, evaluation - an appraisal of the value of something; "he set a high valuation on friendship" of the fleet routing schedules following the Shank Services acquisition; (2) higher sales and marketing expenses of $773,000, including a $367,000 increase in credit card fees; (3) $125,000 in general and administrative expenses and $40,000 in initial integration costs incurred in connection with the Shank Services acquisition; (4) overall higher public company reporting expenses of $220,000; (5) accelerated depreciation and write-down of accounting and information software of $164,000 related to the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of software costs for replacing, redesigning and upgrading accounting and information tools and acceleration of depreciation for the shortened short·en v. short·ened, short·en·ing, short·ens v.tr. 1. To make short or shorter. 2. useful lives; and (6) interest expense of $1,911,000, of which $372,000 related to the issuance of the Company's January January: see month. 2005 Notes, the proceeds of which were partially used to acquire Shank Services. These increases in expenses were partially offset by an increase in net margin of $2,627,000. RICHARD Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a E. GATHRIGHT, CHAIRMAN, PRESIDENT AND CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. COMMENTED: "We are pleased with our recent acquisitions of Shank Services and H & W and in the growth of our core commercial mobile and bulk fueling business. We are also pleased that the fundamentals of our business continue to improve. While the Company incurred a net loss of $1.46 million for the year ended June 30, 2005, $1.35 million of this loss was incurred during the third quarter and principally related to costs incurred in connection with our Shank Services acquisition in February 2005, and our corporate infrastructure initiatives to support the Company's growth and diversification strategy. As we grow our operations there may be a difference in the timing of expenditures and the bottom line financial performance resulting from these investments in our future." "We experienced overall higher volumes and margins along with material increases in our working capital and improvements in our balance sheet. Cash and cash availability grew to over $9.0 million from $3.8 million this past year. EBITDA increased by over $1.0 million in this fiscal year when adjusted for the $757,000 gain on extinguishment of debt posted last year. We expect that our corporate infrastructure initiatives commenced in the third quarter will contribute to improved internal operational performance, as well as reduce the fixed cost of conducting our business." "The Shank Services and H & W acquisitions provide the Company with an opportunity to make an immediate and meaningful penetration into petroleum lubricants lubricants preparations for the lubrication of passages to reduce frictional injury, e.g. oily preparations, including petroleum jelly, lanolin or water-soluble preparations such as methyl cellulose. marketing and distribution as well as specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. heavy and ultra-haul transportation services. H & W has established a major presence in the branded lubricants business and has numerous mature long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. business relationships with high volume customers who rely on its specialized and reliable service. We intend to emphasize the growth of our lubricants business in both Texas and other national markets. We also plan to expand the Shank Services heavy and ultra-heavy haul transportation operations through internal growth and the acquisition of additional equipment and customers from existing service providers who will benefit from integrating their business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets with ours." "With the addition of Shank Services and H & W, the combined Company could generate annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. revenues in excess of $225 million on volumes over 100 million gallons. We anticipate that our financial performance will improve in the year ending June 30, 2006 with both Shank Services and H & W contributing to growing volumes, revenues, margins, cashflow and profitability. Coupled with the steady expansion of our existing business and absent unanticipated market or economic developments, the Company's combined operations For the department of the British War Office during World War II, see . In the military, combined operations are operations conducted by forces of two or more allied nations acting together for the accomplishment of a single mission. See also
"Our strategic plan to build the Company's business through selective acquisitions, as well as expansion of existing service components, continues to progress. Integral to this plan is a reduction of cash and non-cash interest expenses burdening our bottom line financial performance. Reduction of our debt will also help us to generate additional capacity for funding future acquisitions with a more flexible balance of debt and equity. Alternatives presently under consideration to eliminate as much of the $1.9 million of interest expense incurred this past year are a secondary offering of common stock, a conversion of a portion of long term notes to common stock or a combination of both. We will pursue these initiatives in the coming months, with the actual timing of any transactions naturally dependent upon our financial performance as well as general market conditions." "We have confidence in energy products distribution and related services business sectors and believe that the Company will play an important role in its future growth. Our optimism is grounded in the ability of our management team to achieve the objectives of our success driven business plan and our understanding of the opportunities before us." The financial impact of the expenses for the Shank Services acquisition and the corporate infrastructure initiatives on the Company's results for the year ended June 30, 2005 are summarized in the following table for clarification:
Non-GAAP Measure Reconciliation - Shank Services Acquisition and
Corporate Infrastructure Expenses
Amount Percentage
---------- ----------
Loss, not including expenses directly
related to the Shank Services
acquisition and write-off of
accounting and information software $ 462,000 31.7%
Expenses related to the Shank Services
acquisition and integration:
Accelerated depreciation expense
related to excess equipment
abandonment for acquisition
re-routing integration 297,000
General and administrative expenses 125,000
Integration administrative costs 40,000
-------
Sub-total 462,000
Interest expense and amortization
for January 2005 Notes 372,000 834,000 57.1%
-------
Accelerated depreciation expense and
write-off of accounting and
information software for changes in
technology infrastructure 164,000 11.2%
---------- ----------
Net loss $1,460,000 100%
========== ==========
Additional selected information covering the Company's financial
position and performance is set forth in the following tables:
CONDENSED CONSOLIDATED BALANCE SHEET
------------------------------------
(All amounts in thousands of dollars)
June 30, June 30,
2005 2004
-------- --------
ASSETS
Current assets $ 19,392 $ 11,584
Property, plant and equipment, net 9,555 7,602
Other assets, net 1,178 832
-------- --------
$ 30,125 $ 20,018
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 13,531 $ 9,112
Long-term debt, net 9,756 5,558
Stockholders' equity 6,838 5,348
-------- --------
$ 30,125 $ 20,108
WORKING CAPITAL $ 5,861 $ 2,472
SELECTED INCOME STATEMENT AND FINANCIAL DATA
(All amounts in thousands of dollars, except share and volume data)
Three-Month Periods Twelve-Month Periods
Ended Ended
(Unaudited) (Unaudited)
6/30/2005 6/30/2004 6/30/2005 6/30/2004
--------- --------- --------- ----------
Total revenues 43,527 26,539 135,166 89,997
Gross profit 2,302 1,426 6,588 4,298
Operating income (1) 384 314 443 661
Net loss (225) (57) (1,460) (698)
EBITDA (1, 2, 5) 766 635 2,278 1,983
Basic and diluted net
loss per share (0.03) (0.01) (0.19) (0.10)
Basic and diluted weighted
average shares
outstanding 8,859,375 7,300,548 7,857,434 7,261,372
Depreciation and
amortization (3) 382 322 1,835 1,320
Gallons sold in thousands 20,077 14,261 66,427 54,594
Average net margin per
gallon (in cents) (4) 13.1 11.9 12.1 9.9
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(1) Includes in the twelve-month period ended 6/30/2004, a $757,000
gain on extinguishment of debt during the first quarter ended
9/30/2003
(2) Earnings before interest, taxes, depreciation and amortization
(3) Depreciation and amortization included in cost of sales was
$323,000, $277,000, $1,467,000 and $1,130,000 for the respective
periods
(4) Net margin per gallon equals gross profit plus cost of sales
depreciation and amortization divided by number of gallons sold
(5) See non-GAAP measure EBITDA Reconciliation Table as follows:
Non-GAAP Measure Reconciliation - EBITDA Reconciliation Table
3 Months Ended
---------------------------------------
Increase Increase
--------- ---------
6/30/2005 6/30/2004 (Decrease)(Decrease)
---------------------------------------
Net loss (225) (57) (168) (295)%
Add back:
Interest, net 609 370 239 65 %
Depreciation and
amortization:
Cost of sales 323 277 46 17 %
Sales, general,
and administrative 59 45 14 31 %
-----------------------------
EBITDA 766 635 131 21 %
12 Months Ended
---------------------------------------
Increase Increase
6/30/2005 6/30/2004 (Decrease)(Decrease)
---------------------------------------
Net loss (1,460) (698) (762) (109)%
Add back:
Interest, net 1,903 1,361 542 40 %
Depreciation and
amortization:
Cost of sales 1,467 1,130 337 30 %
Sales, general,
and administrative 368 190 178 94 %
-----------------------------
EBITDA 2,278 1,983 295 15 %
QUARTERLY SELECTED FINANCIAL DATA FOR FISCAL YEARS 2005 AND 2004
----------------------------------------------------------------
(in thousands, except net margin per gallon and per share data)
June 30, 2005
YTD
Selected Income Statement Data: Q1 Q2 Q3 Q4 2005
---------------------------------------------------------------------
Total revenue 28,909 29,647 33,083 43,527 135,166
Gross profit 1,800 1,444 1,042 2,302 6,588
Operating income (loss) 677 212 (830) 384 443
Net income (loss) 295 (181)(1,349) (225) (1,460)
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Per Share Data:
---------------------------------------------------------------------
Basic net income (loss) per share 0.04 (0.02) (0.17) (0.03) (0.19)
Diluted net income (loss) per
share 0.04 (0.02) (0.17) (0.03) (0.19)
Basic weighted average common
shares outstanding ('000) 7,332 7,436 7,813 8,859 7,857
Diluted weighted average common
shares outstanding ('000) 7,870 7,436 7,813 8,859 7,857
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Selected Balance Sheets Data:
---------------------------------------------------------------------
Cash and cash equivalents 3,213 4,463 3,759 4,108 4,108
Accounts receivable, net 10,654 8,290 12,705 14,129 14,129
Bank line of credit payable 6,278 5,316 3,707 4,801 4,801
Long-term debt (including current
portion) 5,639 5,726 11,057 11,141 11,141
Shareholders' equity 5,738 5,620 6,887 6,838 6,838
Total Assets 22,459 21,537 28,278 30,125 30,125
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---------------------------------------------------------------------
Financial and Statistical
Information:
---------------------------------------------------------------------
EBITDA (1) 992 522 (2) 766 2,278
Working Capital (Deficit) (4) 2,563 2,792 5,830 5,861 5,861
Net Margin (2) 2,071 1,706 1,653 2,625 8,055
Net Margin per gallon (in
dollars) (3) 0.137 0.115 0.101 0.131 0.121
Total Gallons (000's) 15,153 14,795 16,402 20,077 66,427
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---------------------------------------------------------------------
Non-GAAP Measure Reconciliation
EBITDA Calculation:
---------------------------------------------------------------------
Net income/(loss) 295 (181)(1,349) (225) (1,460)
Add back:
Interest expense, net of
interest income 382 393 519 609 1,903
Depreciation and amortization:
Cost of sales 271 262 611 323 1,467
Sales, general, and
administrative 44 48 217 59 368
-----------------------------------
EBITDA 992 522 (2) 766 2,278
---------------------------------------------------------------------
June 30, 2004
YTD
Selected Income Statement Q1 (5) Q2 Q3 Q4 2004
Data:
---------------------------------------------------------------------
Total revenue 19,417 21,136 22,906 26,539 89,997
Gross profit 822 1,074 976 1,426 4,298
Operating income (loss) 487 (20) (120) 314 661
Net income (loss) 206 (382) (465) (57) (698)
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---------------------------------------------------------------------
Per Share Data:
---------------------------------------------------------------------
Basic net income (loss) per share 0.03 (0.05) (0.06) (0.01) (0.10)
Diluted net income (loss)
per share 0.03 (0.05) (0.06) (0.01) (0.10)
Basic weighted average common
shares outstanding ('000) 7,248 7,248 7,248 7,301 7,261
Diluted weighted average common
shares outstanding ('000) 7,505 7,248 7,248 7,301 7,261
---------------------------------------------------------------------
---------------------------------------------------------------------
Selected Balance Sheets
Data:
---------------------------------------------------------------------
Cash and cash equivalents 2,086 2,037 2,454 2,708 2,708
Accounts receivable, net 6,119 6,997 7,657 8,280 8,280
Bank line of credit payable 3,541 4,412 4,855 4,919 4,919
Long-term debt (including
current portion) 5,344 5,424 5,481 5,558 5,558
Shareholders' equity 6,200 5,815 5,336 5,348 5,348
Total Assets 17,932 18,796 19,725 20,018 20,018
---------------------------------------------------------------------
---------------------------------------------------------------------
Financial and Statistical
Information:
---------------------------------------------------------------------
EBITDA (1) 824 313 211 635 1,983
Working Capital (Deficit) (4) 2,155 2,157 2,053 2,472 2,472
Net Margin (2) 1,107 1,359 1,259 1,703 5,428
Net Margin per gallon (in
dollars) (3) 0.083 0.099 0.095 0.119 0.099
Total Gallons (000's) 13,273 13,746 13,314 14,261 54,594
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---------------------------------------------------------------------
Non-GAAP Measure Reconciliation
EBITDA Calculation:
---------------------------------------------------------------------
Net income/(loss) 206 (382) (465) (57) (698)
Add back:
Interest expense, net of
interest income 284 362 345 370 1,361
Depreciation and amortization:
Cost of sales 285 285 283 277 1,130
Sales, general, and
administrative 49 48 48 45 190
-----------------------------------
EBITDA 824 313 211 635 1,983
---------------------------------------------------------------------
(1) EBITDA = Earnings before interest, taxes, depreciation and
amortization.
(2) Net Margin = Gross profit plus cost of sales depreciation
(3) Net margin per gallon = Net Margin / Total Gallons
(4) Working Capital (deficit)= current assets - current
liabilities
(5) June 30, 2004, first quarter operating profit, net income and
EBITDA includes a $757,000 gain on extinguishment of debt
RECENT DEVELOPMENTS Shank Services Acquisition and Related Financing On February 18, 2005, the Company acquired substantially all of the assets and related business of Shank C&E Investments, L.L.C. ("Shank Services") a Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the based provider of commercial fueling and heavy and ultra-heavy haul transportation services for $8.3 million, including a $1.9 million performance based contingency contingency n. an event that might not occur. and $0.6 million in acquisition costs. We acquired a fleet of 24 commercial fueling vehicles, including specialized fuel delivery, transport, oil and lubricant Lubricant A gas, liquid, or solid used to prevent contact of parts in relative motion, and thereby reduce friction and wear. In many machines, cooling by the lubricant is equally important. flatbed and tanker trucks and related support equipment; over 600 portable fuel and lubricant tanks with more than 500,000 gallons of capacity used by customers to store products provided by Shank Services; 15 heavy and ultra-heavy haul tractor-trailer trac·tor-trail·er n. A truck consisting of a tractor attached to a semitrailer or trailer, used for transporting loads. units designed to transport heavy construction equipment and other over-sized and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. over weight loads weighing up to 250,000 pounds; a limited quantity of fuel and lubricant inventories; office and computer equipment and related specialized software technology; customer lists and agreements; certain other intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ; and outstanding customer accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying . We did not assume any material Shank Services' liabilities or debt. Shank Services employs approximately 80 personnel. We continue to operate the acquired assets and business under the trade name Shank Services; and we are integrating the existing Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; and Dallas/Fort Worth commercial mobile and bulk fueling operations of the Company with those of Shank Services. Of the $8.3 million purchase price for the acquired assets and related business, $5.8 million was paid in cash, $1.9 million was paid with a contingent two-year deferred payment promissory note promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. , and $0.6 million was incurred in acquisition costs. The payment of the promissory note is dependent on Shank Services meeting a specific target performance objective. Some or all of the $1.9 million principal amount and accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. due under the note will not be payable if the performance target which covers an operating period commencing prior to the acquisition date is not achieved. We believe that Shank Services should provide significant cost reductions as a result of more effective bulk fuel purchasing; lower insurance premiums; improved delivery scheduling; decreased equipment rentals; better utilization of operations personnel and equipment; and reduced administrative expenses. These savings, together with increasing sales volumes and improved margins from a consolidation of our Texas based commercial fueling operations and Shank Services concentrated marketing and sales program, are expected to provide a positive impact on future cash flows and earnings. On January 25, 2005, in anticipation of the February closing of the Shank Services acquisition, we completed a $6.1 million private placement with a small group of institutions and other accredited investors Accredited Investor A term used by the Securities and Exchange Commission (SEC) under Regulation D to refer to investors who are financially sophisticated and have a reduced need for the protection provided by certain government filings. Also known as "qualified purchaser". to fund the acquisition, to develop its operations and for other general corporate purposes. We issued $6.1 million in 10%, five-year Senior Secured Notes (the "January 2005 Notes") that require six semi-annual principal payments commencing January 24, 2007 and a 40% balloon payment The final installment of a loan to be paid in an amount that is disproportionately larger than the regular installment. When a loan is made, repayment of the principal, which is the amount of the loan, plus the interest that is owed on it, is divided into installments due at on January 24, 2010. The investors also received four year warrants to purchase 866,200 shares of our common stock at an exercise price of $1.60 per share, including customary redemption and registration rights. In addition, 140,300 warrants with substantially similar terms were issued to Philadelphia Philadelphia, ancient cities Philadelphia, name of several ancient cities. One was in Lydia, W Asia Minor (now W Turkey). At the foot of Mt. Tmolus and near the location of modern Alaşehir, it was founded in the 2d cent. B.C. Brokerage Corporation, the financing placement agent. Results of Shank Services' operations have been included in our consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge since the February 18, 2005 acquisition date. The January 2005 Notes are secured by a first priority security interest in the tangible assets Tangible Asset An asset that has a physical form such as machinery, buildings and land. Notes: This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. acquired from Shank Services. In connection with the issuance of the January 2005 Notes and related security agreement, the Company entered into an indenture An agreement declaring the benefits and obligations of two or more parties, often applicable in the context of Bankruptcy and bond trading. The term indenture primarily describes secured contracts and has several applications in U.S. law. with a third party trustee for payment of the January 2005 Notes. The Shank Services' assets and related operations, when fully integrated with our present Texas based business in Houston and Dallas/Fort Worth, will materially extend the SMF (1) (Standard Messaging Format) An electronic mail format for Novell's MHS messaging system. The application puts the data into this format in order to send an e-mail message. Group's footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. in major Texas markets and should provide a solid platform for further growth in the Southwest. We expect to offer commercial mobile fueling services to over 400 active Shank customers, particularly those in the construction, agriculture, energy, manufacturing and marine industries with large local and regional fleets. The acquisition will also expand our business into related bulk commercial fueling operations, generator generator, in electricity, machine used to change mechanical energy into electrical energy. It operates on the principle of electromagnetic induction, discovered (1831) by Michael Faraday. services and the marketing and distribution of lubricants and related petroleum products. The Shank Services heavy and ultra-heavy haul transportation operations offer a new and growing opportunity to provide this specialized logistical lo·gis·tic also lo·gis·ti·cal adj. 1. Of or relating to symbolic logic. 2. Of or relating to logistics. [Medieval Latin logisticus, of calculation service to numerous businesses that regularly transport heavy construction, refinery and chemical equipment, and other unusually large payloads, locally, regionally and nationally. It also provides us the opportunity to offer our other products and services to these new customers, including commercial mobile and bulk fueling, fuel management and the sale and distribution of lubricants. While the Shank Services operating, marketing, sales and administrative functions have not yet been fully integrated into the Company's pre-existing Adj. 1. pre-existing - existing previously or before something; "variations on pre-existent musical themes" pre-existent, preexistent, preexisting antecedent - preceding in time or order operations and our present organizational structure To comply with Wikipedia's lead section guidelines, one should be written. , when this integration is complete, it will create efficiencies and cost-reductions from cross-utilization of personnel in multiple geographic operating locations as well as from combining other commercial fueling functions and responsibilities. Because Shank Services is experienced in delivering emergency response fueling services in disaster relief situations, the acquisition has also increased our capability to provide this vital support, regionally and nationally. By establishing a greater operating presence in the Texas market, together with continued growth in the Southeast and Mid-Atlantic states Mid-At·lan·tic States See Middle Atlantic States. Noun 1. Mid-Atlantic states - a region of the eastern United States comprising New York and New Jersey and Pennsylvania and Delaware and Maryland U.S.A. , the Shank Services acquisition should facilitate further acquisitions by the Company of businesses in petroleum product distribution and sales, out-sourced fuel management services and transportation logistics. H & W Acquisition and Related Financing On October October: see month. 1, 2005, the Company acquired all of the outstanding shares of Houston-based H & W Petroleum Company, Inc. ("H & W") which is engaged in the marketing and distribution of lubricants, fuels and other petroleum products in Texas. Immediately prior to the acquisition by the Company, H & W purchased the operating assets Operating Assets Another term for working capital. and limited inventory of Harkrider Distributing Company, Incorporated ("Harkrider"), also based in Houston, which is related to H & W through some common shareholder ownership and is engaged in the marketing and distribution of dry cleaning dry cleaning, process of cleaning fabrics without water. Special solvents and soaps are used so as not to harm fabrics and dyes that will not withstand the effects of ordinary soap and water. Dry cleaning began in France about the middle of the 19th cent. solvents, chemicals and petroleum products. In addition to providing service to the greater Houston Houston–Sugar Land–Baytown is a 10-county metropolitan area defined by the Office of Management and Budget. It is located along the Gulf Coast region in the U.S. state of Texas. metropolitan area, H & W and Harkrider also service the Dallas/Fort Worth, Freeport Freeport, city, Bahamas Freeport, city (1990 pop. 25,115), Grand Bahama Island, Bahamas. A popular resort area, it developed out of a 1955 agreement between the Bahamian colonial government and a private development company to create a free port and , Longview, Lufkin, San Antonio San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837. and Waco markets. H&W provides lubricants and fueling services to over 3,800 customers, with its primary emphasis on those companies requiring large volumes of specialty industrial oils, motor and gear lubricants and greases subject to rigid technical and performance specifications. Harkrider has distributed solvents and specialty petroleum products to dry cleaners and industrial customers in the Houston, Beaumont and San Antonio areas since 1946. Today, it is one of the largest dry cleaning solvents distributors in those Texas markets with over 800 customers. Together, H&W and Harkrider operate a combined fleet
The Combined Fleet ( of 52 specialized lubricant, fuel and chemical delivery "bobtail bobtail a short tail, either natural or docked. Seen naturally in some species, e.g. bobcat, and some dog breeds, e.g. Schipperke and Old English sheepdog. bobtail disease " trucks; oil and lubricant flatbed and box trucks; tanker transports; and related support equipment, including approximately 200 storage tanks with over 1,200,000 gallons of capacity. The H & W and Harkrider operations currently employ approximately 75 personnel. The purchase price of approximately $6.3 million, which was based on a multiple of 4.5 times a projected annualized EBITDA (earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Compleat Angler, The Izaak Walton’s classic treatise on the Contemplative Man’s Recreation. [Br. Lit.: The Compleat Angler] Thinker, The sculpture by Rodin, depicting contemplative man. of the then pending H & W acquisition , the Company issued $3.0 million in five-year 10% redeemable Redeemable Eligible for redemption under the terms of an indenture. promissory notes (the "September 2005 Notes") to a small group of institutions and other accredited accredited recognition by an appropriate authority that the performance of a particular institution has satisfied a prestated set of criteria. accredited herds cattle herds which have achieved a low level of reactors to, e.g. lenders. Installment payments Installment payments Distribution of plan assets to beneficiaries based upon a regular schedule. of six (6) equal semi-annual principal payments of ten percent (10%) of the principal amount of the September 2005 Notes will commence on August 31, 2007 and continue on February 28 and August 31 of each year thereafter, with the remaining balance of forty percent (40%), a $1.2 million balloon payment, due at maturity on August 31, 2010. The amounts due under the September 2005 Notes will become due and payable immediately upon the occurrence of customary events of default. The September 2005 Notes are redeemable by the Company, in whole or in part, by payment of a percentage of the principal amount of the note, together with accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. but unpaid interest, if any, as follows: September 1, 2005 - August 31, 2006, 102%; September 1, 2006 - August 31, 2007, 101%; and September 1, 2007 - August 31, 2010, 100%. A portion of the proceeds of the September 2005 Notes were used by the Company to fund the approximately $1.5 million of the H & W Acquisition purchase price that was paid in cash at closing. The balance of the proceeds will be used to develop the combined operations of H & W and Harkrider, including the integration of the lubricant distribution operations of Shank Services and H & W, and for other general working capital purposes. In connection with the issuance of the September 2005 Notes and related security agreement, the Company entered into an indenture with a third party trustee for the payment of the September 2005 Notes. The September 2005 Notes are secured by a first priority security interest in the vehicles, equipment and other physical assets, other than inventory, of H & W. The H & W inventory is subject to the first priority security interest on the Company's assets held by its primary lender. In connection with the September 2005 Notes, the Company also issued 360,000 four-year warrants to purchase shares of common stock at $2.28 per share to the purchasers of the Notes and to the Company's placement agent for the financing transaction. Amendment of Credit Facility Concurrently with the October 1, 2005 of H & W, in order to finance the acquired accounts receivable and inventory, the Company and its primary lender amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. the credit facility. Among other changes, the amendment (1) added H & W as a borrower; (2) increased the facility to $20 million; (3) provided financing for the newly acquired and ongoing accounts receivable and inventory resulting from the H & W Acquisition; (4) extended the term of the original loan and security agreement to September 26, 2007; (5) reduced the interest rate to prime plus 0.75% per annum Per annum Yearly. ; (6) replaced the effective net worth covenant with a maximum capital expenditures covenant; and (7) lowered the fixed charge coverage ratio covenant to 1.0 to 1.0 and made such covenant effective only when there is less than $3 million available on the facility. CONFERENCE CALL Management will host a conference call on Tuesday, October 11, 2005 at 10:00 A.M. ET, to further discuss the results of the Company's fourth quarter and fiscal year ended June 30, 2005. The conference call will be available via teleconference by dialing 866.202.3048 (domestic) or 617.213.8843 (international), using Pass Code 74430557. There will also be a web-cast over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.mobilefueling.com. An audio digital replay of the call will be available from October 11, 2005, at 12:00 P.M. ET until Midnight ET on October 18, 2005, by dialing 888.286.8010 (domestic) or 617.801.6888 (international), using Pass Code 73630634. A web archive will be available for 30 days at www.mobilefueling.com. ABOUT STREICHER MOBILE FUELING, INC. The Company provides commercial mobile and bulk fueling; the packaging, distribution and sale of lubricants; integrated out-sourced fuel management; transportation logistics and emergency response services. Our fleet of custom specialized tank wagons, tractor-trailer transports, box trucks and customized flatbed vehicles deliver diesel fuel and gasoline gasoline or petrol, light, volatile mixture of hydrocarbons for use in the internal-combustion engine and as an organic solvent, obtained primarily by fractional distillation and "cracking" of petroleum, but also obtained from natural gas, by to customers' locations on a regularly scheduled or as needed as needed prn. See prn order. basis, refueling vehicles and equipment, re-supplying fixed-site and temporary bulk storage tanks, and emergency power generation systems; and distribute a wide variety of specialized petroleum products, lubricants and chemicals to refineries, manufacturers and other industrial customers. In addition, our fleet of special duty tractor-trailer units provides heavy and ultra-heavy haul transportation services over short and long distances to customers requiring the movement of over-sized or over-weight equipment and manufactured products. The Company conducts operations from 27 locations serving metropolitan markets in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , Florida, Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. , Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). , North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York , Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. , Texas, Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). and Washington, D.C. More information on the Company is available at www.mobilefueling.com. FORWARD LOOKING STATEMENTS This press release includes "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provision of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. For example, predictions or statements of belief or expectation concerning the future performance of the acquired businesses, the planned diversification or expansion plans of the Company, the anticipated cost savings or operating efficiencies from integration of the acquired businesses and the potential for further growth of the Company, by acquisition or otherwise, are all "forward looking statements" which should not be relied upon. Such forward-looking statements are based on the current beliefs of the Company and its management based on information known to them at this time. Because these statements depend on various assumptions as to future events, they should not be relied on by shareholders or other persons in evaluating the Company. Although management believes that the assumptions reflected in such forward-looking statements are reasonable, actual results could differ materially from those projected. There are numerous risks and uncertainties which could cause actual results to differ from those anticipated by the Company, including those cited in the "Certain Factors Affecting Future Operating Results" section of the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended June 30, 2005. |
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