United Fuel & Energy Reports Record Results for the Third Quarter of 2006.MIDLAND, Texas Midland is the county seat of Midland CountyGR6 located on the Southern Plains of the western area of the U.S. State of Texas. As of the 2006 U.S. Census estimate, the city had a total population of 102,073. , Nov. 13 /PRNewswire-FirstCall/ -- United Fuel & Energy Corporation (BULLETIN BOARD: UFEN) , a leading distributor of 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 , diesel, propane propane, CH3CH2CH3, colorless, gaseous alkane. It is readily liquefied by compression and cooling. It melts at −189.9°C; and boils at −42.2°C;. and lubricant LubricantA 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. products to customers in the rural markets of the southwestern south·west n. 1. Abbr. SW The direction or point on the mariner's compass halfway between due south and due west, or 135° west of due north. 2. An area or region lying in the southwest. 3. and south central U.S. today announced its financial and operational results for the three months ended September September: see month. 30, 2006.
-- Third quarter 2006 revenue grew 13% over third quarter 2005 to $91.1
million;
-- Third quarter 2006 net income applicable to common equity increased 39%
over third quarter 2005 to $512,000;
-- Third quarter 2006 diluted earnings per share were $0.04 compared to
$0.03 for the third quarter of 2005.
Third Quarter Results
Revenue for the third quarter of 2006 increased $10.4 million to $91.1 million compared to revenue of $80.7 million for the same quarter in 2005. The higher revenue was primarily due to an 18% increase in selling prices for fuel and lubricant products and as a result of the Company's continued pricing initiatives, partially offset by a 4% decline in sales volumes to 34.1 million gallons. Net income applicable to common equity was $512,000 (net of a $256,000 preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. dividend) for the third quarter of 2006, versus net income of $368,000 for the same period in 2005. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of in the third quarter of 2006 was $0.04 on weighted average shares outstanding of 22.2 million, compared to $0.03 per 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. shares for the third quarter of 2005 on weighted average share outstanding of 12.3 million. 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, income taxes, depreciation and amortization and certain other non-cash items) for the third quarter of 2006 was $3.2 million, a 60% increase compared to EBITDA of $2.0 million in the third quarter of 2005. A reconciliation of EBITDA to net income is provided at the end of this release. On January January: see month. 1, 2006, the Company adopted SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123(R), resulting in a $38,000 after-tax expense related to stock options in the third quarter 2006. Had the company adopted SFAS 123(R) on January 1, 2005, it would have reported an after-tax expense related to stock options of $22,000 for the third quarter of 2005. "As we work to expand our operations and integrate recent acquisitions, we continue to remain focused on implementing programs that drive efficiencies, better customer service and unit cost reduction," stated Chuck McArthur McArthur may refer to: Places:
Nine Month Results Revenue for the nine months ended September 30, 2006 increased $58.6 million to $259.4 million compared to revenue of $200.8 million for the same nine month period in 2005. The higher revenue was primarily due to an increase in selling prices for fuel and 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. and an increase in sales volumes due to higher customer demand for products and the integration of the Queen and Clark Acquisitions. Net income applicable to common equity was $976,000, (net of $481,000 of preferred stock dividends) for the nine months of 2006, versus net income of $594,000 for the comparable period in 2005. Diluted earnings per share in the nine months of 2006 was $0.08 on weighted average shares outstanding of 19.2 million, compared to $0.05 per diluted share for the first nine months of 2005 on weighted average shares outstanding of 11.7 million. EBITDA for the first nine months of 2006 was $7.6 million, a 65% increase compared to EBITDA of $4.6 million in the first nine months of 2005. On January 1, 2006, the Company adopted SFAS 123(R), resulting in a $123,000 after-tax expense related to stock options in the first nine months 2006. Had the company adopted SFAS 123(R) on January 1, 2005, it would have reported an after-tax expense related to stock options of $66,000 for the first nine months of 2005. 2006 Financial Outlook The following statements are based on management's current expectations. These statements are forward-looking and actual results may differ materially. These statements do not include the potential impact of any future acquisitions, divestitures or financings that may be completed after the date of this news release. The 2006 guidance also does not include the effect from the change in method of accounting for compensation expense for stock awards required by SFAS 123(R), which was adopted effective January 1, 2006. In addition, the Company's guidance ranges are based on the assumption that current market conditions in the Company's businesses will continue through at least the end of 2006. Calendar year 2006: The Company confirms its estimate that for the full- year of 2006, revenue will range between $325 million and $350 million and EBITDA will range between $9.0 million and $11.0 million. About United Fuel United Fuel, located in Midland, Texas, is engaged in the business of distributing gasoline, diesel, propane and lubricant products primarily in certain rural markets of Texas, New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). and Oklahoma Oklahoma (ōkləhō`mə), state in SW United States. It is bordered by Missouri and Arkansas (E); Texas, partially across the Red R. (S, W); New Mexico, across the narrow edge of the Oklahoma Panhandle (W); and Colorado and Kansas (N). . United Fuel represents the consolidation of four companies, the most significant of which is the Eddins-Walcher Company. Eddins-Walcher has been in business since 1937, has a reputation of reliability with its customers and currently represents the majority of United Fuel's consolidated revenues. United Fuel intends to continue to expand its business through strategic acquisitions. United Fuel currently engages in the following activities: -- Card-lock operation (unattended re-fueling of commercial vehicles). -- Wholesale fuels and lubricants (to commercial customers). -- Propane distribution (to commercial and residential users). United Fuel conducts its operations through 19 branch locations and 96 card-lock (unattended) fuel sites. United Fuel currently has approximately 275 full-time employees. For more information, please visit the Company's website at http://www.ufeonline.com/ or to request future press releases via email, go to http://www.b2i.us/irpass.asp?BzID=1318&to=ea&Nav=1&S=0&L=1. 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. Statement Certain statements included in this press release may constitute forward- looking statements. Actual outcomes could differ materially from such statements expressed or implied herein as a result of a variety of factors including, but not limited to: weather, levels of oil and gas drilling and general industrial activity in United Fuel's area of operations, changes in oil and gas prices, risks associated with acquiring other businesses, the price of United Fuel's products, availability of financing and interest rates, competition, changes in, or failure to comply with, government regulations, costs, uncertainties and other effects of legal and other administrative proceedings, general economic conditions and other risks and uncertainties. As a result, this press release should be read in conjunction with periodic filings United Fuel makes with the SEC. The forward looking statements contained herein are made only as of the date of this press release, and United Fuel does not undertake any obligation to publicly update such forward looking statements to reflect subsequent events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . Supplemental Disclosure Regarding Non-GAAP Financial Information EBITDA represents net income (loss) before income taxes, interest and depreciation and amortization. EBITDA is not a presentation made in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ") and is not a measure of financial condition or profitability. EBITDA should not be considered in isolation or as a substitute for "net income (loss)", the most directly comparable GAAP financial measure, or as an indicator of operating performance. By presenting EBITDA, United Fuel intends to provide investors with a better understanding of its core operating results to measure past performance as well as prospects for the future. United Fuel evaluates operating performance based on several measures, including EBITDA, as United Fuel believes it is an important measure of the operational strength of its business. EBITDA may not be comparable to similarly titled measures used by other companies. EBITDA is not necessarily a measure of United Fuel's ability to fund its cash needs, as it excludes certain financial information when compared to "net income (loss)". Users of this financial information should consider the types of events and transactions which are excluded. A reconciliation of EBITDA to net income (loss) follows:
Reconciliation of EBITDA To Net Income,
(in thousands)
Three Months Ended Nine Months Ended
Sept 30, Sept 30, Sept 30, Sept 30,
2006 2005 2006 2005
EBITDA $3,178 $1,981 $7,593 $4,599
Less:
Depreciation &
Amortization 636 439 1,667 1,226
Interest Expense 1,262 872 3,418 2,166
Other Non-Cash Expenses 57 64 186 193
Income Tax Expense 455 238 865 420
Net Income $768 $368 $1,457 $594
Reconciliation of 2006 Projected EBITDA with Projected Net Income:
EBITDA $9.0 to $11.0 million
Less:
Depreciation and Amortization 2.0 to 2.6 million
Interest Expense 3.9 to 4.2 million
Income Tax Expense 1.1 to 1.7 million
Net Income $2.0 to $2.5 million
United Fuel & Energy Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September September September September
30, 2006 30, 2005 30, 2006 30, 2005
Revenues
Sales $90,364 $79,997 $256,769 $198,403
Other 770 731 2,625 2,357
Total revenues 91,134 80,728 259,394 200,760
Cost of Sales 79,867 71,961 229,086 177,686
Gross Profit 11,267 8,767 30,308 23,074
Expenses
Operating 4,585 3,662 12,297 9,879
General and administrative 3,633 3,277 10,763 8,992
Depreciation, amortization and
accretion 518 330 1,312 915
Total expenses 8,736 7,269 24,372 19,786
Operating Income 2,531 1,498 5,936 3,288
Other Income (Expense)
Interest expense (1,262) (872) (3,418) (2,166)
Amortization of debt issue
costs (118) (109) (355) (311)
Other income (expense), net 72 89 159 201
Gain (loss) on disposal of
assets - - - 2
Total other income (expense) (1,308) (892) (3,614) (2,274)
Income Before Income Taxes 1,223 606 2,322 1,014
Income Tax Expense 455 238 865 420
Net Income $768 $368 $1,457 $594
Cumulative Preferred Stock Dividend $256 $- $481 $-
Net Income Applicable to Common
Equity $512 $368 $976 $594
Net income per common share:
Basic $0.04 $0.03 $0.07 $0.05
Diluted $0.04 $0.03 $0.08 $0.05
Weighted average common shares
outstanding:
Basic 13,656 12,088 13,656 11,573
Diluted 22,232 12,345 19,207 11,747
United Fuel & Energy Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2006 2005
ASSETS (Unaudited)
CURRENT ASSETS
Cash and cash equivalents $5,964 $673
Accounts receivable, net of
allowance for doubtful accounts
of $1,532 and $1,101, at
September 30, 2006, and
December 31, 2005, respectively 52,901 43,290
Other receivables 813 386
Inventories, net of allowance
for slow moving inventory of
$275 and $250 at September 30,
2006, and December 31, 2005,
respectively 11,155 9,345
Prepaid expenses 877 1,237
Deferred taxes 584 474
Total current assets 72,294 55,405
PROPERTY, PLANT AND EQUIPMENT, net 22,048 14,338
OTHER ASSETS
Cash value of life insurance 2,775 2,675
Goodwill 2,027 1,942
Debt issuance costs, net 655 986
Other 117 209
Total other assets 5,574 5,812
$99,916 $75,555
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $19,140 $16,473
Accrued and other current
liabilities 3,225 1,467
Accrued income taxes 521 449
Current maturities of long-term
debt 46,034 1,713
Total current liabilities 68,920 20,102
OTHER LIABILITIES
Long-term debt, less current
maturities 8,071 47,351
Asset retirement obligations 169 127
Deferred income taxes 1,335 1,135
Total liabilities 78,495 68,715
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock - par value
$0.001; 5,000,000 shares
authorized; 12,800 shares
issued and outstanding at September
30, 2006; no shares issued or
outstanding at December 31, 2005 - -
Common stock - $0.001 par value,
55,000,000 shares authorized;
13,656,202 issued and
outstanding at September
30, 2006; 12,287,869 shares
issued and outstanding at
December 31, 2005 14 12
Paid-in capital 17,399 3,796
Retained earnings 4,008 3,032
Total stockholders' equity 21,421 6,840
$99,916 $75,555
Contact:
Chuck McArthur, President and CEO
cmcarthur@ufeonline.com
432-571-8000
Lisa Elliott / lelliott@drg-e.com
DRG&E / 713-529-6600
CONTACT: Chuck McArthur, 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. of United Fuel & Energy Corporation, +1-432-571-8000, cmcarthur@ufeonline.com; or Lisa Elliott Lisa Elliot was a fictional character in the Australian soap opera Neighbours, played by Kate Straub for several months in 1997. of DRG&E, +1-713-529-6600, lelliott@drg-e.com Web site: http://www.ufeonline.com/ |
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