HOUSTON, May 22, 2012 /PRNewswire/ -- Texas Gulf Energy, Inc. (OTCQX: TXGE) (www.tgnrg.com) Chairman and CEO David Mathews announced today "Texas Gulf Energy, Inc. is pleased to report that the company generated $9.1 Million in Revenues in the First Quarter of 2012, a 60% increase from the same period in the prior year. Gross profits increased from 5.6% in Q1 2011 to 21.6% in Q1 2012. There were significant non-recurring, one time items relating to our acquisition of three companies due to legal, accounting and professional fees in excess of $200,000 and non-cash compensation expense of $214,000. We continue to be pleased with our progress in building Texas Gulf Energy and have exceeded our business plan to date for 2012." Please see management's discussion of the results of operations, summarized below, and the full first quarter 2012 10-Q Report available on our website.
RESULTS OF OPERATIONS
Three Months Ended March 31, 2012 Compared to the Three Months Ended March 31, 2011 Consolidated
Consolidated revenues were $9.1 million for the three months ended March 31, 2012; an increase of $3.4 million, or 60%, from consolidated revenues of $5.7 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., the underlying business environment, and the acquisitions completed by the Company.
Consolidated gross profit increased from $.32 million in the three months ended March 31, 2011 to $1.96 million in the three months ended March 31, 2012. The increase of $1.6 million, or 513%, was primarily due to higher gross revenues. Gross profit increased to 21.6% in the three months ended March 31, 2012 from 5.6% in the same period a year earlier. The gross profit improved due to improved utilization and rates. The Company has increased its employee utilization from 76% to 95% for the three months ended March 31, 2011 to March 31, 2012, respectively. The Company also improved rates we charge to our customers and have negotiated better rates from our vendors.
Consolidated selling, general & administrative ("SG&A") expenses were $1.9 million in the three months ended March 31, 2012 compared to $.7 million in the same period a year earlier. The increase of $1.2 million, or 171%, 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 and strategic initiatives.
SG&A expenses in the three months ended March 31, 2011 included $214,000 in non-cash compensation not incurred in the 1st quarter of 2010. SG&A expense as a percentage of revenue increased to 21% in the three months ended March 31, 2012 compared to 12% in the same period in the prior fiscal year. 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 2012 plan.
About Texas Gulf Energy, Inc. (www.tgnrg.com)
Since its founding in 2003, our flagship company, International Plant Services, has deployed thousands of engineering, construction, technical, skilled crafts and project management personnel to major international energy companies, including Exxon Mobil, Conoco Phillips, Chevron, Valero, and others. We are particularly well known throughout the energy markets for our ability to provide construction services with professional, experienced and well trained teams to maximize the ability of our customers to complete major projects safely, on time and on budget. Now entering our tenth year in business, we have vertically integrated our service offering into other energy market segments, including wellhead services, oil and gas production, and professional consulting services both domestically and internationally to better serve the needs of our customers.
Precautionary and Forward-Looking Statements
This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may," "future," "plan" or "planned," "will" or "should," 'expected," "anticipates," "draft," "eventually" or "projected." You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified TXGE's disclosures or filings with the SEC. You are further cautioned that penny stocks, like TXGE, are inherently volatile and risky and that no investor should buy this stock unless they can afford the loss of their entire investment.
SOURCE Texas Gulf Energy, Inc.