Texas Gulf Energy, via its wholly-owned subsidiaries, like the company's primary operating arm, International Plant Services (NYSEARCA:IPS), provides a broad spectrum of integrated energy services, from oil/gas production and project management, to professional consulting for both domestic and international refinery, chemical, construction, mining, and power concerns.
Chairman and CEO of TXGE, David Mathews, reported on results from operations today, in conjunction with release of the company's full 10-Q (available on their website) for Q1, underscoring the whopping 60% increase in revenues from last year, as TXGE has pulled in some $9.1M in the first quarter of this year (largely due to increased utilization at IPS and the improved underlying market conditions). Mathews expressed the great confidence management has in the overall business model's performance, explaining that operations have already significantly exceeded expectations.
The job they have done building this company since its inception in 2003 is indeed remarkable, bringing together a family of subsidiaries who have become widely known and trusted throughout the energy markets as providing exemplary construction capabilities and the skilled person to execute. As the company enters its tenth year of operations, things are really looking up, with the earned reputation really paying off amid continued increases in domestic hydrocarbon activity, and the company's subsidiaries providing everything from wellhead services to consulting.
The U.S. has truly re-emerged as a frontline in the global energy resource production sector and taking a look at Q1 data coming out of TXGE, we have a good barometer of this resurgence. Comparing the figures for Q1 to the same period last year, we see:
Revenues (consolidated) - up 60% to $9.1M
Gross Profits - up 16% to 21.6%, or $1.96M on improved utilization/rates
Employee Utilization - up 19% to a very healthy 95%
Customer Rates were improved across the board, as well as Vendor Rates
Additionally, there were three large, one-time expense items associated with the acquisition of three companies by TXGE, for which the company incurred fees and non-cash compensation expenses totaling $414k. Thus, SG&A Expense (expressed as a percentage of revenue) was up roughly 9% to $1.9M, closing the quarter at around 21% (when compared to last year's figures), due in large part to the higher operating costs associated with new units being brought online that were not yet producing (as well as certain other costs associated with becoming a fully reporting public company and other ancillary acquisitive/strategic efforts). This expense is projected by management to drop sharply as new business units bring more projects on board, with the associated revenues offsetting SG&A, in accordance with the company's plan for 2012.
Clearly, TXGE has invested a great deal of time and effort assembling a portfolio of services companies, and made a name for itself among top industry players like Chevron, Conoco Phillips, and Exxon Mobil in the process. Results are reflected in the company's Q1 bottom line and readily extensible as the domestic hydrocarbon area not only shows no signs of slowing down, but is in fact speeding up dramatically as new hydrocarbon resources are discovered right here at home and in emerging markets abroad as well. The company has continually sought to integrate its envelope of offerings and today stands atop an impressive foundation of some of the most skilled armies of engineering, construction, technical, skilled craft, and project management personnel anywhere.
With a guy like David Mathews at the helm, it's not hard to see why TXGE has risen so meteorically into the skies over the Texas gulf (he took Inserv Construction Services in Houston from startup to industry powerhouse in just four years). So confident is Matthews in TXGE that he and a group of his assembled investors put $3M of their own money into the business, expressing the overwhelming confidence this industry giant has in the underlying business model. But it's not hard to deconstruct this decision, after all the gulf region, and the domestic energy production market in general, look to have a very bright future where, if anything, a lack of such competent services/personnel to deliver them are in short supply.
For more information on this rapidly emerging energy services powerhouse, or to learn more about Texas Gulf Energy, Inc. subsidiaries, please start by visiting the company's website at: TGNRG.com
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