SOURCE: ESP Resources, Inc.

ESP Resources, Inc.

November 16, 2012 10:39 ET

ESP Resources, Inc. Reports Third Quarter 2012 Results

Revenue Increases of 90% Over Prior Year Put Company on Track for Continued Record Revenues for 2012

SCOTT, LA--(Marketwire - Nov 16, 2012) - ESP Resources, Inc. (OTCBB: ESPI) (the "Company" or "ESP Resources"), an oil and gas services company, today announced the Company's unaudited financial results for the nine and three months ended September 30, 2012.

Mr. David Dugas, President of ESP Resources, Inc., commented, "As we head into the balance of 2012 with another year of record revenues, we are not only focused on our continued domestic expansion, but also the start of our international initiatives and the broadening of our portfolio of services offered. We look forward to announcing these new agreements in the near term and toward the impact that they will have on our growth in 2013."

Nine Months Ended September 30, 2012

Revenues were $14,352,271, as compared to $7,535,739 for the nine months ended September 30, 2011, an increase of $6,816,532, or 90%. The increase was mainly due to increased sales volume from completion petrochemical sales and services to customers engaged in the hydraulic fracturing of oil and gas wells. In addition, revenue increased through increases in sales of production petrochemicals in the Southern Louisiana, South Texas and Southeastern Texas regions. The addition of field service technicians in the South Texas and Arkansas regions in previous quarters and their sales contacts resulted in a direct increase in sales volumes from these regions.

Gross profit was $6,498,162, or 45% of net sales, for the nine months ended September 30, 2012, compared to $3,945,762, or 52% of net sales, for the same period in 2011. The 7% decrease in gross profit for the nine month period in 2012 is the result of new completion petrochemical sales from customers engaged in the hydraulic fracturing of oil and gas wells that have a lower gross profit margin than production petrochemical products.

The Company's net loss decreased to $(2,129,396) for the nine months ended September 30, 2012, as compared to a net loss of $(2,750,300) for the same period in 2011. The primary reason for the decrease in the net loss was due to a decrease, as a percentage of sales, in general and administrative expenses relating to the expansion of sales from existing facilities and, stock compensation expense and increase in the cost of additional infrastructure to support higher levels of sales in future periods and development of international operations.

Three Months Ended September 30, 2012

Revenues were $4,461,459, as compared to $3,425,518 for the three months ended September 30, 2011, an increase of $1,035,941, or 30%. The increase was mainly due to increased sales volume from completion petrochemical sales and services to customers engaged in the hydraulic fracturing of oil and gas wells. In addition, sales increased through increases in sales of production petrochemicals in the Southern Louisiana, South Texas and Southeastern Texas regions. The addition of field service technicians in the South Texas and Arkansas regions in previous quarters and their sales contacts resulted in a direct increase in sales volumes from these regions.

Gross profit was $2,213,006, or 50% of net sales, for the three months ended September 30, 2012, as compared to $1,799,324, or 53% of net sales, for the same period in 2011. The 3% decrease in gross profit for the three month period in 2012 is the result of new completion petrochemical sales from customers engaged in the hydraulic fracturing of oil and gas wells that has a lower gross profit margin than production petrochemical products.

The Company's net loss increased to $(1,084,892) for the three months ended September 30, 2012, as compared to a net loss of $(706,109) for the same period in 2011. The primary reason for the increase in the net loss was due to a increase, as a percentage of sales in general and administrative expenses relating to the expansion of sales from existing facilities, stock compensation expense, the cost of additional infrastructure to support higher levels of sales in future periods and development of international operations.

Modified Earnings before interest, taxes, depreciation amortization and stock-based compensation ("Modified EBITDA") are a non-GAAP financial measure. Modified EBITDA for the three and nine months ended September 30, 2012 was $(164,142) and $136,709, compared to $103,641 and $(288,309), respectively, for the same periods in 2011, a change of $(267,783) and $391,950, respectively.

As of September 30, 2012, the Company had total assets of $8,715,663, of which $3,128,956 was cash and receivables. Total liabilities were $7,662,195, of which $6,025,821 were current liabilities.

For more information on the Company's performance in the nine months ended September 30, 2012, please refer to the corresponding Form 10-Q as filed with the Securities and Exchange Commission.

About ESP Resources, Inc.:

ESP Resources, Inc. is a publicly traded oil and gas services company (OTCBB: ESPI) headquartered in Scott, LA. Through its subsidiaries, the Company manufactures, blends, distributes and markets specialty chemicals and analytical services to the oil and gas industry and also provides services for the upstream, midstream and downstream sectors of the energy industry, including new construction, major modifications to operational support for onshore and offshore production, gathering, refining facilities and pipelines designed to optimize performance and increase operators' return on investment. The Company's senior management has over 100 years of combined operating experience in the oil and gas services industry. More information is available on the Company's Website at www.espchem.com.

Legal Notice Regarding Forward-Looking Statements:

This press release contains "forward looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements in this news release that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined and assumptions of management. Forward looking statements are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "aims", "potential", "goal", "objective", "prospective", and similar expressions or that events or conditions "will", "would", "may", "can", "could" or "should" occur. Information concerning oil or natural gas reserve estimates may also be deemed to be forward looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed. Actual results may differ materially from those currently anticipated due to a number of factors beyond the reasonable control of the Company. It is important to note that actual outcomes and actual results could differ materially from those in such forward-looking statements.

Readers are cautioned not to place undue reliance on the forward-looking statements made in this press release. In evaluating these statements, you should consider the risks discussed, from time to time, in the reports we file with the U.S. Securities & Exchange Commission. For a discussion of some of the risks and important factors that could affect the Company's future results and financial condition, see the Company's Form 10-Ks and 10-Qs on file with the U.S. Securities & Exchange Commission.

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