Macro Enterprises Inc.
TSX VENTURE : MCR

Macro Enterprises Inc.

November 22, 2007 19:41 ET

Macro Enterprises Inc. Announces 2007 Third Quarter Results

CALGARY, ALBERTA--(Marketwire - Nov. 22, 2007) - Macro Enterprises Inc. (TSX VENTURE:MCR) -



Summary of financial results
(thousands of dollars except per share amounts)

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Three months ended Nine months ended
September 30 September 30
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2007 2006 2007 2006
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Revenues $15,917 $17,471 $70,101 $76,637

Net earnings (loss) (137) 2,397 4,326 8,378

Net earnings (loss) per share
- basic ($0.01) $0.11 $0.19 $0.41

Net earnings (loss) per share
- diluted ($0.01) $0.11 $0.16 $0.40
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Weighted average common shares
outstanding (thousands) 21,577 20,489
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Highlights

- Revenues were lower in third quarter and year-to-date due to reduced levels of construction activity

- Gross margins were lower in third quarter due to competitive marketplace conditions and weather related cost over-runs on one project

- In September, the Company acquired the assets of Omineca Oilfield Services Ltd., a premier supplier of facilities maintenance services to the oil and gas industry in northern British Columbia.

Third quarter results

Consolidated revenue was $15.9 million compared to $17.5 million in the third quarter last year. Results in the third quarter last year included one large facility turnaround project whereas this year the quarter was comprised mainly of smaller projects.

Direct costs were 82.4% of revenue in the quarter compared to 67.0% last year. Costs were higher this quarter due to lower bid margins, reflecting the competitive marketplace, and weather related cost over-runs on one project.

General and administrative expenses were $1.5 million, up from $1.3 million last year. However, expenses were down $0.1 million from the second quarter, as consultants have now completed their assignments.

Amortization expense increased to $1.1 million compared to $0.8 million in the third quarter last year due to higher levels of fixed assets.

Interest expense was $0.3 million compared to $0.2 million last year, as a result of higher levels of debt this year.

There was a small income tax expense in the quarter, despite the loss before taxes, due in part to some permanent differences between accounting and taxable income.

Net loss for the quarter was $0.1 million (a loss of $0.01 per share) compared to a net profit of $2.4 million ($0.11 per share) in the same quarter last year.

Outlook

Drilling activity for oil and gas wells in the market region remains lower than was the case in 2006. Industry sources predict that this reduced drilling activity will continue for the remainder of 2007 and in to 2008. This reduced activity may impact the volume of work and margins for Macro for the remainder of the year related to facility tie in. The Company expects its facilities maintenance work to increase through this period, due to the addition of Omineca in September. However, some clients may defer maintenance should gas prices remain low.

The Company will continue to focus on its core business, and will maintain and build its relationships with key customers active in the northern B.C. and northwest Alberta markets. The Company will also continue to actively pursue new service offerings to its current client base, and may grow these offerings through organic growth or through strategic acquisitions to strengthen its expertise and to broaden its customer base.

Macro's core business is providing pipeline and facilities construction and maintenance services to major companies in the oil and gas industry in northeastern British Columbia and northwestern Alberta. The Company's corporate office is in Calgary, Alberta. Its shares are listed on the TSX Venture exchange under the symbol MCR. Information on the Company's principal operating unit, Macro Industries Inc., can be found at www.macroindustries.ca.

Contact Information

  • Macro Enterprises Inc.
    J. Norman Rokosh
    President and C.E.O.
    (403) 705-7303
    (403) 705-7310 (FAX)
    Website: www.macroindustries.ca