Macro Enterprises Inc.
TSX VENTURE : MCR

Macro Enterprises Inc.

November 13, 2008 16:55 ET

Macro Enterprises Inc. Announces 2008 Third Quarter Results

FORT ST JOHN, BRITISH COLUMBIA--(Marketwire - Nov. 13, 2008) - Macro Enterprises Inc. (TSX VENTURE:MCR) -



Summary of financial results
(thousands of dollars except per share amounts)
(unaudited)
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Three months ended Nine months ended
September 30 September 30
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2008 2007 2008 2007
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Revenues $12,600 $15,917 $50,251 $70,101

Net earnings (loss) (1,047) (137) (3,901) 4,326

Net earnings (loss) per share
- basic ($ 0.05) ($ 0.01) ($ 0.19) $ 0.19

Net earnings (loss) per share
- diluted ($ 0.05) ($ 0.01) ($ 0.19) $ 0.16
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Weighted average common shares
outstanding (thousands) 22,117 21,577
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Highlights

- Revenues were down compared to the third quarter last year due to reduced levels of oil and gas activity in the company's market region.

- Gross margin percentage was down from the third quarter last year but up from the second quarter this year due to improved performance on certain jobs.

Third quarter results

Consolidated revenue was $12.6 million compared to $15.9 million in the third quarter last year. Similar to results in the first six months of the year, volumes were lower this year due to reduced oil & gas activity in the Company's market region and increased competition for the work that was available.

Direct costs were 84.4% of revenue in the quarter compared to 82.4% in the same quarter last year. This variance was principally due to lower bid margins this year compared to last year, reflecting increased competition in the region. Performance improved from the first six months of the year due to improved project execution and additional cost reimbursable work in the third quarter.

General and administrative expenses were $2.0 million, up from $1.5 million in the same quarter last year. Most of the increase is due to costs associated with the resignation of the Chief Executive Officer in September 2008.

Total amortization expense of $1.2 million compared to $1.1 million in the third quarter last year due to higher levels of fixed assets and amortization of intangible assets related to the acquisitions of Tracer and Omineca in 2007.

Interest expense of $0.3 million was marginally lower than last year.

Income taxes recovered in the quarter were $0.4 million representing an effective tax rate of 29.6%. The implied rate at which income taxes were recovered was lower than statutory rates due mainly to the effect of permanent differences between accounting and taxable income.

Net loss for the quarter was $1.0 million (a loss of $0.05 per share) compared to a net loss of $0.1 million (a loss of $0.01 per share) in the same quarter last year.

Outlook

Drilling activity in the Western Canadian Sedimentary Basin, a leading indicator of demand for oilfield construction services, is expected to continue at lower levels due to reduced commodity prices and, in Alberta, due also to a higher royalty regime.

The Company is currently bidding on several significant projects but has adopted a cautious outlook with respect to current market conditions. The Company will reduce cash expenditures if expected revenue targets are not attained.

Macro's core business is providing pipeline and facilities construction and maintenance services to major companies in the oil and gas industry in northeastern B.C. 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.

Forward Looking Statements

Certain statements in this news release may include forward-looking information that involves various risks and uncertainties. These may include, without limitation, statements regarding expected revenues, expenses and industry trends and the pursuit of strategic acquisitions. These risks and uncertainties include, but are not restricted to, government regulation of energy and resource companies, seasonal weather patterns, maintaining and increasing market share, terrorist activity, the price and availability of alternative fuels, the availability of pipeline capacity, potential instability or armed conflict in oil producing regions and the overall economic environment. For a more detailed description of these risks and uncertainties, please see the section "Risk Factors" in the Company's Annual Information Form for the year ended December 31, 2007 available on SEDAR at www.sedar.com. These risks and uncertainties may cause actual results to differ from information contained herein. There can be no assurance that such forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These statements are based on the estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, the Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Macro Enterprises Inc.
    Frank Miles
    President and C.E.O.
    (250) 785-0033
    or
    Macro Enterprises Inc.
    T. Jerrold Jackson
    C.F.O.
    (403) 705-7302
    Website: www.macroindustries.ca