SOURCE: TexCom, Inc.

TexCom, Inc.

November 15, 2010 14:59 ET

TexCom, Inc. Reports Third Quarter Earnings

HOUSTON, TX--(Marketwire - November 15, 2010) - TexCom, Inc. (PINKSHEETS: TEXC)("TexCom" or the "Company"), an environmental services company for the oil and gas industry, today announced its earnings report for the three and nine month periods ended September 30, 2010.

For the nine months ended September 30, 2010, the Company reports net income of $801,838, as compared to a net loss during the same period in 2009 of ($36,278). During the three months ended September 30, 2010, the Company incurred two non-recurring, periodic expenses (repair and maintenance and income tax expense), as explained below, which contributed to a loss for the period of ($486,127) as compared to a gain of $498,299 for the same period in 2009.

M.B. Environmental Services (MBES), TexCom's subsidiary in the oil & gas waste disposal business, encountered operating problems with its disposal well midway through the third quarter of 2010, resulting in reductions in revenues and increases in expenses while repair efforts were in progress. Revenue for the third quarter 2010 declined by $55,685, or 2.6%, from the same period last year, while year to date revenue for the first nine months of 2010 exceeded 2009 by approximately $1,710,724, or 34%. Gross profit over cost of goods for the first nine months of 2010 were $3.88 million, a 15.8% increase from the year earlier.

Cost of sales for the three month period increased substantially as a percentage of sales due to the costs associated with repair and maintenance of the disposal well, coupled with increased royalties payable to Matador Acquisition Company IV, LP under the terms of the loan agreement entered into in 2009.

The Company also incurred increased expense for the three month period in the form of a one-time charge for income taxes owed by TexCom's operating subsidiary during the period in which this entity was not 80% or more owned by TexCom, Inc. The final return filed during the third quarter 2010 exceeded the year-end estimates of the Company by approximately $275,000, resulting in expense during the quarter unrelated to current quarterly or annual operations. Effective January 1, 2010, the operations of the subsidiary are consolidated for Federal Tax purposes with the operations of the parent, TexCom, Inc., and the net operating loss carry-forward of the parent is expected to keep income taxes to a minimum in the current year and into 2011.

Management Comments

C.E.O. and Chairman Lou Ross stated, "We continue to work to expand TexCom's size, services and locations. Our nine month net income of $801,838 compared to a loss of $36,278 for the first nine months of 2009, together with across the board strengthening of our balance sheet, clearly reflects the results of these efforts. We have made significant strides at M.B. Environmental Services toward expanding our revenue and earnings capability. We are preparing to close on the purchase of approximately five additional acres at the site to expand our offloading capacity and will soon be adding the additional equipment needed. In September, we drilled, completed and put into service our second disposal well. Having experienced problems with our first disposal well in August of 2010 that caused over $176,000 of unanticipated expense and lost days of operations, we want to keep redundant disposal capacity operating in the future in order to avoid work stoppages. We made the decision to plug the first disposal well which had taken in over 14 million barrels of oil & gas waste over 10 years and have received a permit to drill a third well. We anticipate that these accomplishments will return our revenues and earnings to the growth patterns we achieved over the preceding four quarters. With two new disposal wells operating, we should continue operating efficiently for many years into the future. Moreover, as critical elements of our growth plans, we remain committed to vertical expansion in our environmental services business and opening of new sites in order to serve our existing customer base in the new shale plays that have lured the major oil companies back on-shore for oil and natural gas production."

For the three month period ending September 30, 2010, TexCom's revenues were $2,037,169 as compared to $2,092,854 for the same period in 2009. Due to the increased expenses related to repairs and maintenance on the disposal well at the company's M.B. Environmental Services, LLC subsidiary, TexCom's gross profit over cost of goods declined for the three month period from $1,400,446 in 2009 to $844,745 in 2010.

Key Initiatives

Since the beginning of 2009, TexCom management has focused on four key initiatives; (i) bringing TexCom's ownership position in MBES to 100%, (ii) assembling a pipeline of growth projects and acquisition candidates predominantly in the environmental services sector, (iii), adding engineering and remediation services to the NORM disposal capability at MBES; and (iv) securing financing to expand environmental services and re-activate alternative energy prospects in Paraguay.

While we encourage you to read the entire filed document, this release is intended to summarize some of the significant information in our earnings statement which is more fully disclosed in our earnings post. Complete information can be found at www.pinksheets.com/pink/quote/quote.jsp?symbol=texc.

The following is a summary of certain historical financial information for TexCom, Inc. for the three months ended March 31, 2009 and March 31, 2010.

                                TEXCOM, INC. AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF OPERATIONS
                      For the Three and Nine months ended June 30, 2010
                                         (Unaudited)

                       Three months ended           Nine months ended
                           September 30,              September 30,
                    --------------------------  --------------------------
                         2010         2009          2010          2009
                    ------------  ------------  ------------  ------------

Sales               $  2,037,169  $  2,092,854  $  6,678,981  $  4,968,257

Cost of Sales          1,192,424       692,408     2,800,286     1,620,140
                    ------------  ------------  ------------  ------------

Gross Profit             844,745     1,400,446     3,878,695     3,348,117

Selling, general &
 administrative
 expenses                707,433       574,632     1,606,773     1,088,061
                    ------------  ------------  ------------  ------------
  Operating income
   (loss)                137,312       825,814     2,271,922     2,260,056
                    ------------  ------------  ------------  ------------

Other income (expense)
  Impairment of assets         -             -             -      (517,000)
  Interest expense      (318,426)      (35,175)     (969,182)     (165,222)
  Other, net              (4,429)      (15,146)       70,110        (6,326)
                    ------------  ------------  ------------  ------------

     Total other
      income
      (expense)         (322,855)      (50,321)     (899,072)     (688,548)
                    ------------  ------------  ------------  ------------

Income (loss) before
 income taxes and
 non-controlling
 interest               (185,543)      775,493     1,372,850     1,571,508


Provision for income
 taxes                  (277,684)     (444,200)     (277,684)     (703,579)
                    ------------  ------------  ------------  ------------

Net income (loss)
 before non-
 controlling interest   (463,227)      331,288     1,095,166       867,929

Income attributable
 to non-controlling
 interest                (22,900)      167,011      (293,328)     (904,208)
                    ------------  ------------  ------------  ------------

Net income (loss)
 available to common
 shareholders       $  ( 486,127) $    498,299  $    801,838  $    (36,278)
                    ============  ============  ============  ============

Weighted average
 shares outstanding
 - basic              50,177,334    44,775,758    48,937,580    44,775,758
                    ------------  ------------  ------------  ------------

Weighted average
 shares outstanding
 - fully diluted      51,677,334    44,775,758    49,437,580    44,775,758
                    ------------  ------------  ------------  ------------

Income (loss) per
 share - basic      $      (.010) $       .016  $       .011  $      (.001)
                    ------------  ------------  ------------  ------------

Income (loss) per
 share - fully
 diluted            $      (.010) $       .016  $       .011  $      (.001)
                    ------------  ------------  ------------  ------------

About TexCom

TexCom, Inc., headquartered in Houston, Texas, is a growth-oriented company with its primary focus on the disposal of nonhazardous wastes and production of biodiesel. Domestically, TexCom disposes of nonhazardous materials generated by oil and gas exploration and production and is expanding its interests in disposal of nonhazardous industrial wastewater, serving the refining and petrochemical industries.

For further information on TexCom, please visit: http://www.texcomresources.com.

Forward-Looking Statements

This press release may contain forward-looking statements, including information about management's view of TexCom, Inc.'s future expectations, plans and prospects. In particular, when used in the preceding discussion, the words "believes," "expects," "intends," "plans," "anticipates," or "may," and similar conditional expressions are intended to identify forward-looking statements. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of TexCom, Inc., its divisions and concepts to be materially different than those expressed or implied in such statements. Unknown or unpredictable factors also could have material adverse effects on TexCom's future results. The forward-looking statements included in this press release are made only as of the date hereof. TexCom cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, TexCom undertakes no obligation to update these statements after the date of this release, except as required by law, and also takes no obligation to update or correct information prepared by third parties that are not paid for by TexCom.

Contact Information

  • Contacts:
    TexCom, Inc.
    Management contact
    Britt Brooks, EVP
    713-914-9193
    Email Contact: Email Contact