Coil Tubing Announces Improved 2014 Annual Results
By Business Wire News
By Business Wire News
Coil Tubing Technology, Inc. (OTCQB:CTBG), a leading provider of enterprise-class coil tubing products and services, announced that the Company has filed its Annual Report on Form 10-K with the Securities and Exchange Commission reporting results for the year ended December 31, 2014.
During 2014, we experienced an increase in sales activity in most of the United States and Mexico; however, our sales in Canada and Pennsylvania decreased due to a reduction of drill sites using coil tubing products in such locations. Our revenues were approximately $6,866,000 in 2014 and approximately $6,143,000 in 2013. During 2014, the coil tubing industry experienced a decline in the use of our technology. During this period we continued to maintain our presence in these affected drilling regions and, concurrently developed a new tool, Ampli-Max which is now being used by existing and new customers to reduce their drilling time in the lateral section of a well which enables these operators to achieve greater savings in the fracking and drillout process. We are manufacturing this new tool to be used domestically and internationally. Our sales of products increased in 2014 as service companies, including our clients, emphasized purchasing over renting. We plan to continue to sell products; however, our business strategy is to emphasize the rental of tools which results in greater gross profit for us versus sales of tools. We continued to invest in our distribution system for our tools during 2014 to reduce delivery time through the improvement of our inventory management and tool repair cycle. These changes are ongoing and necessary to maintain our market share.
During 2014 and continuing in 2015, the oil and gas industry is experiencing a significant downturn in oil prices. This trend impacts our customer’s operations and their use of our tools for drilling and workover operations. We are meeting this challenge through new product and service offerings and a reduction in our operating costs. Our immediate plans are to continue to expand product offerings to include tool and drill pipe inspections and grow by meeting expected demand for our rental tool products in our current geographic markets and further expanding our efforts to rent and sell our tools in international markets, including Mexico, Asia, Latin America and the Middle East. Moving forward, we anticipate increased spending on research and development activities, which we believe is required to provide technological advancement to our coiled tubing technologies and workover product lines and expansion of our new tool and drill pipe inspection business. We are currently working on multiple new generation coil tubing tools to aid in and facilitate horizontal drilling. We expect the market for new applications of coiled tubing to continue to expand throughout fiscal 2015 and 2016, especially in the horizontal drilling and workover applications. Since 2011, the Company has seen an acceptance of its new technology in the coiled tubing service market. Additionally, during 2014 the Company purchased ownership rights to $3,750,000 of new patent and patent pending technology (which technology it was already using in its products) from its senior vice-president, to provide a broader base of products to sell or rent to our customers. Based on our management’s personal knowledge of the market for our products, we believe that we have established a significant market share for certain of our products including the CTT H/H, CTT Oscillator and Ampli-Max, our newest product, which will be one of our core products in the future. The following is a summary of our financial activities:
- The Company reported revenues of $6,866,000 for the year ended December 31, 2014, as compared to revenues of $6,143,000 for the same period ending December 31, 2013; an increase of $723,000 or 11.8%.Total revenues included approximately $1,357,000 of product revenue for the year ended December 31, 2014 compared to approximately $129,000 for the year ended December 31, 2013, an increase in product revenue of approximately $1,228,000 or 951.9% from the prior period. The increase in product revenue was mainly due to an increase in international sales. Total revenues also included rental revenue of approximately $5,509,000 for the year ended December 31, 2014 compared to approximately $6,014,000 for the year ended December 31, 2013, a decrease of approximately $505,000 or 8.4% from the prior year. The decrease in rental revenue was primarily due to reduced customer demand during 2014 in Canada and the eastern United States due to a decrease in the decline of oil prices.
- The Company reported a net loss of $316,000 for the year ended December 31, 2014, as compared to a net loss of $866,000 for the year ended December 31, 2013; a decrease of $550,000 or 63.5% in net loss.
- Primary and fully-diluted net (loss) per share for the twelve months ended December 31, 2014 was ($0.02). Primary and fully-diluted net (loss) per share for the twelve months ended December 31, 2013, was ($0.06).
- The Company reported a gross profit of $3,330,000 for the year ended December 31, 2014, as compared to a gross profit of $2,867,000 for the year ended December 31, 2013; an increase of $463,000 or 16.1%.
- The Company reported a decrease in operating expenses of $101,000 or 2%, principally related to a reduction in compensation and commissions, for the year ended December 31, 2014, as compared to the year ended December 31, 2013.
- The Company’s working capital increased by $701,000 for 2014, as compared to 2013. Additionally, the Company’s operations continue to provide cash flow which totaled $1,196,000 in 2014 as compared to $694,000 in 2013.
- Lastly, the Company used $744,000 of cash in investing activitiesduring the year ended December 31, 2014, primarily for the acquisition of operating assets.
Mr. Jason Swinford, CEO of the Company, commented, “During 2014, we experienced a significant downturn in the demand for our rental products in Canada and the United States which was created by significantly lower oil and gas prices; however, our diversification of products and the increased emphasis of the sale of tools to our international customers offset the decrease in our U.S. operational areas. Our 2015 strategy is to provide a broader base of products and new service offerings to the coil tubing industry in both our domestic and international operational areas. I believe this strategy will allow us to maintain our market share.”
Mr. Jerry Swinford, Chairman of the Company, commented, “During the calendar year 2014 and continuing in 2015, we have developed and purchased new tool technology to meet the demands of our current customer base. We expect this investment will allow us to develop new sales in the domestic and international oil and gas drilling industry. We will continue to invest in technology to remain a leader in the coil tubing industry.”
Complete information regarding the Company’s results of operations for the year ended December 31, 2014, the Company’s plans for fiscal 2015 and other information regarding the Company, including risks associated with an investment in the Company’s securities, can be found in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 30, 2015, which can be found at www.sec.gov and the Company’s website, www.coiltubingtechnology.com, under “About Coil Tubing Technology, Inc.”, “SEC Filings”.
About Coil Tubing Technology
Coil Tubing Technology, Inc. is a fully reporting public corporation located in Spring, Texas, and is the parent company of Coil Tubing Technology Holdings, Inc., a Nevada corporation, which in turn has three wholly-owned subsidiaries, Total Downhole Solutions, Inc. (“TDS”) and Coil Tubing Technology, Inc. (“CTT Texas”), both Texas corporations and Coil Tubing Technology Canada Inc., an Alberta, Canada corporation (“CTT Canada”) and also holds a 51% interest in Excel Inspection, LLC. The Company specializes in providing coil tubing products and service solutions to oil and gas clients on a regional, national and international basis. Its principals have been in the tool rental business for more than 40 years. For more information, please visit our website at www.coiltubingtechnology.com or call 281-651-0200.
This press release contains forward-looking statements, including information about management’s view of the Company’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. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it can give no assurance that its forward-looking statements will prove to be correct. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. These risk factors and others are included from time to time in documents the Company files with the Securities and Exchange Commission, including but not limited to, its Form 10-Ks, Form 10-Qs and Form 8-Ks. Other unknown or unpredictable factors also could have material adverse effects on the Company’s future results. The forward-looking statements included in this press release are made only as of the date hereof. The Company cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, the Company 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 the Company.
Coil Tubing Technology, Inc.
Mr. Jerry L. Swinford, 281-651-0200
Chairman of the Board