VANCOUVER, March 2, 2012 /CNW/ - Ridgeline Energy Services Inc. [TSX-V: RLE; OTCQX: RGDEF] ("Ridgeline," "the Company"), an energy and environmental services company, is pleased to announce its results for the fiscal quarter ended December 31, 2011 ("third quarter of 2012").
Third Quarter of 2012 Highlights
- Total revenues of $5.4 million, an 80% increase from the $3.0 million recorded during the third quarter of fiscal 2011.
- Ridgeline Greenfill continued expansion through successful construction and commissioning of two additional waste management sites, located in Lloydminster, Saskatchewan and Redcliff, Alberta.
- Subsequent to the conclusion of the third quarter of 2012, the Company completed both the acquisition of Danzik Hydrologic Sciences, LLC and a private placement for gross proceeds of $7.5 million.
"Both Ridgeline's third quarter results and the business initiatives completed during the subsequent month represent positive developments within all areas of the Company's business," stated Tony Ker, Ridgeline's Chief Executive Officer. "Ridgeline Environment continues to improve on project completion and increasing cash flow. The consistent growth of Ridgeline Environment, quarter over quarter, is evidence of that division's strong relationships within the oil and gas industry. In recent years we have been able to build on these relationships, which will provide a competitive advantage as we seek to accelerate market penetration for our wastewater treatment and storage technologies."
Ridgeline's Greenfill operations produced significant growth during the third quarter. Revenues increased 49%, or $0.4 million, as compared to the same quarter in 2011. Ridgeline Greenfill has completed facilities in Lloydminster, Saskatchewan and Redcliff, Alberta, and will complete two additional facilities during this calendar year.
Ridgeline's water treatment facility installations continue to expand, and the Company's Santa Fe Springs, California and Lomas Rojas facilities continued both laboratory and full scale testing.
Subsequent to the conclusion of the third quarter, Ridgeline completed two significant milestones. On January 5, 2012, Ridgeline completed its acquisition of Danzik Hydrologic Sciences, LLC ("DHS"). Following this acquisition, the Company now owns the exclusive rights to certain intellectual property developed by Mr. Dennis M. Danzik and 100% of the Eau Claire Partnership.
On January 9, 2012, Ridgeline completed a private placement of 12,500,100 common shares at $0.60 per share, generating gross proceeds of $7.5 million. The primary application for these proceeds will be an expansion of the Company's manufacturing capacity to meet the immediate demand for water treatment facilities in New Mexico and Texas. As this manufacturing capacity increases, and a field study backlog grows, the Company will be well positioned to capitalize on opportunities for both commercial installations and additional development agreements.
Ridgeline's revenues for the third quarter of 2012 were $5.4 million, an 80% increase from the $3.0 million recorded during the third quarter of fiscal 2011. Gross profit for the third quarter of 2012 was $1.8 million, a 29% increase from the $1.4 million recorded during the third quarter of fiscal 2011. This growth was primarily due to the increase in REI's revenue contribution.
Cost of revenue for the third quarter of 2012 was $3.6 million, a 126% increase from the $1.6 million recorded during the third quarter of fiscal 2011. This increase was primarily due to the completion rate of REI's services. Cost of revenue was 66% and 53% of revenue for the three months ended December 31, 2011 and 2010, respectively. The decrease in the gross profit margin for the three months ended December 31, 2011 compared to 2010 primarily relates to the increased costs associated with engaging third party resources necessary to augment our workforce for our REI operations.
Operating expenses for the third quarter of 2012 were $1.9 million, a 51% increase from the $1.3 million recorded during the third quarter of fiscal 2011. The increase in operating expenses for third quarter of 2012, when compared to the corresponding period in the previous year, relates to higher staffing costs, increased professional fees, and increased costs associated with stock-based compensation. These cost increases were somewhat offset by reduced research and development expenses associated with Ridgeline Water Inc. activities. These expenses are now primarily capital costs, as opposed to an expense to the Company.
Net loss for the third quarter of 2012 was $0.5 million ($0.00 per share), compared to net income of $0.2 million ($0.01 per share) during the third quarter of fiscal 2011. The decrease in net income reflects increases in both the cost of revenues and operating expenses.
About Ridgeline Energy Services Inc.
Ridgeline Energy Services Inc. is an energy and environmental services company focused on waste management in the oil and gas industry. Through its subsidiary Ridgeline Water Inc., the Company is applying proprietary technology to treat the large volumes of contaminated water generated by oil and gas production. The Company is working with energy majors in the application of its technology for the recycle and reuse of; produced and hydraulic fracturing water; enhanced recovery chemical flood water; and oil sands process water. As well the Company is utilising its technology in the testing and treatment of commercial and industrial waste water. Through its environmental consulting and remediation subsidiaries, Ridgeline Environment Inc. and Ridgeline GreenFill Inc., the Company has built a reputation as an established provider of environmental services to North America's oil and gas industry. The Company trades on the TSX Venture Exchange under the symbol "RLE" and the OTCQX as "RGDEF" Additional information is available on the Company's website at: www.ridgelinecanada.com.
ON BEHALF OF THE BOARD OF DIRECTORS
"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release. This news release may contain forward-looking statements. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. Such information is subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information, as no assurances can be given as to future results, levels of activity or achievements."
Ryan Johnson of Ridgeline Energy Services Inc.
(604) 566-8066 ext. 3 (Vancouver)
David Waldman at Crescendo Communications
(212) 671-1021 (New York)