XRG Inc. Reports Quarterly Results; Company Reports GAAP Net Income
CLEARWATER, Fla.--March 2, 2005--XRG Inc. (OTCBB:XRGI), a provider of a wide range of truckload freight services in the United States, today announced results for its quarter ended Dec. 31, 2004.XRG generated revenue of $12,130,523 for the three months ended Dec. 31, 2004, as compared to $908,066 during the three-month period ended Dec. 31, 2003. This increase is the result of revenues attributable to five new truckload carriers that were acquired in April and two existing truckload operations. For the nine months ended Dec. 31, 2004, revenues were $33,985,161. Positive net income for the quarter ended Dec. 31, 2004, was $48,011, as compared to a net loss in the previous quarter ended Sept. 30, 2004, of $2,157,832.
The quarter ended Dec. 31, 2004 provided some key highlights for the company.
-- First positive net income quarter since making five acquisitions in 2004
-- Quarterly revenue represents annual run rate of over $46 million
-- Increased stockholders' equity 36% from the previous quarter to $5,311,165
XRG Chairman of the Board Don Huggins said of the quarter's achievements: "We achieved several key operational milestones this quarter. Foremost, I am very pleased to report our first quarterly positive net income following the major acquisitions we completed in April. Our main focus has been to achieve better asset utilization to improve cost and productivity. Advancing from a net loss to positive income this quarter validates our strategy to grow aggressively through acquisitions, while maintaining a focus on profitability."
About XRG Inc.
XRG Inc. is a public company trading on the OTCBB under the symbol XRGI that was established in November 2000 to consolidate established and profitable truckload carriers throughout the United States. The company is targeting carriers that have long-term customer relationships. Our consolidation strategy enables us to diversify our customer base, technical capabilities and geographic areas served. For more information about XRG Inc. visit http://www.xrginc.com or call 727-475-3060.
Safe Harbor Statement
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking information made on the company's behalf. All statements, other than statements of historical facts which address the company's expectations of sources of capital or which express the company's expectation for the future with respect to financial performance or operating strategies, can be identified as forward-looking statements. Such statements made by the company are based on knowledge of the environment in which it operates, but because of the factors previously listed, as well as other factors beyond the control of the company, actual results may differ materially from the expectations expressed in the forward-looking statements.
XRG Inc. and Subsidiaries
Consolidated Balance Sheet
Dec. 31, 2004
(Unaudited)
Assets
Current assets:
Accounts receivable, net of allowance of
$133,746 $4,958,170
Other current assets 907,294
Total current assets 5,865,464
Fixed assets, net of accumulated depreciation 5,411,812
Other assets
Goodwill 4,606,520
Other assets 35,338
Total other assets 4,641,858
$15,919,134
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $1,840,806
Current portion of long-term convertible debt;
net of unamortized discount of $73,725 231,276
Current portion of capital lease obligations 6,111
Bank overdraft 630,205
Accounts payable 762,759
Accrued expenses 623,765
Accrued purchased transportation 102,798
Accrued payroll expenses 234,424
Factor line of credit 3,487,968
Related party advances and payables 163,126
Total current liabilities 8,083,238
Long-term liabilities:
Notes payable 2,468,809
Other long-term liabilities 55,923
Total long-term liabilities 2,524,732
Total liabilities 10,607,970
Stockholders' equity:
Common stock; $.001 par value; 25,000,000
shares authorized; 14,500,040 shares
issued and outstanding 14,500
Common stock to be issued 24,000
Additional paid-in capital 33,137,265
Subscription receivable (380,000)
Accumulated deficit (26,304,600)
Treasury stock; at cost, 210,500 shares (1,180,000)
Total stockholders' equity 5,311,165
$15,919,134
XRG Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Three months ended Nine months ended
Dec. 31, Dec. 31,
2004 2003 2004 2003
Revenues $12,130,523 $908,066 $33,985,161 $1,206,291
Cost of revenues 8,078,692 228,130 26,470,154 251,100
Gross profit 4,051,831 679,935 7,515,007 955,190
Selling, general and
administrative
expenses 3,521,524 281,921 10,166,562 1,507,546
Settlement loss - - 744,582 -
3,521,524 281,921 10,911,144 1,507,546
Income (loss) from
operations 530,307 398,014 (3,396,137) (552,356)
Interest expense (482,296) (153,799) (1,606,750) (222,741)
Intrinsic value of
convertible debt and debt
discount for value of
detachable warrants - - (153,844) (551,798)
(482,296) (153,799) (1,760,594) (774,539)
Net income (loss)
applicable to common
shareholders $48,011 $244,215 $(5,156,731)$(1,326,895)
Basic income (loss) per
common shareholder $0.00 $0.22 $(0.49) $(1.59)
Basic weighted average
number of common
shares outstanding 13,920,467 1,110,354 10,456,005 832,791
Diluted income (loss)
per common shareholder $0.00 $0.21 $(0.49) $(1.59)
Diluted weighted
average number of
common shares
outstanding 14,419,348 1,165,123 10,456,005 832,791