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 activities during 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.
Forward-Looking Statements
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,
281-651-0200Chairman of the Boardwww.coiltubingtechnoloy.com
Coil Tubing Technology (CE) (USOTC:CTBG)
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