Streicher Mobile Fueling, Inc. Announces Financial Details of Shank Services Acquisition; Conference Call to Be Held Tuesday, Ma
May 09 2005 - 9:23PM
Business Wire
STREICHER MOBILE FUELING, INC. (NASDAQ: FUEL and FUELW) (the
"Company"), a leading out-sourced refueling and fuel management
solution provider for vehicle and equipment fleets, announced today
that it filed Form 8-K/A related to the acquisition by its wholly
owned subsidiary, SMF Services, Inc., of Houston-based Shank
Services, a provider of commercial fueling and heavy haul
transportation services with operations in Houston, Dallas/Forth
Worth, Austin and San Antonio, Texas. Total consideration for the
Shank Services purchase was $7.7 million, consisting of $5.8
million paid in cash at the February 18, 2005 closing and $1.9
million to be paid contingent upon achieving certain financial
performance objectives during an eighteen month period ending
December 31, 2005 under a two year deferred payment promissory
note. The purchase price included the vehicles, trailers, tanks,
other operating equipment, business interests and related
intangibles of the Shank Services business, valued at $5.2 million,
based on a multiple of four times a $1.3 million annualized
projected EBITDA (projected earnings before interest, taxes,
depreciation and amortization - a non-GAAP measure) for the Shank
Services business. Purchase price adjustments of $480,000 primarily
relating to pending equipment purchases and the $1.9 million
deferred payment promissory note resulted in a net cash payment of
$2.8 million for the operating assets and related business. The
Company paid an additional $3.0 million for the net working
capital, including accounts receivable, inventory and certain
pre-paid items, which resulted in the total cash consideration paid
of $5.8 million. The Company did not assume any material Shank
Services liabilities or debt. The Company believes that projected
cost reductions from more effective bulk fuel purchasing, lower
insurance premiums, improved delivery scheduling, decreased
equipment rentals and better utilization of operations personnel
and equipment could add $500,000 in post integration annualized
Shank Services business EBITDA to the $1.3 million annualized
projected EBITDA. These savings, together with increasing sales
volumes from a consolidated Company and Shank Services business
concentrated marketing and sales program, are expected to provide a
positive impact on future cash flows and earnings, as early as the
first quarter of the Company's 2006 fiscal year commencing July 1,
2005. Richard E. Gathright, Chairman and CEO commented, "Having
reorganized and refinanced our core mobile fueling business, the
Company has reaffirmed its corporate goals to expand services to
our more than 1,200 active customers and to broaden and diversify
our service portfolio within the energy and transportation
logistics sectors. We view the acquisition of the Shank Services
business as an important initial step in our strategy to add core
complementary businesses and accelerate our growth in Texas and
adjoining states. Since acquiring the Shank Services business in
February, the integration process has progressed smoothly and we
would expect to generate efficiency gains in fleet utilization and
operating costs in support of both existing and new geographical
markets." "This acquisition generated nearly $40 million in annual
revenues last year, consisting of commercial fuel sales for both
off-road applications such as construction, agriculture, marine and
rail as well as for over-the-road trucking operations. Furthermore,
it gives the Company an initial presence in the packaging and
distribution of petroleum lubricants and provides an entry into
specialized transportation and logistics for its construction
customers. We now have 18 units to serve the heavy haul oversized
construction equipment market, with a strong presence in Houston,
Austin and Dallas. The heavy haul operations which commenced in
2002 provide an excellent opportunity for the Company to expand its
services to refinery and chemical plant operations." Mr. Gathright
concluded, "We are aggressively pursuing additional acquisition
opportunities, including commercial bulk fuel and lubricant
distributors and terminals; unattended card lock commercial
refueling stations; fleet credit card services; propane storage and
delivery services; mobile refueling operations; and heavy haul
transportation providers. Our experienced management team is
committed to building and operating a large and diverse
organization which serves the energy and transportation industries
and generating increasing equity value for our shareholders."
CONFERENCE CALL As previously announced, management will host a
conference call on Tuesday, May 10, 2005 at 3:30 P.M. ET, to
further discuss the aspects of the Shank Services acquisition that
closed on February 18, 2005. The conference call will be available
via teleconference by dialing 800-599-9795 (domestic) or
617-786-2905 (international), using Pass Code 84259035. There will
also be a web-cast over the Internet at www.streetevents.com and
www.mobilefueling.com. An audio digital replay of the call will be
available from Tuesday, May 10, 2005, at 6:30 P.M. ET until
Midnight ET on Tuesday, May 17, 2005, by dialing 888-286-8010
(domestic) or 617-801-6888 (international), using Pass Code
#48833040. A web archive will be available for 30 days at
www.streetevents.com and www.mobilefueling.com. About Streicher
Mobile Fueling, Inc. Streicher Mobile Fueling provides integrated
out-sourced energy and transportation logistics to the trucking,
construction, energy, chemical and government service industries.
It offers commercial mobile and bulk fueling, lubricant and fuel
management services for vehicle and equipment fleets, as well as
short and long distance specialized heavy and ultra-heavy hauling
transportation and fueling services. Its energy solutions and
fueling alternatives which include the use of the Company's
proprietary electronic fuel tracking system assist fleet managers
in containing the cost of operating their equipment, and alleviate
security and environmental concerns associated with off-site
refueling and on-site storage. The Company conducts operations from
20 locations serving metropolitan markets in California, Florida,
Georgia, Maryland, North Carolina, Pennsylvania, Tennessee, Texas,
Virginia and Washington, D.C. Forward Looking Statements This press
release includes "forward-looking statements" within the meaning of
the safe harbor provision of the Private Securities Litigation
Reform Act of 1995. For example, predictions or statements of
belief or expectation concerning the future diversification or
expansion plans of the Company, anticipated cost savings from
integration of the Shank Services business and potential
improvements in the EBITDA of the Shank Services business are all
"forward looking statements" which should not be relied upon. Such
forward-looking statements are based on the current beliefs of the
Company and its management based on information known to them at
this time. Because these statements depend on various assumptions
as to future events, they should not be relied on by shareholders
or other persons in evaluating the Company. Although management
believes that the assumptions reflected in such forward-looking
statements are reasonable, actual results could differ materially
from those projected. There are numerous risks and uncertainties
which could cause actual results to differ from those anticipated
by the Company, including but not limited to those cited in the
"Certain Factors Affecting Future Operating Results" section of the
Company's Form 10-K for the year ended June 30, 2004.
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