Operating expenses were 77.3% of revenue in the quarter compared to 82.8% in the same quarter last year. The quarterly performance is in line the Company's year-to-date performance. Expenses were lower, as a percent of revenue, due to improved bidding and a greater proportion of hourly-based work.
General and administrative expenses were $2.3 million, up from $1.3 million last year. Included in costs this year is $0.5 million related to one-time acquisition costs on the NAP acquisition. In addition, expenses were up due to the greater level of activity.
Amortization of property, plant and equipment was $1.4 million compared to $1.3 million in the prior period reflecting a higher level of fixed assets in the period, partly from the NAP acquisition. In addition, the Company recorded $1.7 million of amortization of the value attributed to a customer contract. This charge completely amortized this asset as the benefit of this asset was obtained during the period from the acquisition date to the year end.
Net finance costs of $0.3 million were approximately the same as last year.
The Company recorded a one-time non-cash gain of $2.2 million related to the NAP acquisition. This gain arose because the value of the assets obtained in this acquisition exceeded the purchase price.
Income tax expense in the quarter of $0.8 million was at an effective tax rate of 12.2%. This is below the expected rate of 25.0% due mainly to the inclusion of the gain from business combination which is not subject to tax. On a year-to-date basis, the effective tax rate is 23.9%, in line with statutory rates after adjusting for the gain from business combination.
Net earnings were $5.6 million ($0.23 per share) compared to $2.1 million ($0.08 per share).
The Company expects its revenues for the first quarter of 2013 will be higher than the revenues recorded in the first quarter last year. The increase will be attributable to revenues generated from the pipeline construction and maintenance business acquired from North American Pipeline Inc. in November 2012. The Company will continue to actively bid new jobs. The continued low price of natural gas could affect future levels of activity in the areas where the Company is active.
Macro's core business is providing pipeline and facilities construction and maintenance services to major companies in the oil and gas industry in northeastern B.C. and northwestern Alberta. The Company's corporate office is in Calgary, Alberta. Its shares are listed on the TSX Venture Exchange under the symbol MCR. Information on the Company's principal operating unit, Macro Industries Inc., can be found at www.macroindustries.ca.
Certain statements in this news release may include forward-looking information that involves various risks and uncertainties. These may include, without limitation, statements regarding expected revenues, expenses and industry trends and the pursuit of strategic acquisitions. These risks and uncertainties include, but are not restricted to, global economic conditions, government regulation of energy and resource companies, seasonal weather patterns, maintaining and increasing market share, terrorist activity, the price and availability of alternative fuels, the availability of pipeline capacity, and potential instability or armed conflict in oil producing regions. These risks and uncertainties may cause actual results to differ from information contained herein. There can be no assurance that such forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These statements are based on the estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, the Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Macro Enterprises Inc.
President and C.E.O.
Macro Enterprises Inc.
T. Jerrold Jackson
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