Earnings for the Period Total $3.07 per Diluted Share
RIVERTON, Wyo., Aug. 16 /PRNewswire-FirstCall/ -- U.S. Energy Corp. (NASDAQ:USEG) today announced record net earnings for the second quarter of 2007 totaling $59.3 million, or $2.65 per diluted share, compared with a loss of ($6.2 million), or ($0.34) per share, in the comparable prior-year period. The significant earnings increase was primarily due to the sale of the Company's uranium assets to Uranium One for a pretax gain of $95.3 million. (See http://www.usnrg.com/ for a full explanation of results.) "U.S. Energy Corp. is in its best financial condition in the Company's history," stated Keith Larsen, Chief Executive Officer of the Company. "As a result of the sale of our uranium assets, the Company currently has approximately $86.7 million in working capital, which will principally be re- invested in new natural resource opportunities with the goal of duplicating similar gains in the future." HIGHLIGHTS OF QUARTER AND SIX MONTHS ENDED JUNE 30, 2007
Results of Operations The sale of U.S. Energy Corp.'s uranium assets to Uranium One generated net income before taxes of $95.3 million and $93.6 million for the three and six months ended June 30, 2007 respectively. This represents increases in earnings before taxes of $101.5 million and $101 million, respectively, from the reported losses of the three and six months ended June 30, 2006. Net earnings after taxes for the three and six months ended June 30, 2007 totaled $59.3 million and $58 million, respectively, or $2.95 and $2.94 per basic share ($2.65 and $2.63 per diluted share). Operating revenues for the three and six months ended June 30, 2007 were comparable to those recorded during the six months ended June 30, 2006.
Operating costs and expenses increased during the three and six months ended June 30, 2007 by $6.0 million and $5.6 million, respectively, over those recorded during the three and six months ended June 30, 2006. The increases were result of increased activity on the Company's mineral claims and higher General and Administrative expenses, which increased by $4.9 million primarily as a result of employee compensation.
Liquidity and Capital Resources The liquidity position of the U.S. Energy Corp. is the strongest it has ever been during the Company's forty year history. At June 30, 2007, the Company had $8.9 million in cash on hand, along with $92.9 million in marketable securities. Current assets at June 30, 2007 approximated $110.3 million, compared with current liabilities of $23.7 million. The Company's working capital at June 30, 2007 totaled $86.7 million, and its current ratio was 4.7-to-1.0.
Current liabilities at June 30, 2007 consisted primarily of income taxes payable of $20.0 million (primarily related to the gain on sale of uranium assets), dividends payable of $2.1 million and accrued compensation relating to the retirement policy for executives of $1 million. The current portion of long-term debt was $0.1 million. This, along with the long-term portion of the Company's debt of $0.3 million at June 30, 2007, resulted in total debt owed by the Company of $.04 million.
Second Quarter Conference Call/Webcast When: Friday, August 17th at 12:00 PM EDT (10:00 AM MDT) Dial-In Number: (866) 257-9956 (Within US and Canada),
(706) 645-9218 (International) Replay Number: (800) 642-1687 (Within the US and Canada),
(706) 645-9291 (International). ID Number #13073592. The replay will be available starting at
approximately 2:00 PM EDT on August 17th and will be
available for seven days through 11:59 PM EDT on
Friday, August 24th.
Webcast: The live webcast can be accessed by going to
http://www.videonewswire.com/event.asp?id=41856. Web participants are encouraged to go to the site at
least 15 minutes prior to the start of the call to
register, download and install any necessary audio
software. U.S. ENERGY CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS June 30, December 31,
2007 2006
CURRENT ASSETS:
Cash and cash equivalents $8,948,400 $16,973,500
Marketable securities
Held to maturity - treasury
bills 70,330,100 --
Available for sale securities 22,464,800 1,148,500
Trading securities 94,300 123,400
Accounts receivable
Trade 27,800 156,500
Reimbursable project costs 631,200 188,400
Sale of marketable securities 6,223,300 --
Note receivable -- 560,500
Assets held for sale -- 9,686,300
Deferred tax assets 1,413,500 14,321,600
Prepaid expenses and other
current assets 184,000 166,500
Total current assets 110,317,400 43,325,200 INVESTMENTS: 27,000 27,000 PROPERTIES AND EQUIPMENT: 14,429,400 11,563,500
Less accumulated depreciation,
depletion and amortization (5,635,900) (5,454,200)
Net properties and equipment 8,793,500 6,109,300 OTHER ASSETS:
Deferred tax assets 54,500 610,200
Real estate held for development 1,549,700 --
Real estate held for resale 1,819,700 1,819,700
Deposits and other 653,700 10,000
Total other assets 4,077,600 2,439,900
Total assets $123,215,500 $51,901,400
U.S. ENERGY CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY June 30, December 31,
2007 2006
CURRENT LIABILITIES:
Accounts payable $298,200 $1,115,000
Accrued compensation expense 955,500 1,190,200
Dividends payable 2,131,900 --
Income taxes payable 19,906,200 --
Current portion of long-term debt 129,600 937,200
Liabilities held for sale -- 7,375,800
Refundable deposits -- 800,000
Other current liabilities 231,900 177,000
Total current liabilities 23,653,300 11,595,200 LONG-TERM DEBT, net of current portion 247,500 294,900 ASSET RETIREMENT OBLIGATIONS 129,300 124,400 OTHER ACCRUED LIABILITIES 401,400 462,700 MINORITY INTERESTS 8,361,900 4,700,200 COMMITMENTS AND CONTINGENCIES FORFEITABLE COMMON STOCK, $.01 par
value
0 and 297,540 shares issued,
respectively
forfeitable until earned -- 1,746,600 PREFERRED STOCK,
$.01 par value; 100,000 shares
authorized
No shares issued or outstanding -- -- SHAREHOLDERS' EQUITY:
Common stock, $.01 par value;
unlimited shares authorized;
20,829,628
and 19,659,591 shares issued
net of
treasury stock, respectively 208,300 196,600
Additional paid-in capital 77,503,800 72,990,700
Retained earnings (accumulated
deficit) 16,743,400 (39,101,900)
Treasury stock at cost, 497,845
shares (923,500) (923,500)
Unrealized (loss) gain on
marketable securities (2,619,400) 306,000
Unallocated ESOP contribution (490,500) (490,500)
Total shareholders' equity 90,422,100 32,977,400
Total liabilities and
shareholders' equity $123,215,500 $51,901,400
U.S. ENERGY CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) Three months ended June 30, Six months ended June 30,
2007 2006 2007 2006
OPERATING REVENUES:
Real estate operations $151,100 $48,000 $184,100 $102,800
Management fees and
other 102,000 100,300 141,000 222,100
253,100 148,300 325,100 324,900 OPERATING COSTS AND
EXPENSES:
Real estate operations 3,100 66,100 169,000 136,300
Mineral holding costs 998,900 682,300 1,795,600 1,183,400
General and
administrative 8,118,400 2,367,300 9,824,000 4,916,000
9,120,400 3,115,700 11,788,600 6,235,700 LOSS BEFORE INVESTMENT
AND PROPERTY
TRANSACTIONS (8,867,300) (2,967,400) (11,463,500) (5,910,800) OTHER INCOME &
(EXPENSES):
Gain on sales of
assets 1,821,200 408,600 1,822,200 2,823,500
Loss on sale of
marketable
securities (6,828,800) -- (6,091,400) --
Gain on foreign
exchange 516,600 -- 516,600 --
Gain on sale of
uranium assets 111,728,200 -- 111,728,200 --
Loss from valuation
of derivatives -- (45,500) -- (630,900)
Loss from Enterra
share exchange -- (3,848,600) -- (3,845,800)
Loss on sale of
investment -- -- -- (27,500)
Dividends 2,700 2,200 5,600 5,000
Interest income 641,100 198,700 867,100 250,000
Interest expense 6,100 (27,600) (49,700) (57,100)
107,887,100 (3,312,200) 108,798,600 (1,482,800) INCOME (LOSS) BEFORE
MINORITY INTEREST,
PROVISION FOR INCOME
TAXES 99,019,800 (6,279,600) 97,335,100 (7,393,600) MINORITY INTEREST IN
(GAIN) LOSS OF
CONSOLIDATED
SUBSIDIARIES: (3,716,800) 43,400 (3,698,600) 47,600 INCOME (LOSS) BEFORE
PROVISION
FOR INCOME TAXES 95,303,000 (6,236,200) 93,636,500 (7,346,000) INCOME TAXES:
Current provision
for (20,620,300) -- (20,620,300) --
Deferred provision
for (15,387,300) -- (15,039,000) --
(36,007,600) -- (35,659,300) -- NET INCOME (LOSS) $59,295,400 $(6,236,200) $57,977,200 $(7,346,000)
U.S. ENERGY CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) Three months ended June 30, Six months ended June 30,
2007 2006 2007 2006
PER SHARE DATA
Basic earnings (loss)
per share $2.95 $(0.34) $2.94 $(0.40) Diluted earnings (loss)
per share $2.65 $(0.34) $2.63 $(0.40) WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic 20,087,999 18,300,530 19,752,827 18,213,107
Diluted 22,378,861 18,300,530 22,036,586 18,213,107
About U.S. Energy Corp.
U.S. Energy Corp. is a diversified natural resource company with interests in molybdenum, gold, and oil and gas. As a transitional owner of assets, U.S. Energy Corp. acquires properties on favorable terms, adds value through the application of its expertise, and exits the investment through a joint venture or sale to a strategic buyer. While the Company's primary emphasis is upon investments in the natural resources sector, it is also broadening its business interests to include cash-flow-generating investments driven by surging growth created by energy and mining activity in the intermountain west region of the United States.
The Company is headquartered in Riverton, Wyoming, and its common stock is listed on The NASDAQ Capital Market under the symbol "USEG".
Disclosure Regarding Mineral Resources
Under SEC and Canadian Regulations;
and Forward-Looking Statements The Company owns or may come to own stock in companies which are traded on foreign exchanges, and may have agreements with some of these companies to acquire and/or develop the Company's mineral properties. Examples of these other companies are Sutter Gold Mining Inc. and Kobex Resources Ltd. These other companies are subject to the reporting requirements of other jurisdictions.
United States residents are cautioned that some of the information available about our mineral properties, which is reported by the other companies in foreign jurisdictions, may be materially different from what the Company is permitted to disclose in the United States.
This news release includes statements which may constitute "forward- looking" statements, usually containing the words "believe," "estimate," "project," "expect," or similar expressions. These statements are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, future trends in mineral prices, the availability of capital, competitive factors, and other risks. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revision or changes after the date of this release.
For further information on the differences between the reporting limitations of the United States, compared to reports filed in foreign jurisdictions, and also concerning forward-looking statements, please see the Company's Form 10-K ("Disclosure Regarding Forward-Looking Statements"; "Disclosure Regarding Mineral Resources under SEC and Canadian Regulation"; and "Risk Factors"); and similar disclosures in the Company's Forms 10-Q. DATASOURCE: U.S. Energy Corp.
CONTACT: Keith G. Larsen, CEO, or Mark J. Larsen, President, both of U.S. Energy Corp., +1-307-856-9271 Web site: http://www.usnrg.com/
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