Universal Bioenergy Inc., (OTCQB: UBRG), a publicly traded independent diversified energy company, announced today that it has filed its Quarterly Report on Form 10-Q for its fiscal second quarter ended December 31, 2013 with the Securities and Exchange Commission. The Report contains the Company's financial statements, management's discussion and analysis (MD&A), its plans and future outlook and other disclosures. The Results of Operations was excerpted from the Form 10-Q Report.
The Company projects that it will continue to experience significant growth in revenues in the next 12 months through higher sales of natural gas, propane, petroleum products, coal and electric power.
Results of Operations
Revenues
Our revenues for the three months period ended December 31, 2013, increased compared to the three months period ended December 30, 2012. Our primary revenues from this period are from the sale of natural gas and propane. Our revenues for the three and six months ended December 31, 2013 were $18,705,137 and $32,577,523 respectively, as compared to $13,322,660 and $28,885,520 respectively for the same periods in 2012. This resulted in an increase of $3,692,003 in revenues or 12.78% over the previous year.
Our Cost of Sales for the three and six months ended December 31, 2013 were $18,685,525 and $32,545,212 respectively, as compared to $13,303,088 and $28,841,943 for the same periods in 2012.
We incurred losses of $461,400 for the six months ended December 31, 2013; and $874,770 for the same period in 2012. Our accumulated deficit since our inception through December 31, 2013 amounts to $22,539,221. We did not issue any common shares for services for this period which had an aggregate fair value of approximately $0.00 that was included in the $360,281 in general and administrative expenses for the six month period ended December 31, 2013.
We also incurred interest expenses of $295,204 for the six month period ended December 31, 2013. Excluding the value of the common stock that was issued for services and interest expenses, which together totaled $295,204, would correspondingly reduce our net loss of $461,400 to an adjusted net loss of $166,196 for the three month period ending December 31, 2013. Based on an adjusted net loss of $166,196, this loss equals only 0.51% of our total revenues of $32,577,739 for the six month period ended December 31, 2013, as compared to 6.69% for the same period ended 2012.*
Operating Costs and Expenses
Our Cost of Sales for the three months ended December 31, 2013 were $18,685,525 as compared to $13,303,088 for the same period in 2012, and our Cost of Sales for the six months ended December 31, 2013 were $32,545,312 as compared to $28,841,943 for the same period in 2012. This was an increase of $3,703,369 or 12.84% in our Cost of Sales. Our primary operation is the marketing of natural gas, propane and coal to our customers. Our total operating expenses for the three months ended December 31, 2013 were $205,050, as compared to $407,702 for the same period in 2012 and for the six months ended December 31, 2013 were $361,589 as compared to $769,261 for the same period in 2012. We pay our employees and consultants largely in common shares as our cash availability is currently limited.
We decreased our total operating expenses from $769,261 for the six month period ending December 31, 2012, by a total of $407,672, or by 53.00%, to $361,589 for the period ending December 31, 2013.
Assets
Our "total assets" have decreased by $3,142,823, or 25.41%, to $9,226,706 for the period ending December 31, 2013, compared to $12,369,529 for the year ended June 30, 2013. This was due to a decrease in the amount of our Accounts Receivables from the sales of natural gas.
Working Capital
Our working capital requirements increased, and we incurred significant fluctuations in our working capital for this period. This resulted in a working capital deficit of ($1,547,430) for the period ending December 31, 2013, as compared to a working capital deficit of ($1,021,031) for the period ending December 31, 2012. This increased our working capital deficit by $526,399 or by 51.56%. The working capital deficit was primarily due to the costs of pursuing acquisitions, funding of NDR Energy's operating expenses, the amount of funds borrowed from our creditors, purchase of natural gas inventories, our capital spending exceeding our cash flows from operations, and from the increase in accrued expenses.
Cash Flows
The prices and margins in the energy industry are normally volatile, and are driven to a great extent by market forces over which we have no control. Taking into consideration other extenuating factors, as these prices and margins fluctuate, this would result in a corresponding change in our revenues and operating cash flows. Our cash flows for the six months ended December 31, 2013 and 2012 were as follows:
Cash Flows from Operating Activities
Our cash, used in operating activities, for the six months ended December 31, 2013, was $218,245, as compared to cash used in operating activities of $1,429,832 for the six months ended December 31, 2012. The decrease was primarily attributable to amortization of beneficial conversion feature, the accruing certain management salaries, and a reduction of prepaid expenses.
Cash Flows from Investing Activities
Cash used in investing activities for the six months ended December 31, 2013 was $40,050 as compared to cash provided by investing activities of $0.00 for the six months ended December 31, 2012.
Cash Flows from Financing Activities
Our cash provided by financing activities for the six months ended December 31, 2013 was $259,550, as compared to $569,067 for the six months ended December 31, 2012. The net cash used in financing activities is primarily attributed to our Notes Payables.
Liabilities / Indebtedness
Current liabilities decreased to $7,586,534 for the six months ended December 31, 2013, compared to $10,197,223 for the same period in 2012. This 25.60% decrease was primarily due to a $3,078,704 decrease in accounts payable from the purchasing costs and supplies of natural gas. Our long term liabilities are $341,653 for the period ending December 31, 2013, compared to $976,248 for the six months ending December 31, 2012. In the past twelve months the Company has significantly reduced its borrowings from its creditors to further reduce its short and long-term debt.
Universal's President Vince M. Guest states, "We are very excited about the financial and operating results for the second quarter of our fiscal year. Our sales increase of 12.78% is very significant, and puts us back in the mode of a double-digit high growth company. Everyone at Universal and NDR Energy Group worked very hard to improve our financial position by reducing our operating expenses by 53.00%, and decreasing our liabilities by 25.60%. We have some very exciting plans for the rest of the fiscal year, and anticipate that these plans could produce higher sales and begin to generate positive earnings in the next six months. We are working on a number of significant energy transactions that we anticipate closing soon, that should have a very positive effect on our stock price and our shareholders."
The full Form 10-Q Quarterly Report is available for viewing on the SEC's website and it is also available at our website at www.universalbioenergy.com Investor Relations, SEC Filings section. *This disclosure of information as presented is a non-GAAP accounting measure, and is not based on GAAP accounting principles or guidelines.
About Universal Bioenergy Inc.
Founded in 2004, Universal Bioenergy Inc., is a publicly traded independent diversified energy company that produces and markets natural gas, petroleum, coal and propane. We market energy resources to the largest public utilities, electric power producers and local gas distribution companies in the U.S., that serve millions of commercial, industrial and residential customers. We are also engaged in the acquisition and development of existing or recently discovered oil and gas fields, leases and surface coal mines. For more information visit www.universalbioenergy.com
Safe Harbor Statement - There are matters discussed in this media information that are forward looking statements within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. Such statements are only forecasts and actual events or results may differ materially from those discussed. For a discussion of important factors which could cause actual results to differ from the forward looking statements, refer to Universal Bioenergy Inc.'s most recent annual report and accounts and other SEC filings. The company undertakes no obligation to update publicly, or revise, forward looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
For inquiries contact:
Media Relations:
Solomon Ali
704-837-5705
SOURCE: Universal Bioenergy Inc.
Associated Documentation:
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UBRG_3-6-14_ETL_SMU.docx
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