Epic Energy Resources Announces First Quarter Results

HOUSTON, May 13 /PRNewswire-FirstCall/ -- Epic Energy Resources, Inc. (OTC Bulletin Board: EPCC) ("Epic") a provider of engineering, management consulting, training and data management services to the energy industry, today announced its financial and operating results for the three months ended March 31, 2010.

"The first quarter or 2010 was challenging for Epic," said John Ippolito, President and CEO. "Revenue decreased 33.2% compared to the same period in 2009. Loss from operations was $5.9 million and EBITDA was ($1.1) million. The Company is taking stringent measures to align our costs with our revenue. This effort should be largely complete by June."

First Quarter 2010 Financial Results:

• Revenues were $6.0 million for the first quarter of 2010, a 33.2% decrease compared to the $9.0 million for the first quarter of 2009.
  • Consulting fee revenue was $4.1 million for the first quarter of 2010, a 47.7% decrease as compared to $7.8 million for the first quarter of 2009.
  • Reimbursed materials revenue was $1.9 million for the first quarter of 2010, a 57.3% increase as compared to $1.2 million for the first quarter of 2009.
• Loss from operations was $5.9 million for the first quarter of 2010, a 659% increased loss compared to a $0.8 million loss for the first quarter of 2009.
• EBITDA was ($1.1) million for the first quarter of 2010, a 152% decrease compared to a $2.2 million for the first quarter of 2009.  EBITDA is a non-GAAP measure and is defined and reconciled to net income later in this press release.  
• During the first quarter of 2010, Epic had a net loss of $5.6 million, or ($0.13) per weighted average common shares outstanding, a 452% decrease compared to a net loss of $1.0 million, or $0.02 per share in the first quarter of 2009. Net loss in the quarter was negatively impacted by the following non-cash items: impairment charges to intangible assets, stock compensation expense, non-cash interest expense and depreciation and amortization expense.  Excluding total non-cash expenses of $4.8 million, the first quarter 2010 net loss would have been $0.8 million or ($0.02) per share.

Conference Call

Epic will host a conference call to discuss its first quarter 2010 results on May 13, at 10:00 a.m. Eastern Time (9:00 a.m. Central). To access the call, please dial (888) 228-0568 at least 10 minutes prior to the start time. A telephonic replay of the conference call will be available on our website at www.1epic.com as well. For more information, please contact Mike Kinney at (281)863-9635 or email at [email protected].

About Epic

Epic Energy Resources, Inc. is a Houston based integrated energy services company.  Epic provides business and operations consulting; engineering, procurement, and construction management; production operations & maintenance; specialized training, operating manuals, data management and data integration focused primarily on the upstream, midstream and downstream energy infrastructure.  Epic is headquartered at 1450 Lake Robbins Drive, Suite 160, The Woodlands, Texas 77380. Office - 281-419-3742, www.1epic.com.

Forward Looking Statements

Certain statements included in this release constitute forward-looking statements.  These forward-looking statements are based on management's belief and assumptions derived from currently available information.  Although Epic Energy Resources ("Epic") believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Actual results could differ materially from forward-looking statements expressed or implied herein as a result of a variety of factors including, but not limited to: a decline in the price of, or demand for, oil and gas, demand for Epic's services, loss or unavailability of key personnel, inability to recruit or retain personnel, competition for customers and contracts, various potential losses associated with fixed-price contracts,  general economic conditions; and other financial, operational and legal risks and uncertainties detailed from time to time in Epic's SEC filings.  Epic does not undertake any obligation to publicly update forward looking statements contained herein to reflect subsequent events or circumstances.

(1) This earnings release contains references to the non-GAAP financial measure of earnings (net income) before interest, taxes, depreciation and amortization, or "EBITDA."  EBITDA should not be considered in isolation or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP.  However, Epic believes EBITDA is a useful supplemental financial measure used by its management and directors and by external users of its financial statements, such as investors, to assess:

• The financial performance of its assets without regard to financing methods, capital structure or historical cost basis;
• The ability of its assets to generate cash sufficient to pay interest on our indebtedness; and
• Its operating performance and return on invested capital as compared to those of other companies in the well servicing industry, without regard to financing methods and capital structure.

EBITDA has limitations as an analytical tool and should not be considered an alternative to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Limitations to using EBITDA as an analytical tool include:

• EBITDA does not reflect its current or future requirements for capital expenditures or capital commitments;
• EBITDA does not reflect changes in, or cash requirements necessary to service interest or principal payments on, its debt;
• EBITDA does not reflect income taxes;
• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and
• Other companies in its industry may calculate EBITDA differently than Epic does, limiting its usefulness as a comparative measure.

The following table presents a reconciliation of net income to EBITDA, which is the most comparable GAAP performance measure, for each of the periods indicated:

SOURCE Epic Energy Resources, Inc.