EXHIBIT 99.1
INFINITY REPORTS FIRST QUARTER OPERATING RESULTS
COMPANY REPORTS RECORD OIL AND GAS SALES AND PRODUCTION VOLUMES
CHANUTE, KANSAS (May 15, 2003) - INFINITY, INC. (Nasdaq National Mkt: IFNY), an
independent energy exploration/development and oilfield services company, today
reported its operating results for the first quarter of 2003.
For the three months ended March 31, 2003, revenues increased 71% to
approximately $3.6 million, compared with approximately $2.1 million in the
first quarter of 2002. The Company reported a net loss of ($622,022), or ($0.08)
per share, in the most recent quarter, versus a net loss of ($307,776), or
($0.05) per share, in the corresponding period of the previous year. Per share
results were calculated on 7,751,819 weighted average shares outstanding in the
first quarter of 2003, compared with 6,761,024 weighted average common shares
outstanding in the prior-year quarter. No income taxes were accrued in the
quarter ended March 31, 2003, whereas a deferred income tax benefit of $193,000
was recognized in the quarter ended March 31, 2002.
Oil and gas service revenues increased 27% in the first quarter of 2003 to
approximately $1.9 million, when compared with approximately $1.5 million in the
year-earlier quarter. Oil and gas sales rose 143% to approximately $1.7 million,
versus approximately $0.7 million in the first quarter of 2002.
The Company's operating loss improved 28% to ($373,710) in the most recent
quarter, compared with ($503,820) in the quarter ended March 31, 2002 even
though the Company recognized an additional $363,332 in depreciation, depletion
and amortization in the period ended March 31, 2003, when compared with the
period ended March 31, 2002. The Company reported a net loss before income taxes
of ($622,022) in the quarter ended March 31, 2003, compared with a net loss
before income taxes of ($500,776) in the quarter ended March 31, 2002. The
primary reason for the increase in net loss before income taxes related to an
increase in interest and financing costs, which totaled $289,112 in the first
quarter of 2003, versus $6,049 in the first quarter of 2002.
"I am pleased to report that our gross profits increased 87% to approximately
$1.5 million in the first quarter of 2003, largely due to higher oil and gas
sales and an improvement in our oilfield services revenues during the seasonally
slow first quarter, when business is curtailed by winter weather in many
markets," stated Stanton E. Ross, President and Chief Executive Officer of
Infinity, Inc. "Oil and gas sales generated 48% of total revenues in the most
recent quarter, compared with 31% in the first quarter of 2002, and we believe
oil and gas sales could represent a majority of our revenues for the first time
in our Company's history in the quarter ending June 30, 2003. Demand for our
oilfield services improved in the first quarter, when compared with the
prior-year period, following completion of the Powder River Environmental Impact
Study, and we expect sales to improve significantly in the second quarter as the
issuance of drilling permits accelerates in that market."
"The 143% rise in oil and gas sales reflected an increase in the number of
producing wells from five in the first quarter of 2002 to twenty-three in the
most recent quarter, along with higher commodity prices," continued Ross. "We
expect oil and gas production to increase further in the current quarter as we
continue to optimize the capabilities of our existing wells and add compression
capacity in areas where production is currently bypassing the compressor in
order to access the sales line."
THE COMPANY WILL HOST A CONFERENCE CALL ON WEDNESDAY, MAY 21, 2003, AT 11:00
A.M. EASTERN STANDARD TIME TO DISCUSS REPORTED OPERATING RESULTS AND OTHER
CORPORATE DEVELOPMENTS IN GREATER DETAIL. THE DIAL-IN NUMBER FOR THE CALL IS
800-388-8975 (INTERNATIONAL PARTICIPANTS SHOULD DIAL 973-694-2225).
PARTIES INTERESTED IN PARTICIPATING IN THE CONFERENCE CALL SHOULD DIAL IN
APPROXIMATELY TEN MINUTES PRIOR TO 11:00 A.M. EST. THE CALL WILL ALSO BE
BROADCAST LIVE ON THE INTERNET AT HTTP://WWW.VCALL.COM/EVENTPAGE.ASP?ID=83944. A
REPLAY OF THE CONFERENCE CALL WILL BE AVAILABLE TWO HOURS AFTER THE COMPLETION
OF THE CALL, FROM MAY 21, 2003 UNTIL MAY 28, 2003, BY DIALING 800-428-6051
(INTERNATIONAL CALLERS DIAL 973-709-2089) AND ENTERING ACCESS CODE ID #294545.
THE CALL WILL ALSO BE ARCHIVED FOR 90 DAYS AT
HTTP://WWW.VCALL.COM/EVENTPAGE.ASP?ID=83944.
Infinity, Inc. is an independent energy exploration and development company with
a primary focus on coalbed methane projects and emerging exploration areas. The
Company has obtained the rights to develop approximately 210,000 acres for
prospective coalbed methane production in Wyoming and Colorado. Infinity's
Consolidated Oil Well Services, Inc. subsidiary provides oilfield services
(including well enhancement, fracturing, cementing, acidizing and nitrogen
pumping) in Kansas, Oklahoma and Wyoming. Infinity, Inc. is headquartered in
Chanute, Kansas, and its common stock is listed on The Nasdaq National Market
under the symbol "IFNY".
This press release includes statements that 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 provisions 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 could cause or contribute to such differences include, but are not
limited to, fluctuations in the prices of oil and gas, uncertainties inherent in
estimating quantities of oil and gas reserves and projecting future rates of
production and timing of development activities, competition, operating risks,
acquisition risks, liquidity and capital requirements, the effects of
governmental regulation, adverse changes in the market for the Company's oil and
gas production, continued acceptance of the Company's oilfield services in the
marketplace, dependence upon third-party vendors, and other risks detailed in
the Company's periodic report filings with the Securities and Exchange
Commission. There can be no assurance that an agreement or agreements relating
to any strategic alternatives involving the Company and a third party or third
parties will be reached, or that if an agreement or agreements are reached, that
the transactions contemplated by such agreements will be consummated. By making
these forward-looking statements, the Company undertakes no obligation to update
these statements for revisions or changes after the date of this release.
For additional information, please contact:
Stanton E. Ross, President/CEO of Infinity, Inc. at (620) 431-6200
or
RJ Falkner & Company, Investor Relations Counsel at (800) 377-9893 or via
e-mail at INFO@RJFALKNER.COM
------------------
(Financial Highlights Follow)
-2-
INFINITY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
------
March 31, 2003 Dec. 31, 2002
-------------- -------------
CURRENT ASSETS (Unaudited)
Cash $ 264,624 $ 867,017
Accounts Receivable, less allowance for doubtful
Accounts of $25,000 1,700,113 1,493,224
Inventories 265,991 340,217
Prepaid expenses and other 322,692 278,510
------------ ------------
Total current assets 2,553,420 2,978,968
Property and equipment, at cost, less accumulated
depreciation and impairment 10,987,490 10,315,068
Oil and gas properties, using full cost accounting net
of accumulated depreciation, depletion and amortization
Subject to amortization 21,902,807 19,107,427
Not subject to amortization 13,752,862 13,176,850
Intangible assets, at cost, less accumulated amortization 5,179,615 5,299,881
Note receivable, less current portion 1,593,385 1,597,053
Other Assets, net 800,374 655,022
------------ ------------
Total assets $ 56,769,953 $ 53,130,269
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes Payable $ 1,000,000 $ --
Current portion of long-term debt 5,227,255 2,227,195
Accounts Payable 3,252,250 2,875,900
Accrued Expenses 1,452,117 969,526
------------ ------------
Total Current Liabilities 10,931,622 6,072,621
Long-term Liabilities
7% subordinated convertible notes payable 12,040,000 12,540,000
8% subordinated convertible notes payable 3,128,000 4,243,000
Long-term debt, less current portion above 4,997,960 7,464,156
Asset retirement obligations 451,578 --
------------ ------------
Total Liabilities 31,549,160 30,319,777
Stockholders' Equity
Common stock, par value $.0001, authorized 300,000,000
shares, issued and outstanding 7,942,244 shares;
7,558,462 shares 794 756
Additional paid-in-capital 25,931,274 22,870,449
Accumulated other comprehensive loss (105,841) (77,301)
(Accumulated Deficit)/Retained Earnings (605,434) 16,588
------------ ------------
Total stockholders' equity 25,220,793 22,810,492
------------ ------------
Total Liabilities and stockholders' equity $ 56,769,953 $ 53,130,269
============ ============
-3-
INFINITY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended March 31,
----------------------------
2003 2002
----------- -----------
Revenues
Oil and Gas Service Operations $ 1,867,307 $ 1,459,853
Oil and Gas Sales 1,738,136 666,140
----------- -----------
Total Revenue 3,605,443 2,125,993
Cost of sales
Oil and Gas Service Operations 1,204,947 904,335
Oil and Gas Production Expenses and Taxes 950,323 413,815
----------- -----------
Total cost of sales 2,155,270 1,318,150
----------- -----------
Gross profit 1,450,173 807,843
Operating expenses 1,102,233 953,345
Depreciation, depletion and amortization 721,650 358,318
----------- -----------
Operating loss (373,710) (503,820)
----------- -----------
Other income (expense)
Interest Income & Other Income 40,800 1,095
Interest Expense & Finance (289,112) (6,049)
Gain on sales of assets and marketable securities -- 7,998
----------- -----------
Total other income (expense) (248,312) 3,044
----------- -----------
Net loss before income taxes
(622,022) (500,776)
Income tax benefit -- 193,000
----------- -----------
Net loss $ (622,022) $ (307,776)
----------- -----------
Net loss per common share $ (0.08) $ (0.05)
----------- -----------
Net loss per diluted common share $ (0.08) $ (0.05)
----------- -----------
Weighted Average Basic Shares Outstanding 7,751,819 6,761,024
Weighted Average Diluted Shares Outstanding 7,751,819 6,761,024
-4-