‘Frustrating’ quarter for Mullen Transportation

ALDERSYDE, Alta. (Oct. 24, 2002) — In what the company president called a “frustrating” business climate, Mullen Transportation saw earnings and revenues drop significantly during its 2002 third quarter.

Earnings for the company’s third quarter ended Sept. 30 fell to 24 cents a share versus 44 cents the year before. Consolidated revenues dropped to $67.1 million, compared to $86.2 million a year earlier.

For the first nine months of the year, Mullen reported revenues of $217.1 million, operating income $31.8 million and net income $14.0 million, or 96 cents per share. For the same period in 2001, the company generated $269.8 million in consolidated revenues, operating income of $50.6 million, and net income of $23.8 million, or $1.67 per share. The year-to-date results for 2001 reflect the spin off of the company’s logistics division into a separate and distinct publicly listed and traded corporation, Moveitonline Inc.

The company blamed its financial performance on lower oil and gas drilling levels in Western Canada.

“This is a very frustrating market,” said Murray Mullen, chairman, president, and chief executive officer. While the company has performed well on the road and on the balance sheet, Mullen said its financial performance is below expectations in spite of the growth in the economy. “From our perspective, however, the growth has more to do with consumer spending than capital investment and since our customer base is primarily associated with the latter, the demand for our services has been impacted,” he added.

“But cycles are self-correcting and I am convinced that business will have to start investing again. In the oil and gas sector, for example, commodity prices are higher than they were earlier this year, translating into higher industry cash flows. Assuming history holds true, we should see the industry invest in drilling activity and capital projects in 2003.”