Exchange: OTC | Sector: Energy | Industry: Oil Gas Exploration Production
Q4 2024
Published: May 28, 2024
Earnings Highlights
Revenue of $0.08M up 28.1% year-over-year
EPS of $0.00 increased by 22.2% from previous year
Gross margin of -146.1%
Net income of -194.98K
""Our operational focus needs to shift towards efficiency and leveraging our existing assets to drive better outcomes in this volatile market."" - CEO, John Norris
Norris Industries Inc (NRIS) Q4 2024 Financial Results Report: Navigating Challenges and Opportunities in Energy Sector
Executive Summary
Norris Industries Inc (NRIS) reported a challenging fourth quarter of 2024, evident from a significant decrease in revenue to $78,540 against a cost of revenue amounting to $193,279, resulting in a gross loss of $114,739. The company’s operating income and net income further highlighted operational difficulties, with the reporting of an operating loss of $162,360 and net income of -$194,980. Despite these hurdles, management expressed optimism in comments about potential strategic acquisitions and improvements in operations, suggesting a longer-term recovery plan in response to current market conditions.
With a year-over-year revenue decline of 28.06% and a quarterly decrease of 9.84%, Norris must reassess its business model to address cash flow issues and mounting losses. The management's guidance projected a cautious recovery pathway as commodity prices stabilize, focusing on improving operational efficiencies while maximizing asset utilization in their Texas oil fields.
Norris's financial position reflects deteriorating profit margins, emphasizing the need for operational adjustments. The significant increase in costs, particularly other expenses amounting to $329,379,273, indicates challenges in managing operational expenditures efficiently. This spike suggests a need for cost containment strategies moving forward.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
78.54K
28.06%
-9.84%
Gross Profit
-114.74K
5.90%
-44.99%
Operating Income
-162.36K
11.95%
-46.15%
Net Income
-194.98K
19.89%
-36.34%
EPS
0.00
22.22%
-31.25%
Key Financial Ratios
currentRatio
0.59
grossProfitMargin
-146.1%
operatingProfitMargin
-207%
netProfitMargin
-248%
returnOnAssets
-42.6%
returnOnEquity
3.95%
debtEquityRatio
-0.85
operatingCashFlowPerShare
$-0
freeCashFlowPerShare
$-0
priceToBookRatio
-0.61
priceEarningsRatio
-3.85
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management Insights
- Operations: "We are strategically looking at potential acquisitions that could optimize our reserve base and driving down operational costs."
- Market Outlook: "While today’s market presents significant operational challenges, our belief in the long-term potential of the Ellenberger formation remains strong."
These excerpts reveal management's strategic pivot towards scalability by improving reserve bases, while simultaneously managing cost structures in response to volatile oil prices and operational constraints.
"Our operational focus needs to shift towards efficiency and leveraging our existing assets to drive better outcomes in this volatile market."
— CEO, John Norris
"We're exploring several options that could position us better to manage both future uncertainties and capitalize when market conditions improve."
— CFO, Emily Greene
Forward Guidance
Moving forward, management anticipates stabilizing commodity prices and operational efficiencies could lead to improved cash flow in upcoming quarters. Specific targets to monitor include operational cost reductions and strategic asset acquisitions over the next year. The ability to respond to industry fluctuations will be crucial for Norris’s recovery, as the energy sector faces both upsides and risks from regulatory and economic variables.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
NRIS Focus
-1.46%
-2.07%
3.95%
-3.85%
CEI
26.80%
-36.10%
-51.40%
-85.20%
INDO
21.40%
-92.10%
-3.48%
-13.45%
HUSA
26.40%
-1.53%
-32.40%
-1.51%
MXC
39.10%
24.50%
1.50%
23.15%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Given the negative performance metrics alongside management's strategic vision, Norris Industries requires close monitoring for operational improvements and market recovery signals. The ongoing volatility of commodity prices presents inherent risks, yet the potential for scaling operations through acquisition remains promising. Investors should consider the balance between operational risk and the possible upside from strategic enhancements to the company’s asset base.
Key Investment Factors
Growth Potential
Norris Industries has potential growth through strategic acquisitions and operational efficiency improvements in its Texas reserve base, presenting future upside as commodity prices stabilize.
Profitability Risk
The significant operational losses indicate high risk exposure associated with unpredictable oil prices and increased operational expenses. Reliance on a singular geographic focus increases vulnerability to regional market fluctuations.
Financial Position
Norris operates with a current ratio of 0.588 and a strong reliance on long-term debt amounting to $4.2 million, pressuring financial flexibility. The net income deficiency indicates urgent attention to cost control and profitability.
SWOT Analysis
Strengths
Strong presence in the Ellenberger formation; established resource base in Texas.
Management’s history of operational experience in the energy sector.
Weaknesses
High operating expenses relative to revenue.
Negative cash flow impacting overall liquidity and operational flexibility.
Opportunities
Potential acquisitions to enhance asset reserves.
Improvements in extraction technologies to lower operational costs.
Threats
Market volatility impacting oil prices and demand.
Regulatory changes affecting operational costs in the energy sector.