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Knoxville, TN – 
- The annual financial statements for the fiscal years ended February 28, 2022 and 2021 include an opinion from an Independent Registered Public Accounting Firm. The audits were conducted in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”). We elected to have the audits performed under PCAOB standards in anticipation of a future filing with the U.S. Securities and Exchange Commission
- 2022 net sales increase $25,999,817 over 2021
- 2022 gross gallons sold increase 9,103,968 over 2021
- $1,694,000 in capital raised from the sale of our common stock
- 2022 quarterly sales in dollars and gallons:
| Sales Dollars | Sales Gallons | |||||||
| Q1 – May 31, 2021 | $ | 5,395,011 | 2,092,377 | |||||
| Q2 – August 31, 2021 | 3,804,159 | 1,487,165 | ||||||
| Q3 – November 30, 2021 | 8,766,954 | 3,185,825 | ||||||
| Q4 – February 28, 2022 | 10,728,638 | 3,711,022 | ||||||
| Fiscal Year 2022 Total | $ | 28,694,762 | 10,476,389 | |||||
Scott M. Boruff, CEO of Blue Earth, commented “As a start-up just completing our first full year of operations, we are happy, but not content, with our accomplishments. Increasing sales growth, in both dollars and gallons, in a very challenging credit environment is a testament to our leadership team in those areas. Our primary goal the first year has always been to expand our customer base and increase our credit limits with quality suppliers. I feel like we have accomplished that goal. Obviously, we aren’t satisfied with our net margin, and that will be emphasized more going forward. Our goal is to beat industry averages.”
In general, the retail sales of refined fuels is heavily based on high volume, low margin transactions. Blue Earth had a net profit margin of approximately $0.022/gallon for the year, as compared to the industry average of approximately $0.024/gallon. Obtaining credit on favorable terms from the most advantageous suppliers has been challenging, which has forced us to purchase from suppliers with less favorable pricing on the majority of our transactions. Other than continuing to obtain, move or increase our credit limits with more favorable suppliers, we identified and implemented certain transactional controls to increase the net margin on individual transactions.
“Beginning March 1, 2022, we obtained a substantial credit limit increase from one of our most favorable suppliers, and it really impacted our margins for that month. Unfortunately, that supplier ran into credit issues of their own in April and are currently trying to get all of that sorted out. The rising fuel prices are impacting credit for everyone in the industry. All of our net margins are on a per gallon basis, whereas all of our credit limits are based on dollars. Obviously, as fuel prices increase, we can sell fewer gallons within the confines of a static credit limit. We’ve done a great job working with our suppliers to not only maintain our sales volumes, but to grow them in this environment,” said Billy Ford, COO of Blue Earth.
One of the more common issues that impact our net margins is underbilling freight charges. Due to rising fuel prices, specifically diesel, rates charged by carriers that deliver our fuel are changing daily. The constant changing of rates have caused the underbilling of freight on many transactions. Due to the small net margins inherent in the industry, underbilling a freight charge could eliminate part or all of the net profit margin of a transaction. Charles Lobetti, CFO of Blue Earth, commented “Effective May 1, 2022, we have fully implemented a transaction monitoring system that allows us to identify billing issues with individual transactions on a real-timebasis, and timely correct any issues that could impact our net margin. This is especially relevant to making sure we do not lose money on freight. We expect to see improvement in our net margins when we report our financial results for our first quarter ending May 31, 2022.”
During 2022 we significantly expanded our customer base. We are now a licensed motor fuel distributor in 7 states, including Tennessee, Kentucky, North Carolina, South Carolina, Georgia, Alabama,and Arkansas. In addition, we are currently brokering transactions in Virginia, Utah,and Idaho. We now have 41 active customers representing approximately 650 sites.
“Our primary goal entering into our first full fiscal year was to increase our customer base and sales volumes,” said Billy Phipps, CMO of Blue Earth. “We have certainly achieved that goal, which is especially pleasing considering the current credit crunch in this industry. Other than continuing the growth trend, I will be working closely with our COO and CFO to improve net margins.”
In summary, Mr. Boruff stated, “I really like the Blue Earth plan and where we are headed. And I love our management team. It has been a crazy year with the rising fuel prices, resulting supplier credit issues, and implementing the systems to manage our growth. Our team has always responded and I’m confident they will continue to do so. Increasing sales volumes in this environment, our new BP Branded Jobber Contract, the development of our new Blue Petro brand – these are all things we are proud to have accomplished in 2022. The team and I are happy with the results of 2022, but even more excited about the future of Blue Earth in 2023 and beyond.”
About Blue Earth Resources, Inc.
Blue Earth Resources, Inc. is a fuel marketer which provides custom-designed solutions to refined fuel procurement (branded and private label), supply issues, and logistics challenges faced by fuel customers in the United States. We offer a customized composite of risk management services, specializing in the computation of industry, financial, and geo-political information to assist each customer in making real time market decisions that reduce cost and prevent business interruption. Our risk management reporting solution incorporates specific risk tolerance assessments of each customer and includes purchase and sales contract review, and will include bulk inventory management (shipping, terminaling, and hedging), retail margin protection, and other custom reporting.
Wholesale products supplied and distributed are various grades of refined fuels including gasoline, diesel, kerosene, biofuels, ethanol, and aviation fuel that are marketed along multiple supply points within regional pipelines.
Customers include retailers, jobbers, commercial, industrial, power plants, municipalities, government, agricultural, and manufacturers.
Statements Regarding Forward-Looking Information
Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans, or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Forward-looking statements are not a guarantee of future activities and are subject to many risks and uncertainties. Due to such risks and uncertainties, actual events may differ materially from those reflected or contemplated in such forward-looking statements. Forward-looking statements can be identified by the use of the future tense or other forward-looking words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “should,” “may,” “will,” “continue,” “strategy,” “position,” “opportunity,” statements regarding the “flexibility” of Blue Earth or the negative of any of those terms or other variations of them or by comparable terminology.
Contact:
Scott M. Boruff, CEO
investorrelations@berifuels.com
(865) 237-4448
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