SMF Energy Corp. (FUEL) said Friday that in light of a substantial reduction in projected sales revenue and earnings for the current fiscal quarter and future periods, its Board of Directors has determined to suspend the company's quarterly dividend program until further notice.
The company also said its lower revenue and earnings are also expected to cause the company to reverse its prior recognition as income, in the quarter ended December 31, 2011, of a realizable net deferred tax asset of approximately $3.7 million.
The company now expects to report a loss for the quarters ending March 31, 2012, and June 30, 2012, and for the year ending June 30, 2012.
SMF Energy noted that the anticipated reduction in sales revenue results from necessary changes to its pricing structure. The company is seeking to mitigate the adverse impact on revenue and earnings by instituting significant expense reductions and revenue enhancement measures but does not believe that those measures will be sufficient to offset the revenue and earnings downturn in the foreseeable future.
The company also said it is considering an overhaul of its business model to permit it to drastically reduce its back office and interest expense in order to better match its total expenses with its revenues.
Resumption of the dividend program, however, is unlikely in the foreseeable future but the Board will continue to evaluate all available means of providing additional value to its shareholders, the company said in a statement.
Additionally, the company said that Mark Smith, who first joined the board as an outside board member on February 7, has submitted his resignation.
by RTT Staff Writer
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