SOURCE:
General Environmental Management
2008-08-14 15:24:00
General Environmental Management Inc. Announces Second Quarter 2008 Results
Third Consecutive Quarter With Continued Improvements Over Same Prior Year Period; Gross Revenue Increased 44%; Adjusted EBITDA $1,108k Higher; Operating Expenses Reduced $725k
POMONA, CA–(EMWNews – August 14, 2008) – General Environmental Management, Inc. (“GEM”)
(
announced today the financial results for the second quarter ended June 30,
2008.
“The results for the second quarter of 2008 provide the third consecutive
quarter of continued improvements over the same period for the previous
year. GEM’s revenue for the second quarter of 2008 exceeded our
forecasts.” Tim Koziol, Chairman and CEO of GEM stated, “We continue to
execute our strategic plan and remain focused to achieve our company wide
goal for positive adjusted EBITDA for fiscal 2008. We did not anticipate
the significant revenue expansion in the June quarter due to the much
debated broad based economic slow down affecting our nation.
Notwithstanding, we were able to increase our revenue by 44% over the
quarter ending June 30th, 2007.”
The company faced an increase in fuel costs due to the rapid rise in
national fuel prices. Brett Clark the Chief Financial Offer commented,
“Our second quarter results were affected by the sudden rise of fuel costs.
As a result, certain key vendors of the company passed these cost increases
back to GEM through necessitated surcharges.”
Fiscal Second Quarter 2008 compared to the same quarter in 2007:
HIGHLIGHTS
-- Revenues for the second quarter of fiscal 2008 were $9.41 million, up
44% from $6.54 million for the second quarter of fiscal 2007.
-- Adjusted EBITDA (see description below) was a profit of $90,491 for
the second quarter of 2008 compared to a loss of $1,017,662 for the same
period in 2007 for a positive change of $1,108,153.
-- Operating expenses were reduced for the second consecutive quarter by
$725,189.
OUTLOOK
“We are very pleased with the increase in revenue in spite of the economic
slow down which indicates our service is meeting the needs of clients.
Furthermore, the additional reduction in operating expense matched with the
revenue increase allows us to expect positive adjusted EBITDA for 2008,”
stated Koziol.
About General Environmental Management, Inc.
General Environmental Management, Inc. (www.go-gem.com) is a full-service
hazardous waste management and environmental services firm providing
integrated environmental solutions managed through its proprietary
web-based enterprise software, GEMWare, including the following service
offerings: management and transportation of waste; design and management of
on-site waste treatment systems; management of large remediation projects;
response to environmental incidents and spills; and environmental, health
and safety compliance. Headquartered in Pomona, California, GEM operates
seven field service locations and one Treatment, Storage, Disposal facility
(TSDF), servicing all markets in the Western U.S.
Statements made in this press release that are not historical in nature
constitute forward-looking statements within the meaning of the Safe Harbor
Provision of the Private Securities Litigation Reform Act of 1995. Such
statements are based on the current expectations and beliefs of the
management of GEM. No forward-looking statement can be guaranteed. GEM
undertakes no obligation to publicly update any forward-looking statement,
whether as a result of new information, future events or otherwise.
Forward-looking statements in this press release should be evaluated
together with the many uncertainties that affect GEM’s business.
GENERAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2008 2007
------------ ------------
CURRENT ASSETS:
Cash $ 38,800 $ 954,581
Accounts receivable, net of allowance for
doubtful accounts of $178,969 and $236,781
respectively 6,897,307 6,495,736
Prepaid expenses and current other assets 505,740 156,340
------------ ------------
Total Current Assets 7,441,847 7,606,657
------------ ------------
Property and Equipment - Net of accumulated
depreciation $2,239,582 and $1,854,141
respectively 4,863,228 3,950,253
Restricted cash 1,194,896 1,184,835
Intangibles, Net 946,391 1,028,044
Deferred financing Fees 225,182 394,082
Deposits 291,600 282,070
Goodwill 946,119 946,119
------------ ------------
TOTAL ASSETS $ 15,909,263 $ 15,392,060
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3,293,422 $ 4,314,515
Accrued expenses 3,609,414 2,301,288
Accrued disposal costs 620,291 478,833
Payable to related party 123,927 31,871
Current portion of financing agreement 876,589 662,719
Current portion of long term obligations 1,287,660 1,274,464
Current portion of capital lease obligations 387,097 187,015
Notes payable to Investors 509,222 -
------------ ------------
Total Current Liabilities 10,707,622 9,250,705
LONG-TERM LIABILITIES:
Financing agreements, net of current portion $ 4,251,870 $ 3,708,694
Long term obligations, net of current portion 57,704 79,842
Capital lease obligations, net of current
portion 1,786,958 1,046,920
Notes payable to Investors - 520,208
------------ ------------
Total Long-Term Liabilities 6,096,532 5,355,664
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 1,000,000,000
shares authorized, 12,673,885 and 12,473,885
shares issued and outstanding, respectively 12,674 12,474
Additional paid in capital 51,021,050 50,151,615
Accumulated deficit (51,928,615) (49,378,398)
------------ ------------
Total Stockholders' Equity (894,891) 785,691
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 15,909,263 $ 15,392,060
============ ============
GENERAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
Three months ended Six months ended
-------------------------- --------------------------
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
------------ ------------ ------------ ------------
REVENUES $ 9,406,585 $ 6,541,832 $ 16,358,238 $ 12,859,212
COST OF REVENUES 7,822,370 5,068,675 13,467,714 10,145,012
------------ ------------ ------------ ------------
GROSS PROFIT 1,584,215 1,473,157 2,890,524 2,714,200
OPERATING EXPENSES 1,956,313 2,681,502 3,805,927 7,748,042
------------ ------------ ------------ ------------
OPERATING LOSS (372,098) (1,208,345) (915,403) (5,033,842)
OTHER INCOME
(EXPENSE):
Interest income 2,795 10,948 9,812 19,415
Interest and
financing costs (844,711) (560,120) (1,661,319) (1,240,133)
Costs to induce
conversion of debt - (3,428,847) - (3,547,687)
Other non-operating
income 9,030 34,259 16,693 68,239
------------ ------------ ------------ ------------
Net Loss $ (1,204,984) $ (5,152,105) $ (2,550,217) $ (9,734,008)
============ ============ ============ ============
Net loss per common
share, basic and
diluted $ (.10) $ (.53) $ (.20) $ (1.13)
============ ============ ============ ============
Weighted average
shares of common
stock Outstanding,
basic and diluted 12,473,885 9,767,147 12,473,885 8,611,020
============ ============ ============ ============
For the periods presented, “Adjusted EBITDA” consists of net loss plus
depreciation and amortization, net interest expense, non-recurring
employment charges, stock based compensation charges, and other
non-recurring financing-related expenses. We also exclude gain/loss on sale
of fixed assets, non-operating costs expired acquisition, and costs to
induce conversion of debt as these amounts are not considered part of usual
business operations. Such definition of “Adjusted EBITDA” is the same as
the definition of “EBITDA” used in our incentive plans for management. Our
management considers Adjusted EBITDA to be a measurement of performance
which provides useful information to both management and investors.
Adjusted EBITDA should not be considered an alternative to net income or
loss or other measurements under GAAP. Because Adjusted EBITDA is not
calculated identically by all companies, this measurement of Adjusted
EBITDA may not be comparable to similarly titled measures reported by other
companies.
For the three months ended For the six months ended
June 30, June 30,
-------------------------- --------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
NET LOSS $ (1,204,984) $ (5,152,105) $ (2,550,217) $ (9,734,008)
Depreciation and
amortization 240,301 191,253 467,096 363,326
Interest expense,
net 844,711 560,120 1,661,319 1,240,133
Non-recurring
employment charges - - -
Stock based
compensation
charges 210,419 145,476 427,135 634,745
Issuance of
warrants and
common shares for
services - - 2,294,104
Gain/Loss on
disposal of fixed
assets - -
Non-operating costs
expired
acquisition - -
Costs to induce
conversion of debt 3,428,847 3,547,687
------------ ------------ ------------ ------------
ADJUSTED EBITDA $ 90,447 $ (826,409) $ 5,333 $ (1,654,013)
============ ============ ============ ============
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