Attached files
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| 8-K - FORM 8-K - EQM Technologies & Energy, Inc. | v328431_8k.htm |
Exhibit 99.1
EQM Technologies & Energy Inc. ANNOUNCEs THIRD QUARTER RESULTS
ENVIRONMENTAL SERVICES SEGMENT REPORTS SUBSTANTIAL
IMPROVEMENTS IN OPERATING RESULTS
Cincinnati, OH, November 14, 2012 – EQM Technologies & Energy, Inc. (OTCQB: EQTE) (“EQM”), a leading provider of environmental services to government and commercial businesses, today announced results for the third quarter ended September 30, 2012.
Revenue for the quarter ended September 30, 2012 was $26.0 million compared to $23.5 million for the third quarter of the prior year. Operating income for the third quarter was $0.1 million compared to an operating loss of $2.7 million for the third quarter of 2011. Net loss for the third quarter was $0.2 million, or $0.00 per share, compared to a net loss of $1.1 million or $0.04 per share for the third quarter of 2011. EBITDA (earnings before interest, taxes, depreciation and amortization) for the third quarter of 2012 was a profit of $0.8 million compared to a loss of $2.0 million in 2011.
For the first nine months of 2012, EQM reported revenue of $53.8 million, compared to $57.7 million in the same period of 2011. Operating loss was $0.9 million for the nine months ended September 30, 2012, as compared with an operating loss of $5.6 million for the 2011 period. Net loss for the first nine months of 2012 was $0.9 million, or $0.02 per share, compared to a net loss of $3.1 million, or $0.14 per share for the same period in 2011. EBITDA for the nine months ended September 30, 2012 was a profit of $1.5 million compared to a loss of $5.0 million last year, with the improvement attributable principally to our environmental services business.
As recently announced, EQ, the company’s wholly owned subsidiary which provides environmental services, closed on a new $10 million loan agreement with First Financial Bank, N.A.
“We are very proud to be making our first earnings release as a public reporting company,” said James E. Wendle, President and Chief Operating Officer of EQM. “The improved financial results from our environmental services business are the direct result of operating improvements and cost reductions enacted in late 2011 and early 2012, and increased volume under government contracts, principally from services provided to the EPA. We believe that demand continues to be strong for environmental services. As such, we are anxious to continue our progress with this business segment and believe that we will be able to grow organically through leveraging our relationships with our existing public and private sector clients, and potentially through selected acquisitions,” according to Wendle.
“The biodiesel industry as a whole continues to be challenging, with producers experiencing higher raw feedstock costs, lower RIN values and lower wholesale margins. We are continually monitoring these market conditions, the potential for additional government support, as well both the short and long-term prospects of the biodiesel business, and are evaluating steps that we might take to improve our biodiesel operating results, including evaluating strategic alternatives related to our biodiesel business,” added Wendle.
Use of Non-GAAP Financial Information
In addition to the results presented in accordance with generally accepted accounting principles, or GAAP, in this press release, the Company presents EBITDA, which is a non-GAAP measure. EBITDA is determined by taking net loss and adding back amortization of intangible assets, depreciation and amortization of property and equipment and interest expense. The Company believes that this non-GAAP measure, viewed in addition to and not in lieu of the Company’s reported GAAP results, provides useful information to investors by providing a more focused measure of operating results. This metric is an integral part of the Company’s internal reporting to evaluate its operations and the performance of senior management. A reconciliation to the comparable GAAP measure is available in the accompanying schedule. The non-GAAP measure presented herein may not be comparable to similarly titled measures presented by other companies.
EQM Technologies & Energy, Inc.
EQM, based in Cincinnati, OH, is a leading provider of environmental services - consulting & engineering, clean technology, and remediation & construction management - to the public and industrial sectors, with approximately 219 employees and satellite offices and operations in 10 states. EQM has longstanding relationships and multi-year contracts with numerous federal agencies, including the Environmental Protection Agency and the Department of Defense (including the Air Force Center for Engineering & Environment, Naval Facilities Engineering Command, and the Army Corps of Engineers), as well as private sector clients across numerous industries. For more information, please visit www.eqm.com.
Statements in this press release regarding the Company's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. The Company wishes to caution readers not to place undue reliance on such forward-looking statements, which speak only as of the date made. To the extent the content of this press release includes forward-looking statements, they involve various risks and uncertainties, including the successful integration of acquired businesses, projected financial information and the continued successful implementation of the Company's business strategy.
Certain of these risks and uncertainties are described in greater detail in EQM‘s filings with the Securities and Exchange Commission. EQM is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
Contact
EQM Technologies & Energy, Inc.
Robert Galvin, 800-229-7495 or 513-742-7219
Chief Financial Officer
Fax: 513-825-7495
rgalvin@eqm.com
EQM TECHNOLOGIES & ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| As of September 30, | As of December 31, | |||||||
| 2012 | 2011 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 2,430,256 | $ | 1,835,629 | ||||
| Accounts receivable, net | 10,766,854 | 10,071,283 | ||||||
| Cost and estimated earnings in excess of billings on uncompleted contracts, net | 6,467,517 | 3,912,699 | ||||||
| Inventory | 126,824 | 55,777 | ||||||
| Prepaid expenses and other current assets | 776,170 | 760,550 | ||||||
| Deferred income taxes | 1,128,948 | 1,417,961 | ||||||
| Total current assets | 21,696,569 | 18,053,899 | ||||||
| Property and equipment, net | 5,084,148 | 5,460,610 | ||||||
| Intangible assets, net | 4,194,720 | 4,465,553 | ||||||
| Goodwill | 2,219,347 | 2,219,347 | ||||||
| Other assets | 845,908 | 724,630 | ||||||
| Total Assets | $ | 34,040,692 | $ | 30,924,039 | ||||
EQM TECHNOLOGIES & ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| As of September 30, | As of December 31, | |||||||
| 2012 | 2011 | |||||||
| (unaudited) | ||||||||
| LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 11,608,973 | $ | 7,185,270 | ||||
| Accrued expenses and other current liabilities | 4,723,741 | 4,582,122 | ||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 176,559 | 34,264 | ||||||
| Financing agreement | 6,577,878 | 5,967,733 | ||||||
| Current portion of notes payable | - | 407,680 | ||||||
| Current portion of capitalized lease obligations | 45,209 | 45,209 | ||||||
| Derivative liabilities | 581,290 | 1,560,437 | ||||||
| Total current liabilities | 23,713,650 | 19,782,715 | ||||||
| Long-term liabilities: | ||||||||
| Notes payable, less current portion | - | 478,840 | ||||||
| Convertible promissory notes, net | 5,975,213 | 5,525,023 | ||||||
| Capitalized lease obligations, less current portion | 20,836 | 59,285 | ||||||
| Deferred income taxes | 243,342 | 179,802 | ||||||
| Deferred rent | 132,891 | 150,650 | ||||||
| Total long-term liabilities | 6,372,282 | 6,393,600 | ||||||
| Total liabilities | 30,085,932 | 26,176,315 | ||||||
| Redeemable preferred stock, $0.001 par value, 5,000,000 shares authorized: | ||||||||
| Series A Convertible Preferred stock, 952,381 shares designated, 952,381 shares issued and outstanding at September 30, 2012 and December 31, 2011 at stated value; liquidation preference of $3,000,000 | 3,000,000 | 3,000,000 | ||||||
| Stockholders' equity: | ||||||||
| Common stock, $0.001 par value, 70,000,000 shares
authorized; 40,473,570 shares issued and outstanding at September 30, 2012 and December 31 2011, respectively | 40,474 | 40,474 | ||||||
| Additional paid-in capital | 7,270,278 | 7,172,436 | ||||||
| Accumulated deficit | (6,355,992 | ) | (5,465,186 | ) | ||||
| Total stockholders' equity | 954,760 | 1,747,724 | ||||||
| Total liabilities, redeemable preferred stock and stockholders' equity | $ | 34,040,692 | $ | 30,924,039 | ||||
EQM TECHNOLOGIES & ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues | $ | 25,955,677 | $ | 23,461,155 | $ | 53,798,092 | $ | 57,723,589 | ||||||||
| Cost of revenues | 21,738,931 | 21,979,875 | 41,986,772 | 49,821,493 | ||||||||||||
| Gross profit | 4,216,746 | 1,481,280 | 11,811,320 | 7,902,096 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative expenses | 3,720,194 | 3,804,224 | 11,621,262 | 12,441,575 | ||||||||||||
| Depreciation and amortization | 361,085 | 377,671 | 1,062,007 | 1,068,251 | ||||||||||||
| Total operating expenses | 4,081,279 | 4,181,895 | 12,683,269 | 13,509,826 | ||||||||||||
| Operating income (loss) | 135,467 | (2,700,615 | ) | (871,949 | ) | (5,607,730 | ) | |||||||||
| Other income (expense): | ||||||||||||||||
| Change in fair value of derivative liabilities | 90,347 | 363,120 | 1,021,224 | 493,743 | ||||||||||||
| Interest expense | (320,501 | ) | (269,106 | ) | (965,067 | ) | (637,787 | ) | ||||||||
| Other income | 234,425 | - | 324,891 | - | ||||||||||||
| Other income (expense), net | 4,271 | 94,014 | 381,048 | (144,044 | ) | |||||||||||
| Income (loss) before income taxes | 139,738 | (2,606,601 | ) | (490,901 | ) | (5,751,774 | ) | |||||||||
| Income tax expense (benefit) | 311,400 | (1,460,061 | ) | 399,905 | (2,655,061 | ) | ||||||||||
| Net loss | $ | (171,662 | ) | $ | (1,146,540 | ) | $ | (890,806 | ) | $ | (3,096,713 | ) | ||||
| Deemed
dividend on redeemable Series A Convertible Preferred Stock | - | - | - | (947,027 | ) | |||||||||||
| Net loss available to common stockholders | $ | (171,662 | ) | $ | (1,146,540 | ) | $ | (890,806 | ) | $ | (4,043,740 | ) | ||||
| Basic and diluted net loss per share | $ | (0.00 | ) | $ | (0.04 | ) | $ | (0.02 | ) | $ | (0.14 | ) | ||||
| Weighted
average number of common shares outstanding - basic and diluted | 40,650,387 | 29,216,529 | 39,106,399 | 28,100,494 | ||||||||||||
EQM TECHNOLOGIES & ENERGY, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP INFORMATION
(unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| EBITDA | ||||||||||||||||
| Net Loss available to common stockholders (GAAP) | $ | (171,662 | ) | $ | (1,146,540 | ) | $ | (890,806 | ) | $ | (4,043,740 | ) | ||||
| Add back the items: | ||||||||||||||||
| Depreciation and amortization | 361,085 | 377,671 | 1,062,007 | 1,068,251 | ||||||||||||
| Interest expense | 320,501 | 269,106 | 965,067 | 637,787 | ||||||||||||
| Income tax expense (benefit) | 311,400 | (1,460,061 | ) | 399,905 | (2,655,061 | ) | ||||||||||
| EBITDA | $ | 821,324 | $ | (1,959,824 | ) | $ | 1,536,173 | $ | (4,992,763 | ) | ||||||