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SOURCE: General Environmental Management
General Environmental Management, Inc. Announces First Quarter 2008 Results
Second Consecutive Quarter With Continued Improvements Over Same Prior Year Period; Gross Revenue Increased 10%; Adjusted EBITDA $742k Higher; Operating Expenses Reduced $923k
POMONA, CA--(Marketwire - May 15, 2008) - General Environmental Management, Inc. ("GEM")
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"The results for the first quarter of 2008 provide the second consecutive quarter of continued improvements over the same previous year periods. GEM's performance in the 1st quarter of 2008 exceeded our forecasts. We continue to be on target for a positive adjusted EBITDA in 2008," stated Tim Koziol, chairman and CEO of GEM.
He also stated, "Our first quarter has historically been our slowest because of cyclical weather conditions. Further, we were not expecting any revenue expansion because of the current economic slow down that is affecting our country. Notwithstanding, we were able to increase our revenue by 10% over the same period in 2007. We have accomplished this revenue expansion by capitalizing on market opportunities, by acquiring new customers in a price-sensitive market, and by promoting service, safety, and innovation."
Fiscal First Quarter 2008 compared to the same quarter in 2007:
HIGHLIGHTS
-- Revenues for the first quarter of fiscal 2008 were $6.95 million, up
10% from $6.32 million for the first quarter of fiscal 2007.
-- Adjusted EBITDA (see description below) was a loss of $85,114 for the
first quarter of 2008 compared to a loss of $827,605 for the same period in
2007 for a positive change of $742,491.
-- Operating expenses, excluding non-cash expenses in March 2007 related
to issuance of warrants and common shares for services, were reduced
significantly by $922,822.
OUTLOOK
"We continue to expect revenue growth and greater financial efficiencies leading to our goal of positive adjusted EBITDA for 2008. The growth we are experiencing supports our customer-first policy," concluded 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
March 31, December 31,
2008 2007
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CURRENT ASSETS:
Cash $ 200,479 $ 954,581
Accounts receivable, net of allowance for
doubtful accounts of $236,781 and $236,781,
respectively 4,972,207 6,495,736
Prepaid expenses and current other assets 662,979 156,340
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Total Current Assets 5,835,665 7,606,657
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Property and Equipment - Net of accumulated
depreciation
$2,040,086 and $1,854,141 respectively 4,708,463 3,950,253
Restricted cash 1,191,298 1,184,835
Intangibles, Net 987,195 1,028,044
Deferred financing Fees 309,632 394,082
Deposits 282,260 282,070
Goodwill 946,119 946,119
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TOTAL ASSETS $ 14,260,632 $ 15,392,060
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,353,386 $ 4,314,515
Accrued expenses 3,182,709 2,301,288
Accrued disposal costs 411,506 478,833
Payable to related party 506,426 31,871
Current portion of financing agreement 606,842 662,719
Current portion of long term obligations 1,281,318 1,274,464
Current portion of capital lease
obligations 338,412 187,015
Current portion of convertible notes
payable 514,850 -
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Total Current Liabilities 9,195,449 9,250,705
LONG-TERM LIABILITIES:
Financing agreements, net of current
portion $ 3,665,780 $ 3,708,694
Long term obligations, net of current
portion 68,772 79,842
Capital lease obligations, net of current
portion 1,673,457 1,046,920
Convertible Notes payable - 520,208
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Total Long-Term Liabilities 5,408,009 5,355,664
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 1,000,000,000
shares authorized, 12,473,885 and 12,473,885
shares issued and outstanding, respectively 12,474 12,474
Additional paid-in capital 50,368,331 50,151,615
Accumulated deficit (50,723,631) (49,378,398)
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Total Stockholders' Equity (342,826) 785,691
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 14,260,632 $ 15,392,060
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GENERAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
For the three months ended
March 31,
2008 2007
REVENUES $ 6,951,653 $ 6,317,380
COST OF REVENUES 5,645,344 5,076,337
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GROSS PROFIT 1,306,309 1,241,043
OPERATING EXPENSES 1,849,614 5,066,540
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OPERATING LOSS (543,305) (3,825,497)
OTHER INCOME (EXPENSE):
Interest income 7,017 8,466
Interest and financing costs (816,608) (798,852)
Other non-operating income 7,663 33,980
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Net loss applicable to common shareholders $ (1,345,233) $ (4,581,903)
CALCULATIONS OF NET LOSS PER COMMON SHARE,
BASIC AND DILUTED:
Net loss per common share, basic and diluted (0.11) (0.62)
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Weighted average shares of common stock
outstanding, basic and diluted 12,473,885 7,442,046
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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
March 31,
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2008 2007
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NET LOSS $ (1,345,233) $ (4,581,903)
Depreciation and amortization 226,795 172,073
Interest expense, net 816,608 798,852
Stock based compensation charges 216,716 489,269
Issue of warrants and common shares for
services - 2,294,104
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ADJUSTED EBITDA $ (85,114) $ (827,605)
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General Environmental Management (GEM)
Tim Koziol
909-444-9500