GEM Press Release
General Environmental Management, Inc. Announces Third Quarter 2008 Results
11/14/08
General Environmental Management, Inc. ("GEM") (OTC BB:GEVI.OB - News), a leading environmental and waste remediation company, announced today the financial results for the third quarter ended September 30, 2008.
"The trailing four quarters of positive adjusted EBITDA of $927,563 is evidence of the company's continued execution of its strategic plan," stated Tim Koziol, Chairman and CEO of GEM. "The entire company is focused on our drive for the measured improvement of our key fundamentals. The foundation set in our sales, operations and systems this year provides the basis for our financial performance in 2009."
HIGHLIGHTS: Fiscal Third Quarter 2008
-- Revenues for the first nine months of fiscal 2008 were $24.99 million,
up 17% from $21.41 million for the first nine months of fiscal 2007.
-- Adjusted EBITDA (see description below) was a profit of $517,923 for
the third quarter of 2008, compared to a loss of $1,124,274 for the same
period in 2007 for a positive change of $1,642,197.
-- Adjusted EBITDA (see description below) was a profit of $523,256 for
the first nine months of 2008, compared to a loss of $2,119,427 for the
same period in 2007 for a positive change of $2,642,683.
-- Operating expenses were reduced for the nine month period by
$5,131,000.
OUTLOOK
"The company's acquisition of Island Environmental Services, Inc. (IES) was a key acquisition for the company, providing assets and an entry into certain customer bases that we had previously not serviced. We have successfully acquired, integrated and driven organic growth with all of our acquisitions and expect to do the same with IES. IES is the sixth acquisition the company has successfully completed and integrated," 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
September 30, December 31,
2008 2007
------------- -------------
CURRENT ASSETS:
Cash $ 604,526 $ 954,581
Accounts receivable, net of allowance for
doubtful accounts of $178,779 and
$236,781 respectively 6,209,475 6,495,736
Prepaid expenses and current other assets 654,557 156,340
------------- -------------
Total Current Assets 7,468,558 7,606,657
------------- -------------
Property and Equipment - Net of accumulated
depreciation $2,506,196 and $1,854,141
respectively 7,847,706 3,950,253
Restricted cash 1,198,450 1,184,835
Intangibles, Net 905,586 1,028,044
Deferred financing Fees 561,545 394,082
Deposits 503,804 282,070
Goodwill 946,119 946,119
------------- -------------
TOTAL ASSETS $ 19,431,768 $ 15,392,060
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3,214,047 $ 4,314,515
Accrued expenses 2,136,606 2,301,288
Accrued disposal costs 747,659 478,833
Payable to related party 513,115 31,871
Current portion of financing agreement 812,500 662,719
Current portion of long term obligations 43,763 1,274,464
Current portion of capital lease obligations 613,857 187,015
Notes payable to Investors 495,848 -
------------- -------------
Total Current Liabilities 8,577,395 9,250,705
LONG-TERM LIABILITIES:
Financing agreements, net of current portion $ 8,538,084 $ 3,708,694
Long term obligations, net of current portion 1,296,633 79,842
Capital lease obligations, net of current
portion 1,904,590 1,046,920
Notes payable to Investors - 520,208
------------- -------------
Total Long-Term Liabilities 11,739,307 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 53,168,600 50,151,615
Accumulated deficit (54,066,208) (49,378,398)
------------- -------------
Total Stockholders' Equity (884,934) 785,691
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 19,431,768 $ 15,392,060
============= =============
GENERAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Nine months ended Three months ended
---------------------------- ----------------------------
September 30, September 30, September 30, September 30,
2008 2007 2008 2007
------------- ------------- ------------- -------------
REVENUES $ 24,989,210 $ 21,415,043 $ 8,630,972 $ 8,555,831
COST OF
REVENUES 20,327,989 17,023,247 6,860,275 6,878,235
------------- ------------- ------------- -------------
GROSS PROFIT 4,661,221 4,391,796 1,770,697 1,677,596
OPERATING
EXPENSES 5,651,106 10,782,081 1,845,179 3,034,039
------------- ------------- ------------- -------------
OPERATING LOSS (989,885) (6,390,285) (74,482) (1,356,443)
OTHER INCOME
(EXPENSE):
Interest income 15,894 30,056 6,082 10,641
Interest and
financing
costs (3,748,992) (1,815,131) (2,087,673) (574,998)
Costs to induce
conversion of
related party
debt - (6,737,413) - (3,189,726)
Other
non-operating
income 35,173 93,568 18,480 25,329
------------- ------------- ------------- -------------
Net Loss
applicable to
common stock
holders $ (4,687,810) $ (14,819,205) $ (2,137,593) $ (5,085,197)
============= ============= ============= =============
Net loss per
common share,
basic and
diluted $ (.37) $ (1.53) $ (.17) $ (.43)
============= ============= ============= =============
Weighted
average shares
of common
stock
outstanding,
basic and
diluted 12,673,885 9,661,979 12,673,885 11,737,377
============= ============= ============= =============
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 nine months ended For the three months ended
September 30, September 30,
---------------------------- ----------------------------
2008 2007 2008 2007
------------- ------------- ------------- -------------
NET LOSS $ (4,687,810) $ (14,819,205) $ (2,137,593) $ (5,085,197)
Depreciation
and
amortization 827,862 559,525 360,765 196,199
Interest
expense, net 3,748,992 1,785,075 2,087,673 456,159
Non-recurring
employment
charges - - -
Stock based
compensation
charges 634,213 758,290 207,078 123,545
Issuance of
warrants and
common shares
for services - 2,829,419 - -
Gain/Loss on
disposal of
fixed assets - - -
Non-operating
costs expired
acquisition - -
Costs to induce
conversion of
debt 6,737,413 3,189,726
------------- ------------- ------------- -------------
ADJUSTED EBITDA $ 523,257 $ (2,149,483) $ 517,923 $ (1,119,568)
============= ============= ============= =============
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