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| 8-K - CURRENT REPORT - EQM Technologies & Energy, Inc. | v345315_8-k.htm |
EXHIBIT 99.1
EQM Technologies & Energy, Inc. ANNOUNCEs First QUARTER RESULTS
FIRST QUARTER RESULTS IMPACTED BY THE FEDERAL BUDGET SEQUESTER
Cincinnati, OH, May 16, 2013 – EQM Technologies & Energy, Inc. (OTCQB: EQTE) (“EQM”), a leading provider of environmental services to government and commercial businesses, today announced results for the first quarter ended March 31, 2013.
Revenue from continuing operations for the quarter ended March 31, 2013 was $7.9 million compared to $12.0 million for the first quarter of the prior year. Operating loss from continuing operations for the first quarter was $1.1 million compared to an operating loss from continuing operations of $0.3 million for the first quarter of 2012. Net loss for the first quarter was $1.4 million, or $0.03 per share, compared to a net profit of $0.4 million, or $0.01 per share, for the first quarter of 2012. EBITDA from continuing operations (earnings before discontinued operations, interest, taxes, depreciation and amortization) for the first quarter of 2013 was negative $0.7 million compared to positive $0.9 million in 2012. Adjusted EBITDA from continuing operations (earnings after EBITDA and before the change in the fair value of derivative liabilities) for the first quarter of 2013 was negative $0.7 million compared to negative $0.1 million in 2012.
During the three months ended March 31, 2013, the EPA delayed the funding and authorization of work under our existing contracts due in large part to cuts in spending under the federal budget sequester. These delays negatively impacted our revenues and profits for the first quarter. EQM’s management team has been in contact with the contracting officers and project officers at the EPA and it is our understanding that the funding of ongoing work and the start of new work that was delayed from the first quarter of 2013 is being shifted to the second or third quarter of 2013, although we cannot provide any assurance that the EPA will resume the funding and authorization of our work on that schedule or at any other time.
“We have already redeployed our resources where our EPA work was delayed. It is our highest priority to work with the EPA to catch up this work,” said James E. Wendle, President and Chief Operating Officer of EQM. “We believe that demand continues to be strong in both the government and commercial sectors and we remain optimistic about realizing our dual goals of getting our EPA business back on track and profitably growing our business through leveraging existing customers and selected acquisitions,” said 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 from continuing operations and Adjusted EBITDA from continuing operations, which are non-GAAP measures. EBITDA from continuing operations is determined by taking net loss and adding back the income (loss) from discontinued operations, amortization of intangible assets, depreciation and amortization of property and equipment and interest expense. Adjusted EBITDA from continuing operations further eliminates the impact of the change in fair value of derivative liabilities. The Company believes that these non-GAAP measures, viewed in addition to and not in lieu of the Company’s reported GAAP results, provide useful information to investors by providing more focused measures of operating results. These metrics are 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 measures 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 205 employees and satellite offices and operations in 11 states. EQM has longstanding relationships and multi-year contracts with numerous federal agencies, including the EPA 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 | ||||||||
| March 31, 2013 | December 31, 2012 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 953,527 | $ | 42,219 | ||||
| Accounts receivable, net | 4,415,712 | 9,994,407 | ||||||
| Cost and estimated earnings in excess of billings on uncompleted contracts, net | 3,192,810 | 5,480,206 | ||||||
| Prepaid expenses and other current assets | 380,347 | 460,218 | ||||||
| Deferred income taxes | 1,688,833 | 1,976,823 | ||||||
| Current assets of discontinued operations | 40,739 | 600,898 | ||||||
| Total current assets | 10,671,968 | 18,554,771 | ||||||
| Property and equipment, net | 697,489 | 773,095 | ||||||
| Intangible assets, net | 4,344,416 | 4,491,443 | ||||||
| Goodwill | 2,762,083 | 2,762,083 | ||||||
| Other assets | 1,145,511 | 850,309 | ||||||
| Other assets of discontinued operations | 4,974 | 4,250,777 | ||||||
| Total assets | $ | 19,626,441 | $ | 31,682,478 | ||||
| EQM TECHNOLOGIES & ENERGY, INC. AND SUBSIDIARIES | |||
| Condensed Consolidated Balance Sheets |
| As of | ||||||||
| March 31, 2013 | December 31, 2012 | |||||||
| (unaudited) | ||||||||
| LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 5,088,705 | $ | 9,341,047 | ||||
| Accrued expenses and other current liabilities | 2,844,700 | 4,501,441 | ||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 151,014 | 244,226 | ||||||
| Loan agreement | 2,557,123 | 4,910,773 | ||||||
| Current portion of capitalized lease obligations | 33,735 | 45,209 | ||||||
| Derivative liabilities | 34,398 | 81,663 | ||||||
| Current liabilities of discontinued operations | 567,149 | 1,160,142 | ||||||
| Total current liabilities | 11,276,824 | 20,284,501 | ||||||
| Long-term liabilities: | ||||||||
| Notes payable | 250,000 | 250,000 | ||||||
| Convertible promissory notes, net | 4,521,037 | 6,073,087 | ||||||
| Capitalized lease obligations, less current portion | 12,170 | 10,715 | ||||||
| Deferred income taxes | 1,080,265 | 1,246,257 | ||||||
| Deferred rent | 116,907 | 126,971 | ||||||
| Total long-term liabilities | 5,980,379 | 7,707,030 | ||||||
| Total liabilities | 17,257,203 | 27,991,531 | ||||||
| Commitments and contingencies | ||||||||
| 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 March 31, 2013 and December 31, 2012 | ||||||||
| at stated value; liquidation preference of $3,000,000 | 3,000,000 | 3,000,000 | ||||||
| Stockholders' (deficit) equity: | ||||||||
| Common stock, $0.001 par value, 70,000,000 shares authorized; | ||||||||
| 41,473,570 shares issued and outstanding at March 31, 2013 and | ||||||||
| December 31, 2012 | 41,474 | 41,474 | ||||||
| Additional paid-in capital | 7,529,981 | 7,482,615 | ||||||
| Accumulated deficit | (8,202,217 | ) | (6,833,142 | ) | ||||
| Total stockholders' (deficit) equity | (630,762 | ) | 690,947 | |||||
| Total liabilities, redeemable preferred stock and stockholders' (deficit) equity | $ | 19,626,441 | $ | 31,682,478 | ||||
| EQM TECHNOLOGIES & ENERGY, INC. AND SUBSIDIARIES | |||||
| Condensed Consolidated Statements of Operations | |||||
| (Unaudited) |
| For the Three Months Ended March 31, | ||||||||
| 2013 | 2012 | |||||||
| Revenues | $ | 7,928,621 | $ | 11,959,055 | ||||
| Cost of revenues | 5,474,856 | 9,256,072 | ||||||
| Gross profit | 2,453,765 | 2,702,983 | ||||||
| Operating expenses: | ||||||||
| Selling, general and administrative expenses | 3,195,946 | 2,785,386 | ||||||
| Depreciation and amortization | 342,790 | 221,209 | ||||||
| Total operating expenses | 3,538,736 | 3,006,595 | ||||||
| Operating loss | (1,084,971 | ) | (303,612 | ) | ||||
| Other (expense) income: | ||||||||
| Change in fair value of derivative liabilities | 47,882 | 997,514 | ||||||
| Interest expense | (306,042 | ) | (311,537 | ) | ||||
| Other income | 300 | — | ||||||
| Other (expense) income, net | (257,860 | ) | 685,977 | |||||
| (Loss) income from continuing operations before income taxes | (1,342,831 | ) | 382,365 | |||||
| Income tax (benefit) expense from continuing operations | (38,875 | ) | 18,366 | |||||
| (Loss) income from continuing operations | (1,303,956 | ) | 363,999 | |||||
| Discontinued Operations: | ||||||||
| (Loss) income from discontinued operations, net of tax | (385,994 | ) | 72,124 | |||||
| Gain on disposal of Biodiesel Production Facility, net of tax | 320,875 | — | ||||||
| (Loss) income from discontinued operations, net of tax | (65,119 | ) | 72,124 | |||||
| Net loss | $ | (1,369,075 | ) | $ | 436,123 | |||
| Basic and diluted net (loss) income per share: | ||||||||
| Continuing operations | $ | (0.03 | ) | $ | 0.01 | |||
| Discontinued operations, net of tax | — | — | ||||||
| Net (loss) income per common share | $ | (0.03 | ) | $ | 0.01 | |||
| Weighted average number of common shares outstanding - | ||||||||
| basic and diluted | 40,650,387 | 36,001,456 | ||||||
| EQM TECHNOLOGIES & ENERGY, INC. AND SUBSIDIARIES | |||
| RECONCILIATION OF NON-GAAP INFORMATION | |||
| (unaudited) |
| For the Three Months Ended March 31, | ||||||||
| 2013 | 2012 | |||||||
| EBITDA from continuing operations | ||||||||
| Net (loss) income (GAAP) | $ | (1,369,075 | ) | $ | 436,123 | |||
| Add back the items: | ||||||||
| Loss (income) from discontinued operations | 65,119 | (72,124 | ) | |||||
| Depreciation and amortization | 342,790 | 221,209 | ||||||
| Interest expense | 306,042 | 311,537 | ||||||
| Income tax (benefit) expense | (38,875 | ) | 18,366 | |||||
| EBITDA from continuing operations | (693,999 | ) | 915,111 | |||||
| Change in fair value of derivative liabilities | (47,882 | ) | (997,574 | ) | ||||
| Adjusted EBITDA from continuing operations | $ | (741,881 | ) | $ | (82,403 | ) | ||