FlagshipPDG Announces First Quarter Results
PITTSBURGH, PA, June 12, 2008 – PDG Environmental, Inc. (dba FlagshipPDG) (OTC BB: PDGE), a leading provider of environmental remediation, disaster response and reconstruction services, today reported financial results for the fiscal first quarter ended April 30, 2008.
Revenue for the first quarter of fiscal 2009 was $17.7 million, down 18.4% from the $21.7 million reported in the first quarter of fiscal 2008. Field margin for the first quarter of fiscal 2008 was $4.7 million or approximately 27% of revenue as compared to field margin of $6.5 million or approximately 30% of revenue in the prior year fiscal quarter. The company reported a net after-tax loss of $(1.1) million, or $(0.05) per diluted share in the first quarter of fiscal 2009, compared with net income of $0.3 million, or $0.01 per diluted share in the first quarter of fiscal 2008. EBITDA (earnings before interest, taxes, depreciation and amortization) was a negative $(0.8) million for the current quarter versus a positive EBITDA of $1.3 million for the comparable period in fiscal 2008. Although other direct and SG&A costs were down $0.65 million sequentially from the fourth quarter of fiscal 2008, they did increase by $0.35 million as compared to the first quarter of fiscal 2008 due principally to marketing and re-branding costs, personnel costs for finance and sales professionals, non-cash stock option expense, and ongoing costs for Sarbanes Oxley. In the first quarter of fiscal 2009 and first quarter of fiscal 2008, FlagshipPDG recorded non-cash accounting costs of $0.2 million related to its July 2005 private placement. Average shares outstanding for the quarter rose to 20.8 million for the first quarter of fiscal 2009 from 20.5 million for the first quarter of fiscal 2008.
"While the first quarter is historically very slow for FlagshipPDG, the revenues for the first quarter of fiscal 2009 were significantly less than anticipated. Two significant projects in New York that were expected to start early in the quarter did not begin to ramp up until April, a large contract with a school district in California did not produce expected revenues, and reconstruction revenues were down significantly from the fourth quarter. Fortunately the two contracts in New York are now going strong, the California contract is beginning to generate additional revenues and we have recently received a number of significant awards on the reconstruction side that will be starting this quarter. Backlog remains strong at about $57 million and we continue to trim overhead costs where appropriate with recent cuts projected to save nearly $700,000 annually. On the strength of the recent backlog additions and ramp-up of existing contracts, we look forward to much improved results for the second quarter," said John C. Regan, chairman and chief executive officer of FlagshipPDG.
Conference Call
FlagshipPDG will host a conference call on June 12, 2008 at 11:00 a.m. Eastern. During the call, John C. Regan, Chairman and Chief Executive Officer, and Nick Battaglia, Chief Financial Officer, will discuss the Company’s quarterly performance and financial results.
Conference Call Details
Date: Thursday, June 12, 2008
Time: 11:00 a.m. (EST)
Dial-in Number: 1-800-762-8779
International Dial-in Number: 1-480-248-5081
It is recommended that participants phone-in approximately 5 to 10 minutes prior to the start of the 11:00 a.m. call. A telephonic replay of the conference call may be accessed approximately two hours after the call through June 19, 2008, by dialing 1-800-406-7325 or 1-303-590-3030 for international callers and entering the replay access code 3884941.
The company makes use of EBITDA (earnings before interest, taxes, depreciation and amortization) as a financial measure which it believes is a useful performance indicator. EBITDA is not a recognized term under generally accepted accounting principles, or "GAAP," and should not be considered as an alternative to net income/(loss) or net cash provided by operating activities, which are GAAP measures. A reconciliation of EBITDA to net income/(loss) appears at the end of this release as actual results for the quarter.
About FlasgshipPDG
FlagshipPDG, headquartered in Pittsburgh, PA, is a leading provider of specialty contracting services including asbestos abatement, mold remediation, emergency response, demolition and reconstruction to commercial, industrial and governmental clients nationwide. With over twenty years experience, FlagshipPDG has offices nationwide capable of responding to customer requirements coast to coast. For additional information, please visit www.FlagshipPDG.com.
Safe Harbor Statement under Private Securities Act of 1995: The statements contained in this release, which are not historical facts, may be deemed to contain forward-looking statements, including, but not limited to, deployment of new services, growth of customer base, and growth of service area, among other items. Actual results may differ materially from those anticipated in any forward-looking statement with regard to magnitude, timing or other factors. Deviation may result from risk and uncertainties, including, without limitation, the company's dependence on first parties, market conditions for the sale of services, availability of capital, operational risks on contracts, and other risks and uncertainties. The company disclaims any obligation to update information contained in any forward-looking statement.
STATEMENTS OF CONSOLIDATED OPERATIONS
(UNAUDITED)
|
For the Three Months Ended April 30, | |
| 2008 |
2007 |
|
| Contract Revenues | $ 17,715,000 | $ 21,700,000 |
| Job Costs | 13,002,000 ----------- |
15,234,000 ----------- |
| Field Margin | 4,713,000 |
6,466,000 |
| Other Direct Costs | 2,480,000 ----------- |
2,773,000 ----------- |
| Gross Margin | 2,233,000 |
3,693,000 |
| Selling General & Administrative Expenses (Gain) Loss on Sale of Fixed Assets |
3,461,000 3,000 ----------- |
915,000 - ----------- |
| Income (Loss) From Operations | (1,231,000) |
879,000 |
Other Income (Expense): Interest Expense Non-cash interest expense for preferred dividends and accretion of discount Interest and other income, net |
(203,000) (248,000) 21,000 ----------- (430,000) |
(271,000) (210,000) 5,000 ----------- (476,000) |
| (Loss) Before Income Taxes | (1,661,000) |
403,000 |
| Income Tax (Benefit) Provision | (517,000) ----------- |
89,000 ----------- |
| Net Income (Loss) | $ (1,144,000) ============ |
$ 314,000 ============ |
| Per share of common stock: Basic Dilutive |
$ (0.05) ============ <$ (0.05) ============ |
$ 0.02 ============ $ 0.01 ============ |
| Earnings per share calculation: Average common share equivalents outstanding Average dilutive common share equivalents outstanding Average common share and dilutive common equivalents outstanding |
20,814,000 - ------------ 20,814,000 ============ |
20,502,000 495,000 ------------ 20,997,000 ============ |
PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
RECONCILIATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA")
(UNAUDITED)
|
For the Three Months Ended April 30, | |
| 2008 |
2007 |
|
Net Income (Loss) |
$ (1,144,000) |
$ 314,000 |
| Income Tax Provision (Benefit) | (517,000) | 89,000 |
| Interest Expense | 203,000 | 271,000 |
| Non-cash interest expense for preferred dividends and accretion of discount | 248,000 | 210,000 |
| Depreciation and Amortization | 450,000 ----------- |
461,000 ----------- |
| EBITDA | 760,000 ============ |
1,345,000 ============ |
PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
|
April 30, 2008 ----------- (Unaudited) |
January 31, 2008 ----------- |
| ASSETS Current Assets |
||
| Cash and cash equivalents | $ 87,000 | $ 90,000 |
| Contracts receivable, net | 19,348,000 | 22,154,000 |
| Costs and estimated earnings in excess of billings on uncompleted contracts | 3,266,000 | 3,325,000 |
| Inventories | 601,000 | 689,000 |
| Prepaid income taxes | - | - |
| Deferred income tax asset | 1,181,000 | 1,111,000 |
| Other current assets | 1,037,000 ----------- |
94,000 ----------- |
| Total Current Assets | 25,520,000 | 27,463,000 |
| Property, Plant and Equipment Less: accumulated depreciation |
12,296,000 10,102,000 ----------- |
12,201,000 9,859,000 ----------- |
Goodwill |
2,614,000 |
2,614,000 |
2,194,000 |
2,342,000 |
|
| Deferred Income Tax Asset | 3,251,000 | 2,804,000 |
| Contracts Receivable, Non Current | 677,000 | 677,000 |
| Costs in excess of billings, Non Current | 3,327,000 | 3,327,000 |
| Intangible and Other Assets | 4,822,000 ----------- |
5,018,000 ----------- |
Total Assets |
$ 42,405,000 ============ |
$ 44,245,000 ============ |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
Current Liabilities Accounts payable |
$ 7,936,000 |
$ 9,729,000 |
Billings in excess of costs and estimated earnings on uncompleted contracts |
1,859,000 |
1,832,000 |
Accrued income taxes |
187,000 |
255,000 |
Current portion of long-term debt |
394,000 |
412,000 |
Accrued liabilities |
5,827,000 ----------- |
4,921,000 ----------- |
Total Current Liabilities |
16,203,000 |
17,149,000 |
Long-Term Debt |
10,552,000 |
10,679,000 |
Series C Redeemable Convertible Preferred Stock |
3,694,000 |
3,446,000 |
Total Liabilities |
30,449,000 |
31,274,000 |
Stockholders' Equity Common stock |
418,000 | 418,000 |
| Common stock warrants | 1,628,000 | 1,628,000 |
| Additional paid-in capital | 19,857,000 | 19,728,000 |
| Retained Earnings (deficit) | (9,909,000) | (8,765,000) |
| Less treasury stock, at cost | (38,000) | (38,000) |
Total Stockholders' Equity |
11,956,000 ----------- |
12,971,000 ----------- |
Total Liabilities and Stockholders' Equity |
$ 42,405,000 ============ |
$ 44,245,000 ============ |
PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(UNAUDITED)
|
For the Three Months Ended April 30, | |
| 2008 |
2007 |
|
Cash Flows From Operating Activities: |
||
Net (loss) |
$ (1,144,000) | $ 314,000 |
| Adjustments to Reconcile Net Income (Loss) to Cash: | ||
| Depreciation and amortization | 450,000 | 461,000 |
| (Benefit) Provision for deferred income taxes | (517,000) | 67,000 |
| Interest expense for Series C preferred stock accretion of discount | 248,000 | 210,000 |
| Loss on sale of fixed assets | 3,000 | - |
| Stock based compensation | 129,000 | 53,000 |
| Provision for uncollectable accounts | - ----------- (831,000) |
(40,000) ----------- 1,065,000 |
| Changes in Assets and Liabilities Other than Cash: | ||
| Contracts receivable | 2,806,000 | (1,905,000) |
| Costs and Estimated Earnings in Excess of Billings on uncompleted contracts | 59,000 | 58,000 |
| Inventories | 88,000 | (35,000) |
| Prepaid/accrued income taxes | (68,000) | 230,000 |
| Other current assets | 370,000 | 584,000 |
| Accounts payable | (1,793,000) | 541,000 |
| Billings in excess of costs and estimated earnings on uncompleted contracts | 27,000 | (506,000) |
| Accrued liabilities | (81,000) ----------- |
(292,000) ----------- |
| Total Changes in Assets and Liabilities Other than Cash | 1,408,000 ----------- |
(1,325,000) ----------- |
| Net Cash Provided by (Used in) by Operating Activities | 577,000 | (260,000) |
Cash Flows From Investing Activities: |
||
| Purchase of property, plant and equipment | (86,000) | (137,000) |
| Proceeds from sale of fixed assets | 1,000 | - |
| Change in other assets | 3,000 ----------- |
(25,000) ----------- |
| Net Cash Used in Investing Activities | (82,000) | (162,000) |
Cash Flows From Financing Activities: |
||
| Proceeds from debt | - | 705,000 |
| Payment of premium financing liability | (326,000) | (289,000) |
| Principal payments on debt | (172,000) ----------- |
(82,000) ----------- |
| Net Cash (Used in) Provided by Financing Activities | (498,000) ----------- |
334,000 ----------- |
| Change in cash and cash equivalents | (3,000) | (88,000) |
| Cash and cash equivalents, beginning of period | 90,000 ----------- |
158,000 ----------- |
Cash and Cash Equivalents, end of period |
$ 87,000 ============ |
$ 70,000 ============ |
Supplementary disclosure of non-cash Investing and Financing Activity: |
||
| Change in goodwill and accrued liabilities for earnout liability | - | (32,000) |
| Financing of annual insurance premium | $1,313,000 | $983,000 |
| Non-Cash purchase of fixed assets financed through capital lease | $27,000 | $38,000 |
