PDG Environmental Announces Second Quarter Results
PITTSBURGH--(BUSINESS WIRE)--PDG Environmental, Inc. (OTC BB: PDGE - News), a leading provider of environmental remediation and specialty contracting services, today reported financial results for the fiscal second quarter and six months ended July 31, 2007.
Revenue for the quarter was $26.6 million, up 18.8% from the $22.4 million reported in the second quarter of fiscal 2007 and an increase of 22.8% from the $21.7 million in the first fiscal quarter of 2008. In tandem with the rise in revenue, PDGE's field margin improved to $6.8 million from $6.4 million last year and $6.5 million in the fiscal 2008 first quarter. EBITDA (earnings before interest, taxes, depreciation and amortization) increased to $1.7 million in the second quarter of fiscal 2008 versus $0.2 million for the comparable period in fiscal 2007. SG&A and other direct costs totaled $5.8 million, or 21.7% of revenue, down from $6.4 million, or 28.7% of revenue, last year. The company reported net after-tax income of $0.5 million, or $0.02 per diluted share, compared with a net loss of $(1.2) million, or $(0.06) per diluted share, in the second quarter of fiscal 2007. In the second quarter of fiscal 2008, PDG Environmental recorded non-cash accounting costs of $0.15 million related to its July 2005 private placement versus $0.9 million last year. The second quarter of fiscal 2007 also included $0.3 million in one-time charges related to employee fraud, while the current quarter included other income of $0.2 million largely related to the partial insurance recovery from the fraud claim. Fully diluted shares outstanding rose to 21.3 million from 19.9 million in fiscal 2007 due to the conversion of preferred stock to common and the exercise of stock options and warrants.
For the six months ended July 31, 2007, revenue rose to $48.3 million, up 24.6% versus the $38.8 million recorded during the same period in the prior fiscal year. The company's field margin increased to $13.3 million from $10.5 million in fiscal 2007. EBITDA improved to $3.0 million from a negative $(1.6) million last year. PDG Environmental reported net after-tax income of $0.8 million for the six month period, or $0.04 per diluted share, compared with a net loss of $(3.4) million, or $(0.18) per share, last year. The non-cash accounting cost of the July 2005 private placement totaled $0.4 million versus $1.7 million in fiscal 2007. Fiscal 2007 also included $0.6 million in one-time charges related to employee fraud, while fiscal 2008 included other income of $0.15 million largely related to the partial insurance recovery from the fraud claim. Fully diluted shares outstanding rose to 21.1 million from 19.1 million in fiscal 2007.
"PDG Environmental again performed well this quarter, marking solid progress in our operations and recording our highest revenue ever in a three month period," said John C. Regan, chairman and chief executive officer of PDG Environmental. "The Company's backlog remains above $50 million - testimony to our increased sales and marketing efforts - and, even with a thus far light hurricane season, our reconstruction business is back on track - with the backlog in that segment at record levels. Our streamlined infrastructure remains right-sized to meet the Company's revenue targets in the second half, and we will closely monitor our operations to make additional modifications as necessary to optimize margins."
Conference Call
PDG Environmental will host a conference call on September 14, 2007 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. The telephone number for the conference call is (888) 804-7108.
Investors will be able to access an encore recording of the conference call for one week by calling (800) 642-1687, conference ID# 14677150. The encore recording will be available two hours after the conference call has concluded.
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 do both actual results for the quarter and year-to-date periods.
About PDG Environmental
PDG Environmental, Inc., 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, PDG Environmental has 13 offices capable of responding to customer requirements coast to coast. For additional information, please visit www.pdge.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 third 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.
PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
(UNAUDITED)
For the Three Months
Ended July 31
|
2007 ----------- |
2006 ------------ |
| Restated ------------ |
||
| Contract Revenues | $26,638,000 | $ 22,428,000 |
| Job Costs | 19,815,000 ----------- |
16,032,000 ------------ |
| Field Margin | 6,823,000 | 6,396,000 |
| Other Direct Costs | 2,782,000 ----------- |
3,102,000 ----------- |
| Gross Margin | 4,041,000 | 3,294,000 |
| Selling General & Administrative expenses | 2,991,000 ----------- |
3,324,000 ------------ |
| Income (Loss) From Operations | 1,050,000 | (30,000) |
| Other Income (Expense): | ||
| Interest Expense | (309,000) | (251,000) |
| Non-cash interest expense for preferred dividends and accretion of discount |
(219,000) |
(891,000) |
| Non-recurring charge employee fraud | (251,000) | |
| Interest and other income | 147,000 ----------- |
8,000 ----------- |
| (381,000) | (1,385,000) | |
| Income (Loss) Before Income Taxes | 669,000 | (1,415,000) |
| Income Tax (Benefit) Provision | 164,000 | (182,000) |
| Net Income (Loss) | $ 505,000 =========== |
$(1,233,000) =========== |
| Per share of common stock: Basic |
$ 0.02 =========== |
$ (0.06) =========== |
| Dilutive | $ 0.02 =========== |
$ (0.06) =========== |
| Earnings per share calculation: Average common share equivalents outstanding |
20,588,000 |
19,875,000 |
| Average dilutive common share equivalents outstanding |
759,000 ----------- |
- ----------- |
| Average common share and dilutive common equivalents outstanding |
21,347,000 =========== |
19,875,000 =========== |
PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
RECONCILIATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION
("EBITDA")
(UNAUDITED)
For the Three Months Ended July 31
------------------------
|
2007 ----------- |
2006 ------------ |
| Restated ------------ |
||
| Net Income (Loss) | $ 819,000 | $(3,393,000) |
| Income Tax Provision (Benefit) | 253,000 | (1,158,000) |
| Interest Expense | 580,000 | 470,000 |
| Non-cash interest expense for preferred dividends and accretion of discount |
429,000 |
1,675,000 |
| Depreciation and Amortization | 934,000 ----------- |
854,000 ----------- |
| EBITDA | 3,015,000 =========== |
(1,552,000) ============ |
PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
|
July 31, 2007 ----------- |
January 31, 2007 ------------ |
| ASSETS | (unaudited) | |
Current Assets |
||
Cash and cash equivalents |
$ 267,000 | $ 158,000 |
Contracts receivable, net |
28,108,000 | 21,257,000 |
Costs and estimated earnings in excess |
5,462,000 |
5,607,000 |
Inventories |
669,000 |
553,000 |
Prepaid income taxes |
|
271,000 |
Deferred income tax asset |
915,000 | 915,000 |
Other current assets |
639,000 ------------ |
534,000 ------------ |
| Total Current Assets | 36,060,000 | 29,295,000 |
| Property, Plant and Equipment | 11,883,000 | 11,352,000 |
| Less: accumulated depreciation | 9,340,000 ------------ |
8,795,000 ------------ |
| 2,543,000 | 2,557,000 | |
| Goodwill | 2,619,000 | 2,651,000 |
| Deferred Income Tax Asset | 2,454,000 | 2,565,000 |
| Contracts Receivable, Non Current | 500,000 | 500,000 |
| Intangible and Other Assets | 5,360,000 ------------ |
5,686,000 ------------ |
| Total Assets | $ 49,536,000 ============ |
$ 43,254,000 ============ |
LIABILITIES AND STOCKHOLDERS' EQUITY
| Current Liabilities |
||
Accounts payable |
$ 9,092,000 | $ 7,403,000 |
|
4,393,000 |
3,421,000 |
Accrued income taxes |
35,000 | - |
Current portion of long-term debt |
385,000 | 322,000 |
Accrued liabilities |
5,181,000 ------------ |
4,007,000 ------------ |
| Total Current Liabilities | 19,086,000 |
15,153,000 |
| Long-Term Debt | 13,044,000 |
12,161,000 |
| Series C Redeemable Convertible Preferred Stock |
2,979,000 |
2,550,000 |
| Total Liabilities | 35,109,000 |
29,864,000 |
| Stockholders' Equity | ||
Common stock |
414,000 | 411,000 |
Common stock warrants |
1,628,000 |
1,628,000 |
Additional paid-in capital |
19,460,000 | 19,245,000 |
Retained Earnings (deficit) |
(7,037,000) | (7,856,000) |
Less treasury stock, at cost |
(38,000) | (38,000) |
| Total Stockholders' Equity | 14,427,000 ------------ |
13,390,000 ------------ |
| Total Liabilities and Stockholders' Equity |
$ 49,536,000 ============ |
$ 43,254,000 ============ |
PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(UNAUDITED)
For the Six Months Ended July 31,
-------------------------
|
2007 ------------ |
2006 ------------ |
| Restated ------------ |
||
Cash Flows From Operating Activities: |
||
Net income |
$ 819,000 | $(3,393,000) |
Adjustments to Reconcile Net Income to Cash: Depreciation and Amortization |
934,000 |
854,000 |
Deferred Income Taxes |
111,000 |
(532,000) |
Interest expense for Series C |
429,000 |
1,675,000 |
Loss on sale of fixed asses and |
|
5,000 |
Stock based compensation 149,000 163,000 |
(39,000) |
40,000 |
Changes in Assets and Liabilities |
(6,812,000) |
(55,000) |
Costs and Estimated Earnings in |
145,000 |
(1,910,000) |
Inventories |
(116,000) | (29,000) |
Prepaid/accrued income taxes |
306,000 |
(231,000) |
Other current assets |
878,000 | 160,000 |
Accounts payable |
1,689,000 | 460,000 |
Billings in excess of costs and |
972,000 |
634,000 |
Accrued liabilities |
795,000 ------------ |
749,000 ------------ |
Total Changes in Assets and |
(2,143,000) ------------ |
(222,000) ------------ |
Net Cash Provided by (Used in) by |
260,000 |
(1,410,000) |
|
|
(403,000) |
Proceeds from sale of equity |
34,000 |
|
Increase in other assets |
(58,000) ------------ |
(50,000) ------------ |
Net Cash Used by Investing |
(423,000) | (419,000) |
| Cash Flows From Financing Activities: | ||
Proceeds from debt |
960,000 | 2,514,000 |
Proceeds from exercise of stock |
69,000 |
792,000 |
Payment of premium financing liability |
(572,000) | (687,000) |
Principal payments on debt |
(185,000) ------------ |
(73,000) ------------ |
Net Cash Provided by Financing |
272,000 ------------ |
2,546,000 ------------ |
Change in cash and cash equivalents |
109,000 | 717,000 |
Cash and cash equivalents, beginning of period |
158,000 ------------ |
230,000 ------------ |
Cash and Cash Equivalents, end of period |
$ 267,000 ============ |
$ 947,000 ============ |
Supplementary disclosure of non-cash |
(32,000) |
301,000 |
Financing of annual insurance premium |
$ 983,000 | $ 1,157,000 |
Non-Cash purchase of fixed assets |
$ 176,000 |
|
Contact:
Lippert / Heilshorn & Associates, Inc.
Chris Witty
212-838-3777
cwitty@lhai.com
or
PDG Environmental, Inc.
John C. Regan
412-243-3200
Chairman & CEO
--------------------------------------------------
Source: PDG Environmental, Inc.
