PDG Environmental Announces Third Quarter Results
PITTSBURGH, PA--(MARKET WIRE)--Dec 14, 2007 -- PDG Environmental, Inc. (OTC BB:PDGE.OB - News), a leading provider of environmental remediation and specialty contracting services, today reported financial results for the fiscal third quarter and nine months ended October 31, 2007.
Revenue for the quarter was $26.6 million, up 34.5% from the $19.8 million reported in the third quarter of fiscal 2007. The company reported a net after-tax loss of $(1.0) million, or $(0.05) per diluted share in the third quarter of fiscal 2008, compared with a net loss of $(2.0) million, or $(0.10) per diluted share, in the third quarter of fiscal 2007. The loss for the current quarter was due to negative margin adjustments of approximately $1.8 million, including a $0.8 million loss on an asbestos contract performed in the third quarter. EBITDA (earnings before interest, taxes, depreciation and amortization) was a negative $(0.2) million for the current quarter versus a negative $(0.6) million for the comparable period in fiscal 2007. SG&A and other direct costs as a percent of revenue decreased to 23.5% for the current quarter as compared to 29.9% for the comparable quarter last year although the costs increased $0.35 million largely related to increased selling costs, initial implementation costs for Sarbanes Oxley and higher legal costs. In the third quarter of fiscal 2008 and third quarter of fiscal 2007, PDG Environmental recorded non-cash accounting costs of $0.2 million related to its July 2005 private placement. The third quarter of fiscal 2007 also included $0.15 million in one-time charges related to employee fraud and $0.1 million for a non-cash impairment charge for goodwill, 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 20.7 million from 20.4 million.
For the nine months ended October 31, 2007, revenue rose to $74.9 million, up 28.0% versus the $58.6 million recorded during the same period in the prior fiscal year. PDG Environmental reported net after-tax loss of $0.18 million for the nine month period, or $(0.01) per diluted share, compared with a net loss of $(5.4) million, or $(0.28) per share, last year. EBITDA improved to $2.8 million from a negative $(2.2) million last year due to the increased level of revenues. SG&A and other direct costs decreased by $0.65 million in spite of being adversely impacted by the increased costs in the third quarter noted above. The non-cash accounting cost of the July 2005 private placement totaled $0.7 million in fiscal 2008 versus $1.9 million in fiscal 2007. Fiscal 2007 also included $0.7 million in one-time charges related to employee fraud, while fiscal 2008 included other income of $0.3 million largely related to the insurance recovery from the fraud claim. Fully diluted shares outstanding rose to 20.6 million from 19.5 million in fiscal 2007.
"While we are very pleased with the top line growth we have experienced this fiscal year, we are obviously very disappointed with our bottom line results which were adversely impacted by losses on a single project performed this quarter. Prospectively we have put in place new policies and procedures to mitigate the level of contract adjustments noted above. With backlog remaining at $50 million, over half of which is reconstruction related, and with additional controls in place we look forward to improved results going forward," said John C. Regan, chairman and chief executive officer of PDG Environmental.
Conference Call
PDG Environmental will host a conference call on December 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 1-888 339-9446.
Investors will be able to access an encore recording of the conference call for one week by calling 1-800-406-7325, conference ID# 3814622. 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
October 31,
|
|
2007 ----------- |
2006 ------------ |
| Contract Revenues | $ 26,616,000 | $ 19,783,000 |
| Job Costs | 21,200,000 ------------ |
14,790,000 ------------ |
| Field Margin | 5,416,000 | 4,993,000 |
| Other Direct Costs | 2,674,000 ------------ |
2,982,000 ------------ |
| Gross Margin |
2,742,000 |
2,011,000 |
| Selling General & Administrative expenses | 3,594,000 | 2,932,000 |
| (Gain) loss on Sale of Fixed Assets | - ------------ |
12,000 ------------ |
| Income (Loss) From Operations | (852,000) | (933,000) |
| Other Income (Expense): Interest Expense |
(303,000) |
(246,000) |
| Non-cash interest expense for preferred dividends and accretion of discount |
(229,000) |
(195,000) |
| Non-recurring charge employee fraud |
- |
(150,000) |
| Non-cash impairment charge for goodwill | - |
(111,000) |
| Interest and other income, net | 163,000 ------------ |
3,000 ------------ |
| (369,000) | (699,000) | |
| Income (Loss) Before Income Taxes | (1,221,000) | (1,632,000) |
| Income Tax (Benefit) Provision | (221,000) |
365,000 |
| Net Income (Loss) | $ (1,000,000) ============ |
$ (1,997,000) ============ |
| Per share of common stock: Basic |
$ (0.05) ============ |
$ (0.10) ============ |
| Dilutive | $ (0.05) ============ |
$ (0.10) ============ |
| Earnings per share calculation: Average common share equivalents outstanding |
20,749,000 |
20,445,000 |
| Average dilutive common share equivalents outstanding |
- ------------ |
- |
| Average common share and dilutive common equivalents outstanding |
20,749,000 ============ |
20,445,000 ============ |
PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
RECONCILIATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTIZATION ("EBITDA")
(UNAUDITED)
For the Three Months Ended
October 31,
| 2007 ------------ |
2006 ------------ |
|
| Contract Revenues | $ 74,954,000 | $ 58,579,000 |
| Job Costs |
56,249,000 ------------ |
43,046,000 ------------ |
| Field Margin | 18,705,000 | 15,533,000 |
| Other Direct Costs | 8,229,000 ----------- |
9,082,000 ----------- |
| Gross Margin |
10,476,000 | 6,451,000 |
| Selling General & Administrative expenses | 9,399,000 |
9,188,000 |
| (Gain) loss on Sale of Fixed Assets |
- ----------- |
17,000 ----------- |
| Income (Loss) From Operations | 1,077,000 |
(2,754,000) |
| Other Income (Expense): Interest Expense |
(883,000) |
(716,000) |
| Non-cash interest expense for preferred dividends and accretion of discount |
(658,000) |
(1,870,000) |
| Non-recurring charge employee fraud | - | (748,000) |
| Non-cash impairment charge for goodwill | - | (111,000) |
| Interest and other income, net | 315,000 ------------ |
16,000 ------------ |
| (1,226,000) | (3,429,000) | |
| Income (Loss) Before Income Taxes | (149,000) |
(6,183,000) |
| Income Tax (Benefit) Provision | 32,000 ------------ |
(793,000) ------------ |
| Net Income (Loss) | $ (181,000) ============ |
$ (5,390,000) ============ |
| Per share of common stock: Basic |
$ (0.01) ============ |
$ (0.28) ============ |
| Dilutive | $ (0.01) ============ |
$ (0.28) ============ |
| Earnings per share calculation: Average common share equivalents outstanding |
20,614,000 |
19,543,000 |
| Average dilutive common share equivalents outstanding |
- ------------ |
- ------------ |
| Average common share and dilutive common equivalents outstanding |
20,614,000 ============ |
19,543,000 ============ |
PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
RECONCILIATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTIZATION ("EBITDA")
(UNAUDITED)
For the Nine Months Ended
October 31,
|
2007 ----------- |
2006 ------------ |
| Net Income (Loss) | $ (181,000) | $ (5,390,000) |
| Income Tax Provision (Benefit) |
32,000 |
(793,000) |
| Interest Expense | 883,000 | 716,000 |
| Non-cash interest expense for preferred dividends and accretion of discount |
658,000 |
1,870,000 |
| Depreciation and Amortization | 1,403,000 ------------ |
1,395,000 ------------ |
| EBITDA | 2,795,000 ============ |
(2,202,000) ============ |
PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
October 31, 2007 ------------ |
January 31, 2006 ------------ |
|
| ASSETS | (unaudited) | |
Current Assets Cash and cash equivalents |
$ 143,000 |
$ 158,000 |
Contracts receivable, net |
25,250,000 | 25,250,000 |
Costs and estimated earnings in excess |
6,753,000 |
5,607,000 |
| Inventories |
660,000 | 553,000 |
| Prepaid income taxes | 21,000 |
271,000 |
| Deferred income tax asset | 1,109,000 | 915,000 |
| Other current assets | 404,000 ------------ |
534,000 ------------ |
| Total Current Assets | 34,340,000 | 29,295,000 |
| Property, Plant and Equipment | 12,066,000 | 11,352,000 |
| Less: accumulated depreciation | 9,614,000 ------------ |
8,795,000 ------------ |
| 2,452,000 |
2,557,000 |
|
| Goodwill | 2,619,000 | 2,651,000 |
| Deferred Income Tax Asset | 2,548,000 | 2,565,000 |
| Contracts Receivable, Non Current | 500,000 | 500,000 |
| Intangible and Other Assets | 5,174,000 ------------ |
5,686,000 ------------ |
| Total Assets | $47,633,000 ============ |
$ 43,254,000 ============ |
LIABILITIES AND STOCKHOLDERS' EQUITY
| Current Liabilities Accounts payable |
$ 10,079,000 |
$ 7,403,000 |
| Billings in excess of costs and estimated earnings on uncompleted contracts |
1,835,000 |
3,421,000 |
Accrued income taxes |
123,000 | - |
Current portion of long-term debt |
414,000 | 322,000 |
| Accrued liabilities |
5,688,000 ------------ |
4,007,000 ------------ |
| Total Current Liabilities |
18,139,000 | 15,153,000 |
| Long-Term Debt | 12,709,000 |
12,161,000 |
| Series C Redeemable Convertible Preferred Stock |
3,207,000 |
2,550,000 |
| Total Liabilities | 34,055,000 |
29,864,000 |
| Stockholders' Equity Common stock |
416,000 |
411,000 |
| Common stock warrants | 1,628,000 | 1,628,000 |
| Additional paid-in capital | 19,609,000 |
19,245,000 |
| Retained Earnings (deficit) | (8,037,000) |
(7,856,000) |
| Less treasury stock, at cost | (38,000) | (38,000) |
| Total Stockholders' Equity | 13,578,000 ------------ |
13,390,000 ------------ |
| Total Liabilities and Stockholders' Equity | $ 47,633,000 ============ |
$ 43,254,000 ============ |
PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(UNAUDITED)
For the Nine Months Ended
October 31,
2007 ------------ |
2006 ------------ |
|
| Cash Flows From Operating Activities: |
||
Net income |
$ (181,000) | $ (5,390,000) |
Adjustments to Reconcile Net Income to Cash: Depreciation and amortization |
1,403,000 |
1,284,000 |
| Provision for deferred income taxes |
(177,000) |
(895,000) |
| Interest expense for Series C |
657,000 |
1,870,000 |
| Impairment charge for goodwill | - |
111,000 |
| Loss on sale of fixed asses and equity investment |
- |
17,000 |
| Stock based compensation | 224,000 |
209,000 |
| Provision for uncollectable accounts |
11,000 | 140,000 |
| Changes in Assets and Liabilities Other than Cash: Contracts receivable |
(4,004,000) |
382,000 |
| Costs and Estimated Earnings in Excess of Billings on uncompleted contracts |
(1,146,000) |
(372,000) |
| Inventories | (107,000) |
(35,000) |
| Prepaid/accrued income taxes | 373,000 | 509,000 |
| Other current assets | 1,113,000 |
869,000 |
| Accounts payable | 2,676,000 |
534,000 |
| Billings in excess of costs and estimated earnings on uncompleted contracts |
(1,586,000) |
(63,000) |
| Accrued liabilities | 1,612,000 ------------ |
(458,000) ------------ |
| Total Changes in Assets and Liabilities Other than Cash |
(1,069,000) ------------ |
1,366,000 ------------ |
| Net Cash Provided by (Used in) by Operating Activities |
868,000 |
(1,288,000) |
| Cash Flows From Investing Activities: Purchase of property, plant and equipment |
(528,000) |
(775,000) |
| Proceeds from sale of equity investment and fixed assets |
24,000 |
|
| Increase in other assets | (66,000) ------------ |
(57,000) ------------ |
| Net Cash Used in Investing Activities | (594,000) | (808,000) |
| Cash Flows From Financing Activities: Proceeds from debt |
730,000 |
2,664,000 |
| Proceeds from exercise of stock options and warrants |
145,000 |
861,000 |
| Payment of premium financing liability | (882,000) | (1,039,000) |
| Principal payments on debt | (282,000) ------------ |
(485,000) ------------ |
| Net Cash (Used in) Provided by Financing Activities |
(289,000) ------------ |
2,001,000 ------------ |
| Change in cash and cash equivalents (15,000) (95,000) Cash and cash equivalents, beginning of period |
158,000 ------------ |
230,000 ------------ |
| Cash and Cash Equivalents, end of period | $ 143,000 ============ |
$ 135,000 ============ |
| Supplementary disclosure of non-cash Investing and Financing Activity: Increase in goodwill and accrued liabilities for contingent liability |
(32,000) |
561,000 |
| Financing of annual insurance premium | $ 983,000 | $ 1,157,000 |
| Non-Cash purchase of fixed assets financed through capital lease |
$ (197,000) |
$ - |
Contact:
PDG Environmental, Inc.
John C. Regan, 412-243-3200
Chairman & CEO
or
Investors:
Lippert/Heilshorn & Associates, Inc.
Jody Burfening / Chris Witty, 212-838-3777
cwitty@lhai.com
________________________________________
Source: PDG Environmental, Inc.
