SOURCE: Flagship PDG

Flagship PDG

June 15, 2009 12:28 ET

FlagshipPDG Announces First Quarter Results for Period Ended April 30, 2009

PITTSBURGH, PA--(Marketwire - June 15, 2009) - PDG Environmental, Inc. (dba FlagshipPDG) (OTCBB: PDGE), a leading provider of environmental remediation, disaster response and reconstruction services, today reported financial results for the first fiscal quarter ended April 30, 2009.

Revenues for the first quarter of fiscal 2010 were $12.6 million, down 28.7% from the $17.7 million reported in the first quarter of fiscal 2009. The decrease was due to lower customer spending resulting from the overall economic conditions as well as several ongoing contracts being put on hold during the quarter. The field margin which is defined as the difference between contract revenues and direct field costs, increased to 29.2% of revenue for the current quarter, from 26.6% in the prior year fiscal quarter. Other direct and SG&A costs decreased $1.3 million from the first quarter of fiscal 2009 largely as a result of cost cutting measures in the third and fourth quarter of fiscal 2009. Pre-tax loss decreased by $200,000 from the prior fiscal quarter as a result of the factors noted previously. The Company reported a net loss of $(1.5) million, or $(0.07) per diluted share in the first quarter of fiscal 2010, compared with a net loss of $(1.1) million, or $(0.05) per diluted share in the first quarter of fiscal 2009. EBITDA (earnings before interest, taxes, depreciation and amortization) was a negative $(553,000) for the current quarter versus a negative EBITDA of $(760,000) for the comparable period in fiscal 2009. In the first quarter of fiscal 2010, FlagshipPDG recorded non-cash accounting costs of $297,000 related to its July 2005 private placement as compared to $248,000 for the comparable period last year.

"While the first quarter is historically our slowest revenue quarter, it is clear that our results were greatly impacted by the overall national economic conditions. In the last half of fiscal 2009, we took necessary steps to rationalize our fixed costs to achievable revenue levels which resulted in a decrease to our overhead cost of approximately $1.3 million as compared to the comparable period last year. In spite of nearly 30% lower revenues, we were able to reduce the quarterly loss through cost cutting and significant margin improvement. We are entering historically the busiest part of our fiscal year and we are beginning to see an increase in opportunities and are hopeful that federal economic stimulus dollars will also have a positive impact on our top line through increased spending on projects for schools, public housing, DOE site clean-up and federal buildings," said John C. Regan, chairman and chief executive officer of FlagshipPDG.

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 FlagshipPDG

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 http://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.

                 PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)

                                                For the Three Months Ended
                                                        April 30,
                                                --------------------------
                                                    2009          2008
                                                ------------  ------------

Contract Revenues                               $ 12,630,000  $ 17,715,000

Direct Job Costs                                   8,947,000    13,002,000
                                                ------------  ------------

Field Margin                                       3,683,000     4,713,000

Other Direct Costs                                 1,830,000     2,480,000
                                                ------------  ------------

Gross Margin                                       1,853,000     2,233,000

(Loss) on Sale of Fixed Assets                       (18,000)       (3,000)
Selling, General and Administrative Expenses       2,825,000     3,461,000
                                                ------------  ------------

(Loss) from Operations                              (990,000)   (1,231,000)

Other Income (Expense):
  Interest Expense                                  (194,000)     (203,000)
  Non-Cash Interest Expense for Preferred
   Dividends and Accretion of Discount              (297,000)     (248,000)
  Interest and Other Income                           20,000        21,000
                                                ------------  ------------
                                                    (471,000)     (430,000)
                                                ------------  ------------

(Loss) Before Income Taxes                        (1,461,000)   (1,661,000)
                                                ------------  ------------

Income Tax (Benefit)                                       -      (517,000)
                                                ------------  ------------

Net (Loss)                                      $ (1,461,000) $ (1,144,000)
                                                ============  ============

(Loss) Per Common Share - Basic:                $      (0.07) $      (0.05)
                                                ============  ============

(Loss) Per Common Share - Diluted:              $      (0.07) $      (0.05)
                                                ============  ============

Average Common Shares Outstanding                 20,875,000    20,814,000

Average Dilutive Common Stock Equivalents
 Outstanding                                               -             -
                                                ------------  ------------

Average Common Shares and Dilutive Common Stock
 Equivalents Outstanding                          20,875,000    20,814,000
                                                ============  ============


                 PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
                RECONCILIATION OF EARNINGS BEFORE INTEREST,
                   TAXES, DEPRECIATION AND AMORTIZATION
                                ("EBITDA")
                                (UNAUDITED)

                                                For the Three Months Ended
                                                        April 30,
                                                --------------------------
                                                    2009          2008
                                                ------------  ------------

Net (Loss)                                        (1,461,000)   (1,144,000)

Interest Expense                                     194,000       203,000
Non-Cash Interest Expense for Preferred
 Dividends and Accretion of Discount                 297,000       248,000
Income Tax (Benefit)                                       -      (517,000)
Depreciation and Amortization                        417,000       450,000
                                                ------------  ------------

EBITDA                                          $   (553,000) $   (760,000)
                                                ============  ============




                 PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS

                                                  April 30,   January 31,
                                                    2009          2009
                                                ------------  ------------
ASSETS                                           (unaudited)

 Current Assets
  Cash and Cash Equivalents                     $     30,000  $    314,000
  Contracts Receivable, Net                       14,892,000    20,677,000
  Costs and Estimated Earnings in Excess of
   Billings on Uncompleted Contracts               2,209,000     3,180,000
  Inventories                                        634,000       616,000
  Income Taxes Receivable                              3,000       355,000
  Deferred Income Tax Asset                          983,000       983,000
  Other Current Assets                             2,119,000       344,000
                                                ------------  ------------

 Total Current Assets                             20,870,000    26,469,000

 Property, Plant and Equipment                    12,420,000    12,431,000
 Less: Accumulated Depreciation                  (10,990,000)  (10,786,000)
                                                ------------  ------------
                                                   1,430,000     1,645,000

 Intangible Assets, Net                            3,824,000     4,026,000
 Goodwill                                          2,489,000     2,489,000
 Deferred Income Tax Asset                         2,948,000     2,948,000
 Contracts Receivable, Non Current                 1,820,000     1,820,000
 Costs in Excess of Billings on Uncompleted
  Contracts, Non Current                           1,630,000     1,630,000
 Other Assets                                        326,000       345,000
                                                ------------  ------------

 Total Assets                                   $ 35,337,000  $ 41,372,000
                                                ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY

 Current Liabilities
  Accounts Payable                              $  8,232,000  $  9,411,000
  Billings in Excess of Costs and Estimated
   Earnings on Uncompleted Contracts                 982,000     1,125,000
  Accrued Income Taxes                                     -        44,000
  Accrued Liabilities                              4,530,000     2,742,000
  Current Portion of Long-Term Debt                  250,000       303,000
  Mandatorily Redeemable Cumulative Convertible
   Series C Preferred Stock                          190,000       137,000
                                                ------------  ------------

 Total Current Liabilities                        14,184,000    13,762,000

 Long-Term Debt                                    9,748,000    15,045,000

 Mandatorily Redeemable Cumulative Convertible
  Series C Preferred Stock                         4,616,000     4,372,000
                                                ------------  ------------

 Total Liabilities                                28,548,000    33,179,000

 Stockholders' Equity
  Common Stock                                       418,000       418,000
  Common Stock Warrants                            1,628,000     1,628,000
  Paid-In Capital                                 20,168,000    20,111,000
  Accumulated Deficit                            (15,387,000)  (13,926,000)
  Less Treasury Stock, at Cost                       (38,000)      (38,000)
                                                ------------  ------------

 Total Stockholders' Equity                        6,789,000     8,193,000
                                                ------------  ------------

 Total Liabilities and Stockholders' Equity     $ 35,337,000  $ 41,372,000
                                                ============  ============




                 PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (UNAUDITED)

                                                For the Three Months Ended
                                                        April 30,
                                                --------------------------
                                                    2009          2008
                                                ------------  ------------
Cash Flows From Operating Activities:
Net (Loss)                                      $ (1,461,000) $ (1,144,000)
Adjustments to Reconcile Net Income (Loss) to
 Cash Provided by (Used in) Operating
 Activities:
  Depreciation and Amortization                      417,000       450,000
  Deferred Income Taxes                                    -      (517,000)
  Interest Expense for Series C Preferred Stock
   Dividends and Accretion of Discount               297,000       248,000
  Stock Based Compensation                            57,000       129,000
  Loss on Sale of Fixed Assets                        18,000         3,000
  Provision for Receivable Allowance                  (8,000)            -
                                                ------------  ------------
                                                    (680,000)     (831,000)

Changes in Operating Assets and Liabilities:
  Contracts Receivable                             5,793,000     2,806,000
  Costs and Estimated Earnings in Excess of
   Billings on Uncompleted Contracts                 971,000        59,000
  Inventories                                        (18,000)       88,000
  Accrued Income Taxes                               (44,000)      (68,000)
  Other Current Assets                             1,307,000       370,000
  Accounts Payable                                (1,179,000)   (1,793,000)
  Billings in Excess of Costs and Estimated
   Earnings on Uncompleted Contracts                (143,000)       27,000
  Accrued Liabilities                                 44,000       (81,000)
                                                ------------  ------------
Total Changes                                      6,731,000     1,408,000
                                                ------------  ------------
Net Cash Provided by Operating Activities          6,051,000       577,000

Cash Flows From Investing Activities:
  Purchase of Property, Plant and Equipment          (18,000)      (86,000)
  Proceeds from Sale of Fixed Assets                       -         1,000
  Changes in Other Assets                             19,000         3,000
                                                ------------  ------------
Net Cash Provided by (Used in) Investing
 Activities                                            1,000       (82,000)

Cash Flows From Financing Activities:
  Payment of Premium Financing Liability            (986,000)     (326,000)
  Principal Payments on Debt                      (5,350,000)     (172,000)
                                                ------------  ------------
Net Cash Used in Financing Activities             (6,336,000)     (498,000)
                                                ------------  ------------

Net Decrease in Cash and Cash Equivalents           (284,000)       (3,000)
Cash and Cash Equivalents, Beginning of Year         314,000        90,000
                                                ------------  ------------
Cash and Cash Equivalents, End of Period        $     30,000  $     87,000
                                                ============  ============

Supplementary Disclosure of Non-Cash Investing
 and Financing Activity:
  Financing of Annual Insurance Premium         $  2,730,000  $  1,313,000
                                                ============  ============
  Non-Cash Purchase of Fixed Assets Financed
   Through Capital Leases                       $          -  $     27,000
                                                ============  ============

Contact Information

  • Investor Contact:
    Alliance Advisors, LLC.
    Mark McPartland / Chris Camarra
    212-398-3487
    Email Contact

    Company Contact:
    John C. Regan, Chairman & CEO
    Nick Battaglia, CFO
    412-243-3200