SOURCE: General Environmental Management, Inc.

April 15, 2009 19:32 ET

General Environmental Management, Inc. Announces 2008 Financial Results

Gross Revenue Increased by 14.5% Over Previous Year to $34.86mm; Operating Expenses Reduced by $5,219,922; Positive Adjusted EBITDA of $636,877

POMONA, CA--(Marketwire - April 15, 2009) - General Environmental Management, Inc. ("GEM") (OTCBB: GEVI), a leading environmental and waste remediation company, announced today the financial results for the year ended December 31, 2008.

In announcing the results, Tim Koziol, Chairman and CEO of GEM, stated, "Throughout the year, we have been challenged by the global economic recession which included fuel price fluctuations early in the year, and the collapse of certain financial institutions and industries throughout the remainder of the year.

"We believe we are meeting and adapting to the current economic challenges presented and through Management's coordinated efforts, the company will continue to adjust towards positive performance during these changing times. We continue to monitor all of our key economic indicators both within the Company and our industry in an effort to reach our growth targets and increase shareholder value."


HIGHLIGHTS:

--  Revenues for 2008 were $34.86 million, up 14.5% from $30.44 million
    for 2007.
    
--  Adjusted EBITDA (see description below) was a positive $636,877 for
    2008 compared to a negative EBITDA of $4,436,799 for 2007, an improvement
    of $5,073,676.
    
--  2008 Operating Expenses were reduced by $5,219,922 compared to 2007.
    

"Today, similar to many companies in our industry, we have been affected by the economic downturn which is evident in our year end results, particularly in the fourth quarter of 2008," stated Koziol. "Although the revenues for the fourth quarter were 9.4% greater than the prior year, we did not achieve the EBITDA levels required by the covenants in our Revolving Credit and Term Loan Agreement with our senior lender, CVC California, LLC. Not achieving the required levels is considered an 'Event of Default' under the terms of the Agreement.

"However, as of April 15, 2009, the Company is in discussions with our Lender to obtain a waiver of the Event of Default and we continue to operate in the normal course of business and receive uninterrupted advances from our Lender under the Agreement."

About General Environmental Management, Inc.

General Environmental Management, Inc. (www.go-gem.com) is a full-service hazardous waste management and environmental services firm providing integrated environmental solutions managed through its proprietary web-based enterprise software, GEMWare, including the following service offerings: management and transportation of waste; design and management of on-site waste treatment systems; management of large remediation projects; response to environmental incidents and spills; and environmental, health and safety compliance. Headquartered in Pomona, California, GEM operates seven field service locations and one Treatment, Storage, Disposal facility (TSDF), servicing all markets in the Western U.S.

Statements made in this press release that are not historical in nature constitute forward-looking statements within the meaning of the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. Such statements are based on the current expectations and beliefs of the management of GEM. No forward-looking statement can be guaranteed. GEM undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Forward-looking statements in this press release should be evaluated together with the many uncertainties that affect GEM's business.


         GENERAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS


                                                December 31,  December 31,
                                                    2008          2007
                                                ------------  ------------

CURRENT ASSETS:
Cash                                            $    375,983  $    954,581
Accounts receivable, net of allowance for
 doubtful accounts of $174,834 and $236,781
 respectively                                      6,729,743     6,495,736
Prepaid expenses and current other assets            537,289       156,340
                                                ------------  ------------
Total Current Assets                               7,643,015     7,606,657
                                                ------------  ------------

Property and Equipment - Net of accumulated
 depreciation $2,917,056 and $1,854,141
 respectively                                      7,783,208     3,950,253
Restricted cash                                    1,199,784     1,184,835
Intangibles, Net                                     864,781     1,028,044
Deferred financing Fees                              513,412       394,082
Deposits                                             291,224       282,070
Goodwill                                             946,119       946,119

                                                ------------  ------------
TOTAL ASSETS                                    $ 19,241,543  $ 15,392,060
                                                ============  ============

    LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable                                $  3,499,178  $  4,314,515
Accrued expenses                                   2,620,224     2,263,519
Accrued disposal costs                               743,474       478,833
Payable to related party                             706,868        31,871
Deferred Rent                                         41,202        37,769
Current portion of financing agreement            10,366,544       662,719
Current portion of long term obligations             794,278     1,274,464
Current portion of capital lease obligations         623,007       187,015

                                                ------------  ------------
Total Current Liabilities                         19,394,775     9,250,705

LONG-TERM LIABILITIES:
Financing agreements, net of current portion    $          -  $  3,708,694
Long term obligations, net of current portion        535,689        79,842
Capital lease obligations, net of current
 portion                                           1,751,854     1,046,920
Convertible Notes Payable                            489,605       520,208
                                                ------------  ------------
Total Long-Term Liabilities                        2,777,148     5,355,664

STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 1,000,000,000
 shares authorized, 12,691,409 and 12,473,885
 shares issued and outstanding, respectively          12,692        12,474

Additional paid in capital                        53,585,035    50,151,615
Accumulated deficit                              (56,528,107)  (49,378,398)
                                                ------------  ------------
Total Stockholders' Equity (Deficiency)           (2,930,380)      785,691
                                                ------------  ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $ 19,241,543  $ 15,392,060
                                                ============  ============




         GENERAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                               (UNAUDITED)


                        Twelve months ended         Three months ended
                    --------------------------  --------------------------
                    December 31,  December 31,  December 31,  December 31,
                        2008          2007          2008          2007
                    ------------  ------------  ------------  ------------


REVENUES            $ 34,864,714  $ 30,445,608  $  9,875,504  $  9,030,565

COST OF REVENUES      28,981,325    23,756,677     8,653,336     6,733,430
                    ------------  ------------  ------------  ------------

GROSS PROFIT           5,883,389     6,688,931     1,222,168     2,297,135

OPERATING EXPENSES     8,397,355    13,617,277     2,746,249     2,835,196
                    ------------  ------------  ------------  ------------

OPERATING LOSS        (2,513,966)   (6,928,346)   (1,524,081)     (538,061)

OTHER INCOME
 (EXPENSE):
Interest income           17,569        39,667         1,675         9,611
Interest and
 financing costs      (4,695,041)   (2,548,609)     (946,049)     (733,478)
Costs to induce
 conversion of
 related party
 debt                          -    (6,797,639)            -       (60,226)
Other non-operating
 income                   41,729       148,890         6,556        55,322
                    ------------  ------------  ------------  ------------

Net Loss
 applicable to
 common stock
 holders            $ (7,149,709) $(16,086,037) $ (2,461,899) $ (1,266,832)
                    ============  ============  ============  ============


Net loss per common
 share, basic and
 diluted            $       (.57) $      (1.55) $       (.19) $       (.10)
                    ============  ============  ============  ============

Weighted average
 shares of common
 stock
 outstanding, basic
 and diluted          12,578,104    10,360,712    12,688,660    12,434,482
                    ============  ============  ============  ============

For the periods presented, "Adjusted EBITDA" consists of net loss plus depreciation and amortization, net interest expense, non-recurring employment charges, stock based compensation charges, and other non-recurring financing-related expenses. We also exclude gain/loss on sale of fixed assets, non-operating costs expired acquisition, and costs to induce conversion of debt as these amounts are not considered part of usual business operations. Such definition of "Adjusted EBITDA" is the same as the definition of "EBITDA" used in our incentive plans for management. Our management considers Adjusted EBITDA to be a measurement of performance which provides useful information to both management and investors. Adjusted EBITDA should not be considered an alternative to net income or loss or other measurements under GAAP. Because Adjusted EBITDA is not calculated identically by all companies, this measurement of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

                   For the twelve months ended  For the three months ended
                           December 31,                December 31,
                    --------------------------  --------------------------
                        2008          2007          2008          2007
                    ------------  ------------  ------------  ------------

NET LOSS            $ (7,149,709) $(16,086,037) $ (2,461,899) $ (1,266,832)
Depreciation and
 amortization          1,226,178       769,227       398,362       209,702
Interest expense,
 net                   4,695,041     2,548,609       946,049       733,478

Non-recurring
 employment charges      357,630       307,740       357,630       200,000

Stock based
 compensation
 charges                 906,182     1,199,301       271,970       441,011
Issuance of
 warrants and
 common shares for
 services                298,564             -       298,564             -

Contract loss
 accruals                302,991             -       302,991             -
Non-recurring
 financing related
 expenses                      -        26,722             -        26,722

Costs to induce
 conversion of debt            -     6,797,639             -        60,226

                    ------------  ------------  ------------  ------------

ADJUSTED EBITDA     $    636,877  $ (4,436,799) $    113,667  $    404,307

                    ============  ============  ============  ============

Contact Information

  • Company Contact:
    General Environmental Management (GEM)
    Tim Koziol
    909-444-9500