SOURCE: General Environmental Management

May 21, 2007 16:00 ET

General Environmental Management, Inc. Announces First Quarter 2007 Results

First Quarter Revenue Grew 73% Compared to the First Quarter 2006

POMONA, CA -- (MARKET WIRE) -- May 21, 2007 -- General Environmental Management, Inc. ("GEM") (OTCBB: GEVI), a leading environmental and waste remediation company, today announced financial results for the first quarter ended March 31, 2007.

"Our first quarter 2007 revenue of $6.3 million was up 73 percent year-over-year, driven by our expanded footprint in the Western region," stated Tim Koziol, chairman and CEO of GEM. "In addition, we generated stronger sales from a broader product line that today includes mobile wastewater treatment, vapor recovery services and enviroconstruction services. In the first quarter, we also began extending our presence nationwide with the opening of a Denver service center. We further expanded eastward with our strategic marketing agreement with Systech Environmental Corporation that enables us to utilize a portion of Systech's Fredonia, Kansas EPA permitted Part B Treatment, Storage and Disposal Facility (TSDF).

"We have built a strong infrastructure to support what we believe will be a larger revenue base in 2007, which resulted in a significant increase in our quarterly operating expenses as compared to last year's quarter. Overall, we are encouraged by the progress made to date in our strategy to expand nationwide and believe successful execution of our strategy will result in revenues for the full year 2007 of $29 million," Koziol concluded.

Total revenue for the quarter ended March 31, 2007 was $6.3 million, up approximately 73 percent compared to $3.6 million in the same quarter of 2006. Operating expenses for the first quarter of 2007 were $5.1 million and included non-cash charges of $500 thousand for options vested under the new GEM 2007 Stock Incentive Plan and $2.4 million for stock-based consulting and advisory fees. This compared to operating expenses of $1.8 million in the prior year's quarter. Net loss for the first quarter of 2007 was $4.6 million, or $0.62 per common share, compared to a net loss of $1.1 million, or $1.22 per common share, in the first quarter of 2006. Recent Highlights

--  Awarded four new contracts totaling $6.1 million in February for work
    in 2007, including 1) a follow-up contract from Jacobs Engineering Group,
    Inc. in Alaska; 2) an award from a public sector site remediation in
    Southern California; and 3) contracts from two large national customers
    representing the electronics industry.
    
--  Completed the opening of a new Service Center in Denver in February to
    better serve the Rocky Mountain region and grow market share in a service
    intensive territory.
    
--  A large southern California-based public utility selected GEM's
    proprietary data management software, GEMWare®, as its exclusive
    environmental data management system in March.
    
--  Entered into a strategic marketing relationship with Systech
    Environmental Corporation (Systech) in May 2007, a premier provider of
    alternative fuels. This relationship will enable both companies to more
    effectively penetrate the national environmental services marketplace while
    drawing on their respective resources.
    
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 offering: 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 five field service locations and one Treatment, Storage and 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

                                                March 31,     December 31,
                                                  2007           2006
                                              -------------  -------------
                                               (Unaudited)
ASSETS
CURRENT ASSETS:
Cash in bank                                  $     131,087  $     618,654
Accounts receivable, net of allowance for
 doubtful accounts of $278,210 and
 $285,000, respectively                           5,410,618      5,540,069
Prepaid expenses and other current assets           864,922        428,018
                                              -------------  -------------
Total Current Assets                              6,406,627      6,586,741

Property and Equipment - Net of accumulated
 depreciation $1,398,002 and $1,248,088,
 respectively                                     3,623,096      2,918,690
Restricted cash                                   1,155,270        911,168
Intangibles, net                                  1,169,060      1,191,217
Deferred financing fees                             229,053        291,529
Deposits                                            257,632        147,742
Goodwill                                            946,119        946,119
                                              -------------  -------------
TOTAL ASSETS                                  $  13,786,857  $  12,993,206
                                              =============  =============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable                              $   3,466,392  $   3,755,264
Accrued expenses                                  2,336,576      2,149,178
Accrued disposal costs                              609,429        593,575
Payable to related party                          1,097,069        824,783
Deferred rent                                        29,213         25,150
Current portion of notes payable                    208,864        125,432
Current portion of financing agreement              920,340      1,017,048
                                              -------------  -------------
Total Current Liabilities                         8,667,883      8,490,430
                                              -------------  -------------

LONG-TERM LIABILITIES:
Financing agreements, net of current portion      2,120,739      2,050,588
Notes payable, net of current portion             2,312,853      1,704,892
Convertible Notes payable                           500,000        601,161
                                              -------------  -------------
Total Long-Term Liabilities                       4,933,592      4,356,641
                                              -------------  -------------

STOCKHOLDERS' EQUITY
Series B Convertible Preferred Stock, net of
 offering costs of $60,960, liquidation
 preference $1 per share, $.001 par value,
 100,000,000 shares authorized, none and
 2,480,500 shares issued and outstanding                  -          2,481
Common stock, $.001 par value, 1,000,000,000
 shares authorized, 9,767,147 and 5,920,408
 shares issued and outstanding                        9,767          5,920
Additional paid in capital                       38,049,879     33,430,095
Accumulated deficit                             (37,874,264)   (33,292,361)
                                              -------------  -------------
Total Stockholders' Equity                          185,382        146,135
                                              -------------  -------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY      $  13,786,857  $  12,993,206
                                              =============  =============






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


                                                   Three months ended
                                              ----------------------------
                                                March 31,      March 31,
                                                  2007           2006
                                              -------------  -------------

REVENUES                                      $   6,317,380  $   3,647,918

COST OF REVENUES                                  5,076,337      2,788,369
                                              -------------  -------------

GROSS PROFIT                                      1,241,043        859,549

OPERATING EXPENSES                                5,066,540      1,751,277
                                              -------------  -------------

OPERATING LOSS                                   (3,825,497)      (891,728)

OTHER INCOME (EXPENSE):
  Interest income                                     8,466          5,348
  Interest and financing costs                     (798,852)      (286,257)
  Other non-operating income                         33,980         29,986

                                              -------------  -------------
NET LOSS                                      $  (4,581,903) $  (1,142,651)
                                              =============  =============
NET LOSS PER COMMON SHARE, BASIC AND DILUTED:

Net loss applicable to common shareholders    $       (0.62) $       (1.22)
                                              =============  =============
Weighted average shares of common stock
 outstanding, basic and diluted                   7,442,046        936,167
                                              =============  =============



Contact Information

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

    Investor Contact:
    Lippert / Heilshorn & Associates, Inc.
    Moriah Shilton / Kirsten Chapman
    415-433-3777
    Email Contact