SOURCE: General Environmental Management

May 15, 2008 05:30 ET

General Environmental Management, Inc. Announces First Quarter 2008 Results

Second Consecutive Quarter With Continued Improvements Over Same Prior Year Period; Gross Revenue Increased 10%; Adjusted EBITDA $742k Higher; Operating Expenses Reduced $923k

POMONA, CA--(Marketwire - May 15, 2008) - 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, 2008.

"The results for the first quarter of 2008 provide the second consecutive quarter of continued improvements over the same previous year periods. GEM's performance in the 1st quarter of 2008 exceeded our forecasts. We continue to be on target for a positive adjusted EBITDA in 2008," stated Tim Koziol, chairman and CEO of GEM.

He also stated, "Our first quarter has historically been our slowest because of cyclical weather conditions. Further, we were not expecting any revenue expansion because of the current economic slow down that is affecting our country. Notwithstanding, we were able to increase our revenue by 10% over the same period in 2007. We have accomplished this revenue expansion by capitalizing on market opportunities, by acquiring new customers in a price-sensitive market, and by promoting service, safety, and innovation."

Fiscal First Quarter 2008 compared to the same quarter in 2007:

HIGHLIGHTS

--  Revenues for the first quarter of fiscal 2008 were $6.95 million, up
    10% from $6.32 million for the first quarter of fiscal 2007.
    
--  Adjusted EBITDA (see description below) was a loss of $85,114 for the
    first quarter of 2008 compared to a loss of $827,605 for the same period in
    2007 for a positive change of $742,491.
    
--  Operating expenses, excluding non-cash expenses in March 2007 related
    to issuance of warrants and common shares for services, were reduced
    significantly by $922,822.
    

OUTLOOK

"We continue to expect revenue growth and greater financial efficiencies leading to our goal of positive adjusted EBITDA for 2008. The growth we are experiencing supports our customer-first policy," concluded Koziol.

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


                                                March 31,     December 31,
                                                  2008            2007
                                              ------------    ------------
CURRENT ASSETS:
Cash                                          $    200,479    $    954,581
Accounts receivable, net of allowance for
 doubtful accounts of $236,781 and $236,781,
 respectively                                    4,972,207       6,495,736
Prepaid expenses and current other assets          662,979         156,340
                                              ------------    ------------
Total Current Assets                             5,835,665       7,606,657
                                              ------------    ------------

Property and Equipment - Net of accumulated
 depreciation
$2,040,086 and $1,854,141 respectively           4,708,463       3,950,253
Restricted cash                                  1,191,298       1,184,835
Intangibles, Net                                   987,195       1,028,044
Deferred financing Fees                            309,632         394,082
Deposits                                           282,260         282,070
Goodwill                                           946,119         946,119

                                              ------------    ------------
TOTAL ASSETS                                  $ 14,260,632    $ 15,392,060
                                              ============    ============

      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable                              $  2,353,386    $  4,314,515
Accrued expenses                                 3,182,709       2,301,288
Accrued disposal costs                             411,506         478,833
Payable to related party                           506,426          31,871
Current portion of financing agreement             606,842         662,719
Current portion of long term obligations         1,281,318       1,274,464
Current portion of capital lease
 obligations                                       338,412         187,015
Current portion of convertible notes
 payable                                           514,850               -

                                              ------------    ------------
Total Current Liabilities                        9,195,449       9,250,705

LONG-TERM LIABILITIES:
Financing agreements, net of current
 portion                                      $  3,665,780    $  3,708,694
Long term obligations, net of current
 portion                                            68,772          79,842
Capital lease obligations, net of current
 portion                                         1,673,457       1,046,920
Convertible Notes payable                                -         520,208
                                              ------------    ------------
Total Long-Term Liabilities                      5,408,009       5,355,664

STOCKHOLDERS' EQUITY

Common stock, $.001 par value, 1,000,000,000
 shares authorized, 12,473,885 and 12,473,885
 shares issued and outstanding, respectively        12,474          12,474

Additional paid-in capital                      50,368,331      50,151,615
Accumulated deficit                            (50,723,631)    (49,378,398)
                                              ------------    ------------
Total Stockholders' Equity                        (342,826)        785,691
                                              ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $ 14,260,632    $ 15,392,060
                                              ============    ============



            GENERAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS


                                               For the three months ended
                                                        March 31,
                                                   2008          2007


REVENUES                                      $  6,951,653    $  6,317,380

COST OF REVENUES                                 5,645,344       5,076,337
                                              ------------    ------------

GROSS PROFIT                                     1,306,309       1,241,043

OPERATING EXPENSES                               1,849,614       5,066,540
                                              ------------    ------------

OPERATING LOSS                                    (543,305)     (3,825,497)

OTHER INCOME (EXPENSE):
Interest income                                      7,017           8,466
Interest and financing costs                      (816,608)       (798,852)

Other non-operating income                           7,663          33,980
                                              ------------    ------------
Net loss applicable to common shareholders    $ (1,345,233)   $ (4,581,903)

CALCULATIONS OF NET LOSS PER COMMON SHARE,
 BASIC AND DILUTED:

Net loss per common share, basic and diluted         (0.11)          (0.62)
                                              ============    ============

Weighted average shares of common stock
 outstanding, basic and diluted                 12,473,885       7,442,046
                                              ============    ============

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 three months ended
                                                         March 31,
                                                --------------------------
                                                    2008          2007
                                                ------------  ------------
NET LOSS                                        $ (1,345,233) $ (4,581,903)
Depreciation and amortization                        226,795       172,073
Interest expense, net                                816,608       798,852
Stock based compensation charges                     216,716       489,269
Issue of warrants and common shares for
 services                                                  -     2,294,104

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

ADJUSTED EBITDA                                 $    (85,114) $   (827,605)
                                                ============  ============

Contact Information

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