SOURCE: General Environmental Management

August 14, 2007 08:05 ET

General Environmental Management, Inc. Announces Second Quarter 2007 Results

First Half 2007 Revenue Grew 61% Compared to First Half 2006

POMONA, CA--(Marketwire - August 14, 2007) - General Environmental Management, Inc. ("GEM") (OTCBB: GEVI), a leading environmental and waste remediation company, today announced financial results for the second quarter and six months ended June 30, 2007.

"We generated 61 percent greater revenue in the first half of 2007 as compared to 2006, driven by strong sales in our enviro-construction services and mobile treatment and recovery services," stated Tim Koziol, chairman and CEO of GEM. "In the second quarter, we added new customers to our client roster as well as enhanced existing relationships. Recently, we announced our plans to accelerate our facility expansion plans to meet the anticipated greater demand for our bulk tank storage from existing and new customers."

Total revenue for the quarter ended June 30, 2007 was $6.5 million, up approximately 50 percent compared to $4.3 million in the same quarter of 2006. Operating expenses for the second quarter of 2007 were $2.7 million, compared to $2.2 million in the prior year's quarter. Net loss for the second quarter of 2007 was $5.2 million and included a non-cash charge of $3.4 million related to costs to induce conversion of debt. This compared to a net loss of $1.8 million for the second quarter of 2006, which did not include such a charge. Second quarter 2007 net loss per common share was $0.53, compared to $1.89 per common share in the second quarter of 2006.

Total revenue for the six months ended June 30, 2007 was $12.9 million, up approximately 61 percent compared to $8.0 million in the same period last year. Net loss for the first half of 2007 was $9.7 million and included the aforementioned non-cash charge. This compared to a net loss for the first half of 2006 of $2.9 million, which did not include such a charge. Net loss per common share for the six months ended June 30, 2007 was $1.13, compared to $3.11 for the six months ending June 30, 2006.

Recent Highlights

--  Announced this month the implementation of GEM's Waste-to-Energy
    research and development group. The Institute for Clean Energy Technology
    (ICET), formerly the Diagnostic Instrumentation and Analysis Laboratory
    (DIAL), at Mississippi State University completed successful testing for
    GEM on a unique and inexpensive process to generate hydrogen on demand. GEM
    owns the exclusive worldwide licensing rights to this patented technology.
    
--  In July, declared the intent to construct a bulk tank storage facility
    at the company's Rancho Cordova, California Part B permitted waste
    consolidation facility. The bulk tank storage will enable GEM to receive
    bulk liquid shipments while taking advantage of the economies of blending
    smaller containers of compatible waste for bulk shipments out to third-
    party recycling facilities.
    
--  In May, entered into a strategic marketing relationship with Systech
    Environmental Corporation (Systech), a premier provider of alternative
    fuels. The agreement also provides the platform for Systech and GEM to
    explore additional joint business and investment opportunities as they
    arise.
    
--  In April, received a renewed Part B permit Rancho Cordova LLC (GEM
    LLC) in April 2007 from the California Department of Toxic Substances
    Control (DTSC).
    

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 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


                                           June 30,           December 31,
                                             2007                 2006
                                          -----------         ------------
                                          (Unaudited)
                      ASSETS
CURRENT ASSETS:
Cash                                      $    98,173         $    618,654
Accounts receivable, net of
 allowance for doubtful
 accounts of $263,390 and
 $285,000,respectively                      5,121,009            5,540,069
Prepaid expenses and other
 current assets                               727,929              428,018
                                          -----------         ------------
Total Current Assets                        5,947,111            6,586,741

Property and Equipment - net of
 accumulated depreciation
 $1,567,098 and $1,248,088,
 respectively                               3,736,440            2,918,690
Restricted cash                             1,165,677              911,168
Intangibles, net                            1,146,902            1,191,217
Deferred financing fees                       166,686              291,529
Deposits                                      246,802              147,742
Goodwill                                      946,119              946,119
                                          -----------         ------------

TOTAL ASSETS                             $ 13,355,737         $ 12,993,206
                                         ============         ============

       LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts payable                         $  3,781,902          $ 3,755,264
Accrued expenses                            1,942,671            2,149,178
Accrued disposal costs                        680,557              593,575
Payable to related party                      693,971              824,783
Deferred rent                                  32,618               25,150
Current portion of financing
 agreement                                    769,638            1,017,048
Current portion of long term
 obligations                                  252,747              125,432
Current portion of convertible
 notes payable                                510,083                    -
                                          -----------         ------------
Total Current Liabilities                   8,664,187            8,490,430
                                         ------------         ------------

LONG-TERM LIABILITIES:
Financing agreements, net of
 current portion                            2,154,184            2,050,588
Long term obligations, net of
 current portion                            2,421,200            1,704,892
Convertible Notes payable                           -              601,161
                                         ------------         ------------
Total Long-Term  Liabilities                4,575,384            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,
 11,024,295 and 5,920,408 shares
 issued and outstanding                        11,025                5,920
Additional paid in capital                 43,131,510           33,430,095
Accumulated deficit                       (43,026,369)         (33,292,361)
                                         ------------         ------------
Total Stockholders' Equity                    116,166              146,135
                                         ------------         ------------
TOTAL LIABILITIES & STOCKHOLDERS’
 EQUITY                                  $ 13,355,737         $ 12,993,206
                                         ============         ============




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


                       Three months ended        Six months ended
                  June 30, 2007  June 30, 2006 June 30, 2007 June 30, 2006
                  -------------  ------------- ------------- -------------


REVENUES            $  6,541,832  $  4,349,839  $ 12,859,212  $  7,997,757

COST OF REVENUES       5,068,675     3,338,327    10,145,012     6,126,696
                    ------------  ------------  ------------  ------------

GROSS PROFIT           1,473,157     1,011,512     2,714,200     1,871,061

OPERATING EXPENSES     2,681,502     2,191,472     7,748,042     3,942,749
                    ------------  ------------  ------------  ------------

OPERATING LOSS        (1,208,345)   (1,179,960)   (5,033,842)   (2,071,688)

OTHER INCOME
 (EXPENSE):
Interest income           10,948         6,323        19,415        11,671
Interest and
 financing costs        (560,120)     (610,630)   (1,240,133)     (896,887)
Costs to induce
 conversion of debt   (3,428,847)            -    (3,547,687)            -
Other non-operating
 income                   34,259        22,826        68,239        52,812
                    ------------  ------------  ------------  ------------

Net Loss              (5,152,106)   (1,761,441)   (9,734,008)   (2,904,092)

Preferred stock
 dividends                     -       (16,871)            -       (16,871)
                    ------------  ------------  ------------  ------------

Net Loss
 applicable to
 common share
 holders            $ (5,152,106) $ (1,778,312) $ (9,734,008) $ (2,920,963)
                    ============  ============  ============  ============

Calculations of net
 loss per common
 Share, basic and
 diluted:           $       (.53) $      (1.89) $      (1.13) $      (3.11)
                    ============  ============  ============  ============

Weighted average
 shares of common
 stock outstanding,
 basic and diluted     9,767,147       941,688     8,611,020       938,943
                    ============  ============  ============  ============

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