SOURCE: General Environmental Management

August 14, 2008 16:24 ET

General Environmental Management Inc. Announces Second Quarter 2008 Results

Third Consecutive Quarter With Continued Improvements Over Same Prior Year Period; Gross Revenue Increased 44%; Adjusted EBITDA $1,108k Higher; Operating Expenses Reduced $725k

POMONA, CA--(Marketwire - August 14, 2008) - General Environmental Management, Inc. ("GEM") (OTCBB: GEVI), a leading environmental and waste remediation company announced today the financial results for the second quarter ended June 30, 2008.

"The results for the second quarter of 2008 provide the third consecutive quarter of continued improvements over the same period for the previous year. GEM's revenue for the second quarter of 2008 exceeded our forecasts." Tim Koziol, Chairman and CEO of GEM stated, "We continue to execute our strategic plan and remain focused to achieve our company wide goal for positive adjusted EBITDA for fiscal 2008. We did not anticipate the significant revenue expansion in the June quarter due to the much debated broad based economic slow down affecting our nation. Notwithstanding, we were able to increase our revenue by 44% over the quarter ending June 30th, 2007."

The company faced an increase in fuel costs due to the rapid rise in national fuel prices. Brett Clark the Chief Financial Offer commented, "Our second quarter results were affected by the sudden rise of fuel costs. As a result, certain key vendors of the company passed these cost increases back to GEM through necessitated surcharges."

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

HIGHLIGHTS

--  Revenues for the second quarter of fiscal 2008 were $9.41 million, up
    44% from $6.54 million for the second quarter of fiscal 2007.
    
--  Adjusted EBITDA (see description below) was a profit of $90,491 for
    the second quarter of 2008 compared to a loss of $1,017,662 for the same
    period in 2007 for a positive change of $1,108,153.
    
--  Operating expenses were reduced for the second consecutive quarter by
    $725,189.
    

OUTLOOK

"We are very pleased with the increase in revenue in spite of the economic slow down which indicates our service is meeting the needs of clients. Furthermore, the additional reduction in operating expense matched with the revenue increase allows us to expect positive adjusted EBITDA for 2008," stated 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
                                                  June 30,    December 31,
                                                    2008          2007
                                                ------------  ------------
CURRENT ASSETS:
Cash                                            $     38,800  $    954,581
Accounts receivable, net of allowance for
 doubtful accounts of $178,969 and $236,781
 respectively                                      6,897,307     6,495,736
Prepaid expenses and current other assets            505,740       156,340
                                                ------------  ------------
Total Current Assets                               7,441,847     7,606,657
                                                ------------  ------------

Property and Equipment - Net of accumulated
 depreciation $2,239,582 and $1,854,141
 respectively                                      4,863,228     3,950,253
Restricted cash                                    1,194,896     1,184,835
Intangibles, Net                                     946,391     1,028,044
Deferred financing Fees                              225,182       394,082
Deposits                                             291,600       282,070
Goodwill                                             946,119       946,119

                                                ------------  ------------
TOTAL ASSETS                                    $ 15,909,263  $ 15,392,060
                                                ============  ============

        LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable                                $  3,293,422  $  4,314,515
Accrued expenses                                   3,609,414     2,301,288
Accrued disposal costs                               620,291       478,833
Payable to related party                             123,927        31,871
Current portion of financing agreement               876,589       662,719
Current portion of long term obligations           1,287,660     1,274,464
Current portion of capital lease obligations         387,097       187,015
Notes payable to Investors                           509,222             -

                                                ------------  ------------
Total Current Liabilities                         10,707,622     9,250,705

LONG-TERM LIABILITIES:
Financing agreements, net of current portion    $  4,251,870  $  3,708,694
Long term obligations, net of current portion         57,704        79,842
Capital lease obligations, net of current
 portion                                           1,786,958     1,046,920
Notes payable to Investors                                 -       520,208
                                                ------------  ------------
Total Long-Term Liabilities                        6,096,532     5,355,664

STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 1,000,000,000
 shares authorized, 12,673,885 and 12,473,885
 shares issued and outstanding, respectively          12,674        12,474

Additional paid in capital                        51,021,050    50,151,615
Accumulated deficit                              (51,928,615)  (49,378,398)
                                                ------------  ------------
Total Stockholders' Equity                          (894,891)      785,691
                                                ------------  ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $ 15,909,263  $ 15,392,060
                                                ============  ============



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



                        Three months ended          Six  months ended
                    --------------------------  --------------------------
                      June 30,      June 30,      June 30,      June 30,
                        2008          2007          2008          2007
                    ------------  ------------  ------------  ------------

REVENUES            $  9,406,585  $  6,541,832  $ 16,358,238  $ 12,859,212

COST OF REVENUES       7,822,370     5,068,675    13,467,714    10,145,012
                    ------------  ------------  ------------  ------------

GROSS PROFIT           1,584,215     1,473,157     2,890,524     2,714,200

OPERATING EXPENSES     1,956,313     2,681,502     3,805,927     7,748,042
                    ------------  ------------  ------------  ------------

OPERATING LOSS          (372,098)   (1,208,345)     (915,403)   (5,033,842)

OTHER INCOME
 (EXPENSE):
Interest income            2,795        10,948         9,812        19,415
Interest and
 financing costs        (844,711)     (560,120)   (1,661,319)   (1,240,133)
Costs to induce
 conversion of debt            -    (3,428,847)            -    (3,547,687)
Other non-operating
 income                    9,030        34,259        16,693        68,239
                    ------------  ------------  ------------  ------------

Net Loss            $ (1,204,984) $ (5,152,105) $ (2,550,217) $ (9,734,008)
                    ============  ============  ============  ============

Net loss per common
 share, basic and
 diluted            $       (.10) $       (.53) $       (.20) $      (1.13)
                    ============  ============  ============  ============

Weighted average
 shares of common
 stock Outstanding,
 basic and diluted    12,473,885     9,767,147    12,473,885     8,611,020
                    ============  ============  ============  ============

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   For the six months ended
                             June 30,                    June 30,
                    --------------------------  --------------------------
                        2008          2007          2008          2007
                    ------------  ------------  ------------  ------------

NET LOSS            $ (1,204,984) $ (5,152,105) $ (2,550,217) $ (9,734,008)
Depreciation and
 amortization            240,301       191,253       467,096       363,326

Interest expense,
 net                     844,711       560,120     1,661,319     1,240,133

Non-recurring
 employment charges            -             -                           -

Stock based
 compensation
 charges                 210,419       145,476       427,135       634,745
Issuance of
 warrants and
 common shares for
 services                      -             -                   2,294,104

Gain/Loss on
 disposal of fixed
 assets                        -                           -
Non-operating costs
 expired
 acquisition                   -                           -

Costs to induce
 conversion of debt                  3,428,847                   3,547,687

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

ADJUSTED EBITDA     $     90,447  $   (826,409) $      5,333  $ (1,654,013)
                    ============  ============  ============  ============

Contact Information

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