SOURCE: General Environmental Management

November 14, 2008 05:30 ET

General Environmental Management, Inc. Announces Third Quarter 2008 Results

Fourth Consecutive Quarter With Continued Improvements

Nine Month Gross Revenue Increased 17%

Nine Month Adjusted EBITDA $2,643,000 Higher

Nine Month Operating Expenses Reduced $5,131,000

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

"The trailing four quarters of positive adjusted EBITDA of $927,563 is evidence of the company's continued execution of its strategic plan," stated Tim Koziol, Chairman and CEO of GEM. "The entire company is focused on our drive for the measured improvement of our key fundamentals. The foundation set in our sales, operations and systems this year provides the basis for our financial performance in 2009."

HIGHLIGHTS: Fiscal Third Quarter 2008

--  Revenues for the first nine months of fiscal 2008 were $24.99 million,
    up 17% from $21.41 million for the first nine months of fiscal 2007.
    
--  Adjusted EBITDA (see description below) was a profit of $517,923 for
    the third quarter of 2008, compared to a loss of $1,124,274 for the same
    period in 2007 for a positive change of $1,642,197.
    
--  Adjusted EBITDA (see description below) was a profit of $523,256 for
    the first nine months of 2008, compared to a loss of $2,119,427 for the
    same period in 2007 for a positive change of $2,642,683.
    
--  Operating expenses were reduced for the nine month period by
    $5,131,000.
    

OUTLOOK

"The company's acquisition of Island Environmental Services, Inc. (IES) was a key acquisition for the company, providing assets and an entry into certain customer bases that we had previously not serviced. We have successfully acquired, integrated and driven organic growth with all of our acquisitions and expect to do the same with IES. IES is the sixth acquisition the company has successfully completed and integrated," 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

                                              September 30,  December 31,
                                                  2008           2007
                                              -------------  -------------

CURRENT ASSETS:
Cash                                          $     604,526  $     954,581
Accounts receivable, net of allowance for
 doubtful accounts of $178,779 and
 $236,781 respectively                            6,209,475      6,495,736
Prepaid expenses and current other assets           654,557        156,340
                                              -------------  -------------
Total Current Assets                              7,468,558      7,606,657
                                              -------------  -------------

Property and Equipment - Net of accumulated
 depreciation $2,506,196 and $1,854,141
 respectively                                     7,847,706      3,950,253
Restricted cash                                   1,198,450      1,184,835
Intangibles, Net                                    905,586      1,028,044
Deferred financing Fees                             561,545        394,082
Deposits                                            503,804        282,070
Goodwill                                            946,119        946,119

                                              -------------  -------------
TOTAL ASSETS                                  $  19,431,768  $  15,392,060
                                              =============  =============

    LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable                              $   3,214,047  $   4,314,515
Accrued expenses                                  2,136,606      2,301,288
Accrued disposal costs                              747,659        478,833
Payable to related party                            513,115         31,871
Current portion of financing agreement              812,500        662,719
Current portion of long term obligations             43,763      1,274,464
Current portion of capital lease obligations        613,857        187,015
Notes payable to Investors                          495,848              -

                                              -------------  -------------
Total Current Liabilities                         8,577,395      9,250,705

LONG-TERM LIABILITIES:
Financing agreements, net of current portion  $   8,538,084  $   3,708,694
Long term obligations, net of current portion     1,296,633         79,842
Capital lease obligations, net of current
 portion                                          1,904,590      1,046,920
Notes payable to Investors                                -        520,208
                                              -------------  -------------
Total Long-Term Liabilities                      11,739,307      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                       53,168,600     50,151,615
Accumulated deficit                             (54,066,208)   (49,378,398)
                                              -------------  -------------
Total Stockholders' Equity                         (884,934)       785,691
                                              -------------  -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $  19,431,768  $  15,392,060
                                              =============  =============




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

                     Nine months ended           Three  months ended
                ----------------------------  ----------------------------
                September 30,  September 30,  September 30,  September 30,
                    2008           2007           2008           2007
                -------------  -------------  -------------  -------------


REVENUES        $  24,989,210  $  21,415,043  $   8,630,972  $   8,555,831

COST OF
 REVENUES          20,327,989     17,023,247      6,860,275      6,878,235
                -------------  -------------  -------------  -------------

GROSS PROFIT        4,661,221      4,391,796      1,770,697      1,677,596

OPERATING
 EXPENSES           5,651,106     10,782,081      1,845,179      3,034,039
                -------------  -------------  -------------  -------------

OPERATING LOSS       (989,885)    (6,390,285)       (74,482)    (1,356,443)

OTHER INCOME
 (EXPENSE):
Interest income        15,894         30,056          6,082         10,641
Interest and
 financing
 costs             (3,748,992)    (1,815,131)    (2,087,673)      (574,998)
Costs to induce
 conversion of
 related party
 debt                       -     (6,737,413)             -     (3,189,726)
Other
 non-operating
 income                35,173         93,568         18,480         25,329
                -------------  -------------  -------------  -------------

Net Loss
 applicable to
 common stock
 holders        $  (4,687,810) $ (14,819,205) $  (2,137,593) $  (5,085,197)
                =============  =============  =============  =============

Net loss per
 common share,
 basic and
 diluted        $        (.37) $       (1.53) $        (.17) $        (.43)
                =============  =============  =============  =============

Weighted
 average shares
 of common
 stock
 outstanding,
 basic and
 diluted           12,673,885      9,661,979     12,673,885     11,737,377
                =============  =============  =============  =============


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 nine months ended    For the three months ended
                        September 30,                 September 30,
                ----------------------------  ----------------------------
                    2008           2007           2008           2007
                -------------  -------------  -------------  -------------

NET LOSS        $  (4,687,810) $ (14,819,205) $  (2,137,593) $  (5,085,197)
Depreciation
 and
 amortization         827,862        559,525        360,765        196,199

Interest
 expense, net       3,748,992      1,785,075      2,087,673        456,159

Non-recurring
 employment
 charges                    -              -                             -

Stock based
 compensation
 charges              634,213        758,290        207,078        123,545
Issuance of
 warrants and
 common shares
 for services               -      2,829,419              -              -

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

Costs to induce
 conversion of
 debt                              6,737,413                     3,189,726

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

ADJUSTED EBITDA $     523,257  $  (2,149,483) $     517,923  $  (1,119,568)
                =============  =============  =============  =============

Contact Information

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