SOURCE: LiqTech International

LiqTech International

May 14, 2013 09:26 ET

LiqTech International, Inc. Reports 2013 First Quarter Financial and Operational Results

Management to Host Conference Call Today at 11am ET

BALLERUP, DENMARK--(Marketwired - May 14, 2013) - LiqTech International, Inc. (OTCQX: LIQT) a clean technology company that manufactures and markets highly specialized filtration technologies, announced today its financial and operational results for first quarter 2013.

Financial highlights for the three months ended March 31, 2013

  • Net sales for the three month period ended March 31, 2013 were $3,399,148 compared to $6,341,721 for the same period in 2012, representing a decrease of $2,942,573, or 46.4%.
  • Diesel Particulate Filters ("DPF filters") sales decreased $3,405,261 or 63.8%, Liquid filters sales increased $301,026 or 33.4% and Kiln furniture sales increased $161,662 or 158.1% compared to the same period in 2012.
  • Gross profit for the three month period ended March 31, 2013 was $562,023 compared to $2,089,684 for the same period in 2012 representing a decrease of $1,527,661 or 73.1%.
  • The net loss for the three month period ended March 31, 2013 was $669,811 compared to net income of $322,601 for the same period in 2012, representing a decrease of $992,412.
  • Cash on hand for the three month period ended March 31, 2013 was $3,115,618 compared to $3,873,338 for the year ended December 31, 2012, representing a decrease of $757,720.
  • Working capital for the three month period ended March 31, 2013 was $7,437,217 compared to $8,069,595 for the year ended December 31, 2012, a decrease of $632,378.

2013 operational highlights to date

  • Signed an exclusive agreement in China for soy bean protein recovery (bio tech) and soy bean waste water treatment to supply SiC membranes for Fan Run Si (Shanghai) Fluid Technology Co., Ltd. totaling over $6 million over three-years.
  • Announced an order of SiC membranes for public pool installations in the U.S. valued at $500,000, by Provital Solutions, based in Denmark.
  • Appointment of Mr. Finn Helmer as LiqTech's new Chief Executive Officer and comes to LiqTech with more than 40 years experience.
  • Entered into an agreement with a global leader in oilfield equipment and services, FMC Technologies, Inc., for the use of LiqTech's state-of-the-art disruptive silicon carbide membrane technology for oil/gas applications.
  • Launched a new state-of-the-art Silicon Carbide (SiC) Flat Sheet Membrane (FSM) disc for Membrane Bioreactors (MBR) and Moving Bed Bioreactors (MBBR) for wastewater treatment.
  • Appointment of Mr. Mark Vernon, Group Chief Executive Officer of Spirax-Sarco Engineering plc to our Board of Directors.
  • Announced the SiC membrane discs to the Company's product portfolio.
  • Announced that LiqTech SiC membranes are currently being used in the recovery of protein in a foodstuff application in China.
  • Announced that the Company's ultra-filtration Silicon Carbide (SiC) membrane product has been approved for liquid sterilization according to the recognized ASTM standard F838-05 for liquid filtration.

Management Commentary

In discussing the results, Mr. Finn Helmer, CEO, stated, "The first quarter financial results continued to reflect limited orders for our Diesel Particulate Filters ('DPF filters') as only a relatively small fraction of that amount were actually installed. Despite this lull that we've experienced in the DPF marketplace, we were able to control our costs and limit the cash burn in the quarter. As expressed by the company in the past, we continue to focus our energies on our disruptive Silicon Carbide membrane technology for liquids which represents a vast market opportunity to LiqTech, much larger and more dependable than the DPF market."

"The Company continues to meet requests to sample and test our filtration devices and we expect to add more verticals and customers in the coming quarters. Specifically, the Company recently announced an order for our products for commercial pool applications in North America. We believe that this area could be highly lucrative not only in the commercial pool space, but for also water parks as well, which require water cleansing, but also contain high flux requirements.

"While some orders are filled quickly, many have had a lengthy testing period, but the end result is worth the time. The best example of this is the announcement of our exclusive agreement with FMC Technologies for the use of our Silicon Carbide membranes in unconventional shale oil/gas applications. The engagement with FMC entailed over a year of discussions and testing, but is just one example of the benefits of our patience and sales efforts.

"To conclude, the first quarter results are, of course, disappointing, but I believe they are not reflective of the opportunities that we have in front of us. We continue to receive more inquiries and have consistently been adding more customers that have begun testing our membranes. Over the past couple of years more than 150 customers have tested our products, but we now see a growing number of second and third time buyers and this is a good indicator for growth and market acceptance. We are extremely excited about the revenue opportunities that abound and expect the revenue potential from membrane sales to ramp up rapidly going forward. I am glad to be on board with LiqTech and highly optimistic that we'll be able to monetize many of these testing opportunities into larger, multi-year contracts in the coming quarters."

Conference Call Details

Interested parties may participate in the call by dialing (888) 674-0217 or (201) 604-0485. It is recommended to dial in approximately 10 to 15 minutes prior to the scheduled start time. The conference call will also be available on replay starting at 3 p.m. ET on May 14, 2013 and ending on May 28, 2013. To access the replay, please dial 888-632-8973 and enter the replay code 92292#. The access number for the replay for international callers is 585-295-6791 (replay code 92292#).

- Financial charts follow -

 
 
LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
    As of
March 31,
  As of
December 31,
    2013   2012
Current Assets:   UNAUDITED    
  Cash   $ 3,115,618   $ 3,873,338
  Accounts receivable, net     2,782,493     2,855,184
  Other receivables     286,566     371,001
  Cost in excess of billing     217,842     217,586
  Inventories     4,249,632     4,111,815
  Prepaid expenses     72,955     130,560
  Current deferred tax asset     267,332     267,332
               
    Total Current Assets     10,992,438     11,826,816
             
Property and Equipment, net accumulated depreciation     6,298,222     6,649,817
             
Other Assets:            
  Long term receivable     -     118,258
  Other investments     162,389     158,141
  Long term tax asset     362,505     75,947
  Other intangible assets     26,919     29,150
  Deposits     177,087     182,020
               
    Total Other Assets     728,900     563,516
             
  Total Assets   $ 18,019,560   $ 19,040,149
               
               
   
   
LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEETS  
   
    As of
March 31,
    As of
December 31,
 
    2013     2012  
Current Liabilities:   UNAUDITED        
  Current portion of capital lease obligations   $ 200,241     $ 203,503  
  Accounts payable     2,295,537       2,289,231  
  Accrued expenses     590,948       760,881  
  Billing in excess of cost     236,923       237,063  
  Accrued income taxes payable     1,000       1,000  
  Deferred revenue     230,572       265,543  
                   
    Total Current Liabilities     3,555,221       3,757,221  
                 
  Long-term capital lease obligations, less current portion     656,141       729,567  
                 
    Total Long-Term Liabilities     656,141       729,567  
                     
    Total Liabilities     4,211,362       4,486,788  
                 
Stockholders' Equity:                
  Common stock; par value $0,001, 100,000,000 shares authorized, 24,111,500 and 24,111,500 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively     24,112       24,112  
  Additional paid-in capital     12,658,405       12,658,405  
  Retained earnings     1,840,881       2,510,693  
  Deferred compensation     (94,108 )     (125,477 )
  Other comprehensive loss, net     (649,253 )     (542,806 )
  Non-controlled interest in subsidiaries     28,161       28,434  
                   
    Total Stockholders' Equity     13,808,198       14,553,361  
                   
  Total Liabilities and Stockholders' Equity   $ 18,019,560     $ 19,040,149  
                   
                   
   
   
LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES  
(UNAUDITED) CONSOLIDATED STATEMENTS OF OPERATIONS  
   
             
    For the Three Months Ended  
    March 31,  
    2013     2012  
Net Sales   $ 3,399,148     $ 6,341,721  
Cost of Goods Sold     2,837,125       4,252,037  
                 
Gross Profit     562,023       2,089,684  
                 
Operating Expenses:                
  Selling expenses     573,925       659,918  
  General and administrative expenses     693,674       722,512  
  Research and development expenses     146,985       226,674  
                   
    Total Operating Expenses     1,414,584       1,609,104  
                 
Income (Loss) from Operations     (852,561 )     480,580  
                 
Other Income (Expense)                
  Interest and other income     156       38,963  
  Interest (expense)     (11,705 )     (84,516 )
  Gain (loss) on currency transactions     (114,173 )     (1,449 )
                   
    Total Other Income (Expense)     (125,722 )     (47,002 )
                 
Income Before Income Taxes     (978,283 )     433,578  
                 
Income Tax Expense (Benefit)     (296,864 )     110,977  
                 
Net Income (Loss)     (681,419 )     322,601  
                 
Less Net Income (Loss) Attributable To                
Non-Controlled Interests in Subsidiaries     (11,608 )     -  
                 
Net Income (Loss) Attributable To LiqTech   $ (669,811 )   $ 322,601  
Basic Earnings Per Share   $ (0.03 )   $ 0.01  
Weighted Average Common Shares Outstanding     24,111,500       22,234,775  
Diluted Earnings Per Share   $ (0.03 )   $ 0.01  
Weighted Average Common Shares Outstanding                
Assuming Dilution     24,111,500       27,415,788  
                 

The accompanying notes are an integral part of these financial statements.

   
   
LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES  
(UNAUDITED) CONSOLIDATED STATEMENTS OF OTHER  
COMPREHENSIVE INCOME  
   
    For the Three Months
Ended March 31,
 
    2013     2012  
                 
Net Income (Loss)     (681,419 )     322,601  
Currency Translation, Net of Taxes     (106,447 )     217,575  
                 
Other Comprehensive Income (Loss)   $ (787,866 )   $ 540,176  
                 
Comprehensive Income (Loss) Attributable To                
Non-controlling Interest in Subsidiaries     (11,608 )     (244 )
                 
Comprehensive Income (Loss) Attributable                
To LiqTech International Inc.   $ (776,258 )   $ 540,420  
                 
                 

ABOUT LIQTECH INTERNATIONAL, INC. - (OTCQX: LIQT)

LiqTech International, Inc., a Nevada corporation, is a clean technology company that for more than a decade has developed and provided state-of-the-art technologies for gas and liquid purification using ceramic silicon carbide filters, particularly, highly specialized filters for the control of soot exhaust particles from diesel engines and for liquid filtration. It also manufactures kiln furniture. Using nanotechnology, LiqTech develops products using proprietary silicon carbide technology. LiqTech's products are based on unique silicon carbide membranes, which facilitate new applications and improve existing technologies. For more information, please visit www.liqtech.com.

Forward-Looking Statements
This press release contains "forward-looking statements." Although the forward-looking statements in this release reflect the good faith judgment of management, forward-looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by us in the our reports filed with the Securities and Exchange Commission, including the risk factors that attempt to advise interested parties of the risks that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this release.

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