SOURCE: Speedemissions, Inc.

Speedemissions, Inc.

August 15, 2012 16:46 ET

Speedemissions, Inc. Reports Second Quarter 2012 Results

ATLANTA, GA--(Marketwire - Aug 15, 2012) - Speedemissions, Inc. (OTCBB: SPMI), a leading vehicle emissions testing and safety inspections company with stores in Atlanta, Houston, St. Louis and Salt Lake City today announced its financial results for the second quarter ended June 30, 2012.

Second Quarter 2012:

  • Revenue decreased (7.7%) or $166K to $1,986,863 in the second quarter of 2012 versus $2,152,831 in the second quarter of 2011. The decrease in revenue was due to a drop in same store sales of 6.3% or $133K and the closing of an underperforming store in Q2, 2011. The decline in same store sales is mainly attributable to increased competition at our Texas and Utah locations.
  • Same store operating expenses decreased by $66K or (4.9%).
    General and administrative expenses decreased $84K, or (20.1%) compared to the prior year Q2.
    Both the reduction in store operating expense and the decrease in G & A are a direct result of the cost-cutting measures implemented during the middle of the first quarter of 2012.
  • The Company incurred a net loss of $76,000, or ($0.0022) per diluted share in the second quarter of 2012 compared to net loss of $92,000 or ($0.0029) per diluted share in the second quarter of 2011. A large majority of the operating loss is due to one-time legal fees.

YTD 6-Months ended June 2012:

  • Revenue decreased $356K or (8.4%) to $3,907,869 in the first half of 2012 compared to $4,263,957 in the first half of 2011. During the same period of 2011, we closed two underperforming Houston stores which accounted for $83K of the revenue decrease.
  • The decrease in revenue was primarily due to a decrease in same store sales of 6.5%. The decrease in same store sales is mainly attributable to increased competition and pricing discounts.
  • Same store operating expenses decreased by (5.3%) or $146K in the first half of 2012 compared to the first half of 2011.
  • General and administrative expenses were decreased significantly by (16.5%) or $125K mainly due to corporate staff reductions, rents reduced, service contracts renegotiate and a reduction in professional fees.
  • A net loss of $913,000 was recorded in the first half of 2012 compared to net loss of $236,000 share in the first half of 2011.

Rich Parlontieri, President and Chief Executive Officer of Speedemissions, commented, "While we continue to be affected by the increased competition and pricing adjustments, we have taken several positive steps to grow and diversify our business. The selling of light bulbs, windshield wipers, etc. in 24 of our stores has had a positive effect on our top line. In addition, our CARbonga-SRI (safety & recall) iPhone app® continues to attract more customers as the average consumer sees this app as a great 'Life Style' benefit when buying a used car. We see the recent announcement about franchising the Speedemissions as another step in getting the company back to profitability. These measures, coupled with the securing of a $2.0 million revolving line of credit from TCA Global Credit Master Fund LP, should assist us in achieving our long-term growth strategies."

About Speedemissions Inc. http://www.speedemissions.comhttp://www.carbonga.com

Speedemissions, Inc., based in Atlanta, Georgia, is a leading vehicle emissions testing and safety inspections company in the United States. We provide services in certain areas where auto testing is mandated by the Environmental Protection Agency (EPA). Since the emissions testing market is highly fragmented, Speedemissions expects to be the first company to create a national brand offering their customers quick and efficient vehicle emissions testing service. The current focus of the company is in the Atlanta, Georgia; Houston, Texas; St. Louis, Missouri and Salt Lake City, Utah markets.

Certain statements contained in this news release regarding matters that are not historical facts may be forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, uncertainties pertaining to continued market acceptance for Speedemissions' products and services, its ability to succeed in growing revenue, the effect of new competitors in its market, integration of acquired businesses, and other risk factors identified from time to time in its filings with the Securities and Exchange Commission.

   
Speedemissions, Inc. and Subsidiaries  
Consolidated Balance Sheets  
   
    June 30,
2012
    December 31,
2011
 
    (unaudited)        
Assets                
                 
Current assets:                
  Cash   $ 189,589     $ 129,095  
  Notes receivable - current portion     12,000       21,125  
  Certificate and merchandise inventory     63,646       59,822  
  Other current assets     114,488       59,320  
    Total current assets     379,723       269,362  
Notes receivable, net of current portion     75,424       79,914  
Property and equipment, at cost less accumulated depreciation and amortization     450,823       539,673  
Goodwill     1,240,152       1,240,152  
Other assets     104,363       104,363  
    Total assets   $ 2,250,485     $ 2,233,464  
                 
Liabilities and Shareholders' Deficit                
                 
Current liabilities:                
  Line of credit   $ 350,000     $ 90,000  
  Note payable     55,000       55,000  
  Accounts payable     209,952       220,625  
  Accrued liabilities     195,801       200,096  
  Current portion of capitalized lease obligations     17,010       40,659  
  Current portion of equipment financing obligations     12,653       24,780  
  Current portion - deferred rent     14,795       14,795  
    Total current liabilities     855,211       645,955  
Capitalized lease obligations, net of current portion     -       681  
Deferred rent     122,585       121,390  
Other long term liabilities     7,350       7,350  
    Total liabilities     985,146       775,376  
Commitments and contingencies                
Series A convertible, redeemable preferred stock, $.001 par value, 5,000,000 shares authorized, 5,133 shares issued and outstanding; liquidation preference: $5,133,000     4,579,346       4,579,346  
                 
Shareholders' Deficit:                
Common stock, $.001 par value, 250,000,000 shares authorized, 34,688,166 shares Issued and outstanding at June 30, 2012 and December 31, 2011     34,618       34,618  
Additional paid-in capital     15,918,329       15,918,329  
Accumulated deficit     (19,266,954 )     (19,074,205 )
    Total shareholders' deficit     (3,314,007 )     (3,121,258 )
    Total liabilities and shareholders' deficit   $ 2,250,485     $ 2,233,464  
   
   
Consolidated Statements of Operations  
(unaudited)  
   
    Three Months Ended
June 30
    Six Months Ended
June 30
 
    2012     2011     2012     2011  
                                 
Revenue   $ 1,986,864     $ 2,152,831     $ 3,907,869     $ 4,263,957  
Costs of operations:                                
  Cost of emission certificates     443,750       480,427       869,496       950,495  
  Store operating expenses     1,281,780       1,383,888       2,594,332       2,825,775  
  General and administrative expenses     333,005       416,718       632,047       757,039  
  (Gain) loss on sale of non-strategic assets     -       (39,622 )     (2,458 )     (40,622 )
  Operating loss     (71,671 )     (88,580 )     (185,548 )     (228,730 )
Interest income (expense)                                
  Interest income     755       760       1,510       1,519  
  Interest expense     (5,051 )     (4,648 )     (8,711 )     (9,208 )
    Interest expense, net     (4,296 )     (3,888 )     (7,201 )     (7,689 )
  Net loss   $ (75,967 )   $ (92,468 )   $ (192,749 )   $ (236,419 )
                                 
Basic and diluted net loss per share   $ 0.00     $ (0.00 )   $ (0.01 )   $ (0.01 )
                                 
Weighted average common shares outstanding, basic and diluted     34,688,166       31,692,498       34,688,166       31,660,755  
   
   
Speedemissions, Inc. and Subsidiaries  
Consolidated Statements of Cash Flows  
(unaudited)  
   
    Six Months Ended
June 30,
 
    2012     2011  
Cash flows from operating activities:                
  Net loss   $ (192,749 )   $ (236,419 )
  Adjustments to reconcile net loss to net cash used in operating activities:                
    Depreciation and amortization     91,278       107,830  
    (Gain) loss on sale of assets     (2,458 )     (40,622 )
    Share-based compensation     -       54,842  
    Changes in operating assets and liabilities:                
      Certificate and merchandise inventory     (3,823 )     (1,877 )
      Other current assets     (55,169 )     (32,835 )
      Other assets     -       200  
      Accounts payable and accrued liabilities     (14,968 )     (17,101 )
      Other liabilities     1,195       (35,570 )
  Net cash used in operating activities     (176,694 )     (201,552 )
                 
Cash flows from investing activities:                
    Proceeds from note receivable     13,615       6,000  
    Proceeds from sales of property and equipment     3,100       28,000  
    Purchases of property and equipment     (3,070 )     (7,006 )
  Net cash provided by investing activities     13,645       26,994  
                 
Cash flows from financing activities:                
    Net proceeds from warrant exercise     -       64,000  
    Proceeds from line of credit     355,000       435,262  
    Payments on line of credit     (95,000 )     375,000  
    Payments on equipment financing obligations     (12,127 )     (9,505 )
    Payments on capitalized leases     (24,330 )     (21,670 )
  Net cash provided by financing activities     223,543       93,087  
Net (decrease) increase in cash     60,494       (81,471 )
Cash at beginning of period     129,095       261,600  
Cash at end of period   $ 189,589     $ 180,129  
                 
Supplemental Information:                
Cash paid during the period for interest   $ 8,469     $ 8,953  
                 
Supplemental Disclosure of Non-Cash Activity:                
Note receivable from sale of assets     -     $ 15,000  

Contact Information

  • For Further Information:
    Contact
    Danny Daughtery
    Controller
    770-306-7667