Strategic Environmental & Energy Resources, Inc. Reports Record Second Quarter Revenue and Earnings

GOLDEN, CO--(Marketwired - Aug 11, 2014) - Strategic Environmental & Energy Resources, Inc. (SEER) (OTCQB: SENR), a provider of next-generation clean technologies, renewable fuel and waste management innovations, today announced results for its second quarter and six-month period ended June 30, 2014.

"Our sustained focus on top-line growth while carefully monitoring operating costs resulted in record revenue of $4.3 million, record net income of $464,600 and modified EBITDA of $546,200 in the second quarter," said J. John Combs III, Chairman and CEO. "We had a very strong performance by our expanding industrial cleaning businesses, which combined to achieve 77% revenue growth year over year. It is also important to note that our Paragon waste destruction subsidiary has successfully placed its first units, the result of which generated $743,000 in cash and $78,000 in revenue. We're very pleased to see our investment in Paragon contributing so significantly since its recent launch, confirming our expectation that Paragon is an important long-term growth opportunity for SEER."

Second Quarter Results
Total second quarter revenue increased 46% to a record $4.3 million from $2.9 million in the same quarter last year. Services revenue increased 77% year over year to $3.1 million from $1.8 million due to higher demand for the Company's industrial solutions. Services revenue includes industrial and rail car cleaning services performed by the Company's REGS and Tactical Cleaning subsidiaries. The significant increase in services revenue more than offsets a slight decline in product revenue -- to $1.1 million from $1.2 million -- as commencement of certain environmental projects moved from the second quarter into the third quarter. The majority of product revenue was generated by the Company's MV Technologies subsidiary, although the Paragon Waste Solutions subsidiary generated its initial recognizable revenue -- $78,000 -- in the second quarter as the Company continued its transition from development phase into product rollout phase for its CoronaLux™ waste destruction systems. Paragon continues to win new business and is expected to begin contributing more significantly to revenue as additional CoronaLux™ systems are placed into service in medical and refinery waste applications.

Total operating expenses increased 30% to $3.9 million in the second quarter compared to $3.0 million in the same quarter last year. The increase was primarily due to higher services costs in support of the 77% increase in services revenue as well as to increased staffing and other costs in support of the rollout of Paragon's waste destruction technology.

Net income attributable to SEER common stockholders increased to a record $464,600, or $0.01 per share, from a net loss of $17,300, or less than one cent per share, in the second quarter last year. Modified EBITDA before non-controlling interest for the second quarter was $546,200 as compared with $64,700 in the same quarter last year.

Six-Month Results
Revenue in the first half of 2014 increased 28% to $7.1 million from $5.5 million in the same period last year. Services revenue increased 57% year over year to $5.4 million from $3.4 million, reflecting growing demand for the Company's industrial cleaning solutions. Product revenue declined 23% year over year to $1.6 million from $2.1 million but is expected to increase in the second half 2014. Paragon, which received customer deposits and license fees for its CoronaLux™ systems of $743,000 in the first six months of 2014, amortizes revenue under terms of its customer contracts, so non-refundable deposits and license fees received is a more accurate leading indicator of divisional growth and future revenue.

Total operating expenses increased 34% to $7.8 million from $5.8 million for the comparative six-month periods. This increase was attributable to increased labor expenses and higher costs of services generally in line with service revenue growth, and higher selling, general and administrative expense in support of overall revenue growth and start-up activities associated with Paragon's nationwide product rollout. Net loss attributable to SEER stockholders through six months was $570,600, or $0.01 per share, versus $188,800, or less than one cent per share, in the same period last year. Modified EBITDA before non-controlling interest was $207,900 through six months versus a loss of $58,700 in the same period last year.

Use of Non-GAAP Financial Information

The Company believes that the presentation of results excluding certain items in "Modified EBITDA," such as non-cash equity compensation charges, provides meaningful supplemental information to both management and investors, facilitating the evaluation of performance across reporting periods. The Company uses these non-GAAP measures for internal planning and reporting purposes. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or net income per share prepared in accordance with generally accepted accounting principles.

About Strategic Environmental & Energy Resources, Inc.

Strategic Environmental & Energy Resources, Inc. (SEER) identifies, secures, and commercializes patented and proprietary environmental clean technologies in several multibillion dollar sectors (including oil & gas, renewable fuels, and all types of waste management, both solid and gaseous) for the purpose of either destroying/minimizing hazardous waste streams more safely and at lower cost than any competitive alternative, and/or processing the waste for use as a renewable fuel for the benefit of the customers and the environment. SEER has three wholly-owned operating subsidiaries: REGS, LLC; Tactical Cleaning Company, LLC; MV Technologies, LLC; and two majority-owned subsidiaries: Paragon Waste Solutions, LLC; and ReaCH4biogas ("Reach").

For more information about the Company visit: www.seer-corp.com

Safe Harbor Statement

This press release contains "forward-looking statements" within the meaning of various provisions of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, commonly identified by such terms as "believes," "looking ahead," "anticipates," "estimates," and other terms with similar meaning. Although the company believes that the assumptions upon which its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct. Such forward-looking statements should not be construed as fact. Statements in this press release regarding the cost effectiveness, impact and ability of the Company's products to handle the future needs of customers are forward-looking statements. The information contained in such statements is beyond the ability of the Company to control, and in many cases the Company cannot predict what factors would cause results to differ materially from those indicated in such statements. All forward-looking statements in the press release are expressly qualified by these cautionary statements and by reference to the underlying assumptions.

Strategic Environmental & Energy Resources, Inc.
Consolidated Statements of Operations
(Unaudited)				Three Months Ended								Six Months Ended
				June 30,								June 30,
				2014				2013				2014				2013
Revenue:
	Products			$	1,061,400			$	1,159,300			$	1,581,500			$	2,060,900
	Services			$	3,135,600			$	1,769,600			$	5,398,500			$	3,436,900
	Licensing				78,700				-				78,700				-
	Total revenue			$	4,275,700			$	2,928,900			$	7,058,700			$	5,497,800
Operating Expenses:
	Products costs				747,400				824,200				1,127,600				1,396,500
	Services costs				1,988,900				1,385,500				3,570,200				2,584,100
	Licensing costs				123,500				-				123,500				-
	Selling, general and administrative				1,062,800				801,500				2,971,600				1,816,100
		Total operating expenses			3,922,600				3,011,200				7,792,900				5,796,700
Income (loss) from operations					353,100				(82,300	)			(734,200	)			(298,900	)
Other income (expenses):
	Interest income				-				2,000				-				4,000
	Interest expense				(19,100	)			(29,400	)			(42,700	)			(53,300	)
	Gain on debt settlements				-				-				24,400				-
	Other				32,800				46,300				16,000				45,000
		Total non-operating expense, net			13,700				18,900				(2,300	)			(4,300	)
Net income (loss)				$	366,800			$	(63,300	)		$	(736,500	)		$	(303,200	)
Less: Net loss attributable to non-controlling interest					(97,800	)			(46,000	)			(165,900	)			(114,400	)
Net income (loss) attributable to SEER				$	464,600			$	(17,300	)		$	(570,600	)		$	(188,800	)
Net income (loss) per share, basic and diluted				$	0.01			$	-			$	(0.01	)		$	(0.01	)
Weighted average shares outstanding
	- basic and diluted				51,196,100				42,927,700				50,277,400				42,044,900

Strategic Environmental & Energy Resources, Inc.
Consolidated Balance Sheets
				June 30,				December 31,
				2014				2013
ASSETS				(Unaudited)
Current assets:
	Cash			$	1,360,200			$	2,419,100
	Cash - restricted				250,000				250,000
	Accounts receivable, net				2,514,200				1,170,000
	Costs and estimated earnings in excess billings on uncompleted contracts				173,200				78,500
	Inventory				39,000				22,400
	Prepaid expenses and other current assets				313,900				253,000
		Total current assets			4,650,500				4,193,000
Property and equipment, net					3,894,900				1,762,900
Intangible assets, net					389,700				379,500
Other assets					34,600				36,800
Total assets				$	8,969,700			$	6,372,200
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
	Accounts payable			$	2,227,900			$	1,506,800
	Accrued liabilities				790,600				924,200
	Billings in excess of costs and estimated earnings on uncompleted contracts				349,300				170,300
	Current portion of payroll taxes payable				943,200				250,600
	Customer deposits				330,000				118,000
	Deferred revenue				419,500				-
	Current portion of notes payable and capital lease obligations				383,300				504,700
	Notes payable - related parties, including accrued interest				130,700				136,900
		Total current liabilities			5,574,500				3,611,500
Payroll taxes payable, net of current portion					-				720,800
Notes payable and capital lease obligations, net of current portion					16,500				48,100
Total liabilities					5,591,000				4,380,400
Stockholders' equity:
	Common stock				51,300				47,900
	Common stock subscribed				50,000				50,000
	Additional paid-in capital				16,717,700				14,597,700
	Stock subscription receivable				(50,000	)			(50,000	)
	Accumulated deficit				(12,785,800	)			(12,215,200	)
Total stockholders' equity					3,983,200				2,430,400
Non-controlling interest					(604,500	)			(438,600	)
Total equity					3,378,700				1,991,800
Total liabilities and stockholders' equity				$	8,969,700			$	6,372,200

Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
		Three months ended							Six months ended
		June 30,							June 30,
		2014			2013				2014				2013
Net income (loss)		$	366,800		$	(63,400	)		$	(736,500	)		$	(303,200	)
Non-controlling interest			97,800			46,000				165,900				114,400
Net income (loss) applicable to SEER			464,600			(17,400	)			(570,600	)			(188,800	)
Interest			19,100			29,400				42,700				53,300
Depreciation and amortization			123,600			93,200				216,700				180,100
EBITDA, including non-controlling interest			607,300			105,200				(311,200	)			44,600
Stock-based compensation			36,700			5,500				685,000				11,100
Modified EBITDA, including non-controlling interest		$	644,000		$	110,700			$	373,800			$	55,700
EBITDA, excluding non-controlling interest		$	509,500		$	59,200			$	(477,100	)		$	(69,800	)
Modified EBITDA, excluding non-controlling interest		$	546,200		$	64,700			$	207,900			$	(58,700	)