SOURCE: Strategic Environmental & Energy Resources, Inc.

August 11, 2014 07:11 ET

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

Q2 Revenue up 46% to a Record $4.3 Million From $2.9 Million in Q2 Last Year

Q2 Net Income Increases to a Record $464,600 Versus Net Loss of $17,300 Last Year

Q2 Modified EBITDA Before Non-Controlling Interest of $546,200 Versus $64,700 Last Year

Paragon Waste Solutions Reports Initial Revenue of $78,000 in Second Quarter With Total Customer Deposits and License Fees for CoronaLux™ Systems of $743,000 Through First Half of 2014

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 )
                               

Contact Information

  • Contacts:

    J. John Combs III
    Chief Executive Officer
    720-460-3522

    Jay Pfeiffer
    Pfeiffer High Investor Relations, Inc.
    Email Contact
    303-393-7044