Strategic Environmental & Energy Resources, Inc. Reports Third Quarter Fiscal Year 2014 Financial Results

Achieves Record Revenues and Continued Profitability

GOLDEN, Colo., Nov. 12, 2014 /PRNewswire/ -- Strategic Environmental & Energy Resources, Inc. (SEER) (OTC: SENR), a provider of next-generation clean technologies, renewable fuel and waste management innovations, today announced results for its third quarter of fiscal 2014,  ended September 30, 2014.

Financial Highlights for Q3 & YTD FY 2014:

  • Third quarter revenues for 2014 increased to a record $4.85 million, up 51% from the third quarter of 2013
  • Third quarter 2014 year-to-date revenues of $11.91 million has already surpassed total annual 2013 revenues of $11.61 million, and represents an increase of 37%, or $3.21 million, compared to the year-to-date 2013 comparable
  • Industrial Cleaning revenues for third quarter 2014 increased to $2.92 million, a 61% increase compared to Q3 2013  
  • REGS had year-to-date record revenues of $7.1 million compared to $4.2 million for the same period in 2013, an increase of 71%
  • Environmental Solutions revenues for Q3 2014 increased to $1.19 million, a 73% increase compared to Q3 2013
  • Net income increased to $263,700, or $0.01 per diluted share, for the third quarter 2014 compared to a loss of $122,800, or $(0.01) per diluted share for the third quarter 2013; a positive swing of $386,500
  • Modified EBITDA* excluding non-controlling interest, increased to $496,100 for the third quarter 2014 compared to $88,800 for the third quarter 2013
  • Modified EBITDA* excluding non-controlling interest was $704,500 for the first nine months of 2014 compared to $25,300 in the same period last year, as a result of the higher consolidated revenues for SEER

Operational Highlights:

  • Paragon's facility partner in Broward County, Florida commenced operations with its installed CoronaLux™ medical waste destruction system and is now operating at 65% capacity after less than a month of operations
  • MV announced orders for four mobile V3RU™ vapor capture systems from a leading independent oil and gas producer

"In addition to posting our second consecutive profitable quarter on record quarterly revenues, we achieved exciting operational and commercial milestones in the third quarter that position us for continued future growth," commented J. John Combs III, Chairman and CEO of Strategic Environmental & Energy Resources. "Our industrial services unit 'REGS' continues to perform exceptionally well and we expect growth to continue in the fourth quarter and into 2015. We are also beginning to generate revenues from investments we've made in technology and infrastructure.  We recently announced new orders for our new and patented V3RU™ solution that will be deployed in the gas fields to capture fugitive emissions starting here in Colorado. Our CoronaLux™ technology is now fully operational in Florida and is generating revenue in Florida in the medical waste destruction market. During the quarter we were granted a patent for the plasma assisted pyrolitic process, the disruptive technology underlying the CoronaLux™ system.  This adds great value to the company's IP portfolio as we roll out the technology worldwide in diverse markets. With nine Paragon units now built, placed or on-hand, we anticipate higher sales and profits as we further penetrate into several high-growth areas, particularly volatile organic compounds ("VOC")  gas destruction and tank waste minimization in the refinery market," said Mr. Combs.

"Looking at our achievements over the past nine months, we are on track to achieve another year of record revenues.  We are looking forward to significant and sustainable growth as we continue to bring disruptive technologies to world-wide markets for the benefit of our customers, shareholders and the environment."

Third Quarter Results

Total third quarter revenues of $4.85 million represented an increase of approximately $1.65 million, or 51%, compared to the same quarter last year.  The increase was primarily a result of higher revenues from the Company's Industrial Cleaning segment, REGS. This segment contributed $2.92 million for the quarter, compared to $1.81 million in the same period in 2013.  The Environmental Solutions segment revenue increased by approximately $612,000 to $1.19 million in the quarter; compared to $689,000 in Q3 of fiscal 2013, primarily a result of additional projects booked and delivered in 2014. Revenue from the Railcar Cleaning segment was stable; $723,000, compared with $710,000 achieved in the third quarter of 2013. Revenue from the Solid Waste Disposal segment was $20,600; a result of delivering two CoronaLux™ units in early 2014.  The Company received $413,000 in non-refundable fees in 2014 in connection with the delivery of the two CoronaLux™ units which are recognized as revenue ratably over the initial five year term of the agreements.

Total operating expenses in the third quarter of fiscal 2014 were $4.57 million, an increase of $1.30 million compared with the quarter ended September 30, 2013. This increase in expenses was primarily attributed to increased marketing efforts, new personnel hiring and general growth expenditure to position the company for anticipated orders and associated installation and commissioning of systems.

Service costs as a percentage of service revenues were 63% for the third quarter, compared with 74% for the quarter ended September 30, 2013. The significant improvement was derived from more efficient utilization and deployment of equipment and productivity gains with our field teams at REGS.

Product costs as a percentage of product revenues increased from 65% to 76% when comparing the quarter ended September 30, 2013 to the quarter ended September 30, 2014 due to the mix of product sales. SG&A expense increased from $964,200 for the quarter ended September 30, 2013, to approximately $1.26 million for the quarter ended September 30, 2014, due primarily to additional resources needed to support the growth of the company's solid waste segment, including the hiring of additional senior management to support current and expected growth.

Net income, before non-controlling interest, for the quarter ended September 30, 2014 was $263,700 compared to a net loss, before non-controlling interest, of $(122,800) for the quarter ended September 30, 2013, representing a positive swing of $386,500. 

The net income attributable to SEER (after deducting $115,800 for the net loss attributable to the non-controlling interest) was $379,500 for the quarter ended September 30, 2014 compared with a net loss attributable to SEER of $(70,600) (after deducting $52,200 in net loss attributable to the non-controlling interest) for the quarter ended September 30, 2013.  The primary reason for the improvement in net income in 2014 compared to 2013 is the 51% increase in revenue in 2014 over 2013 partially offset by increases in SG&A as noted above.

Modified EBITDA excluding non-controlling interest was $496,100 for the quarter compared to $88,800 for the previous year's period. The improved result was primarily a result of significantly higher sales from the company's industrial cleaning and environmental services segments.

Year to Date Review and Business Outlook

"We have delivered record financial results in the first three quarters of fiscal 2014, and continue to believe these positive trends in our business will continue not only into the fourth quarter but into fiscal 2015. On the technology side, we further enhanced our IP portfolio with the acquisition of new complementary technologies and several of our disruptive and patented technologies are now being deployed into several multi-billion dollar markets. On the service side, our REGS division is experiencing unprecedented growth and we see no reason why this growth will not continue for the next several quarters. New market opportunities are presenting themselves for our Paragon technologies and we are currently pursuing these opportunities in several other countries," concluded Mr. Combs.   

Conference Call Today:

Management will host a conference call at 4:30 p.m. Eastern Time today to discuss the results with the investment community. Anyone interested in participating should call 1-888-724-9516 if calling within the United States or 1-913-312-1481 if calling internationally. A replay will be available until November 19, 2014 which can be accessed by dialing 1-877-870-5176 if calling within the United States or 1-858-384-5517 if calling internationally. Please use passcode 5382719 to access the replay.

The call will also be accompanied by a webcast over the Internet with slides, which are also accessible at the Investor Relations section of the Company's corporate website at http://www.seer-corp.com.

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 future performance or fiscal projections, 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.

Contacts:




At Strategic Environmental and Energy Solutions:           

At Darrow Associates:

J. John Combs III                                                           

Peter Seltzberg, Managing Director

Chief Executive Officer                                                    

516-510-8768

720-460-3522                                                                  

pseltzberg@darrowir.com

 

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


September 30, 2014


December 31, 2013

ASSETS

Unaudited


*

Current assets:




   Cash

$         735,800


$     2,419,100

   Cash – restricted

250,000


250,000

   Accounts receivable, net of allowance of $74,600 and $76,000, respectively

2,301,600


1,170,000

   Costs and estimated earnings in excess billings on uncompleted contracts

220,300


78,500

   Inventory

49,300


22,400

   Prepaid expenses and other current assets

309,100


253,000

     Total current assets

3,866,100


4,193,000





   Property and equipment, net

4,342,400


1,762,900

   Intangible assets, net

1,411,100


379,500

   Investment in unconsolidated affiliate

1,212,000


-

   Other assets

39,500


36,800

TOTAL ASSETS

$   10,871,100


$     6,372,200





LIABILITIES & STOCKHOLDERS' DEFICIT




Current liabilities:




   Accounts payable

$    1,352,300


$     1,506,800

   Accrued liabilities

880,600


924,200

   Billings in excess of costs and estimated earnings on uncompleted contracts

372,200


170,300

   Current portion of payroll taxes payable

281,100


250,600

   Customer deposits

449,100


118,000

   Deferred revenue

353,800


-

   Current portion of notes payable and capital lease obligations

368,900


504,700

   Notes payable - related parties, including accrued interest

102,500


136,900

     Total current liabilities

4,160,500


3,611,500





   Payroll taxes payable, net of current portion

704,400


720,800

   Notes payable and capital lease obligations, net of current portion

2,200


48,100

     Total liabilities

4,867,100


4,380,400





Commitments and contingencies








Stockholders' equity:




   Preferred stock; $.001 par value; 5,000,000 shares authorized; -0- shares issued



-

   Common stock; $.001 par value; 70,000,000 shares authorized;  53,563,816 and

   47,911,975 shares issued and outstanding 2014 and 2013, respectively

53,600


47,900

   Common stock subscribed

50,000


50,000

   Additional paid-in capital

19,052,000


14,597,700

   Stock subscription receivable

(25,000)


(50,000)

   Accumulated deficit

(12,406,300)


(12,215,200)

     Total stockholders' equity

6,724,300


2,430,400

   Non-controlling interest

(720,300)


(438,600)

     Total equity

$      6,004,000


$     1,991,800

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$    10,871,100


$     6,372,200

*These numbers were derived from the audited financial statements for the year ended December 31, 2013.    See accompanying notes

 

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)








For the Three Months Ended September 30,


For the Nine months ended

September 30,

Revenue:

2014


2013


2014


2013

   Products

$1,192,900


$   688,900


$ 2,774,400


$ 2,749,800

   Services

3,640,600


2,517,400


9,039,100


5,954,300

   Solid waste

20,600


-


99,300


-

     Total revenue

4,854,100


3,206,300


11,912,800


8,704,100









Operating expenses:








Products costs

902,000


444,900


2,029,600


1,841,400

Services costs

2,300,600


1,873,600


5,870,800


4,457,700

Solid waste costs

104,200


-


227,700


-

Selling, general and administrative expenses

1,265,600


964,200


4,237,200


2,762,400

  Total operating expenses

4,572,400


3,282,700


12,365,300


9,061,500









Income (Loss) from operations

281,700


(76,400)


(452,500)


(357,400)









Other income (expense):








   Interest income





-


4,000

   Interest expense

(16,800)


(39,200)


(59,500)


(110,300)

   Gain on debt settlements

-


-


24,400


8,200

   Other

(1,200)


(7,200)


14,800


29,500

     Total non-operating income (expense), net

(18,000)


(46,400)


(20,300)


(68,600)









Net income (loss)

263,700


(122,800)


(472,800)


(426,000)

Less:  Net loss attributable to non-controlling interest

115,800


52,200


281,700


166,600


Net income (loss) attributable to SEER common stockholders

$379,500


$   (70,600)


$  (191,100)


$  (259,400)


Net income (loss) per share – basic

$.01


*


$(.01)


$(.01)


Net income (loss) per share – diluted

$.01


*


$(.01)


$(.01)


Weighted average shares outstanding – basic

52,116,247


43,486,671


50,850,983


42,530,774



Weighted average shares outstanding – diluted

56,429,992


43,486,671


50,850,983


42,530,774











*Less than $.01 per share

 


STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Reconciliation of GAAP EBITDA to Non-GAAP EBITDA

(Unaudited)



Three Month Ended

Nine Months Ended


9/30/2014

9/30/2013

9/30/2014

9/30/2013

Net income (loss)

$     263,700

$  (122,700)

$(472,700)

$ (426,000)

Noncontrolling interest

115,800

52,100

281,700

166,600

Net income (loss) applicable to SEER

379,500

(70,600)

(191,000)

(259,400)






Interest

16,800

39,200

59,500

87,900

Depreciation and Amortization

140,600

95,700

357,700

275,800






EBITDA, including noncontrolling interest

536,900

64,300

226,200

104,300






stock based compensation (option compensation, warrant compensation, stock issued for services)

75,000

76,600

760,000

87,600






Modified EBITDA, including noncontrolling interest

$      611,900

$   140,900

$   986,200

$  191,900






EBITDA, excluding noncontrolling interest

$      421,100

$     12,200

$  (55,500)

$  (62,300)






Modified EBITDA, excluding noncontrolling interest

$      496,100

$     88,800

$  704,500

$     25,300

 

SOURCE Strategic Environmental & Energy Resources, Inc.