|
| |||||||||||||||
American TonerServ Reports Second-Quarter Results, Recent Highlights Revenue More Than Doubles to $2,762,547 From $1,098,630 in Second Quarter, 2007; Company States Intention to Acquire Operators in Florida, Indiana and California SANTA ROSA, CA--(MARKET WIRE)--Aug 15, 2008 -- American TonerServ Corp. (OTC BB:ASVP.OB - News)
("ATS"), a strategic consolidator in the more than $6.0
billion highly
fragmented independent segment of the printer supplies and
services
industry and a leading recycler of toner cartridges, today
announced
financial results for the quarter ended June 30, 2008.
Second-Quarter 2008 Financial Results ATS reported revenue of $2,762,547 for the quarter ended June 30, 2008, compared to $1,098,630 for the quarter ended June 30, 2007, a 151% increase. ATS reported a net loss from operations for the quarter ended June 30, 2008 of $614,488, compared to a net loss from operations of $836,700 in the quarter ended June 30, 2007. ATS reported a net loss from operations of approximately $0.01 per share for the quarter ended June 30, 2008 compared to a net loss from operations of $0.04 per share in the quarter ended June 30, 2007. On a GAAP basis, ATS reported a net loss for the quarter ended June 30, 2008 of $1.25 million, compared to a net loss of $876,809 for the quarter ended June 30, 2007. ATS reported a net loss of approximately $0.02 per share for the quarter ended June 30, 2008 compared to $0.04 per share for the quarter ended June 30, 2007. Earnings before interest, taxes, depreciation, amortization, stock-based compensation expense and other non-cash expenditures (adjusted EBITDA) was a loss of $344,547, or less than $0.01 per share, in the second quarter of 2008, compared to a loss of $581,780, or approximately $0.02 per share, in the second quarter of 2007. This is an improvement of approximately 41 percent year over year. "We are pleased to report that our top line continues to grow organically and from contributions made by the businesses we have acquired to date. Furthermore, since our last quarterly report, we have announced three additional letters of intent to acquire strong businesses in Florida, Indiana and California," said Dan Brinker, Chief Executive Officer. "The ATS strategy continues to be finding and consolidating regional operators of toner service and cartridge recycling and providing these operators the leverage and benefits associated with a national brand name." Mr. Brinker added, "During the second quarter, we began rolling out the GreenSmart recycling program, which diverts waste from landfills and creates an effortless channel for spent toner cartridges to be re-used and recycled. At ATS we are committed to lowering the staggering number of toner cartridges that go directly into solid waste landfills in the United States. Our customers appreciate the help in minimizing their carbon footprint and we appreciate the opportunity to broaden the portfolio of compatible cartridges we offer at economical prices." Recent Highlights In June, ATS announced that the company had signed a letter of intent to acquire the retail business of Imaging Technology Products ("IT Products"), headquartered in Longwood, Florida. IT Products would function as a satellite for the business of Tonertype in Tampa, which was acquired in January of 2008. The founder of IT Products, Joe Cody, said, "The customer-oriented programs that ATS has pioneered would help us develop business for ATS in our market." In July, ATS announced that a letter of intent for acquisition was executed with Mid-America Environmental, LLC, of Evansville, Indiana. Mid-America serves its customers' printers and copiers, creating broad opportunities for service and product sales. Additionally during July ATS announced that iPrint Technologies was its next targeted acquisition, executing a letter of intent to acquire certain assets of the business based in Chatsworth and Larkspur, California. iPrint serves Fortune 1000 customers in California and throughout the country, with an emphasis on reducing overall printing costs and minimizing waste and inefficiency. Due diligence and negotiations of acquisition agreements are underway. Mr. Brinker addressed the Southern California investment Association on August 9, highlighting the acquisition activities and the growth attained both organically and through acquisitions to date. Later in August, both Mr. Brinker and ATS Senior Vice President Andrew Beaurline will make presentations at the Recharger Magazine World Expo, one of the document printing industry's leading events. Outlook "Our bottom line this quarter demonstrates that we are increasing efficiency and carefully controlling costs even as the organization grows to support higher revenue," said Mr. Brinker. "Our team remains focused on identifying the most attractive targets for acquisition, while we emphasize organic growth initiatives within the businesses we have on board to date. Our customers benefit from bulk purchasing power, technology solutions, operational expertise and efficiency as well as our recycling programs. The owners of independent businesses we talk to are excited about the opportunity to grow and develop under the umbrella of a national brand," Mr. Brinker concluded. Presentation of Non-GAAP Information This press release contains non-GAAP financial measures, including EBITDA (earnings before interest, income taxes, depreciation and amortization) and Adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization and other non-cash related expenditures). The Company believes these non-GAAP financial measures are useful to investors in evaluating the Company's results. These measures are not a measurement of our financial performance under GAAP and should not be considered as alternatives to net income, income from operations, or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating, investing or financing activities as a measure of our liquidity. In addition, because EBITDA and Adjusted EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies. For a reconciliation of these non-GAAP financial measures to the most comparable GAAP equivalent, see the Non-GAAP Reconciliation - EBITDA and Adjusted EBITDA, along with related footnotes, below.
AMERICAN TONERSERV CORP. AND SUBSIDIARIES
Results of Operations
Three months ended Six months ended
June 30, June 30,
2008 2007 2008 2007
------------ ------------ ------------ ------------
Revenues:
Toner and
supplies $ 2,284,076 $ 957,743 $ 4,538,965 $ 1,327,527
Service 478,471 140,887 913,261 161,671
------------ ------------ ------------ ------------
Total revenues 2,762,547 1,098,630 5,452,226 1,489,198
------------ ------------ ------------ ------------
Cost of sales:
Toner 1,424,389 602,576 2,877,603 818,540
Service 275,193 133,231 616,569 150,080
------------ ------------ ------------ ------------
Total cost of sales 1,699,582 735,807 3,494,172 968,620
Gross profit 1,062,965 362,823 1,958,054 520,578
Operating expenses:
Salaries and
wages 682,724 410,358 1,356,660 719,222
Professional fees
and services 146,244 218,621 731,126 730,520
Sales and
marketing 286,986 60,966 480,207 210,987
General and
administrative 407,270 408,548 742,511 487,824
Amortization of
customer lists 154,229 101,030 306,206 134,241
------------ ------------ ------------ ------------
Total operating
expenses 1,677,453 1,199,523 3,616,710 2,282,794
------------ ------------ ------------ ------------
Loss from
operations (614,488) (836,700) (1,658,656) (1,762,216)
Other income
(expense):
Change in fair
value of
warrant
liability (1,053) 5,555 1,874 5,662
Gain on claims
settlement - - 66 1,301
Fair value of
convertible debt (375,000) 16,667 (362,500) 4,167
Interest expense (264,268) (62,331) (432,709) (94,888)
------------ ------------ ------------ ------------
Net loss $ (1,254,809) $ (876,809) $ (2,451,925) $ (1,845,974)
============ ============ ============ ============
EBITDA $ (803,672) $ (703,314) $ (1,648,172) $ (1,603,259)
Adjusted EBITDA $ (344,547) $ (581,780) $ (761,137) $ (1,102,347)
Net Loss Per Share:
Basic and
diluted $ (0.02) $ (0.04) $ (0.04) $ (0.08)
============ ============ ============ ============
Weighted average
number of shares
outstanding:
Basic and
diluted 64,542,512 23,631,639 63,233,698 23,293,352
============ ============ ============ ============
Balance Sheet Data
June 30, December 31,
ASSETS 2008 2007
----------- -----------
Current assets:
Cash and cash equivalents $ 21,603 $ 60,196
Accounts receivable, net 1,368,271 1,326,891
Inventory 882,610 715,328
Prepaid expenses and other current assets 51,368 33,127
Deferred compensation 43,469 471,298
Deferred acquisition costs 22,957 -
----------- -----------
Total current assets 2,390,278 2,606,840
Customer lists, net 3,697,156 4,002,862
Goodwill 1,801,895 1,801,895
Property and equipment, net 358,542 394,745
Other assets 31,522 29,959
----------- -----------
Total Assets $ 8,279,393 $ 8,836,301
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Cash overdraft $ 15,463 $ -
Accounts payable and accrued expenses 1,552,984 1,767,997
Shareholder advances 142,345 431,095
Revolving line of credit 584,608 -
Notes payable - current portion
(net of unamortized discount of $128,614) 709,571 2,068,033
Convertible notes payable, related parties
- current portion
(net of unamortized discount of $3,667) 152,583 31,250
Convertible notes payable - current portion
(net of unamortized discount of $49,453) 1,950,547 187,500
Notes payable, related parties - current
portion - 150,000
Deferred revenue 217,394 92,589
----------- -----------
Total current liabilities 5,325,495 4,728,464
----------- -----------
Long-term liabilities:
Notes payable (net of unamortized discount
of $270,881) 1,018,084 1,281,400
Convertible notes payable 800,000 925,000
Warrant liabilities 176,176 119,700
----------- -----------
Total long-term liabilities 1,994,260 2,326,100
----------- -----------
Total liabilities 7,319,755 7,054,564
----------- -----------
Commitments and contingencies
Stockholders' equity
Common stock
64,640,572 shares issued and outstanding 64,640 60,391
Additional paid-in capital 20,925,763 19,300,186
Accumulated deficit (20,030,765) (17,578,840)
----------- -----------
Total stockholders' equity 959,638 1,781,737
----------- -----------
Total Liabilities and Stockholders'
Equity $ 8,279,393 $ 8,836,301
=========== ===========
The following is a reconciliation of cash flows provided by operating
activities to EBIT, EBITDA, and net loss:
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
Cash flows
provided by
operating
activities $ (690,878) $ (629,417) $ (1,326,103) $ (1,246,331)
Changes in
operating assets
and liabilities 202,514 16,418 304,950 96,979
Non-cash
(expenses)
income,
including
depreciation and
amortization (766,445) (263,810) (1,430,772) (696,622)
Interest expense,
net 264,268 62,331 432,709 94,888
------------ ------------ ------------ ------------
EBIT (990,541) (814,478) (2,019,216) (1,751,086)
Depreciation and
amortization 186,869 111,164 371,044 147,827
------------ ------------ ------------ ------------
EBITDA (803,672) (703,314) (1,648,172) (1,603,259)
Interest expense (264,268) (62,331) (432,709) (94,888)
Depreciation and
amortization (186,869) (111,164) (371,044) (147,827)
------------ ------------ ------------ ------------
Net loss $ (1,254,809) $ (876,809) $ (2,451,925) $ (1,845,974)
============ ============ ============ ============
The following is a reconciliation of net loss to EBITDA:
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
Net loss $ (1,254,809) $ (876,809) $ (2,451,925) $ (1,845,974)
Interest expense,
net 264,268 62,331 432,709 94,888
------------ ------------ ------------ ------------
EBIT (990,541) (814,478) (2,019,216) (1,751,086)
Depreciation and
amortization 186,869 111,164 371,044 147,827
------------ ------------ ------------ ------------
EBITDA $ (803,672) $ (703,314) $ (1,648,172) $ (1,603,259)
============ ============ ============ ============
The following is a reconciliation of net EBITDA to adjusted EBITDA, which
excludes all noncash items, one time expenditures and stock related
compensation:
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
EBITDA $ (803,672) $ (703,314) $ (1,648,172) $ (1,603,259)
Stock related
compensation 88,926 143,970 493,909 510,741
Fair value of
conversion feature
of convertible
debt 375,000 (16,667) 362,500 (4,167)
Fair value of
warrant
liabilities (4,801) (5,769) (1,874) (5,662)
Bad debt allowance
for new entitities - - 32,500 -
------------ ------------ ------------ ------------
ADJUSTED EBITDA $ (344,547) $ (581,780) $ (761,137) $ (1,102,347)
============ ============ ============ ============About American TonerServ American TonerServ Corp. ("ATS"), a leading recycler of toner cartridges, is building a nationwide organization to efficiently serve the printing needs of small- and medium-sized businesses by consolidating best-in-class independent operators in the more than $6.0 billion recycled printer cartridge and printer services industry, offering top-quality, environmentally-friendly products and local service teams. Please see www.AmericanTonerServ.com for more information. Forward-Looking Statements Except for historical information contained herein, the matters set forth above may be forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ from those in the forward-looking statements. Words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the current beliefs of management, as well as assumptions made by and information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors such as the level of business and consumer spending, the amount of sales of the Company's products, the competitive environment within the industry, the ability of the Company to continue to expand its operations, the level of costs incurred in connection with the Company's expansion efforts, economic conditions in the industry and the financial strength of the Company's customers and suppliers. The Company does not undertake any obligation to update such forward-looking statements. Investors are also directed to consider all other risks and uncertainties. Contact: Contact:
American TonerServ Corp.
Phone: 800-736-3515
Jordan Goldstein
Stakeholder Communications
Phone: 415-369-9000
E-mail: Email Contact
Source: American TonerServ
|  | ||||||||||||||
