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NWMH > SEC Filings for NWMH > Form 10-Q on 16-May-2016All Recent SEC Filings

Show all filings for NATIONAL WASTE MANAGEMENT HOLDINGS, INC.

Form 10-Q for NATIONAL WASTE MANAGEMENT HOLDINGS, INC.


16-May-2016

Quarterly Report


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words "may," "could," "estimate," "intend," "continue," "believe," "expect" or "anticipate" or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe that the expectations reflected in any of our forward- looking statements are reasonable, actual results could differ materially from those projected or assumed in any or our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

? Our results are vulnerable to economic conditions;

? Our ability to raise adequate working capital;

? Loss of customers or sales weakness;

? Inability to achieve sales levels or other operating results;

? The unavailability of funds for capital expenditures;

? Operational inefficiencies;

? Increased competitive pressures from existing competitors and new entrants;

? Competition for acquisition candidates, consolidation within the waste industry and economic and market conditions may limit our ability to grow through acquisitions;

? We may incur charges related to capitalized expenditures of landfill development projects, which would decrease our earnings;

? Pending or future litigation or governmental proceedings could result in material adverse consequences, including judgments or settlements;

? We may be subject in the normal course of business to judicial, administrative or other third-party proceedings that could interrupt or limit our operations, require expensive remediation, result in adverse judgments, settlements or fines and create negative publicity;

? Our accruals for our landfill site closure and post-closure costs may be inadequate;

? Liabilities for environmental damage may adversely affect our financial condition, business and earnings;

? Our financial and operating performance may be affected by the inability to renew landfill operating permits, obtain new landfills and expand existing ones;

? Extensive and evolving environmental, health and safety laws and regulations may restrict our operations and growth and increase our costs;

? Extensive regulations that govern the design, operation and closure of landfills may restrict our landfill operations or increase our costs of operating landfills; and

? Alternatives to landfill disposal may cause our revenues and operating results to decline.

These risks and uncertainties, as well as others, are discussed in greater detail in this Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission, or SEC, including our most recent Annual Report on Form 10-K. There may be additional risks of which we are not presently aware or that we currently believe are immaterial which could have an adverse impact on our business. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change.

GENERAL

Overview

We are a landfill service that provides landfill services, roll-off dumpster service, and mulch products. We service the counties of Citrus, Hernando, and Marion in Florida. We average annual disposals of approximately 200,000 cubic yards of construction debris and manage our 54 acre landfill facility. We started operations with one roll-off truck and now operate thirteen rolloff trucks and approximately 800 containers (subsequent to the WRE and Gateway Acquisitions). We have maintained a contract with Citrus County Solid Waste Management landfill to back-up their roll-off trucks since 2000. On October 15, 2015 and December 1, 2015, we acquired WRE and Gateway as described above (Item 1, Business) and in Note 10 to the financial statements, Acquisitions. These acquisitions added a large roll-off business for C&D to operations as well as full service Waste Company in Upstate NY, offering residential and commercial trash collection, a transfer station and C&D services.

Results of Operations

Comparison for the three months ended March 31, 2016 and 2015

Sales for the three months ended March 31, 2016 and 2015 were $1,553,296 and $390,592, respectively, an increase of $1,162,704 or approximately 298% of consolidated revenue. This is due to the acquisitions of Waste Recovery Enterprises and Gateway Rolloff during the fourth quarter of 2015 and the execution of our business model, increasing our customer base and expanded sales to current customers.

Cost of revenues for the three months ended March 31, 2016 and 2015 were $917,034 and $197,907, respectively, an increase of $719,127 or approximately 363%. This is due to the acquisitions of Waste Recovery Enterprises and Gateway Rolloff during the fourth quarter of 2015.

General and administrative costs for the three months ended March 31, 2016 and 2015 respectively, were $592,248 and $120,755, respectively, an increase of $471,493 or approximately 390%. This is due to the acquisitions of Waste Recovery Enterprises and Gateway Rolloff during the fourth quarter of 2015.

Interest expense was $17,065 and $8,166 for the three months ended March 31, 2016 and 2015, respectively. The increase is attributable to the Company's acquisition of Waste Recovery Enterprises, and the associated equipment financing and related equipment.

Net income (loss) for the three months ended March 31, 2016 and 2015 was $(41,206) and $38,374 respectively. The decrease of $75,580 is primarily attributable to the write of landfill acquisition deposits included in other income expense during the three months ended, totaling $72,473.

Liquidity and Capital Resources

Our primary sources of cash are cash flows from operations. We intend to use excess cash on hand and cash from operating activities, together with borrowings, to fund purchases of equipment, working capital, acquisitions and debt repayments. As of March 31, 2016, we had cash and cash equivalents of $545,380 and working capital of $104,798 as compared to cash of $344,365 and negative working capital of $556,150 at December 31, 2015.

Cash Flows for the Three Months Ended March 31, 2016 Compared to the Three Months Ended March 31, 2015

Cash flows from operating activities for the three months ended March 31, 2016 provided cash of $316,240 compared to $151,998 for the three months ended March 31, 2015, an increase of $164,242 or 108%. This increase was primarily due to increased sales, expenses incurred where stock was issued to settle the professional fee liability rather than cash, and the timing of payments on payables, accrued expenses and taxes. Our cash flows used in investing activities were $51,389 and $0 for the three months ended March 31, 2016 and 2015, respectively, an increase of $51,389. The increase is due to the purchase of equipment. Our cash flows used in financing activities were $63,836 and $9,273 for the three months ended March 31, 2016 and 2015, respectively, an increase of $54,563 or 588%. The increase is due to servicing the equipment financing debt in our fourth quarter acquisition of Waste Recovery Enterprises, LLC and the servicing of debt for a new grinder purchased in December of 2015.

Off-Balance Sheet Arrangements

None.

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