Revenues Increased 36% for the Quarter and 25% for the Year; Impairment Charge Recorded for the Previously Announced Closure of New Jersey Processing Center
PHOENIX, AZ / ACCESSWIRE / April 1, 2016 / A leader in sustainable glycol technologies, GlyEco, Inc. ("GlyEco" or the "Company") (OTC: GLYE), announced today the following financial results for its quarter and year ended December 31, 2015:
"The Company produced a solid increase in sales during the fourth quarter," said David Ide, GlyEco's Interim Chief Executive Officer. "We also experienced an important change to our business operations during the quarter with the closure of our New Jersey processing center. We believe that this decision will have a significant positive impact on the future of the Company due to the historical losses at the New Jersey processing center as well as the amount of management resources that were disproportionately focused on the New Jersey processing center."
Fourth Quarter Highlights
- Continued growth with revenues of $1.84 million, an increase of $0.49 million or 36% compared to the same period ended December 31, 2014.
- Operating expenses increased to $9.26 million, an increase of $7.37 million compared to the same period ended December 31, 2014.
- Operating loss of $9.62 million, an increase of $7.26 million compared to the same period ended December 31, 2014.
- Impairment charge of $8.6 million, primarily related to the closure of the New Jersey processing center, which is included in operating expenses and operating loss.
- Began servicing 150 national retail automotive customer locations awarded near the end of the third quarter.
- Began delivering windshield washer fluid in Indiana, Kentucky, and Ohio.
Fourth Quarter Financial Review
The Company's sales were $1.84 million for the quarter ended December 31, 2015, compared to $1.35 million for the quarter ended December 31, 2014, an increase of $0.49 million or 36%. Operating loss of $9.62 million for the quarter ended December 31, 2015, compared to a $2.35 million of operating loss for the quarter ended December 31, 2014, and includes an $8.6 million impairment charge, primarily related to the closure of the New Jersey processing center. Net loss for the quarter ended December 31, 2015, was $9.66 million compared to $2.39 million for the quarter end December 31, 2014, and includes an $8.6 million impairment charge, primarily related to the closure of the New Jersey processing center.
There was increased sales across all of the Company's processing centers. The Company experienced gross margin and operating margin improvement across most of its processing centers due to increased sales, operating efficiencies and continued expense management. However, our New Jersey processing center's margins decreased due to downward pricing pressure on commodity monoethylene glycol prices. Additionally, New Jersey revenue decreased quarter over quarter due to its closure in mid-December, causing a decrease in revenue for the 4th quarter versus the 3rd quarter.
Full Year Highlights
- Continued growth with revenues of $7.36 million, an increase of $1.47 million or 25% compared to the same period ended December 31, 2014.
- Operating expenses increased to $11.48 million, an increase of $5.86 million compared to the same period ended December 31, 2014.
- Operating loss of $12.28 million, an increase of $5.98 million compared to the same period ended December 31, 2014.
- Impairment charge of $8.6 million, primarily related to the closure of the New Jersey processing center, which is included in operating expenses and operating loss
- Increased antifreeze sales by 60% year-over-year (approximately $5.3 million in 2015).
- Enhanced the Board of Directors with the appointment of Charles F. Trapp, Frank Kneller, and Karim Babay.
- Began direct delivery services to three National Retail Automotive Customers.
- Created and launched GlyEco University for employee and client training, intellectual property advancement, and implemented field automation systems for processing and distribution facilities.
- Awarded US Patent for Glycol Recycling #9,145,345.
Full Year Financial Review
The Company's sales were $7.36 million for the year ended December 31, 2015, compared to $5.89 million for the same period ended December 31, 2014, an increase of $1.47 million or 25%. Operating loss of $12.28 million for the year ended December 31, 2015, compared to the $6.3 million of operating loss for the same period ended December 31, 2014, and includes an $8.6 million impairment charge, primarily related to the closure of the New Jersey processing center. Net loss for the year ended December 31, 2015, was $12.45 million compared to $8.73 million for the year end December 31, 2014, and includes an $8.6 million impairment charge, primarily related to the closure of the New Jersey facility.
Fourth Quarter and Full Year Business Update
"2015 was a transformational year for our Company, as we achieved the highest revenues in the history of our organization, strengthened our intellectual property assets, pared considerably our losses excluding the impairment charge, reinforced our internal operational systems and procedures, empowered our field leaders, and advanced GlyEco as a premier brand in the automotive retail industry," said David Ide, GlyEco's Interim Chief Executive Officer. "It was our year of transition for GlyEco, we witnessed the departure of key executives including within our C-Level, however, replaced and advanced our team to support, and execute on our strategic objectives. Although the closure of New Jersey decreases our total processing capacity, and with that our cost of raw materials, we are executing on measures to increase capacity and optimize existing distribution and sales channels to strengthen our supply chain and positively affect our profit margins," Ide added.
Over the next year, our Company expects to continue to grow revenues and improve our gross margins through the automation of certain field operating systems, centralized sales and client services, improvement to our internal research and product development (R&D), and targeted customer acquisitions in the Southern United States. Our focus to reduce distraction and assumptions in our business model in 2015 created a foundation of stability for our employees and customers. As our brand continues to instill confidence in the market we will continue to witness higher demand and higher prices for our delivered, finished, ready-to-use antifreeze and specialty products. In addition, we will continue the GlyEco Platform which includes GlyEco University to support our leadership position in the glycol industry. Our quick to partner technology continues to impress our national retail automotive customers, and our systems will continue to evolve in 2016. Our 5,000 customers, retail, and bulk customers know and trust us with their initiatives, and our ability to optimize our operations will continue to support the improvement to gross margin at our centers, allow immediate partnership opportunities, and superior new customer onboarding and customer service.
We believe our retail automotive business will growth significantly in our current markets, which we will optimize through current internal resources, leverage technology to create efficiencies, and our obsession with quality of product and people will service to attract large retail, regional, and local customers. We will create "wins" through our continued progress in consolidation of sales processes and our newly implemented client services group." Mr. Ide added, "We added approximately 1,000 direct deliver customers in 2015 and more importantly serviced those customers with great product and exceptional service. We will continue these efforts while creating continued efficiencies in our six processing centers. Over the recent twelve-month period ended December 31, 2015, our Company expanded its direct-delivery services into Florida, Ohio, Kentucky, and Georgia, and through a partnership into Vermont, Rhode Island and Massachusetts."
With the recent closing of our $3 million Rights Offering we expect to continue our expansion into areas we believe have limited competition, inferior products, and imperfect client services, allowing us to become the market leader for our delivered, finished, ready-to-use antifreeze and specialty products. We have begun to enter these new markets and expect to see positive contribution to top and bottom line through the year.
Our gains in 2015 are not an anomaly; they are calculated both strategically and tactically so that 2016 is not a year of lowered expectations rather a year of expansion, revenue growth, and profitability. We proved our management team is capable of making decisions which align with shareholders, customers, and employees, and are prepared in 2016 to continue developing our culture – in everything we do. We expect 2016 to be a year where we broaden our relationships with existing customers, optimize operations at our facilities, expand our footprint, further our technology through laboratory expansion and facility improvements, enhance our technical and sales personnel, and prioritize timely and customized service to our customers. We are prepared.
Closure of New Jersey Processing Center
We ceased operations at our former New Jersey processing center, effective December 28, 2015. We believe the reduction in expenses and related negative cash flow from the New Jersey processing center will allow the Company to continue and advance its retail automotive business, and as a result, help support the goal of positive cash flows from the Company's six processing centers.
As a result of the closure of the New Jersey processing center, the Company has assessed the carrying values of the property, plant and equipment, inventories, and other intangibles associated with the New Jersey processing center and has recorded an impairment charge of $8.5 million. The Company may incur additional costs in 2016 related to the wind down of the New Jersey operations.
About GlyEco, Inc.
GlyEco, a chemical recycling and distribution company and leader in sustainable glycol technologies, collects and recycles waste glycol streams into reusable glycol products that are sold to third party customers in the automotive and industrial end-markets in the United States. Our proprietary and patented technology allows us to recycle all five major types of waste glycol into high-quality products usable in any glycol application. We are dedicated to being the standard in the glycol industry by providing the highest-quality products, services, and technology possible to our customers.
For further information, please visit: http://www.glyeco.com
To partner or to start a project with us, please visit: Start a Project with GlyEco!
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are often identified by the words "believe," "anticipate," "expect," "intend," "estimate," and similar expressions. All statements in this document regarding the future outlook related to GlyEco, Inc. are forward-looking statements. Such statements are based on the current expectations, beliefs, estimates and projections of management and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements including the risk that the future data will not be as favorable as the initial results. Additional uncertainties and risks are described in our most recent Annual Report on Form 10-K. For a more detailed discussion of factors that affect GlyEco's operations, please refer our filings with the Securities and Exchange Commission ("SEC"). Copies of these filings are available through the SEC website at http://www.sec.gov. All forward-looking statements are based upon information available to us on the date hereof, and GlyEco undertakes no obligation to update this forward-looking information.
Contact:
GlyEco, Inc.
Ian Rhodes
Chief Financial Officer
[email protected]
866-960-1539
GLYECO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2015 and December 31, 2014
GLYECO, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
For the year ended December 31, 2015 and 2014
SOURCE: GlyEco, Inc.