Revenues Increased 7% for the Quarter: Positive Gross Margin Achieved for the Quarter
ROCK HILL, SC / ACCESSWIRE / May 16, 2016 / A leader in sustainable glycol technologies, GlyEco, Inc. ("GlyEco" or the "Company") (GLYE), announced today the following financial results for its quarter ended March 31, 2016:
"The Company achieved an important financial milestone in the first quarter ended March 31, 2016 by achieving positive gross margin," said Grant Sahag, GlyEco's President and Chief Executive Officer. "Attaining this milestone is a testament to the commitment and hard work of our team, a focus on increasing organic sales, gains created in efficiency throughout our supply chain, disposal of underperforming assets, and the execution of our ongoing strategic initiatives. Taking into consideration the closing of our New Jersey processing facility in December 2015, we are very pleased with the overall increase in sales in the first quarter of 2016 as compared to the first quarter of 2015. We also significantly strengthened our capital position with the closing of a $3 million rights offering during the quarter which will allow us to reinvest into our team, our products, and our growing customer base."
First Quarter Highlights:
- Continued growth with revenues of $1.44 million, an increase of $100 thousand or 7% compared to the same period ended March 31, 2015.
- Positive gross profit of $137 thousand as compared to a gross loss of $108 thousand for the same period ended March 31, 2015.
- Operating loss of $801 thousand, a decrease of $135 thousand or 14% compared to the same period ended March 31, 2015.
- Excluding New Jersey, increased revenues by $311 thousand or 28%, from $1.13 million to $1.44 million.
- Cash flows from operations of negative $388 thousand compared to negative $1.33 million for the same period ended March 31, 2015.
- Adjusted EBITDA (a non GAAP measure) of negative $443 thousand compared to negative $400 thousand for the same period ended March 31, 2015.
- Successful $3 million rights offering.
- Advanced in-house technical resources to support product quality enhancements as well as increase recycling capacity.
First Quarter Financial Review:
The Company's sales were $1.44 million for the quarter ended March 31, 2016, compared to $1.34 million for the quarter ended March 31, 2015, an increase of $100 thousand or 7%. Sales in the first quarter of 2016 from new and existing retail customers as well as the retention of profitable bulk customers previously served by our New Jersey processing facility more than offset the loss of sales related to the New Jersey processing facility that was closed in December 2015. The Company experienced sale growth at all of its processing facilities during the quarter ended March 31, 2016 vs. March 31, 2015 respectively.
The Company achieved a positive gross profit of $137 thousand for the quarter ended March 31, 2016, compared to a gross loss of $108 thousand for the same period ended March 31, 2015, as cost of goods sold decreased as a result of the closure of the New Jersey processing facility in December 2015.
The Company reported an operating loss of $801 thousand for the quarter ended March 31, 2016, compared to a $936 thousand operating loss for the quarter ended March 31, 2015, as the improvement in gross margin was partially offset by increased operating expenses related to salaries and wages and general and administrative. Salaries and wages increased year over year due to the hiring of a chief financial officer, shifting technical consulting activities to full-time in-house resources, and transitioning the technical team from New Jersey to corporate. General and administrative increased year over year due to bad debt expense of $63 thousand and New Jersey expenses of $77 thousand which continued during the wind down process.
The Company reported a net loss of $806 thousand for the quarter ended March 31, 2016, compared to $979 thousand for the quarter end March 31, 2015.
Business Update:
"The first quarter of 2016 was both transitional and foundational. We reassigned key technical leadership to our technology, customer service, and sales center in South Carolina, and we are realizing the benefits of our innovation and operating processes. We have, and will continue to experience, lingering expenses associated with our New Jersey facility closure; however, we have begun to remove those ongoing liabilities from our operations. With the high volume of customers we boarded onto our platform in 2015, we have deployed sales staff to continue our growth and invested in personnel and technology committed to increase our customer support strategies. The Company will continue to focus on growth through local and regional opportunities, especially those customers searching for a partner that delivers premium products with a depth of technical expertise and ongoing support. We will to continue to increase our distillation utilization and capacity to assist in driving increased margins. As our centralized technical team focuses on optimizing our profitable business units, we expect to see continued improvement of our financial results. We will continue to be methodical and measured in our executable plan as we continue to invest in our technology, team, product solutions, and customer service that will deliver the proper leverage for continued advancement in 2016." said Grant Sahag, GlyEco's President and Chief Executive Officer. "Our ultimate goal is to sustain real connections with our customers through trusted partnerships, supplying them with timely, educated, and consistent quality of service. Over the next five years, we intend to be recognized as the best and brightest glycol recycling and distribution business in the country." Sahag added.
Over the remainder of the year ending December 31, 2016, the Company expects to continue to produce positive gross margins and will continue its efforts to achieving positive EBITDA.
The Company has begun to deploy capital received from the $3 million rights offering with initiatives under our "2016 Capital Expenditure Budget" to increase recycling production capacity, improve distribution and delivery, advance our technical product quality resources, including the ongoing in-house laboratory and Research & Development (R&D) group, and to support the expansion into new markets and new product offerings.
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
Presented above is the non-GAAP financial measure representing earnings before interest, taxes, depreciation, amortization and stock compensation (which we refer to as "Adjusted EBITDA") and the reconciliations of Adjusted EBITDA to net loss. Adjusted EBITDA should be viewed as supplemental to, and not as an alternative for, net income (loss) and cash flows from operations calculated in accordance with GAAP.
Adjusted EBITDA is used by our management as an additional measure of our Company's performance for purposes of business decision-making, including developing budgets, managing expenditures, and evaluating potential acquisitions or divestitures. Period-to-period comparisons of Adjusted EBITDA help our management identify additional trends in our Company's financial results that may not be shown solely by period-to-period comparisons of net income (loss) and cash flows from operations. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to many of our employees in order to evaluate our Company's performance. Further, we believe that the presentation of Adjusted EBITDA is useful to investors in their analysis of our results and helps investors make comparisons between our company and other companies that may have different capital structures, different effective income tax rates and tax attributes, different capitalized asset values and/or different forms of employee compensation. Our management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, particularly those items that are recurring in nature. In order to compensate for those limitations, management also reviews the specific items that are excluded from Adjusted EBITDA, but included in net income (loss), as well as trends in those items.
SOURCE: GlyEco, Inc.