Adjusted Revenues Increased 3% for the Quarter; Net Loss Decreased 3% for the Quarter
ROCK HILL, SC / ACCESSWIRE / August 15, 2016 / A leader in sustainable glycol solutions, GlyEco, Inc. ("GlyEco" or the "Company") (PINK SHEETS: GLYE), announced today the following financial results for its quarter ended June 30, 2016:
"The Company's financial performance for the quarter ended June 30, 2016, is a reflection of GlyEco's investment in systems and processes. While we benefited from the departure from our Elizabeth, New Jersey location, profits were dampened by lower new account sales than expected, improvements to our operations management and sales team, and upgrades to our facilities that increased both capacity and efficiencies," said Grant Sahag, GlyEco's President and Chief Executive Officer. "We believe that the infrastructure improvements we have made will marry with a strong sales pipeline to yield strong operating performance in the coming months. We had several specific achievements during the quarter which have positioned us for improved financial performance in the future. We completed the acquisition of Brian's On-Site Recycling, which expanded our customer base in Florida, and we reached a new monthly distillation production milestone of 60,000 gallons in June."
Second Quarter of 2016 Highlights
- Expanded our Company's customer base in Florida with the acquisition of Brian's On-Site Recycling in June 2016.
- Reached a new milestone of 60,000 gallons of monthly distillation production in June 2016. Average monthly distillation production was 47,000 gallons for the three months ended June 30, 2016.
- Settled an outstanding $115,000, 12% note payable.
- Increased Revenues (net of revenues related to our Elizabeth, NJ facility) by $30 thousand or 3%, from $1.19 million for the three months ended June 30, 2015, to $1.22 million for the three months ended June 30, 2016.
- Operating loss of $1,046 thousand for the three months ended June 30, 2016, an increase of $11 thousand or 1% compared to the three months ended June 30, 2015.
- Adjusted EBITDA of negative $649 thousand for the three months ended June 30, 2016, compared to negative $536 thousand for the same period ended June 30, 2015.
Second Quarter of 2016 Financial Review
The Company's sales were $1.31 million for the quarter ended June 30, 2016, compared to $2.04 million for the quarter ended June 30, 2015, a decrease of $728 thousand or 36%. The decrease in sales was due to the impact of the closure of our former New Jersey processing center in 2015, partially offset by the addition of new customers.
The Company realized a gross loss of $67 thousand for the quarter ended June 30, 2016, compared to a gross loss of $240 thousand for the same period ended June 30, 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 $1,046 thousand for the quarter ended June 30, 2016, compared to a $1,035 thousand operating loss for the quarter ended June 30, 2015, as the improvement in gross margin was offset by increased operating expenses related to salaries and wages and general and administrative expenses. 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 accounting of our technical team to corporate overhead. General and administrative expenses increased year over year due to wind down costs related to our Elizabeth, New Jersey facility.
The Company reported a net loss of $1,043 thousand for the quarter ended June 30, 2016, compared to $1,076 thousand for the quarter ended June 30, 2015.
First Six Months of 2016 Financial Review
The Company's sales were $2.76 million for the six months ended June 30, 2016, compared to $3.38 million for the six months ended June 30, 2015, a decrease of $620 thousand or 19%. The decrease in sales was due to the impact of the closure of our former Elizabeth, New Jersey processing center in 2015, partially offset by the addition of new customers.
The Company realized a gross profit of $71 thousand for the six months ended June 30, 2016, compared to a gross loss of $348 thousand for the same period ended June 30, 2015, as cost of goods sold decreased as a result of the closure of our Elizabeth, New Jersey processing facility in December 2015.
The Company reported an operating loss of $1.85 million for the six months ended June 30, 2016, compared to a $1.97 million operating loss for the six months ended June 30, 2015, as the improvement in gross margin was partially offset by increased operating expenses related to salaries and wages and general and administrative expenses. 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 accounting of our technical to corporate overhead. General and administrative expenses increased year over year due to wind down costs related to our Elizabeth, New Jersey facility.
The Company reported a net loss of $1.85 million for the six months ended June 30, 2016, compared to $2.05 million for the six months ended June 30, 2015.
Business Update
"While the progress in the second quarter of 2016 was not as significant as what we expected it to be, we have positioned ourselves better than ever to increase sales, increase production, and optimize our distribution channels. We implemented several aspects of our 2016 plan this quarter. First, we increased production capacity, by approximately 20-25%, at our South Carolina and Florida facilities. With these changes and other testing campaigns, our production units were down for 30% of the quarter. While this affected our profits, these were necessary projects and created sustainable value for our company. Second, we continued to invest in our sales team and began adding outside sales personnel. After adding a centralized inside sales and service team in Rock Hill in the first half of the year, we expect to double our outside sales staff in the next two months. Third, we increased our presence in the heavy duty antifreeze markets, including the private and governmental heavy duty fleet, which will net higher margin product sales. Fourth, we brought on three new key managers to drive operations and operational improvements. We feel confident that these individuals will advance our interests significantly. Finally, we reduced ongoing costs relative to our Elizabeth, New Jersey wind down project and are working towards finalizing that departure. Our increase in gross profit for the six months ended June 30, 2016, over 2015 shows how much the health of our business has improved in just the last year," said Mr. Sahag.
He added, "We provide great solutions to our customers—and we intend to continue to expand our reach and results. We are better positioned than ever to do so—and the opportunity is great."
About GlyEco, Inc.
GlyEco is a collector, manufacturer, and distributor of glycol products sold to automotive and industrial customers throughout the United States. Our six facilities deliver superior quality glycol products through a fully-integrated solutions platform. We are dedicated to providing solutions, not just products: consistent, timely, and customized service; environmentally safe handling of waste; product and technology education; and technical performance support.
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.
GLYECO, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
June 30, 2016 and December 31, 2015
GLYECO, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
For the three and six months ended June 30, 2016 and 2015
GLYECO, INC. AND SUBSIDIARIES
Unaudited Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (non-GAAP)
For the three months ended June 30, 2016 and 2015
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.
Contact:
GlyEco, Inc.
Ian Rhodes
Chief Financial Officer
[email protected]
866-960-1539
SOURCE: GlyEco, Inc.