Quarter and Year to Date Positive Gross Margin
Adjusted Revenues Increased 9% for the Quarter
Net Loss Decreased 5% for the Quarter
ROCK HILL, SC / ACCESSWIRE / November 14, 2016 / A leader in sustainable glycol technologies, GlyEco, Inc. ("GlyEco" or the "Company") (GLYE), announced today the following financial results for its quarter ended September 30, 2016:
"The Company's financial performance for the quarter ended September 30, 2016, improved compared to the sequential quarter ended June 30, 2016, as well as the comparable quarter in 2015. The departure from our New Jersey location, improved adjusted revenues and increased distillation production all contributed to our improved financial performance," said Grant Sahag, GlyEco's President and Chief Executive Officer. "We saw the benefit of the infrastructure improvements we made in the first half of 2016, as well as early positive indications from our new sales efforts. The completion of our Quality, Research, and Development Laboratory and the hiring of a new Vice President of Sales and Marketing were also important accomplishments during the quarter."
Third Quarter of 2016 Highlights
- Positive gross margin of $106 thousand for the three months ended September 30, 2016, compared to a negative gross margin of $98 thousand for the three months ended September 30, 2016
- Hired a new Vice President of Sales and Marketing
- Completed our quality, development and research laboratory
- Reached a new milestone of 74,000 gallons of monthly distillation production in September 2016. Average monthly distillation production was 63,000 gallons for the three months ended September 30, 2016.
- Increased Revenues (net of revenues related to our Elizabeth, NJ facility) by $102 thousand or 9%, from $1.19 million for the three months ended September 30, 2015, to $1.29 million for the three months ended September 30, 2016
- Operating loss of $693 thousand for the three months ended September 30, 2016, compared to $694 thousand for the three months ended September 30, 2015
- Adjusted EBITDA of negative $336 thousand for the three months ended September 30, 2016, compared to negative $323 thousand for the three months ended September 30, 2015
Third Quarter of 2016 Financial Review
The Company's sales were $1.39 million for the quarter ended September 30, 2016, compared to $2.14 million for the quarter ended September 30, 2015, a decrease of $753 thousand or 35%. 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 profit of $106 thousand for the quarter ended September 30, 2016, compared to a gross loss of $98 thousand for the same period ended September 30, 2015, as cost of goods sold decreased primarily as a result of the closure of the New Jersey processing facility in December 2015.
The Company reported an operating loss of $693 thousand for the quarter ended September 30, 2016, compared to a $694 thousand operating loss for the quarter ended September 30, 2015, as the improvement in gross margin was offset by increased operating expenses primarily related to salaries and wages. 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.
The Company reported a net loss of $699 thousand for the quarter ended September 30, 2016, compared to $734 thousand for the quarter ended September 30, 2015.
The Company reported adjusted EBITDA of negative $336 thousand for the three months ended September 30, 2016, compared to negative $323 thousand for the three months ended September 30, 2015.
First Nine Months of 2016 Financial Review
The Company's sales were $4.15 million for the nine months ended September 30, 2016, compared to $5.53 million for the nine months ended September 30, 2015, a decrease of $1.38 million or 25%. 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 $177 thousand for the nine months ended September 30, 2016, compared to a gross loss of $445 thousand for the same period ended June 30, 2015, as cost of goods sold decreased primarily as a result of the closure of our Elizabeth, New Jersey processing facility in December 2015.
The Company reported an operating loss of $2.54 million for the nine months ended September 30, 2016, compared to a $2.66 million operating loss for the nine months ended September 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 $2.55 million for the nine months ended September 30, 2016, compared to $2.79 million for the nine months ended September 30, 2015.
The Company reported adjusted EBITDA of negative $1.43 million for the nine months ended September 30, 2016, compared to negative $1.26 million for the nine months ended September 30, 2015.
Business Update
"After realigning our business model and investing in our six distribution facilities in the first half of 2016, we realized returns on those investments in the third quarter. In the first quarter, we refocused our business model on providing glycol solutions through a network of fully-integrated collection and direct-delivery channels, rather than a business so entrenched in the glycol commodity manufacturing business. In the second quarter, we invested in the operations, production capacity, and sales structure of that fully integrated network. In the third quarter, we realized returns on our investment in production and facilities, increasing our total production volume by over 33% from the second quarter of this year. Building from a base of our sales and customer service team, we added a Vice President of Sales and Marketing to construct a comprehensive sales organization and system. We expect to see the benefit of the sales team both in the size of customers we bring in and the price we sell to those customers for. We provide solutions to our customers, not just products, and we continue to hear from them that the convenience of our solutions are what strikes true to their needs. The 12% improvement in gross margin for both the three-month and nine-month periods ending September 30th, 2016 versus the same periods in 2015 indicate a stronger financial model and position for this company. To further increase that margin, we need to continue to see improvements in production and sales, along with cheaper raw materials and more efficient distribution of our products. The managing partners of our facilities are equipped to optimize existing business and grow through new business," said Grant Sahag, GlyEco's President and Chief Executive Officer..
"In concert with the realignment of our business model, we have continued to eliminate distractions and focus on innovation. We came to a settlement with the landlord at our previous New Jersey facility and expect to wind down the remaining items in the coming months. We also finished the build out of our Quality, Research, and Development Laboratory, which will allow us to lead innovation in the glycol space," Sahag added.
"Our focus is clear. We must continue to decrease our raw material costs, produce at record volumes, attract larger customers while growing smart, attract and retain high quality members of our team, invest in our people through training, and innovate. We still have lots of work to do, but we have become smarter and better in our mission to be the best and brightest glycol recycling and distribution business in the country."
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.
Contact:
GlyEco, Inc.
Ian Rhodes
Chief Financial Officer
[email protected]
866-960-1539
GLYECO, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
September 30, 2016 and December 31, 2015
GLYECO, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
For the three and nine months ended September 30, 2016 and 2015
GLYECO, INC. AND SUBSIDIARIES
Unaudited Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (non-GAAP)
For the three and nine months ended September 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.
SOURCE: GlyEco, Inc.