-Continuing Operations Posts 37% Quarterly Net Revenue Growth
-GlyEco Completes the Sale of Consumer Segment Assets
INSTITUTE, WV / ACCESSWIRE / May 15, 2019 / GlyEco, Inc. ("GlyEco" or the "Company") (OTC PINK: GLYE), a developer, manufacturer and distributor of performance fluids for the automotive, commercial and industrial markets, announced today the financial results for the quarter ended March 31, 2019. The Company completed the sale of all consumer related assets effective January 11th, 2019. The following results reflect the continuing operations of the Company which has previously been referred to as the Industrial Segment:
|
|
Quarter ended March 31,
|
|||||||
|
2019
|
2018
|
|||||||
|
Sales, net
|
$
|
1,729,151
|
$
|
1,261,425
|
||||
|
Gross profit (loss)
|
$
|
(136,135)
|
$
|
391,548
|
||||
|
Total operating expenses
|
$
|
1,240,997
|
$
|
1,421,693
|
||||
|
Loss from operations
|
$
|
(1,377,132)
|
|
$
|
(1,030,145)
|
|||
|
Net loss from continuing operations
|
$
|
(1,599,352)
|
$
|
(1,133,823)
|
||||
|
Net loss
|
$
|
(1,723,037)
|
$
|
(1,217,572)
|
||||
|
Adjusted EBITDA from continuing operations
|
$
|
(1,071,222)
|
$
|
(711,201)
|
||||
Q1 2019 Highlights
- Net revenues of $1.7 million were up 37% compared to $1.3 million for Q1 2018.
- Total operating expenses dropped by 13% from $1.4 million in Q1 2018 to $1.2 million in Q1 2019.
- Adjusted EBITDA loss, a non-GAAP measure, was $(1,071,222) compared to $(711,201) for Q1 2018.
Q1 2019 Financial Review
The Company reported total net revenues increased by $468,000 or 37%, from $1,261,000 for Q1 2018 to $1,729,000 for Q1 2019. Sales growth was driven by a combination of new WEBA customers, increased production at the WV glycol plant and the divestiture of the consumer business which allowed more finished product to be sold to third-party customers. The ethylene glycol plant grew net revenues by $275,000 or 36% YoY and the WEBA division which grew sales of chemical additives by $192,000 or 38% YoY. Total sales of $1,039,000 at the WV facility for the quarter included $120,000 in sales of finished anti-freeze from the newly-operational blending facility.
The Company reported a gross loss of ($136,000), representing 8% of net sales, for Q1 2019 vs a gross profit of $392,000 in Q1 2018. The decrease in gross margin was driven by lower pricing in the ethylene glycol market. While production at the WV plant increased YoY, the average sales price fell by $0.07/lb or 18% compared to Q1 2018. The facility remains well below its operational capacity with fixed costs comprising a large portion of overall production costs. Ramping production at the facility will decrease the realized production cost per pound and generate gross profit despite decreased market pricing.
The Company reported operating expenses decreased from $1,422,000, representing a 113% operating expense ratio for Q1 2018, to $1,241,000, representing a 72% expense ratio for Q1 2019. The decease in operating expense ratio was driven by shedding expense associated with the consumer segment. The Company will continue to reduce operating expenses to better match Corporate overhead to the level necessary to run the WV glycol plant and WEBA business.
The Company reported a net loss of $1,723,000 for Q1 2019, compared to a net loss of $1,218,000 for Q1 2018.
The Company reported adjusted EBITDA of $(1,071,000) in Q1 2019, compared to $(711,000) for Q1 2018.
Business Update
The Company executed the sale of its consumer segment assets effective January 11th, 2019. In doing so, the Company exited the business of retail distribution of antifreeze via route delivery trucks and shifted focus to industrial-scale production of ethylene glycol and finished antifreeze in WV and the distribution of chemical additives at WEBA. During the quarter, the Company was burdened by elements of this transition and was delayed in pursuing new sales opportunities for WEBA and the glycol plant in order to execute the consumer business sale. Moving forward, the Company expects to grow revenues in additives, industrial-grade ethylene glycol and finished antifreeze while reducing expenses to match those needed to support continuing operations. The WV plant operated at approximately 15% capacity in Q1 2019 allowing for rapid growth in ethylene glycol processing going forward. Similarly, the new blending facility will serve as a growth engine as it provides the Company the capacity to produce up to 6 million gallons per year of finished antifreeze.
"The first quarter of 2019 reflected the transition from a retail antifreeze distribution company to an industrial-scale chemical manufacturer and distributor. With the sale of the consumer segment finalized, the focus moving forward is on forming strategic partnerships with large customers which will benefit from our ability to supply a full range of glycol-based products at industrial level quantities. Ramping production at the glycol plant remains a key focus as we continue to improve our overall cost structure." said Mr. Geib, President and Chief Executive Officer.
About GlyEco, Inc.
GlyEco, Inc. is a chemical company focused on technology development and manufacturing of coolants, additives, and related performance fluids. We serve and support the automotive, heavy-duty, and industrial markets with an unwavering commitment to customer service and quality. GlyEco Inc., located in Institute, West Virginia, is a vertically integrated company which manufactures ethylene glycol, additives, and finished fluids. Maintaining control over all core ingredients of its glycol-based performance fluids, and directly managing all aspects of the manufacturing process allows GlyEco Inc. to offer our customers the highest value with competitive costs.
For further information, please visit: http://www.glyeco.com
To assist investors and other interested parties in staying informed about GlyEco, the Company distributes, by e-mail, press releases and other information. To be added to the Company distribution list, please contact us at [email protected].
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by words such as "believe," "expect," "anticipate," "plan," "potential," "continue," or similar expressions. Such forward-looking statements include risks and uncertainties, and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks and uncertainties are discussed in the Company's filings with the Securities and Exchange Commission. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond the Company's control which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects the Company's current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future, except as required by federal securities laws.
Contact:
GlyEco, Inc.
Brian Gelman
Corporate EVP and Chief Financial Officer
[email protected]
304-400-4006
GLYECO, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
March 31, 2019 and December 31, 2018
|
March 31,
|
December 31,
|
|||||||
|
2019
|
2018
|
|||||||
|
ASSETS
|
(unaudited)
|
|||||||
|
Current Assets
|
||||||||
|
Cash
|
$
|
157,716
|
$
|
237,648
|
||||
|
Accounts receivable, net
|
736,271
|
215,336
|
||||||
|
Prepaid expenses
|
248,894
|
137,067
|
||||||
|
Inventories
|
218,289
|
238,895
|
||||||
|
Current assets from discontinued operations
|
81,975
|
1,760,100
|
||||||
|
Total current assets
|
1,443,145
|
2,589,046
|
||||||
|
Property, plant and equipment, net
|
2,500,900
|
2,562,618
|
||||||
|
Other Assets
|
||||||||
|
Deposits
|
47,155
|
49,081
|
||||||
|
Operating lease right-of-use assets
|
447,094
|
-
|
||||||
|
Goodwill
|
2,937,288
|
2,937,288
|
||||||
|
Other intangible assets, net
|
1,610,376
|
1,721,000
|
||||||
|
Noncurrent assets from discontinued operations
|
215,106
|
-
|
||||||
|
Total other assets
|
5,257,019
|
4,707,369
|
||||||
|
Total assets
|
$
|
9,201,064
|
$
|
9,859,033
|
||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current Liabilities
|
||||||||
|
Accounts payable and accrued expenses
|
$
|
3,553,794
|
$
|
2,845,856
|
||||
|
Customer deposits
|
107,650
|
274,103
|
||||||
|
Contingent acquisition consideration
|
815,670
|
815,670
|
||||||
|
Notes payable - current portion, net of debt discount
|
2,200,026
|
2,080,071
|
||||||
|
Operating lease liabilities- current portion
|
199,167
|
-
|
||||||
|
Finance lease obligations - current portion
|
508,505
|
494,131
|
||||||
|
Current liabilities from discontinued operations
|
270,470
|
586,019
|
||||||
|
Total current liabilities
|
7,655,282
|
7,095,850
|
||||||
|
Non-Current Liabilities
|
||||||||
|
Notes payable - non-current portion
|
2,715,023
|
2,783,744
|
||||||
|
Operating lease liabilities- non-current portion
|
389,596
|
-
|
||||||
|
Finance lease obligations - non-current portion
|
617,287
|
749,992
|
||||||
|
Noncurrent liabilities from discontinued operations
|
220,752
|
-
|
||||||
|
Total non-current liabilities
|
3,922,658
|
3,533,736
|
||||||
|
Total liabilities
|
11,577,940
|
10,629,586
|
||||||
|
Commitments and Contingencies
|
||||||||
|
Stockholders' Deficit
|
||||||||
|
Preferred stock, par value $0.0001 per share: 40,000,000 shares authorized; no shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively
|
-
|
-
|
||||||
|
Common stock, par value $0.0001 per share: 300,000,000 shares authorized; 1,383,731 and 1,358,597 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively
|
138
|
136
|
||||||
|
Additional paid-in capital
|
46,656,557
|
46,539,845
|
||||||
|
Accumulated deficit
|
(49,033,571
|
)
|
(47,310,534
|
)
|
||||
|
Total stockholders' deficit
|
(2,376,876
|
)
|
(770,553
|
)
|
||||
|
Total liabilities and stockholders' equity
|
$
|
9,201,064
|
$
|
9,859,033
|
||||
GLYECO, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
For the three months ended March 31, 2019 and 2018
|
Three months ended March 31,
|
||||||||
|
2019
|
2018
|
|||||||
|
Net sales
|
$
|
1,729,151
|
$
|
1,261,425
|
||||
|
Cost of goods sold
|
1,865,286
|
869,877
|
||||||
|
Gross (loss) profit
|
(136,135
|
)
|
391,548
|
|||||
|
Operating expenses:
|
||||||||
|
Consulting fees
|
6,500
|
46,689
|
||||||
|
Share-based compensation
|
109,964
|
119,888
|
||||||
|
Salaries and wages
|
353,377
|
556,451
|
||||||
|
Legal and professional
|
321,045
|
330,439
|
||||||
|
General and administrative
|
450,111
|
368,226
|
||||||
|
Total operating expenses
|
1,240,997
|
1,421,693
|
||||||
|
Loss from operations
|
(1,377,132
|
)
|
(1,030,145
|
)
|
||||
|
Other expenses:
|
||||||||
|
Interest expense
|
222,220
|
103,678
|
||||||
|
Total other expense, net
|
222,220
|
103,678
|
||||||
|
Loss from continuing operations before provision for income taxes
|
(1,599,352
|
)
|
(1,133,823
|
)
|
||||
|
Provision for income taxes
|
-
|
17,251
|
||||||
|
Net loss from continuing operations
|
(1,599,352
|
)
|
(1,151,074
|
)
|
||||
|
Loss from discontinued operations, net of income taxes
|
(123,685
|
)
|
(66,498
|
)
|
||||
|
Net loss
|
$
|
(1,723,037
|
)
|
$
|
(1,217,572
|
)
|
||
|
Basic and diluted loss per share from continuing operations
|
$
|
(1.16
|
)
|
$
|
(0.87
|
)
|
||
|
Basic and diluted loss per share from discontinued operations
|
$
|
(0.09
|
)
|
$
|
(0.05
|
)
|
||
|
Basic and diluted loss per share
|
$
|
(1.25
|
)
|
$
|
(0.92
|
)
|
||
|
Weighted average number of common shares outstanding- basic and diluted
|
1,383,031
|
1,323,398
|
||||||
GLYECO, INC. AND SUBSIDIARIES
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (non-GAAP)
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
|
Three Months Ended
March 31,
|
||||||||
|
2019
|
2018
|
|||||||
|
Net loss from continuing operations
|
$
|
(1,599,352
|
)
|
$
|
(1,151,074
|
)
|
||
|
Interest expense
|
222,220
|
103,678
|
||||||
|
Income tax expense
|
-
|
17,251
|
||||||
|
Depreciation and amortization
|
195,945
|
199,056
|
||||||
|
Share-based compensation
|
109,965
|
119,888
|
||||||
|
Adjusted EBITDA
|
$
|
(1,071,222
|
)
|
$
|
(711,201
|
)
|
||
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.