EX-20 2 l36759aexv20.htm EX-20 EX-20
Exhibit 20
(FLAGSHIP PDG LOGO)
George Westinghouse Technology Center
Building 801 — 1386 Beulah Road
Pittsburgh, Pennsylvania 15235
(800) 972-7341
     
Investor Contact
  Company Contact:
Alliance Advisors, LLC.
  John C. Regan, Chairman & CEO
Mark McPartland / Chris Camarra
  Nick Battaglia, CFO
212-398-3487
  412-243-3200
ccamarra@allianceadvisors.net
   
FOR IMMEDIATE RELEASE
FlagshipPDG Announces First Quarter Results for Period Ended April 30, 2009
PITTSBURGH, PA, June 15, 2009 PDG Environmental, Inc. (dba FlagshipPDG) (OTC BB: PDGE), a leading provider of environmental remediation, disaster response and reconstruction services, today reported financial results for the first fiscal quarter ended April 30, 2009.
Revenues for the first quarter of fiscal 2010 were $12.6 million, down 28.7% from the $17.7 million reported in the first quarter of fiscal 2009. The decrease was due to lower customer spending resulting from the overall economic conditions as well as several ongoing contracts being put on hold during the quarter. The field margin which is defined as the difference between contract revenues and direct field costs, increased to 29.2% of revenue for the current quarter, from 26.6% in the prior year fiscal quarter. Other direct and SG&A costs decreased $1.3 million from the first quarter of fiscal 2009 largely as a result of cost cutting measures in the third and fourth quarter of fiscal 2009. Pre-tax loss decreased by $200,000 from the prior fiscal quarter as a result of the factors noted previously. The Company reported a net loss of $(1.5) million, or $(0.07) per diluted share in the first quarter of fiscal 2010, compared with a net loss of $(1.1) million, or $(0.05) per diluted share in the first quarter of fiscal 2009. EBITDA (earnings before interest, taxes, depreciation and amortization) was a negative $(553,000) for the current quarter versus a negative EBITDA of $(760,000) for the comparable period in fiscal 2009. In the first quarter of fiscal 2010, FlagshipPDG recorded non-cash accounting costs of $297,000 related to its July 2005 private placement as compared to $248,000 for the comparable period last year.
“While the first quarter is historically our slowest revenue quarter, it is clear that our results were greatly impacted by the overall national economic conditions. In the last half of fiscal 2009, we took necessary steps to rationalize our fixed costs to achievable revenue levels which resulted in a decrease to our overhead cost of approximately $1.3 million as compared to the comparable period last year. In spite of nearly 30% lower revenues, we were able to reduce the quarterly loss through cost cutting and significant margin improvement. We are entering historically the busiest part of our fiscal year and we are beginning to see an increase in opportunities and are hopeful that federal economic stimulus dollars will also have a positive impact on our top line through increased spending on projects for schools, public housing, DOE site clean-up and federal buildings.” said John C. Regan, chairman and chief executive officer of FlagshipPDG.
The Company makes use of EBITDA (earnings before interest, taxes, depreciation and amortization) as a financial measure which it believes is a useful performance indicator. EBITDA is not a recognized term under generally accepted accounting principles, or “GAAP,” and should not be considered as an alternative to net income/(loss) or net cash provided by operating activities, which are GAAP measures.

 


 

A reconciliation of EBITDA to net income/(loss) appears at the end of this release as actual results for the quarter.
About FlagshipPDG
FlagshipPDG, headquartered in Pittsburgh, PA, is a leading provider of specialty contracting services including asbestos abatement, mold remediation, emergency response, demolition and reconstruction to commercial, industrial and governmental clients nationwide. With over twenty years experience, FlagshipPDG has offices nationwide capable of responding to customer requirements coast to coast. For additional information, please visit http://www.FlagshipPDG.com.
Safe Harbor Statement under Private Securities Act of 1995: The statements contained in this release, which are not historical facts, may be deemed to contain forward-looking statements, including, but not limited to, deployment of new services, growth of customer base, and growth of service area, among other items. Actual results may differ materially from those anticipated in any forward-looking statement with regard to magnitude, timing or other factors. Deviation may result from risk and uncertainties, including, without limitation, the company’s dependence on first parties, market conditions for the sale of services, availability of capital, operational risks on contracts, and other risks and uncertainties. The company disclaims any obligation to update information contained in any forward-looking statement.
— Tables to follow —

 


 

PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
                 
    For the Three Months Ended April 30,  
    2009     2008  
 
               
Contract Revenues
  $ 12,630,000     $ 17,715,000  
 
               
Direct Job Costs
    8,947,000       13,002,000  
 
           
 
               
Field Margin
    3,683,000       4,713,000  
 
               
Other Direct Costs
    1,830,000       2,480,000  
 
           
 
               
Gross Margin
    1,853,000       2,233,000  
 
               
(Loss) on Sale of Fixed Assets
    (18,000 )     (3,000 )
Selling, General and Administrative Expenses
    2,825,000       3,461,000  
 
           
 
               
(Loss) from Operations
    (990,000 )     (1,231,000 )
 
               
Other Income (Expense):
               
Interest Expense
    (194,000 )     (203,000 )
Non-Cash Interest Expense for Preferred Dividends and Accretion of Discount
    (297,000 )     (248,000 )
Interest and Other Income
    20,000       21,000  
 
           
 
    (471,000 )     (430,000 )
 
           
 
               
(Loss) Before Income Taxes
    (1,461,000 )     (1,661,000 )
 
           
 
               
Income Tax (Benefit)
          (517,000 )
 
           
 
               
Net (Loss)
  $ (1,461,000 )   $ (1,144,000 )
 
           
 
               
(Loss) Per Common Share — Basic:
  $ (0.07 )   $ (0.05 )
 
           
 
               
(Loss) Per Common Share — Diluted:
  $ (0.07 )   $ (0.05 )
 
           
 
               
Average Common Shares Outstanding
    20,875,000       20,814,000  
 
               
Average Dilutive Common Stock Equivalents Outstanding
           
 
           
 
               
Average Common Shares and Dilutive Common Stock Equivalents Outstanding
    20,875,000       20,814,000  
 
           
PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
RECONCILIATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION
(“EBITDA”)
(UNAUDITED)
                 
    For the Three Months Ended April 30,  
    2009     2008  
 
               
Net (Loss)
    (1,461,000 )     (1,144,000 )
 
               
Interest Expense
    194,000       203,000  
Non-Cash Interest Expense for Preferred Dividends and Accretion of Discount
    297,000       248,000  
Income Tax (Benefit)
          (517,000 )
Depreciation and Amortization
    417,000       450,000  
 
           
 
               
EBITDA
  $ (553,000 )   $ (760,000 )
 
           

 


 

PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
                 
    April 30,     January 31,  
    2009     2009  
    (unaudited)          
ASSETS
               
 
               
Current Assets
               
Cash and Cash Equivalents
  $ 30,000     $ 314,000  
Contracts Receivable, Net
    14,892,000       20,677,000  
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts
    2,209,000       3,180,000  
Inventories
    634,000       616,000  
Income Taxes Receivable
    3,000       355,000  
Deferred Income Tax Asset
    983,000       983,000  
Other Current Assets
    2,119,000       344,000  
 
           
 
               
Total Current Assets
    20,870,000       26,469,000  
 
               
Property, Plant and Equipment
    12,420,000       12,431,000  
Less: Accumulated Depreciation
    (10,990,000 )     (10,786,000 )
 
           
 
    1,430,000       1,645,000  
 
               
Intangible Assets, Net
    3,824,000       4,026,000  
Goodwill
    2,489,000       2,489,000  
Deferred Income Tax Asset
    2,948,000       2,948,000  
Contracts Receivable, Non Current
    1,820,000       1,820,000  
Costs in Excess of Billings on Uncompleted Contracts, Non Current
    1,630,000       1,630,000  
Other Assets
    326,000       345,000  
 
           
 
               
Total Assets
  $ 35,337,000     $ 41,372,000  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
 
               
Current Liabilities
               
Accounts Payable
  $ 8,232,000     $ 9,411,000  
Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts
    982,000       1,125,000  
Accrued Income Taxes
          44,000  
Accrued Liabilities
    4,530,000       2,742,000  
Current Portion of Long-Term Debt
    250,000       303,000  
Mandatorily Redeemable Cumulative Convertible Series C Preferred Stock
    190,000       137,000  
 
           
 
               
Total Current Liabilities
    14,184,000       13,762,000  
 
               
Long-Term Debt
    9,748,000       15,045,000  
 
               
Mandatorily Redeemable Cumulative Convertible Series C Preferred Stock
    4,616,000       4,372,000  
 
           
 
               
Total Liabilities
    28,548,000       33,179,000  
 
               
Stockholders’ Equity
               
Common Stock
    418,000       418,000  
Common Stock Warrants
    1,628,000       1,628,000  
Paid-In Capital
    20,168,000       20,111,000  
Accumulated Deficit
    (15,387,000 )     (13,926,000 )
Less Treasury Stock, at Cost
    (38,000 )     (38,000 )
 
           
 
               
Total Stockholders’ Equity
    6,789,000       8,193,000  
 
           
 
               
Total Liabilities and Stockholders’ Equity
  $ 35,337,000     $ 41,372,000  
 
           

 


 

PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
                 
    For the Three Months Ended April 30,  
    2009     2008  
Cash Flows From Operating Activities:
               
Net (Loss)
  $ (1,461,000 )   $ (1,144,000 )
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities:
               
Depreciation and Amortization
    417,000       450,000  
Deferred Income Taxes
          (517,000 )
Interest Expense for Series C Preferred Stock Dividends and Accretion of Discount
    297,000       248,000  
Stock Based Compensation
    57,000       129,000  
Loss on Sale of Fixed Assets
    18,000       3,000  
Provision for Receivable Allowance
    (8,000 )      
 
           
 
    (680,000 )     (831,000 )
Changes in Operating Assets and Liabilities:
               
Contracts Receivable
    5,793,000       2,806,000  
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts
    971,000       59,000  
Inventories
    (18,000 )     88,000  
Accrued Income Taxes
    (44,000 )     (68,000 )
Other Current Assets
    1,307,000       370,000  
Accounts Payable
    (1,179,000 )     (1,793,000 )
Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts
    (143,000 )     27,000  
Accrued Liabilities
    44,000       (81,000 )
 
           
Total Changes
    6,731,000       1,408,000  
 
           
Net Cash Provided by Operating Activities
    6,051,000       577,000  
 
               
Cash Flows From Investing Activities:
               
Purchase of Property, Plant and Equipment
    (18,000 )     (86,000 )
Proceeds from Sale of Fixed Assets
          1,000  
Changes in Other Assets
    19,000       3,000  
 
           
Net Cash Provided by (Used in) Investing Activities
    1,000       (82,000 )
 
               
Cash Flows From Financing Activities:
               
Payment of Premium Financing Liability
    (986,000 )     (326,000 )
Principal Payments on Debt
    (5,350,000 )     (172,000 )
 
           
Net Cash Used in Financing Activities
    (6,336,000 )     (498,000 )
 
           
 
               
Net Decrease in Cash and Cash Equivalents
    (284,000 )     (3,000 )
Cash and Cash Equivalents, Beginning of Year
    314,000       90,000  
 
           
Cash and Cash Equivalents, End of Period
  $ 30,000     $ 87,000  
 
           
 
               
Supplementary Disclosure of Non-Cash Investing and Financing Activity:
               
Financing of Annual Insurance Premium
  $ 2,730,000     $ 1,313,000  
 
           
Non-Cash Purchase of Fixed Assets Financed Through Capital Leases
  $     $ 27,000