BALLERUP, Denmark, Aug. 12, 2014 /PRNewswire/ -- LiqTech International, Inc. (NYSE MKT: LIQT) a clean technology company that manufactures and markets highly specialized filtration products and systems, announced today its financial and operational results for second quarter 2014.

2014 Q2 highlights

• Total second quarter sales were $3.97 million, the highest sales quarter since Q1 2012.
• Sales of silicon carbide liquid membrane filters reached a record quarterly high of $1.84 million as the Company continues to gain traction in several key market segments.
• Gross profit margin improved to 21.4% primarily from higher sales as compared to 10.4% in the same period last year. 
• Two noteworthy project orders totaling $0.55 million were received from customers in the Middle East and Denmark for liquid membranes and flat-sheet liquid membranes.  The Middle East application is for produced water and the Danish application is for a reverse-osmosis water purification system.
• During the second quarter, the Board was expanded to four directors and strengthened with the appointment of Mr. Michael Barish, a seasoned investment professional who also sits on the Board of another public company.  Subsequent to the end of the quarter and following the completion of the Provital acquisition on July 29, 2014, Mr. Sune Mathiesen was named Chief Executive Officer and a Director of LiqTech, expanding the Board to five directors.
• Also after the end of the second quarter, the Company successfully closed a public offering of 8 million shares at a price of $1.50 per share on July 28, 2014.  The proceeds were approximately $10.8 million and a portion of the proceeds was used to acquire Provital Solutions A/S, a Danish water filtration business.

Financial highlights for the three months ended June 30, 2014

• Net sales for the three months ended June 30, 2014 were $3.97 million, compared to $2.81 million for the same period in 2013, representing an increase of $1.16 million or 42%. The increase in total sales was driven by higher sales of liquid membranes (up $0.81 million as compared to last year) and higher DPF filter sales of (up $0.51 million), offsetting  a decrease in sales of kiln furniture of $0.15 million.
• Gross profit for the three months ended June 30, 2014 was $0.85 million compared to $0.29 million in same period in 2013, representing an increase of $0.56 million or 191%.  Gross profit margin increased to 21.4% in the second quarter this year compared to 10.4% last year.   
• Net loss attributable to LiqTech for the three months ended June 30, 2014 was $0.76 million, compared to a net loss of $1.31 million in the same period last year, representing a decrease in the loss of $0.55 million.

Financial highlights for the six months ended June 30, 2014

• Net sales for the six months ended June 30, 2014 were $7.17 million compared to $6.21 million for the same period in 2013, representing an increase of $0.96 million or 16%. The increase in sales was driven primarily by higher sales of liquid membranes (up $1.14 million as compared to the same period last year), higher sales of DPF filters (up $0.15 million) and offset by a decrease in sales of kiln furniture of $0.32 million.
• Gross profit for the six months ended June 30, 2014 was $1.41 million compared to $0.85 million in same period in 2013, representing an increase of $0.56 million or 65%.  Gross profit margin in the period was 19.6%, compared to 13.8% last year.
• Net income attributable to the Company for the six months ended June 30, 2014 was a loss of $1.52 million, compared to a loss of $1.98 million for the comparable period in 2013, representing a decrease in loss of $0.46 million. 
• At June 30, 2014, the Company had cash of $1.27 million and working capital of $6.31 million.  At December 31, 2013, the Company had cash of $4.88 million and working capital of $7.69 million. At June 30, 2014, working capital decreased by $1.38 million compared to December 31, 2013.
• Included in the net loss were non-cash charges of $1.37 million, comprising non-cash compensation of $0.39 million, depreciation and amortization of $0.87 million and other non-cash charges of $0.11 million.

Management Commentary

As noted in the results for the most recent quarter, the Company has made good strides in growing sales and moving closer to profitability.  In particular, we are encouraged by growing customer acceptance of our silicon carbide (SiC) liquid membrane filters – we achieved record quarterly sales of liquid membranes in the second quarter this year of $1.84 million, with sequential second quarter sales up 20% on the first quarter and nearly 80% higher than the second quarter last year.  We expect to continue to deliver sales growth in liquid membranes as these products gain further acceptance in our target markets.  Further, we are pleased with the improvement in our production processes that contributed to higher second quarter gross margins.  

The recently completed acquisition of Provital Solutions A/S opens up new opportunities for the Company in developing water-related filtration solutions.  We anticipate that Provital will be a catalyst for growth for many of our smaller customers.  Provital, a key LiqTech silicon carbide liquid membrane customer prior to our acquisition, is water-solution system focused with a team of filtration engineers who work with customers to design, fabricate and install filtration solutions for their specific applications.  LiqTech's current CEO, Sune Mathiesen, was most recently the CEO of Provital, and was instrumental in delivering Provital's strong growth.  Sune is well qualified to lead the Company to profitable sales growth for the combined business.

During the past several years, Diesel Particulate Filter ("DPF") sales decreased substantially due primarily to delayed regulatory enforcement in California and elsewhere.  As expected, we were pleased to see a strong sales gain of DPF filters in the second quarter, with sales up close to $0.50 million sequentially against the first quarter of this year.  This year, we have received DPF filter orders in several new markets, including a $0.45 million order from a Dutch company for an emissions reduction application in the luxury boat market segment.  In addition, DPF activity has also picked up in England and China, two high potential markets where customers already recognize the benefits of LiqTech DPF filters to reduce particulate emissions.  

We have come to recognize that the time frame in working with large, market-leading global companies in major industries such as oil and gas production, ballast water treatment and pharmaceuticals production is very long when considering initial contact to initial sales – in many cases this can take years.  The Board is therefore determined to increase the Company's sales efforts to smaller customers in addition to pursuing continued system sales efforts to the large market leaders.  In particular, we intend to utilize the superior performance parameters of our flat sheet silicon carbide liquid membranes as a means of entering the short lead time replacement market. This marketing strategy has already paid dividends and orders from a variety of customers have steadily increased.  We expect orders from these sales efforts to show good progress going forward.

The Company has made excellent progress during the second quarter in market development and operational improvement.  On top of this, the Board is pleased to have successfully completed the public offering of shares and the acquisition of Provital Solutions A/S, both events occurring after the end of the second quarter.  The Board is confident that the Company has a strong foundation upon which we can now move forward in growing the revenues and profits of LiqTech. 

Conference Call Details:

Interested parties may participate in the call by dialing (877) 407-8029 or (201) 689-8029. It is recommended to dial in approximately 10 to 15 minutes prior to the scheduled start time. The conference call will also be available on replay starting at 3:00 p.m. ET on August 12, 2014 and ending on August 26, 2014. To access the replay, please dial (877) 660-6853 and enter the conference id# 13588822. The access number for the replay for international callers is (201) 612-7415 (conference id# 13588822).

ABOUT LIQTECH INTERNATIONAL, INC.

LiqTech International, Inc., a Nevada corporation, is a clean technology company that develops and supplies proprietary silicon carbide filtration technologies for gas and liquid purification. LiqTech's highly specialized nanotechnology silicon carbide liquid membranes and filters are used primarily for water purification/filtration and for the control of soot exhaust particles from diesel engines.  LiqTech also supplies small-scale, integrated water filtration systems for the swimming pool and large water park market segments through its Provital brand, using its proprietary silicon carbide filter technology and offering customers a new standard for higher water quality.

For more information, please visit www.liqtech.com. 

Follow LiqTech on LinkedIn: http://www.linkedin.com/company/liqtech-international 

Follow LiqTech on Twitter: https://twitter.com/LiqTech

Forward-Looking Statements: This press release contains "forward-looking statements." Although the forward-looking statements in this release reflect the good faith judgment of management, forward-looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by us in the our reports filed with the Securities and Exchange Commission, including the risk factors that attempt to advise interested parties of the risks that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this release.

CONTACT:

Wolfe Axelrod Weinberger Associates, LLC
Stephen D. Axelrod, CFA/Donald C. Weinberger
(212) 370-4500, (212) 370-4505 fax
steve@wolfeaxelrod.com, don@wolfeaxelrod.com

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SOURCE LiqTech International, Inc.