BALLERUP, Denmark, Nov. 13, 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 third quarter 2014.
2014 Q3 Highlights
- The Company delivered net income of $0.35 million, its first profitable quarter since Q1 2012.
- We ended the quarter in a net cash position of $6.74 million.
- On July 28th the Company announced the closing of an underwritten public offering of 8,000,000 shares at $1.50 each, with a portion of the proceeds used to acquire Provital Solutions A/S.
- On July 29th the Company completed the acquisition of Provital Solutions A/S and announced the appointment of Sune Mathiesen as Chief Executive Officer.
- Total third quarter sales were $4.93 million, up 67% as compared to last year, driven by the acquisition of Provital and an 11% increase in the underlying LiqTech business.
- Sales of silicon carbide liquid membrane and systems rose $1.8 million to $3.26 million, due to the acquisition of Provital and an underlying 12% sales increase of liquid membranes in the core LiqTech business.
- Gross profit increased $1.19 million to $1.47 million due to the Provital acquisition and an underlying 125% increase from the core LiqTech business.
- Diesel Particulate Filter (DPF) sales increased $133,000, up 10% compared to last year.
- LiqTech International, Inc. announced a $350,000 first order for a silicon carbide membrane system from a Danish fish farm.
- After the end of the third quarter, the Company announced that it had received an order from a Danish power plant for a silicon carbide membrane system to remove heavy metals from wastewater, as well as the announcement of the Company's new LED-based deep UV water disinfection system.
Comparison of the three month periods ended September 30, 2014 and September 30, 2013
- Net sales for the three months ended September 30, 2014 were $4.93 million, compared to $2.95 million for the same period in 2013, an increase of $1.98 million or 67%. The increase in total sales was driven primarily by higher sales of liquid membranes, including Provital filtration systems (up $1.85 million as compared to last year), and higher DPF filter sales (up $133,000).
- Gross profit for the three months ended September 30, 2014 was $1.47 million compared to $274,000 for the same period in 2013, representing an increase of $1.19 million or 435%. Gross profit margin increased to 29.8% in the third quarter this year, compared to 9.3% for the same period last year.
- Net income attributable to LiqTech for the three months ended September 30, 2014 was $348,000, compared to a net loss of $904,000 in the same period last year, representing an improvement of $1.25 million.
Comparison of the nine months periods ended September 30, 2014 and September 30, 2013
- Net sales for the nine months ended September 30, 2014 were $12.10 million, compared to $9.12 million for the same period in 2013, representing an increase of $2.95 million or 32%. The increase in sales was driven primarily by higher sales of liquid membranes, including Provital filtration systems (up $2.96 million as compared to the same period last year), higher sales of DPF filters (up $280,000) and offset by a decrease in sales of kiln furniture (down $290,000).
- Gross profit for the nine months ended September 30, 2014 was $2.87 million, compared to $1.13 million in same period in 2013, representing an increase of $1.74 million or 155%. Gross profit margin in the period was 23.7%, compared to 12.3% in the same period last year.
- Net income attributable to the Company for the nine months ended September 30, 2014 was a loss of $1.17 million, compared to a loss of $2.88 million for the comparable period in 2013, representing a decrease in loss of $1.71 million.
- At September 30, 2014, the Company had cash of $6.74 million and working capital of $13.85 million. At December 31, 2013, the Company had cash of $4.88 million and working capital of $7.69 million. At September 30, 2014, working capital increased by $6.16 million compared to December 31, 2013.
Management Commentary
As noted in the results for the third quarter, the Company has made good progress in growing sales. We are pleased with the positive developments in sales and gross margins, and we are continuing to add sales resources to ensure future revenue growth and profitability.
The recently completed acquisition of Provital Solutions A/S has opened new market opportunities for the Company. In integrating Provital into LiqTech, we have broadened our product and systems offerings and we are now able to deliver anything from a stand-alone membrane to a complete filtration system. In the short time since the acquisition, we have worked intensively on developing standard units for dead end and cross flow applications to bring down production costs and lead-times. We are already seeing the first results of these efforts and we expect to see further positive effects over the coming periods.
During the third quarter, we completed the re-assessment of our business strategy. We have narrowed our market focus to a more limited number of applications within the water treatment, industrial, oil and gas, swimming pool and emissions control industries. These filtration applications are in areas where we have already proven our technology and have experienced sales staff. By limiting the number of applications, we will be specialists within these specific applications and will become a more valuable partner to our customers.
On November 6, 2014, we announced our new LED-based Deep UV water disinfection system. The system will be ready for delivery in the first quarter of 2015 and we are proud to present this new cutting-edge technology into the market. We have received our first order and we expect that these disinfection systems can become an important part of our total business going forward.
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 November 13, 2014 and ending on November 27, 2014. To access the replay, please dial (877) 660-6853 and enter the conference id# 13595278. The access number for the replay for international callers is (201) 612-7415 (conference id# 13595278).
ABOUT LIQTECH INTERNATIONAL, INC. (NYSE MKT: LIQT)
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.
ABOUT PROVITAL SOLUTIONS A/S
Provital Solutions A/S is a Danish company headquartered in Hobro, Denmark. Provital has developed the "Provital Filtration System," a new standard of water filtration technology to meet the increasing demand for higher water quality. The employees of Provital are highly experienced within the field of water filtration. Provital's filtration systems are designed for local public swimming pools or large water parks and achieve a higher standard for water treatment technology by incorporating advanced LiqTech silicon carbide liquid filtration membranes that offer significantly higher flux as compared to other filter types. The Provital System focuses on the reduction of water use in back washing and reduced energy consumption, chlorine use, and maintenance expense. For more information, please visit www.provital.dk/
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.
- Financial charts follow –
LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | |||||
As of September 30, | As of December 31, | ||||
2014 | 2013 | ||||
UNAUDITED | |||||
Current Assets: | |||||
Cash | $ | 6,736,113 | $ | 4,884,275 | |
Accounts receivable, net | 3,804,426 | 2,341,070 | |||
Other receivables | 261,594 | 231,998 | |||
Cost in excess of billing | 1,065,279 | 406,997 | |||
Inventories | 5,397,011 | 4,258,606 | |||
Prepaid expenses | 89,210 | 12,021 | |||
Current deferred tax asset | 133,927 | 104,143 | |||
Total Current Assets | 17,487,560 | 12,239,110 | |||
Property and Equipment, net accumulated depreciation | 4,856,957 | 5,829,404 | |||
Other Assets: | |||||
Other investments | 6,297 | 6,882 | |||
Long term deferred tax asset | 3,022,692 | 1,863,349 | |||
Goodwill | 7,980,327 | - | |||
Other intangible assets, net | 18,630 | 24,687 | |||
Deposits | 265,408 | 271,916 | |||
Total Other Assets | 11,293,354 | 2,166,834 | |||
Total Assets | $ | 33,637,871 | $ | 20,235,348 | |
LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | |||||
As of September 30, | As of December 31, | ||||
2014 | 2013 | ||||
UNAUDITED | |||||
Current Liabilities: | |||||
Lines of Credit | $ | 2,406 | $ | - | |
Current portion of capital lease obligations | 181,595 | 208,419 | |||
Accounts payable | 2,077,934 | 1,586,962 | |||
Accrued expenses | 1,254,048 | 1,440,522 | |||
Billing in excess of cost | 45,348 | 96,104 | |||
Accrued income taxes payable | - | 2,000 | |||
Deferred revenue / customers deposit | 75,801 | 1,212,434 | |||
Total Current Liabilities | 3,637,132 | 4,546,441 | |||
Long-term capital lease obligations, less current portion | 436,588 | 554,360 | |||
Total Long-Term Liabilities | 436,588 | 554,360 | |||
Total Liabilities | 4,073,720 | 5,100,801 | |||
Stockholders' Equity: | |||||
Common stock; par value $0,001, 100,000,000 shares authorized, | 39,305 | 27,213 | |||
Additional paid-in capital | 35,568,888 | 18,700,574 | |||
Accumulated deficit | (3,486,851) | (2,316,784) | |||
Deferred compensation | (526,568) | (1,008,450) | |||
Other comprehensive income, net | (2,046,330) | (292,565) | |||
Non-controlled interest in subsidiaries | 15,707 | 24,559 | |||
Total Stockholders' Equity | 29,564,151 | 15,134,547 | |||
Total Liabilities and Stockholders' Equity | $ | 33,637,871 | $ | 20,235,348 | |
LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES (UNAUDITED) CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
For the Three Months | For the Nine Months | ||||||||||||
September 30, | September 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Net Sales | $ | 4,931,406 | $ | 2,949,605 | $ | 12,102,595 | $ | 9,154,674 | |||||
Cost of Goods Sold | 3,464,284 | 2,675,132 | 9,229,131 | 8,025,657 | |||||||||
Gross Profit | 1,467,122 | 274,473 | 2,873,464 | 1,129,017 | |||||||||
Operating Expenses: | |||||||||||||
Selling expenses | 831,990 | 654,005 | 2,430,814 | 1,943,522 | |||||||||
General and administrative expenses | 738,761 | 568,944 | 2,174,942 | 1,773,073 | |||||||||
Non-cash compensation expenses | (19,663) | 276,969 | 372,960 | 1,051,857 | |||||||||
Research and development expenses | 83,113 | 92,276 | 223,532 | 350,515 | |||||||||
Total Operating Expense | 1,634,201 | 1,592,194 | 5,202,248 | 5,118,967 | |||||||||
Loss from Operations | (167,079) | (1,317,721) | (2,328,784) | (3,989,950) | |||||||||
Other Income (Expense) | |||||||||||||
Interest and other income | 16,032 | 9,313 | 29,777 | 11,713 | |||||||||
Interest (expense) | (18,794) | (14,381) | (40,914) | (39,038) | |||||||||
Gain (loss) on investments | 9 | - | (832) | - | |||||||||
Gain (loss) on currency transactions | 237,551 | 115,011 | 192,226 | 78,037 | |||||||||
Loss on sale of fixed assets | - | - | - | (2,135) | |||||||||
Total Other Income (Expense) | 234,798 | 109,943 | 180,257 | 48,577 | |||||||||
Income (Loss) Before Income Taxes | 67,719 | (1,207,778) | (2,148,527) | (3,941,373) | |||||||||
Income Tax Expense (Benefit) | (276,870) | (303,784) | (972,430) | (1,045,307) | |||||||||
Net Income (Loss) | 344,589 | (903,994) | (1,176,097) | (2,896,066) | |||||||||
Less Net Income (Loss) Attributable To Non-Controlled | (2,915) | (38) | (6,029) | (14,197) | |||||||||
Net Income (Loss) Attributable To LiqTech | $ | 347,504 | $ | (903,956) | $ | (1,170,068) | $ | (2,881,869) | |||||
Basic Earnings (Loss) Per Share | $ | 0.01 | $ | (0.04) | $ | (0.04) | $ | (0.12) | |||||
Weighted Average Common Shares Outstanding | 35,613,164 | 24,511,500 | 30,043,493 | 24,329,082 | |||||||||
Diluted Earnings (Loss) Per Share | $ | 0.01 | $ | (0.04) | $ | (0.04) | $ | (0.12) | |||||
Weighted Average Common Shares Outstanding | 36,034,570 | 24,511,500 | 30,043,493 | 24,329,082 | |||||||||
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
SOURCE LiqTech International, Inc.
