BALLERUP, Denmark, Nov. 12, 2015 /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 results for the three and nine months ended September 30, 2015.
Financial highlights for the three months ended September 30, 2015
- Net sales for the three months ended September 30, 2015 were $6.9 million, compared to $4.9 million for the same period in 2014, representing an increase of $2.0 million or 40.8%. Our results this year have been significantly impacted by currency translation effects. As a result, third quarter 2015 net sales at constant currency were 85% higher than last year. The increase in net sales was primarily driven by an increase in sales of membranes and systems of $1.3 million and an increase in sales of diesel particulate filters of $0.8 million. The increase in sales of membranes and systems was a result of increased order inflow in the first 9 months that is now starting to materialize into revenue. The increase in sales of our diesel particulate filters was primarily driven by increased sales activities in China.
- Gross profit for the three months ended September 30, 2015 was $2.3 million compared to $1.5 million in the same period of 2014, representing an increase of $0.8 million or 53.3%. Gross profit margin was 33.4% compared to 29.8% in the same period of the preceding year. The increase in gross profit was primarily driven by higher sales activities compared to the same period in 2014. The increase in gross margin was primarily driven by higher sales of membranes and systems that carry a higher gross margin than our other products. Included in gross profit is depreciation of $0.4 million and $0.4 million for the three months ended September 30, 2015 and 2014, respectively.
- Net profit attributable to LiqTech for the three months ended September 30, 2015 was $0.621 million, compared to $0.347 million in the same period last year, representing an increase of $0.274 million or 79.0%.
Financial highlights for the nine months ended September 30, 2015
- Net sales for the nine months ended September 30, 2015 were $10.7 million compared to $12.1 million for the same period of 2014, representing a decrease of $1.4 million or 11.6%. On a constant currency basis, year-to-date net sales were 14% higher than last year. The decrease in net sales was primarily caused by a decrease in sales of diesel particulate filters of $1.0 million and a decrease in sales of membranes and systems of $0.4 million. The decrease in net sales of our diesel particulate filters was mainly due to a decrease in mandates and general market activity for the first six months of 2015, partly offset by higher sales in the three months ended September 2015. The decrease in net sales of our membranes and systems was due largely to customer order placement delays for the first six months of 2015, partly offset by increased deliveries in the three months ended September 30, 2015.
- Gross profit for the nine months ended September 30, 2015 was $1.7 million compared to $2.9 million for the same period of 2014, representing a decrease of $1.2 million or 41.4%. The decrease in gross profit was due to low net sales compared to our fixed cost of goods sold in the first six months of 2015, partly offset by higher net sales in the three months ended September 2015. Included in the gross profit is depreciation of $1.1 million and $1.3 million for the nine months ended September 30, 2015 and 2014, respectively.
- Net loss attributable to LiqTech for the nine months ended September 30, 2015 was $2.3 million, compared to a loss of $1.2 million in the same period last year, representing an increased loss of $1.1 million or 91.7%.
- At September 30, 2015, the Company had cash and restricted cash of $2.3 million and working capital of $7.3 million.
Management Commentary
Shortly after our acquisition of Provital Solutions A/S in July 2014, we formed a new strategy for our membrane business. Having acquired a company with extensive experience in manufacturing and designing systems based on LiqTech membranes, we changed our focus from selling membranes to other system integrators into selling systems directly to end users. We also narrowed our focus to specific applications within the water, swimming pool, oil and gas and industrial markets, where we had already proven our technology.
We believe that the record order inflow of $18.3 million in the first nine months of 2015 shows that our change in strategy is proving successful. We have significantly improved the size and quality of our sales pipeline and we have seen an increased level of interest and acceptance from our target markets.
We are very pleased to see these positive developments in our membrane business. We are equally pleased to see increased activity in our diesel particulate business – third quarter revenue from our diesel particulate filters was $2.3 million, up sequentially from $0.9 million in the second quarter. Over the long term, we anticipate an improving outlook for our DPF filters but sales may vary meaningfully from quarter to quarter.
Revenue of $6.9 million in the third quarter was the highest since the fourth quarter 2011 and the second highest in the history of the company. The net profit attributable to LiqTech of $0.6 million marks a new record for the Company in a single quarter.
The Company collected a $1.2 million customer receivable in the beginning of the fourth quarter 2015. Due to the production of several large orders in the third and fourth quarters of this year, cash and accounts receivable may experience significant swings; however, we expect our cash to be sufficient due to customer deposits and prepayments that will assist us in managing our working capital.
Based on these positive developments we believe that we are progressing towards our goal of establishing our silicon carbide filtration technology as an industrial standard in our target markets.
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. EST on November 12, 2015 and ending on November 26, 2015. To access the replay, please dial (877) 660-6853 and enter the conference id# 13616802. The access number for the replay for international callers is (201) 612-7415.
Callers from Denmark can dial in using the following numbers:
Denmark (fixed) ATT | 80 25 21 64 |
Denmark (mobile) ATT | 80 25 19 17 |
Financial Tables Follow
LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | |||||
ASSETS | |||||
As of | As of | ||||
September 30, | December 31, | ||||
2015 | 2014 | ||||
UNAUDITED | |||||
Current Assets: | |||||
Cash | $ | 2,347,656 | $ | 5,853,752 | |
Restricted cash | - | 218,879 | |||
Accounts receivable, net | 3,917,945 | 1,992,206 | |||
Other receivables | 268,294 | 344,331 | |||
Cost in excess of billing | 480,188 | 1,172,658 | |||
Inventories | 4,461,616 | 4,914,866 | |||
Prepaid expenses | 3,212 | 55,990 | |||
Current deferred tax asset | 127,350 | 109,637 | |||
Total Current Assets | 11,606,261 | 14,662,319 | |||
Property and Equipment, net accumulated depreciation | 3,734,669 | 4,524,386 | |||
Other Assets: | |||||
Other investments | 5,594 | 6,085 | |||
Long term deferred tax asset | 4,182,353 | 3,496,459 | |||
Goodwill | 7,777,704 | 8,460,512 | |||
Other intangible assets | 11,843 | 16,708 | |||
Deposits | 247,671 | 259,070 | |||
Total Other Assets | 12,225,165 | 12,238,834 | |||
Total Assets | $ | 27,566,095 | $ | 31,425,539 | |
(Continued)
LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | ||||||
LIABILITIES | ||||||
As of | As of | |||||
September 30, | December 31, | |||||
2015 | 2014 | |||||
Current Liabilities: | UNAUDITED | |||||
Current portion of capital lease obligations | $ | 158,954 | $ | 170,187 | ||
Accounts payable | 2,579,026 | 2,336,942 | ||||
Accrued expenses | 1,223,645 | 1,439,735 | ||||
Billing in excess of cost | 40,051 | - | ||||
Accrued income taxes payable | - | 570 | ||||
Deferred revenue / customers deposits | 271,418 | 144,476 | ||||
Total Current Liabilities | 4,273,094 | 4,091,910 | ||||
Long-term capital lease obligations, less current portion | 203,694 | 368,614 | ||||
Total Long-Term Liabilities | 203,694 | 368,614 | ||||
Total Liabilities | 4,476,788 | 4,460,524 | ||||
Stockholders' Equity: | ||||||
Common stock; par value $0,001, 100,000,000 shares authorized, 39,532,035 and 39,404,782 | 39,532 | 39,405 | ||||
Additional paid-in capital | 35,991,082 | 35,632,410 | ||||
Accumulated deficit | (7,726,730) | (5,382,852) | ||||
Deferred compensation | (599,454) | (504,748) | ||||
Other comprehensive income, net | (4,615,123) | (2,835,917) | ||||
Non-controlled interest in subsidiaries | - | 16,717 | ||||
Total Stockholders' Equity | 23,089,307 | 26,965,015 | ||||
Total Liabilities and Stockholders' Equity | $ | 27,566,095 | $ | 31,425,539 | ||
LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES (UNAUDITED) CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
Net Sales | $ | 6,933,197 | $ | 4,931,406 | $ | 10,738,753 | $ | 12,102,595 | |||||
Cost of Goods Sold | 4,618,603 | 3,464,284 | 9,029,567 | 9,229,131 | |||||||||
Gross Profit | 2,314,594 | 1,467,122 | 1,709,186 | 2,873,464 | |||||||||
Operating Expenses: | |||||||||||||
Selling expenses | 646,269 | 831,990 | 2,084,204 | 2,430,814 | |||||||||
General and administrative expenses | 656,090 | 738,761 | 2,155,218 | 2,174,942 | |||||||||
Non-cash compensation expenses | 106,448 | (19,663) | 264,094 | 372,960 | |||||||||
Research and development expenses | 171,157 | 83,113 | 536,614 | 223,532 | |||||||||
Total Operating Expense | 1,579,964 | 1,634,201 | 5,040,130 | 5,202,248 | |||||||||
Income (Loss) from Operations | 734,630 | (167,079) | (3,330,944) | (2,328,784) | |||||||||
Other Income (Expense) | |||||||||||||
Interest and other income | 48,978 | 16,032 | 98,680 | 29,777 | |||||||||
Interest expense | (8,677) | (18,794) | (43,504) | (40,914) | |||||||||
Gain (loss) on investments | (10) | 9 | 7,285 | (832) | |||||||||
Gain (loss) on currency transactions | (34,834) | 237,551 | 97,907 | 192,226 | |||||||||
Total Other Income (Expense) | 5,457 | 234,798 | 160,368 | 180,257 | |||||||||
Income (Loss) Before Taxes | 740,087 | 67,719 | (3,170,576) | (2,148,527) | |||||||||
Income Tax Expense (Benefit) | 118,678 | (276,870) | (848,426) | (972,430) | |||||||||
Net Income (Loss) | 621,409 | 344,589 | (2,322,150) | (1,176,097) | |||||||||
Less Net Income (Loss) Attributable To Non-Controlled Interests in Subsidiaries | (29) | (2,915) | 21,731 | (6,029) | |||||||||
Net Income (Loss) Attributable To LiqTech | $ | 621,438 | $ | 347,504 | $ | (2,343,881) | $ | (1,170,068) | |||||
Basic Earnings (Loss) Per Share | $ | 0.02 | $ | 0.01 | $ | (0.06) | $ | (0.04) | |||||
Weighted Average Common Shares Outstanding | 39,519,705 | 35,613,164 | 39,471,745 | 30,043,493 | |||||||||
Diluted Earnings (Loss) Per Share | $ | 0.02 | $ | 0.01 | $ | (0.06) | $ | (0.04) | |||||
Weighted Average Common Shares Outstanding | 39,531,786 | 36,034,570 | 39,471,745 | 30,043,493 | |||||||||
ABOUT LIQTECH INTERNATIONAL, INC.
LiqTech International, Inc., a Nevada corporation, is a clean technology company that for more than a decade has developed and provided state-of-the-art technologies for gas and liquid purification using ceramic silicon carbide filters, particularly highly specialized filters for the control of soot exhaust particles from diesel engines and for liquid filtration. Using nanotechnology, LiqTech develops products using proprietary silicon carbide technology. LiqTech's products are based on unique silicon carbide membranes which facilitate new applications and improve existing technologies. In particular, Provital Solutions A/S (www.provital.dk), the Company's subsidiary, has developed a new standard of water filtration technology to meet the ever increasing demand for higher water quality. By incorporating LiqTech's SiC liquid membrane technology with its longstanding systems design experience and capabilities it offers solutions to the most difficult water pollution problem.
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/Don Weinberger
(212) 370-4500, (212) 370-4505 fax
steve@wolfeaxelrod.com, don@wolfeaxelrod.com
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SOURCE LiqTech International, Inc.
