EX-20 2 l26693aexv20.htm EX-20 EX-20
 

Exhibit 20
(PDG ENVIRONMENTAL LOGO)
George Westinghouse Technology Center
Building 801 — 1386 Beulah Road
Pittsburgh, Pennsylvania 15235
(800) 972-7341
     
Investor Contact:
  Company Contact:
Chris Witty
  John C. Regan, Chairman & CEO
Lippert/Heilshorn & Associates, Inc.
  412-243-3200
212-838-3777
   
cwitty@lhai.com
   
FOR IMMEDIATE RELEASE
PDG Environmental Announces First Quarter Results
Return to Profitability on $21.7 Million in Revenue; Backlog Remains Strong
PITTSBURGH, PA, June 14, 2007 PDG Environmental, Inc. (OTC BB: PDGE), a leading provider of environmental remediation and specialty contracting services, today reported financial results for the first quarter ended April 30, 2007.
Revenue for the quarter was $21.7 million, up 32.6% from the $16.4 million reported in the first quarter of fiscal 2007. The increase primarily reflects the success of the company’s sales and marketing initiatives, along with increased demand for environmental remediation services nationwide. As a result of the rise in revenue, PDGE’s field margin increased to $6.5 million from $4.1 million last year, and field margin percentage expanded to 29.8% from 25.3% in the first quarter of fiscal 2007. EBITDA (earnings before interest, taxes, depreciation and amortization) improved to $1.3 million in the first quarter of 2008 versus a negative $(1.7) million for the comparable period in fiscal 2007. SG&A and other direct expenses totaled $5.6 million, or 25.7% of revenue, down from $5.9 million, or 36.2% of revenue, last year. The company reported after-tax income of $0.3 million, or $0.01 per diluted share, compared with an after-tax loss of $(2.2) million, or $(0.12) per diluted share, in the first quarter of fiscal 2007.
“As anticipated, the first quarter of fiscal 2008 marked our return to profitability, as our right-sizing efforts bore fruit and we continued to book contracts at a strong pace — again resulting in a backlog of over $51 million,” said John C. Regan, chairman and chief executive officer of PDG Environmental. “Our new CFO, Nick Battaglia, is taking a fresh look at the organization for additional cost-containment measures and other initiatives to improve our financial performance. The company’s sales and marketing efforts have led to new opportunities across the board, with our reconstruction division experiencing particularly strong demand heading into the second quarter. We are also preparing for an active hurricane season and are well positioned to take advantage of emergency response and reconstruction opportunities if they arise. Moving into the second and third quarters — traditionally our strongest — we are committed to growing the business organically while maintaining or reducing infrastructure costs and increasing field margins.”
Conference Call
PDG Environmental will host a conference call on June 14, 2007 at 11:00 a.m. Eastern. During the call, John C. Regan, Chairman and Chief Executive Officer, and Nick Battaglia, Chief Financial Officer, will discuss the Company’s quarterly performance and financial results. The telephone number for the conference call is (888) 804-7108.


 

Investors will be able to access an encore recording of the conference call for one week by calling (800) 642-1687, conference ID# 2983896. The encore recording will be available two hours after the conference call has concluded.
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 do both actual results for the quarter and year-to-date periods.
About PDG Environmental
PDG Environmental, Inc., 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, PDG Environmental has 13 offices capable of responding to customer requirements coast to coast. For additional information, please visit            www.pdge.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 third 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
CONDENSED CONSOLIDATED BALANCE SHEETS
                 
    April 30,     January 31,  
    2007     2007  
ASSETS
  (unaudited)        
Current Assets
               
Cash and cash equivalents
  $ 70,000     $ 158,000  
Contracts receivable, net
    23,202,000       21,257,000  
Costs and estimated earnings in excess of billings on uncompleted contracts
    5,549,000       5,607,000  
Inventories
    588,000       553,000  
Prepaid income taxes
    41,000       271,000  
Deferred income tax asset
    915,000       915,000  
Other current assets
    933,000       534,000  
 
           
 
               
Total Current Assets
    31,298,000       29,295,000  
 
               
Property, Plant and Equipment
    11,523,000       11,352,000  
Less: accumulated depreciation
    9,063,000       8,795,000  
 
           
 
    2,460,000       2,557,000  
 
               
Intangible Assets, net
    5,227,000       5,416,000  
 
               
Goodwill
    2,619,000       2,651,000  
 
               
Deferred Income Tax Asset
    2,498,000       2,565,000  
Contracts Receivable, Non Current
    500,000       500,000  
Other Assets
    295,000       270,000  
 
           
Total Assets
  $ 44,897,000     $ 43,254,000  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current Liabilities
               
Accounts payable
  $ 7,944,000     $ 7,403,000  
Billings in excess of costs and estimated earnings on uncompleted contracts
    2,915,000       3,421,000  
Accrued liabilities
    4,377,000       4,007,000  
Current portion of long-term debt
    331,000       322,000  
 
           
 
               
Total Current Liabilities
    15,567,000       15,153,000  
 
               
Long-Term Debt
    12,813,000       12,161,000  
 
               
Mandatorily redeemable cumulative convertible Series C preferred stock
    2,760,000       2,550,000  
 
           
Total Liabilities
    31,140,000       29,864,000  
 
               
Commitments and Contingencies
               
 
               
Stockholders’ Equity
               
Common stock
    411,000       411,000  
Common stock warrants
    1,628,000       1,628,000  
Paid-in capital
    19,298,000       19,245,000  
Accumulated deficit
    (7,542,000 )     (7,856,000 )
Less treasury stock, at cost
    (38,000 )     (38,000 )
 
           
 
               
Total Stockholders’ Equity
    13,757,000       13,390,000  
 
           
 
               
Total Liabilities and Stockholders’ Equity
  $ 44,897,000     $ 43,254,000  
 
           


 

PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
(UNAUDITED)
                 
    For the Three Months Ended April 30,  
    2007     2006  
 
               
Contract Revenues
  $ 21,700,000     $ 16,368,000  
 
               
Job Costs
    15,234,000       12,224,000  
 
           
 
               
Field Margin
    6,466,000       4,144,000  
 
               
Other Direct Costs
    2,773,000       2,998,000  
 
           
 
               
Gross Margin
    3,693,000       1,146,000  
 
               
Selling, General and Administrative Expenses
    2,814,000       2,932,000  
 
           
 
               
Income (Loss) From Operations
    879,000       (1,786,000 )
 
               
Other Income (Expense):
               
Interest expense
    (271,000 )     (219,000 )
Non-cash dividends and interest expense for accretion of discount on preferred stock
    (210,000 )     (784,000 )
Non-recurring charge for employee fraud
          (347,000 )
Interest and other income
    5,000        
 
           
 
    (476,000 )     (1,350,000 )
 
           
 
               
Income (Loss) Before Income Taxes
    403,000       (3,136,000 )
 
               
Income Tax (Benefit) Provision
    89,000       (976,000 )
 
           
 
               
Net Income (Loss)
  $ 314,000     $ (2,160,000 )
 
           
 
               
Earnings Per Common Share — Basic:
  $ 0.02     $ (0.12 )
 
           
 
               
Earnings Per Common Share — Dilutive:
  $ 0.01     $ (0.12 )
 
           
 
               
Average Common Shares Outstanding
    20,502,191       18,268,000  
 
               
Average Dilutive Common Stock Equivalents Outstanding
    495,216        
Average Common Shares and Dilutive Common Stock Equivalents Outstanding
    20,997,407       18,268,000  
PDG ENVIRONMENTAL, INC. AND SUBSIDIARIES
RECONCILIATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”)
(UNAUDITED)
                 
    For the Three Months Ended April 30,  
    2007     2006  
 
               
Net Income (Loss)
  $ 314,000     $ (2,160,000 )
 
               
Income Tax Provision (Benefit)
    89,000       (976,000 )
 
               
Interest Expense
    271,000       219,000  
 
               
Non-cash dividends and interest expense for accretion of discount on preferred stock
    210,000       784,000  
 
               
Depreciation and Amortization
    461,000       426,000  
 
           
 
               
EBITDA
  $ 1,345,000     $ (1,707,000 )