Q1 Fiscal 2015 Revenue Increases 92% to $13.4 Million;
Achieves EBITDA of $1.4 Million
SCOTTSDALE, AZ and CALGARY, AB, Sept. 2, 2014 /PRNewswire/ - RDX Technologies Corporation ("RDX" or the "Company") (TSXV: RDX, OTCQX: RGDEF, FSE:RL7), a water treatment and energy technology company, today announced financial results for its fiscal first quarter ending June 30, 2014.
Q1 Fiscal 2015 highlights (year-over-year):
- Revenues increased 92% to $13.4 million from $7.0 million
- EBITDA improved to $1.4 million from a loss of $2.1 million
- RDX grew its Environmental and Reclamation business to record levels, which included an excess land sale and related water treatment at Santa Fe Springs
Dennis M. Danzik, Chief Executive Officer of RDX, stated, "The RDX growth trend continues as we demonstrated our ability to successfully acquire and monetize underperforming assets. In addition to the real estate sale from Santa Fe Springs, we generated significant revenues related to reclamation and water treatment at the site. As a result, our revenues increased by 92% this quarter compared to the same period last year, and we achieved $1.4 million of EBITDA, compared to a loss of $2.1 million for the same period last year. At the same time, we enhanced our cash position and ended the quarter with over $5 million of cash at the end of the quarter. RDX continues to seek out and evaluate other similar real estate and reclamation opportunities that would benefit from our technologies. Real estate development of properties trapped by environmental challenges, that hold underperforming assets, has become a part of our core business. "
"RDX has moved far beyond its initial locations in California and Missouri. We remain on track to achieve our goal of opening 40 new franchise locations in fiscal 2015, and to open a total of at least 300 locations through the end of fiscal 2018. Demand for franchises has been extremely strong, as evidenced by our recent agreement with Pontus Energy, LLC of Cincinnati, Ohio for sixteen RDX franchises to be located within the State of Ohio, Monroe County Michigan, and the counties of Boone, Kenton, Campbell, Gallatin, Grant, and Pendleton in the State of Kentucky. The total value of the agreement is USD $19.9 million. We are now in the final stages of completing federal and state registration requirements to allow us to open our franchises. Once these filings are complete, we plan to immediately commence equipment sales and support the franchise operations."
"We are also making significant headway securing major energy customers. In fact, our fuel was recently recognized publicly by Omega Proteins for helping cut energy costs, and decreasing fossil fuel consumption by up to 80 percent at their Reedville, Va., facility. We see a virtually limitless market for our fuel as we are in the unique position of having a financial hedge on the single largest traded energy commodity in the world, diesel fuel. This allows us to sell diesel equivalent energy at a substantial discount to our customers. "
Mr. Danzik continued, "Overall, we are extremely encouraged by the outlook for the business. Response from the market, including both prospective energy customers and franchisees, has been overwhelmingly positive. We have developed a highly scalable business model and look forward to driving significant value for shareholders."
Conference Call – The RDX Growth Model
The Company will host a business update conference call entitled "The RDX Growth Model" which will provide more detail regarding the first quarter and expectations for fiscal 2015, as well as upcoming RDX real estate developments, a franchise update, and an energy sales update. The call will be hosted by RDX CEO Dennis M. Danzik and will feature several key RDX division management speakers as well as franchise operators, on Thursday, October 9thth at 10:00 a.m. Eastern Time. The Company will provide dial in information ahead of the scheduled call.
ON BEHALF OF THE BOARD OF DIRECTORS
"Dennis M. Danzik"
Dennis M. Danzik, CEO
danzikdirect@rdxh2o.com
"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release. This news release may contain forward-looking statements. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. Such information is subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information, as no assurances can be given as to future results, levels of activity or achievements."
(tables follow)
RDX TECHNOLOGIES CORPORATION |
(Formerly Ridgeline Energy Services Inc.) |
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
(IN CANADIAN DOLLARS) |
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| June 30, |
| June 30, |
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| 2014 |
| 2013 |
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Environmental and reclamation segment |
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| Revenue | $ 3,775,693 |
| $ - |
| Sale of land | 8,978,890 |
| - |
| Total revenue | 12,754,583 |
| - |
| Cost of revenue | 9,012,967 |
| - |
| Gross profit - Environmental and reclamation segment | 3,741,616 |
| - |
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Other operating segments |
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| Revenue | 648,706 |
| 6,967,033 |
| Cost of revenue: |
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| Direct expenses |
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| 2,056,877 |
| 5,908,608 |
|
| Amortization |
|
|
| 948,988 |
| 919,855 |
| Total cost of revenue |
|
|
| 3,005,865 |
| 6,828,463 |
| Gross profit - Other operating segments | (2,357,159) |
| 138,570 |
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Total gross profit | 1,384,457 |
| 138,570 |
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Operating expenses: |
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| General and administrative | 1,825,813 |
| 2,439,052 |
| Share-based payment expense | 10,675 |
| 184,723 |
| Amortization | 857,398 |
| 861,013 |
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Total operating expenses | 2,693,886 |
| 3,484,788 |
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Loss from operations | (1,309,429) |
| (3,346,218) |
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Other income (expense): |
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| Finance costs | (581,469) |
| (302,487) |
| Foreign exchange loss on CWT notes payable | 754,000 |
| (612,000) |
| Change in fair value of PTEC earn-out | 202,500 |
| 90,000 |
| Gain on forgiveness of indebtedness | 2,962 |
| - |
| Other income (expense), net | (11,332) |
| 4,407 |
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Total other income (expense) | 366,661 |
| (820,080) |
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Loss before tax | (942,768) |
| (4,166,298) |
Income tax expense | 61,468 |
| - |
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Loss from continuing operations | (1,004,236) |
| (4,166,298) |
Income from discontinued operations | - |
| 506,098 |
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Net loss | $ (1,004,236) |
| $ (3,660,200) |
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Basic and diluted loss per share - |
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| continuing operations | $ (0.01) |
| $ (0.02) |
Basic and diluted income per share - |
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| discontinued operations | - |
| - |
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Basic and diluted loss per share | $ (0.01) |
| $ (0.02) |
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Weighted average number of |
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| common shares outstanding | 169,149,750 |
| 164,712,554 |
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Comprehensive loss: |
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| Net loss | $ (1,004,236) |
| $ (3,660,200) |
| Other comprehensive income - Item that may be |
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| reclassified subsequently to earnings: |
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| Foreign currency translation adjustments | (1,726,713) |
| 1,546,956 |
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| Comprehensive loss | $ (2,730,949) |
| $ (2,113,244) |
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RDX TECHNOLOGIES CORPORATION |
(Formerly Ridgeline Energy Services Inc.) |
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
(IN CANADIAN DOLLARS) |
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| June 30, |
| March 31, |
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| 2014 |
| 2014 |
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| Assets |
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Current assets: |
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| Cash | $ 5,359,739 |
| $ 1,350,546 |
| Trade and other receivables, net | 9,009,275 |
| 9,394,277 |
| Inventory, net | 2,638,101 |
| 2,111,043 |
| Prepaid expenses and other current assets | 1,703,313 |
| 1,622,856 |
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| 18,710,428 |
| 14,478,722 |
| Santa Fe Springs assets held for sale | 357,513 |
| 17,295,173 |
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| Total current assets | 19,067,941 |
| 31,773,895 |
|
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Restricted cash | 459,033 |
| 88,655 |
Property, plant and equipment, net | 38,422,008 |
| 37,769,000 |
Maintenance parts | 1,147,935 |
| 1,189,140 |
Intangible assets | 14,793,942 |
| 15,672,666 |
Goodwill | 8,434,402 |
| 8,737,155 |
Other assets | 1,194,324 |
| 1,138,373 |
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Total assets | $ 83,519,585 |
| $ 96,368,884 |
|
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| Liabilities and Equity |
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Current liabilities: |
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| Accounts payable | $ 3,945,424 |
| $ 4,294,210 |
| Accrued liabilities | 7,943,014 |
| 8,876,029 |
| Notes payable, current portion, net of discount of $406,527 | 24,310,792 |
| 23,504,751 |
| Obligations under finance lease, current portion | 95,473 |
| 96,755 |
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| 36,294,703 |
| 36,771,745 |
| Liabilities related to Santa Fe Springs assets held for sale | 106,700 |
| 11,634,861 |
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| Total current liabilities | 36,401,403 |
| 48,406,606 |
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Notes payable, non-current portion | 544,828 |
| 1,011,348 |
Obligations under finance lease, non-current portion | 192,825 |
| 219,335 |
Deferred tax liability | 294,169 |
| 237,940 |
Environmental remediation liability | 533,500 |
| 552,650 |
PTEC earn-out | 225,000 |
| 427,500 |
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| Total liabilities | 38,191,725 |
| 50,855,379 |
|
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Commitments and contingencies |
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Equity: |
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| Share capital | 82,371,100 |
| 79,785,679 |
| Warrants | 2,543,829 |
| 2,543,829 |
| Contributed surplus | 2,496,813 |
| 2,536,930 |
| Accumulated other comprehensive income | 2,905,894 |
| 4,632,607 |
| Accumulated deficit | (44,989,776) |
| (43,985,540) |
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Total equity | 45,327,860 |
| 45,513,505 |
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Total liabilities and equity | $ 83,519,585 |
| $ 96,368,884 |
|
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RDX TECHNOLOGIES CORPORATION |
(Formerly Ridgeline Energy Services Inc.) |
INTERIM UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION |
(IN CANADIAN DOLLARS) |
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Earnings Before Interest, Taxes, and Amortization |
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The Company's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). The following table calculates earnings before interest, taxes, and amortization (EBITDA) and Adjusted EBITDA, which are not measures determined in accordance with IFRS or accounting principles generally accepted in the United States ("US GAAP"), for the three months ended June 30, 2014 and 2013: |
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| Three Months Ended June 30, |
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| 2014 |
| 2013 |
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Net loss - continuing operations | $ (1,004,000) |
| $ (4,166,000) |
|
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Interest and other finance costs | 582,000 |
| 302,000 |
Taxes |
| 61,000 |
| - |
Amortization (in cost of revenue) | 949,000 |
| 920,000 |
Amortization (in operating costs) | 857,000 |
| 861,000 |
EBITDA | 1,445,000 |
| (2,083,000) |
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Share-based payment expense | 11,000 |
| 185,000 |
Foreign exchange loss on CWT notes payable | (754,000) |
| 612,000 |
Change in fair value of PTEC earn-out and note payable | (203,000) |
| (90,000) |
Gain on forgiveness of indebtedness | (3,000) |
| - |
Other expense (income) | 12,000 |
| (5,000) |
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Adjusted EBITDA | $ 508,000 |
| $ (1,381,000) |
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We believe that presenting EBITDA and Adjusted EBITDA are useful to investors because they provide important information concerning our operating performance exclusive of certain non-cash and other costs. EBITDA and Adjusted EBITDA demonstrate our ability to execute our financial strategy, which includes reinvesting in waster water related capital assets to ensure a high level of product quality, investing in capital assets to facilitate growth in our energy business, repurchasing our common stock, and maintaining and improving our market position through business optimization. These measures have limitations. Although amortization and share-based payment expenses are considered operating costs in accordance with IFRS and US GAAP, they represent the allocation of non-cash costs generally associated with long-lived assets acquired or constructed in prior years and non-cash compensation primarily for our employees. Our definition of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures presented by other companies. |
SOURCE RDX Technologies Corporation