Science & Technology
Science and Technology
Science and Technology
Wed, April 1, 2009
Tue, March 31, 2009
American TonerServ Corp.: American TonerServ Reports Solid Financial Results for 2008 Full Year, Fourth Quarter
SANTA ROSA, CA--(Marketwire - March 31, 2009) - American TonerServ Corp. (
"The year 2008 was characterized by the continuation of our consolidation strategy, which included the acquisition of another established independent printer supply and service company located in a top 30 metropolitan area in the United States," said Chuck Mache, who was named chief executive officer in February 2009. "We continue to explore other acquisition candidates, while focusing on achieving our operational goals and maximizing our buying power across the country."
"Our largest acquisition to date -- iPrint Technologies -- was completed in October 2008 and will add approximately $12 million in annualized sales, giving us a great jumpstart for 2009. With offices in Northern California and Los Angeles and a solid customer base, iPrint already is benefiting from our volume purchasing power and related administrative and marketing expertise, and in turn, the transaction has enabled us to broaden our footprint in the printer supplies and services industry," Mache added.
For the 12-months ended December 31, 2008, ATS reported revenue of $12.7 million, up more than fourfold from $3.6 million for the year ended December 31, 2007. The company reduced its net loss for 2008 to $4.6 million, equal to $0.07 per share, from a net loss of $4.8 million, or $0.16 per share, for the year ended December 31, 2007.
For the 2008 fourth quarter, revenue rose to $4.6 million from $1.1 million for the same period a year ago and $2.0 million for the preceding 2008 third quarter. The company reported a net loss of $1.2 million, equal to $0.02 per share, for the most recent fourth quarter, versus a net loss of $1.7 million, or $0.06 per share, for the same period last year, representing a 29 percent reduction in net loss. ATS had a net loss of $1.0 million, or $0.01 per share, for the preceding 2008 third quarter.
Earnings before interest, taxes, depreciation, amortization, stock-based compensation expense and other non-cash expenditures (adjusted EBITDA) was a loss of $240,914, in the fourth quarter of 2008, compared with a loss of $1,381,559, in the fourth quarter of 2007. This is an improvement of approximately 83 percent year-over-year.
Earnings before interest, taxes, depreciation, amortization, stock-based compensation expense and other non-cash expenditures (adjusted EBITDA) was a loss of $1,317,032, for the year ended December 31, 2008, compared with a loss of $3,249,128, for the year ended December 31, 2007. This is an improvement of approximately 60 percent year-over-year.
"For 2009, we will place emphasis on organically growing our existing operations, as we continue to actively seek acquisition opportunities with companies whose leaders see the competitive advantage of our value proposition," Mache said. "We believe the industry is ready for a national consolidator capable of providing buying power, operational infrastructure, inventory management, and best business practices. American TonerServ is that consolidator."
Presentation of Non-GAAP Information
This press release contains non-GAAP financial measures, including EBITDA (earnings before interest, income taxes, depreciation and amortization) and Adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization and other non-cash related expenditures). The Company believes these non-GAAP financial measures are useful to investors in evaluating the Company's results. These measures are not a measurement of our financial performance under GAAP and should not be considered as alternatives to net income, income from operations, or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating, investing or financing activities as a measure of our liquidity. In addition, because EBITDA and Adjusted EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies. For a reconciliation of these non-GAAP financial measures to the most comparable GAAP equivalent, see the Non-GAAP Reconciliation - EBITDA and Adjusted EBITDA, along with related footnotes, below.
About American TonerServ
American TonerServ Corp. ("ATS"), a leading recycler of toner cartridges, is building a nationwide organization to efficiently serve the printing needs of small- and medium-sized businesses by consolidating best-in-class independent operators in the more than $6.0 billion recycled printer cartridge and printer services industry, offering top-quality, environmentally-friendly products and local service teams. Please see [ www.AmericanTonerServ.com ] for more information.
Safe Harbor Statement
Except for historical information contained herein, the matters set forth above may be forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ from those in the forward-looking statements. Words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the current beliefs of management, as well as assumptions made by and information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors such as the level of business and consumer spending, the amount of sales of the Company's products, the competitive environment within the industry, the ability of the Company to continue to expand its operations, the level of costs incurred in connection with the Company's expansion efforts, economic conditions in the industry and the financial strength of the Company's customers and suppliers. The Company does not undertake any obligation to update such forward-looking statements. Investors are also directed to consider all other risks and uncertainties.
AMERICAN TONERSERV CORP. AND SUBSIDIARIES Results of Operations December 31, December 31, 2008 2007 ------------ ------------ Revenues Toner $ 9,858,739 $ 3,203,894 Service 2,886,895 426,637 ----------- ---------- Total revenues 12,745,634 3,630,531 ----------- ---------- Cost of sales Toner 7,222,704 2,116,802 Service 1,030,107 420,046 Inventory write-down - 68,500 ----------- ---------- Total cost of sales 8,252,811 2,605,348 ----------- ---------- Gross profit 4,492,823 1,025,183 Operating Expenses Salaries and wages 2,958,862 1,645,877 Professional fees and services 1,416,084 1,346,706 Sales and marketing 1,008,034 409,763 General and administrative 1,756,826 1,334,711 Amortization of intangible assets 646,136 338,173 ----------- ---------- Total operating expenses 7,785,942 5,075,230 ----------- ---------- Loss from operations (3,293,119) (4,050,047) ----------- ---------- Other Income (Expense) Fair value of convertible debt (293,750) 85,417 Termination of management agreement - (550,000) Interest expense (901,641) (260,267) Change in fair value of warrant liabilities (159,774) (71,873) Other income 7,288 14,445 ----------- ----------- Net loss $(4,640,996) $(4,832,325) =========== =========== Net loss per share Basic and diluted $ (0.07) $ (0.16) =========== =========== Weighted average shares Basic and diluted 66,464,308 29,373,589 =========== =========== Balance Sheet Data December 31, December 31, 2008 2007 ------------ ------------ ASSETS Current assets Cash and cash equivalents $ 4,033 $ 60,196 Accounts receivable, net 2,753,445 1,326,891 Inventory 774,747 715,328 Prepaid expenses and other current assets 75,716 33,127 Deferred compensation 73,275 471,298 ----------- ----------- Total current assets 3,681,216 2,606,840 ----------- ----------- Intangible assets, net 4,058,036 4,002,862 Goodwill 6,935,468 1,801,895 Property and equipment, net 644,477 394,745 Other assets 80,044 29,959 ----------- ----------- Total assets $15,399,241 $ 8,836,301 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Cash overdraft $ 39,381 $ - Accounts payable and accrued expenses 3,030,599 1,767,997 Shareholder advances 173,595 431,095 Line of credit 1,346,722 - Notes payable - current portion (net of unamortized discount of $194,937 and $223,120 at December 31, 2008 and December 31, 2007) 2,080,865 2,068,033 Convertible notes payable, current portion (net of unamortized discount of $147,566 and $0 at December 31, 2008 and December 31, 2007) 1,782,712 187,500 Convertible notes payable, related parties - current portion (net of unamortized discount of $1,466) 123,534 31,250 Notes payable, related parties - current portion - 150,000 Deferred revenue 77,245 92,589 ----------- ----------- Total current liabilities 8,654,653 4,728,464 ----------- ----------- Long-term Liabilities Notes payable (net of unamortized discount of $244,016 and $343,815 at December 31, 2008 and December 31, 2007) 929,842 1,281,400 Convertible notes payable(net of unamortized Discount of $669,042 and $0 at December 31, 2008 and December 31, 2007) 2,926,524 925,000 Balance Sheet Data (continued) Warrant liabilities 639,193 119,700 ----------- ----------- Total long-term liabilities 4,495,559 2,326,100 ----------- ----------- Total liabilities 13,150,212 7,054,564 ----------- ----------- Commitments and contingencies Stockholders' equity Common stock 77,045,995 and 60,390,956 shares issued and outstanding at December 31, 2008 and December 31, 2007 77,046 60,391 Additional paid-in capital 24,391,819 19,300,186 Accumulated deficit (22,219,836) (17,578,840) ------------ ------------ Total stockholders' equity 2,249,029 1,781,737 ------------ ------------ Total liabilities and stockholders' equity $ 15,399,241 $ 8,836,301 ============ =========== The following is a reconciliation of cash flows provided by operating activities to EBIT, EBITDA, and net loss: Three Months Ended Year Ended December 31, December 31, 2008 2007 2008 2007 ----------- ----------- ----------- ----------- Cash flows provided by operating activities $ (456,140) $ (998,527) $(2,163,406) $ (2,805,345) Changes in operating assets and liabilities (44,298) (107,286) 106,515 (102,871) Non-cash (expenses) income, including depreciation and amortization (732,552) (646,501) (2,584,105) (1,924,109) Interest expense, net 288,969 69,218 901,641 260,267 ----------- ----------- ----------- ----------- EBIT (944,021) (1,683,096) (3,739,355) (4,572,058) Depreciation and amortization 227,656 222,996 790,591 370,823 ----------- ----------- ----------- ----------- EBITDA (716,365) (1,460,100) (2,948,764) (4,201,235) Interest expense (288,969) (69,218) (901,641) (260,267) Depreciation and amortization (227,656) (222,996) (790,591) (370,823) ----------- ----------- ----------- ----------- Net loss $(1,232,990) $(1,752,314) $(4,640,996) $ (4,832,325) =========== =========== =========== =========== The following is a reconciliation of net loss to EBITDA: Three Months Ended Year Ended December 31, December 31, 2008 2007 2008 2007 ----------- ----------- ----------- ----------- Net loss $(1,232,990) $(1,752,314) $(4,640,996) $(4,832,325) Interest expense, net 288,969 69,218 901,641 260,267 ----------- ----------- ----------- ----------- EBIT (944,021) (1,683,096) (3,739,355) (4,572,058) Depreciation and amortization 227,656 222,996 790,591 370,823 ----------- ----------- ----------- ----------- EBITDA $ (716,365) $(1,460,100) $(2,948,764) $(4,201,235) =========== =========== =========== =========== The following is a reconciliation of net EBITDA to Adjusted EBITDA; which excludes all non-cash items; one-time expenditures and stock related compensation: Three Months Ended Year Ended December 31, December 31, 2008 2007 2008 2007 ----------- ----------- ----------- ----------- EBITDA $ (716,365) $(1,460,100) $(2,948,764) $(4,201,235) Stock related compensation 338,976 118,230 952,338 929,295 Fair value of conversion feature of convertible debt (37,500) (131,250) 293,750 (85,417) Fair value of warrant liabilities 63,379 78,205 159,774 71,873 Bad debt allowance for entities 5,322 13,356 37,822 36,356 Other one-time Expenses 105,264 - 188,048 - ----------- ----------- ----------- ----------- ADJUSTED EBITDA $ (240,914) $(1,381,559) $(1,317,032) $(3,249,128) =========== =========== =========== ===========
