Speedemissions Reports Net Income in 1st Quarter of 2006; Revenue for Speedemissions Increases 90% in 1st Quarter of 2006
ATLANTA--May 16, 2006--Speedemissions, Inc. (OTC Bulletin Board: SPMI), a leading vehicle emissions testing and safety inspections company, today announced its financial results for the first quarter ended March 31, 2006.Revenue for the first quarter ended March 31, 2006 increased 90% to a record $2,427,529, up from $1,278,290 in the first quarter of 2005. The increase reflects the revenue contribution from its 2005 acquisitions that added fourteen emissions testing stations in Houston, Texas and Salt Lake City, Utah.
Gross margin increased 109% to a record $1,777,279 in the first quarter 2006, up from $849,247 in the first quarter of 2005. Gross margin as a percentage of revenues increased to 73% in the first quarter compared to 66% in the first quarter of 2005.
The Company achieved a significant milestone by reporting net income attributable to common shareholders of $28,080, or $0.01 per basic and diluted share in the first quarter 2006. This is the first time its history that Speedemissions has generated net income in a quarter. The Company reported a net loss attributable to common shareholders of ($405,845) in the first quarter of 2005.
Comments of Management
"In Q1, we reached an important objective for the Company by generating net income and positive cash flow from operations," said Rich Parlontieri, President/CEO of Speedemissions. "The positive impact on our gross margins and bottom line is a result of our aggressive acquisition strategy and our ability to successfully integrate these new companies into our existing business," continued Mr. Parlontieri.
Speedemissions, Inc., based in Atlanta, Georgia, plans to become the leading vehicle emissions (and safety inspection where required) company in the United States in areas where emissions testing is mandated by the Environmental Protection Agency (EPA). Since the emissions testing market is highly fragmented, Speedemissions expects to be the first company to create a national brand offering their customers quick and efficient vehicle emissions testing and safety inspection services. The focus of the company at the present time is the Atlanta, GA. Houston, TX. and Salt Lake City, UT, markets. The Company expects to expand station sites.
For more information, visit Speedemissions, Inc. http://www.speedemissions.com
This press release contains forward -looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations or beliefs of Speedemissions' management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward -looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: inability to further identify, fund and integrate additional acquisitions, increased competition and its effect on pricing, spending, third-party relationships and revenues; and other risks detailed from time to time in filings with the Securities and Exchange Commission.
Speedemissions, Inc. and Subsidiaries
Consolidated Balance Sheet
March 31, 2006
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(Unaudited)
Assets
Current assets:
Cash $ 223,464
Other current assets 170,397
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Total current assets 393,861
Property and equipment, at cost less accumulated
depreciation and amortization 1,420,184
Goodwill 8,107,171
Other assets 48,401
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Total assets $ 9,969,617
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 1,025,911
Debt payable to related parties 51,747
Accrued interest on debt payable to related parties 3,704
Current portion of capitalized lease obligation 15,954
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Total current liabilities 1,097,316
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Commitments and contingencies
Stockholders' equity:
Series A convertible and cumulative preferred stock,
$.001 par value, 5,000,000 shares authorized,
5,133 shares issued and outstanding 5
Series B convertible and cumulative preferred stock,
$.001 par value, 3,000,000 shares authorized,
2,481,482 shares issued and outstanding 2,481
Common stock, $.001 par value, 250,000,000 shares
authorized, 2,873,598 shares issued
and outstanding 2,874
Additional paid-in capital 19,294,000
Deferred compensation (21,685)
Accumulated deficit (10,405,374)
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Total stockholders' equity 8,872,301
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Total liabilities and stockholders' equity $ 9,969,617
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See accompanying notes to consolidated financial statements.
Speedemissions, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
-----------------------
March 31
2006 2005
Revenue $ 2,427,529 $1,278,290
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Costs and expenses:
Cost of emission certificates 650,250 429,043
General and administrative expenses 1,746,422 1,146,889
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Income (loss) from operations 30,857 (297,642)
Interest expense 2,777 64,093
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Net income (loss) $ 28,080 $ (361,735)
Less preferred dividends - undeclared - 44,110
----------- -----------
Net income (loss) attributable to common
shareholders $ 28,080 $ (405,845)
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Basic and diluted net income (loss) per share $ 0.01 $ (0.16)
=========== ===========
Weighted average shares outstanding, basic and
diluted 2,762,481 2,484,437
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See accompanying notes to consolidated financial statements.
Speedemissions, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31,
2006 2005
Operating activities:
Net income (loss) $ 28,080 $(361,735)
Adjustments to reconcile net (loss)
to net cash used by operating activities:
Depreciation and amortization 99,242 88,105
Gain on sale of assets (10,472) -
Share based compensation expenses 6,655 (19,949)
Stock issued for services 50,000 181,764
Changes in operating assets and liabilities, net
of acquisitions:
Other current assets (30,115) (8,083)
Other assets (7,200) -
Accrued interest on long-term debt
payable to related parties 1,294 58,427
Accounts payable and accrued liabilities (104,375) (207,839)
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Net cash provided by (used in) operating
activities 33,109 (269,310)
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Cash flows from investing activities:
Proceeds from asset sales 12,000 -
Net purchases of property and equipment (64,524) -
---------- ---------
Net cash used in investing activities (52,524) -
---------- ---------
Cash flows from financing activities:
Proceeds from promissory note payable to
related party - 350,000
Payments on promissory notes - (20,000)
Payments on capitalized leases (7,348) (14,477)
---------- ---------
Net cash provided by (used in) financing
activities (7,348) 315,523
---------- ---------
Net increase (decrease) in cash (26,763) 46,213
Cash at beginning of period, December 31 250,227 16,431
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Cash at end of period, March 31 $ 223,464 $ 62,644
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Supplemental Information:
Cash paid during the period for interest $ 1,483 $ 4,797
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See accompanying notes to consolidated financial statements.