Speedemissions, Inc. Reports Fourth Quarter & December 31, 2009 Year End Results

ATLANTA--Speedemissions, Inc. (OTC Bulletin Board: SPMI - News), a leading vehicle emissions testing and safety inspections company with testing stores in Atlanta, Houston, St. Louis and Salt Lake City today announced its financial results for the fourth quarter and year ended December 31, 2009.

2009 Highlights:

Income from continuing operations excluding the 2009 goodwill impairment expense of $2,873,766 increased to $86,694 in 2009 compared to a loss from continuing operations of $134,801 in 2008.
Revenue increased 1.4% to $9,916,678 for the year ended December 31, 2009 compared to revenue of $9,779,942 for year ended December 31, 2008. The increase in revenue was led by a 2.6% increase in same store sales over the comparable period of 2008.
General and administrative expenses decreased 20.2% to $1,411,296 during the year ended December 31, 2009 compared to $1,768,519 in the same period of the prior year.
Net loss for the year ended December 31, 2009 was $2,787,072 or ($0.53) per basic and diluted share compared to a net loss of $495,776 or ($0.10) per basic and diluted share in 2008. Excluding the goodwill impairment expense, the Company earned $0.01 per diluted share in the year ended December 31, 2009 compared to a loss of ($0.10) per basic and diluted share in 2008.
Since December 31, 2008, the Company used cash provided by operations to decrease its current liabilities by 42.0% and its total liabilities by 34.4%.

Richard A. Parlontieri, President and Chief Executive Officer of Speedemissions commented:

ā€œWeā€™re pleased that we were able to increase revenue, improve our income from continuing operations and reduce our total liabilities in this most challenging economic environment. We expect to use the cash flows provided by operations to open between one and three new stores in 2010 and to enhance our ability to pursue other opportunities to increase our business.ā€???

Revenue in the fourth quarter of 2009 totaled $2,259,078, a decrease of 1.7%, compared with revenue of $2,298,475 in the same period last year. On a same-store basis, Speedemissions, Inc.ā€™s fourth quarter sales were down 2.3%. This was in line with the Companyā€™s expectations as its fourth quarter revenue from its Texas operations in 2008 included tests postponed in September 2008 as a result of Hurricane Ike.

Excluding the goodwill impairment expense of $2,873,766, the Companyā€™s net loss in the fourth quarter ended December 31, 2009 was $118,907 or ($0.02) per diluted share compared to a net loss of $171,266 or ($0.03) per basic and diluted share in the comparable period of 2008. Net loss for the fourth quarter was $2,992,673 or ($0.56) per basic and diluted share compared to a loss of $171,266 or ($0.03) per basic and diluted share in the comparable period of 2008.

About Speedemissions Inc. http://www.speedemissions.com

Speedemissions, Inc., based in Atlanta, Georgia, is a leading vehicle emissions testing and safety inspections company in the United States. We provide services in certain areas where auto 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 service. The current focus of the company is in the Atlanta, Georgia; Houston, Texas; St. Louis, Missouri and Salt Lake City, Utah markets.

Certain statements contained in this news release regarding matters that are not historical facts may be forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, uncertainties pertaining to continued market acceptance for Speedemissions' products and services, its ability to succeed in growing revenue, the effect of new competitors in its market, integration of acquired businesses, and other risk factors identified from time to time in its filings with the Securities and Exchange Commission.

Speedemissions, Inc. and Subsidiaries
Consolidated Balance Sheets
as of December 31,
				Ā
	Ā	2009	Ā		Ā	2008	Ā
					Ā
Assets
Current assets:
Cash	$	449,203			$	512,492
Other current assets	Ā	136,790	Ā		Ā	137,691	Ā
					Ā
Total current assets		585,993				650,183
Property and equipment, net		953,183				1,214,737
Goodwill		4,251,657				7,100,572
Other assets	Ā	104,003	Ā		Ā	100,937	Ā
					Ā
Total assets	$	5,894,836	Ā		$	9,066,429	Ā
					Ā
Liabilities and Shareholdersā€™ Equity
Current liabilities:
Accounts payable	$	177,647			$	498,554
Accrued liabilities		196,544				237,127
Current portion of capitalized lease obligations		47,288				41,962
Current portion of equipment financing obligations		18,865				16,362
Current portion - deferred rent	Ā	30,513	Ā		Ā	17,949	Ā
					Ā
Total current liabilities		470,857				811,954
Capitalized lease obligations, net of current portion		93,604				140,897
Equipment financing obligations, net of current portion		46,389				64,431
Deferred rent		205,701				230,521
Other long term liabilities	Ā	7,350	Ā		Ā	7,350	Ā
					Ā
Total liabilities	Ā	823,901	Ā		Ā	1,255,153	Ā
Commitments and contingencies
Series A convertible, redeemable preferred stock, $.001 par value, 5,000,000 shares authorized, 5,133 shares issued and outstanding; liquidation preference: $5,133,000	Ā	4,579,346	Ā		Ā	4,579,346	Ā
Shareholdersā€™ equity:
Series B convertible preferred stock, $.001 par value, 3,000,000 shares authorized, 2,279,982 and 2,481,482 shares issued and outstanding; liquidation preference: $5,854,994 and $6,372,446		2,280				2,481
Common stock, $.001 par value, 250,000,000 shares authorized, 6,685,448 and 5,162,108 shares issued and outstanding		6,685				5,162
Additional paid-in capital		15,795,364				15,749,955
Accumulated deficit	Ā	(15,312,740	)		Ā	(12,525,668	)
					Ā
Total shareholdersā€™ equity	Ā	491,589	Ā		Ā	3,231,930	Ā
					Ā
Total liabilities and shareholdersā€™ equity	$	5,894,836	Ā		$	9,066,429	Ā

Speedemissions, Inc. and Subsidiaries
Consolidated Statements of Operations for the Years Ended December 31,
				Ā
	Ā	2009	Ā		Ā	2008	Ā
Revenue	$	9,916,678			$	9,779,942
Costs of revenues:
Cost of emission certificates		2,156,673				2,097,940
Store operating expenses		6,266,578				6,061,774
General and administrative expenses		1,411,296				1,768,519
Gain on disposal of non-strategic assets		(39,820	)			(48,668	)
Goodwill impairment expense	Ā	2,873,766	Ā		Ā	ā€”	Ā
					Ā
Operating loss	Ā	(2,751,815	)		Ā	(99,623	)
					Ā
Interest income (expense)
Interest income		111				1,495
Interest expense	Ā	(35,368	)		Ā	(36,673	)
					Ā
Interest, net	Ā	(35,257	)		Ā	(35,178	)
					Ā
Loss from continuing operations		(2,787,072	)			(134,801	)
Loss from discontinued operations	Ā	ā€”	Ā		Ā	(360,975	)
					Ā
Net loss	$	(2,787,072	)		$	(495,776	)
					Ā
Basic and diluted net loss per common share from continuing operations	$	(0.53	)		$	(0.03	)
					Ā
Basic and diluted net loss per common share from discontinued operations	$	(0.00	)		$	(0.07	)
					Ā
Basic and diluted net loss per common share	$	(0.53	)		$	(0.10	)
					Ā
Weighted average common shares outstanding, basic and diluted	Ā	5,217,990	Ā		Ā	5,162,108	Ā

Speedemissions, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Years Ended December 31,
				Ā
	Ā	2009	Ā		Ā	2008	Ā
Operating activities:
Net loss	$	(2,787,072	)		$	(495,776	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		319,288				336,875
Goodwill impairment expense		2,873,766				ā€”
Gain on disposal of assets		(39,820	)			(48,668	)
Share based compensation		46,731				153,850
Changes in operating assets and liabilities:
Other current assets		901				52,888
Other assets		(3,066	)			2,850
Accounts payable and accrued liabilities		(361,492	)			(282,206	)
Other liabilities	Ā	(12,256	)		Ā	(9,106	)
					Ā
Net cash provided by (used in) operating activities	Ā	36,980	Ā		Ā	(289,293	)
					Ā
Cash flows from investing activities:
Proceeds from disposal of assets		46,330				251,779
Purchases of property and equipment	Ā	(89,093	)		Ā	(203,598	)
					Ā
Net cash (used in) provided by investing activities	Ā	(42,763	)		Ā	48,181	Ā
					Ā
Cash flows from financing activities:
Payments on financing obligations		(15,539	)			(14,206	)
Payments on capitalized leases	Ā	(41,967	)		Ā	(36,852	)
					Ā
Net cash used in financing activities	Ā	(57,506	)		Ā	(51,058	)
					Ā
Net decrease in cash		(63,289	)			(292,170	)
Cash at beginning of period	Ā	512,492	Ā		Ā	804,662	Ā
					Ā
Cash at end of period	$	449,203	Ā		$	512,492	Ā
					Ā
Supplemental Information:
Cash paid during the period for interest	$	35,368	Ā		$	36,702	Ā
					Ā
Non-cash Investing and Financing activities:
Non-cash asset additions for financed and capital leases	$	ā€”	Ā		$	31,425	Ā