SAN JUAN CAPISTRANO, Calif., Aug. 1, 2007 (PRIME NEWSWIRE) -- American Mold Guard, Inc. (Nasdaq:AMGI), an industry leader in the field of antimicrobial surface treatment services, today announced financial results for its second quarter ended June 30, 2007.
Second Quarter Results
The Company reported second quarter 2007 revenue of $1.88 million, a decrease of 28 percent from $2.59 million for the second quarter of 2006. Revenue in the second quarter of 2007 decreased from the second quarter of 2006 as the Company's Gulf Region restoration business slowed and as builders in California and Florida reduced their new housing starts in an effort to decrease new home inventory. Gross margin for the second quarter of 2007 improved by over seven points to 49.8 percent or $.94 million, as compared to 42.6 percent or $1.10 million for the second quarter of 2006. The gross margin percentage increase was realized through improved crew productivity, optimized material usage, reduced material cost and reduced equipment rental costs.
The Company reported a net loss for the second quarter of 2007 of $1.35 million, or $.29 per share, as compared to a net loss of $3.55 million, or $1.57 per share, for the second quarter of 2006. Lower second quarter 2007 revenue was offset by higher gross margin percentages, lower selling, general and administrative expenses and the Company recorded interest income as compared to interest expense that was incurred in 2006.
"Weak demand and high inventory levels in the housing market stalled the Company's revenue growth this quarter as several jobs scheduled for completion in the second quarter pushed out. However, multi-family mold prevention sales continued to be a bright spot for the company, despite a decline in single family mold prevention projects," said Tom Blakeley, Chief Executive Officer. "Our sales focus continues to target national multi-family construction and our expansion plans are on-track with the recent addition of sales personnel in Atlanta, Chicago and Seattle. Financially, in July 2007, the Company finalized a financing agreement that provides up to $4.0 million of additional funds and operationally in the second quarter we were able to once again deliver record gross margins while reducing selling, general and administrative costs," added Mr. Blakeley. "We continue to be very focused on the development of our infection control services, by working with two major hospitals in the fight against hospital-acquired infections," concluded Mr. Blakeley.
Conference Call and Webcast
American Mold Guard will discuss its second quarter 2007 results, on a conference call today beginning at 1:30 p.m. Pacific Daylight Time. You can listen to the call by Domestic Dial at 888-713-4213 or by International Dial at 617-213-4865 using the participant passcode 13895507.
You can also access the conference call via a live webcast at http://www.theconferencingservice.com/prereg/key.process?key=PGX. Prior to the call, the company intends to post on its website a copy of the company's current report on Form 8-K dated August 1, 2007 disclosing the matters addressed in this press release, including the company's operating results for the quarter ended June 30, 2007. The Company's web site can be accessed at www.americanmoldguard.com under "Investor Relations / Press Releases".
About American Mold Guard and AMG Scientific, LLC
American Mold Guard, Inc. (Nasdaq:AMGI), founded in 2002, is the industry leader in the field of antimicrobial surface treatment services. Its mold prevention services are primarily focused on the residential real estate construction industry in California, Florida, Georgia, Illinois, Louisiana, Mississippi, Texas and Washington with active expansion throughout the United States. Its mold prevention customers include many of the largest national and regional home builders. Visit: www.americanmoldguard.com. Through its wholly-owned subsidiary, AMG Scientific LLC, the Company is focused on assisting hospitals, large organizations and institutions in combating the problem of infectious diseases on interior surfaces. Visit: www.amgscientific.com.
The American Mold Guard Inc. logo is available at http://www.primezone.com/newsroom/prs/?pkgid=2964
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans and projections regarding the company's financial position, results of operations, market position, product and service development and market strategy. These statements may be identified by the fact that they use words or phrases such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "targets," "will likely result," "will continue," "may," "could" and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. These factors include, among other things, competitive product and service development, the ability to fully develop the Company's surface infection control services, future broad market acceptance of mold and hospital acquired infection prevention services, difficulties in raising additional capital in the future, difficulties and delays in establishing the "Mold Guard" brand, the impact of the absence of significant proprietary technology underlying the company's services, a continued and long-term dependence on a limited number of customers, changes to the inventory levels of the company's raw materials suppliers, the impact of a continued absence of exclusive or long-term commitments from the company's customers, changes in the anticipated size or trends of the markets in which the company competes, judicial decisions and governmental laws and regulations, and changes in general economic conditions in the markets in which the company may compete. For further details and a discussion of these and other risks and uncertainties, see the company's periodic reports including current reports on Form 8-K, quarterly reports on Form 10-QSB and the annual report on Form 10-KSB, furnished to and filed with the Securities and Exchange Commission. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
CONDENSED CONSOLIDATED (UNAUDITED) STATEMENTS OF OPERATIONS
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Three Months Ended Six Months Ended
June 30, June 30,
2006 2007 2006 2007
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Revenue $2,591,968 $1,876,280 $5,353,622 $3,978,598
Cost of revenue
Direct costs 1,449,341 886,375 3,013,296 1,881,720
Depreciation
expense 38,056 54,851 71,614 131,118
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Total cost of
revenue 1,487,397 941,226 3,084,910 2,012,838
Gross margin 1,104,571 935,054 2,268,712 1,965,760
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Selling, general
and administrative
expenses 2,738,263 2,288,980 4,302,568 4,615,354
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Loss from
operations (1,633,692) (1,353,926) (2,033,856) (2,649,594)
Interest income/
(expense) (1,913,352) 6,563 (2,642,050) 56,561
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Loss before income
tax provision (3,547,044) (1,347,363) (4,675,906) (2,593,033)
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Provision for
income taxes 965 5,016 4,833 5,997
Net loss (3,548,009) (1,352,379) (4,680,739) (2,599,030)
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Dividends on
cumulative
preferred stock 11,720 -- 304,163 --
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Net Loss applicable
to Common
stockholders (3,559,729) (1,352,379) (4,984,902) (2,599,030)
==============================================
Basic and diluted
net loss per
share $ (1.57) $ (0.29) $ (2.92) $ (0.56)
==============================================
Dividends
accumulated for
the year on
cumulative
preferred stock $ (0.01)$ -- $ (0.19) $ --
==============================================
Net loss
attributable to
Common stock per
share $ (1.58) $ (0.29) $ (3.11) $ (0.56)
==============================================
Weighted average
number of Common
shares
outstanding -
basic and diluted 2,260,871 4,629,535 1,601,586 4,625,522
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AMERICAN MOLDGUARD, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
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December 31, June 30,
2006 2007
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ASSETS
Current Assets:
Cash & cash equivalents $ 4,554,890 $ 1,493,313
Accounts receivable, less
allowance for doubtful
accounts 1,222,339 1,531,734
Inventories 125,347 58,565
Prepaid expenses and deposits 409,027 280,696
Other current assets 27,399 --
----------- -----------
Total Current Assets 6,339,002 3,364,308
Restricted cash 752,653 104,375
Property and equipment, net 875,319 726,615
Intangible assets, net 2,368 1,691
----------- -----------
Total Assets $ 7,969,342 $ 4,196,989
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LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIENCY)
Current Liabilities
Accounts payable and accrued
liabilities $ 1,150,286 $ 822,595
Lease line of credit, current
portion 146,326 --
Accrued payroll and related
expenses 661,346 312,441
Short term notes payable 1,581 1,581
----------- -----------
Total Current Liabilities 1,959,539 1,136,617
----------- -----------
Long-Term Liabilities
Lease line of credit, net of
current portion 460,767 --
----------- -----------
$ 2,420,306 $ 1,136,617
----------- -----------
Stockholders' Equity (Deficiency)
Common stock 16,606,734 16,615,990
Additional paid-in capital 6,920,413 7,021,524
Accumulated deficiency (17,978,111) (20,577,142)
----------- -----------
Total Stockholders' Equity
(Deficiency) 5,549,036 3,060,372
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIENCY) $ 7,969,342 $ 4,196,989
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