Abtech Holdings, Inc. Reports First Quarter 2014 Financial Results - WDRB 41 Louisville News

Abtech Holdings, Inc. Reports First Quarter 2014 Financial Results

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SOURCE Abtech Holdings, Inc.

SCOTTSDALE, Ariz., May 14, 2014 /PRNewswire/ -- Abtech Holdings, Inc. (OTC QB: ABHD) ("AbTech" or the "Company"), a full-service environmental technologies and engineering firm providing innovative water pollution and contamination solutions to communities, industry and governments, today reported financial results for its first quarter ended March 31, 2014.  Since the beginning of the year, AbTech has:

  • deployed and validated onsite its first mobile water pre-treatment system, focused on oil recovery and hydrocarbon removal for the treatment of flowback and produced water for the on-shore Oil & Gas industry.  This pretreatment system incorporates AbTech's Smart Sponge® technology and is designed to operate in advance of other treatment systems,  increasing overall efficiency and lowering treatment cost;
  • continued pre-installation design and engineering work on the Nassau County project –  $11.9 million remaining to be billed under the contract;
  • expanded its Advisory Board with notable talent: Governor Parris N. Glendening, two-term governor of Maryland (1995-2003) and three-term County Executive of Prince George's County;  Dr. Francis J. Harvey, 19th Secretary of the Army (2004-2007) and 28-year Westinghouse Electric Corporation Executive (Chief Operating Officer of the Industries and Technology Group and President of Government and Environmental Services); and Steven W. Kohlhagen, author and leading financial expert serving as advisor to the Federal Reserve Board, the United States Treasury and the Council of Economic Advisors, who had previously served on the Company's Board of Directors;
  • added to its Board of Directors William S. Brennan, a seasoned 20-year Wall Street veteran focused on water strategies investment, who has served on the AbTech Advisory Board since September 2012;
  • initiated in March an offering for up to $2 million of a 7½% multi-advance credit facility (debt) for which it has received $875,000 in advances; and
  • subsequent to quarter end, received an order for nearly $70,000 of AbTech Ultra-Urban filters to be used in a stormwater project in the Eastern Shore of Maryland, a project which will help prevent pollution to the Choptank River and Chesapeake Bay.

"The Company continues to focus its efforts on large projects that we believe provide the best opportunity for success.  While the realization of such game changing revenue opportunities takes a great deal of time to close, work has continued on our first marquee contract award – not-to-exceed $12 million – by Nassau County, New York, and now that weather is improving, we are experiencing increasing activity on this project in this current second quarter," commented Glenn Rink, founder and CEO of AbTech.  "We have been actively leveraging this project's solutions approach into other counties, regions and municipalities. We have now secured an initial project in Maryland's Eastern Shore and we anticipate other similar new stormwater projects to develop from a pipeline of targeted opportunities for which we await requests for proposals and/or contracts."

"Our mobile produced water pre-treatment system for the Oil & Gas industry, deployed in the field in March, is yielding positive validation results.  After five weeks (800+ hours) of processing up to 10,000 barrels per day of contaminated flowback water at a site in the Eagle Ford region in Texas, our unit has averaged 60 to 80% hydrocarbon removal even in the most extreme, challenging conditions.  Adverse conditions on site including inconsistent chemistry, accumulated sludges, and no administration of emulsion breaking chemicals all helped to negatively impact the overall efficiency of the Smart Sponge media.  However, given proper chemistry adjustments hydrocarbon removal rates of 95 to 99% would be achievable.  As of early May, we have begun hosting site visits for potential customers ranging from large and independent oil and gas operators to water service providers.  Our cost-effective mobile unit is receiving meaningful early attention.  Though the Company has just started hosting visits, we have interest from several parties and are also pleased to announce that we have begun negotiating the terms of the first commercial contract."

AbTech reported revenues for the three months ended March 31, 2014 of approximately $75,000 compared to $100,000 for the same period of the previous year and $155,000 in the fourth quarter of 2013.  AbTech's backlog at March 31, 2014, was approximately $11.9 million.

The Company reported a net loss attributable to controlling interest of $(1.4) million or $(0.02) per basic share for the three months ended March 31, 2014. This compares to a net loss attributable to controlling interest of $(1.2) million or $(0.02) per basic share for the three months ended March 31, 2013 and $(1.4) million or $(0.02) per basic share for the fourth quarter 2013.   AbTech incurred a loss from operations of $(1.3) million for the three months ended March 31, 2014 versus a loss from operations of $(1.4) million in the same period of the prior year and a loss from operations of $(1.4) million in the fourth quarter 2013.

AbTech had a negative gross margin of $(28,000) during first quarter 2014.  AbTech operated at less than one percent of operating capacity during this period, which adversely affected gross margins, as excess capacity costs flowed through to cost of revenues.  The Company continues to expect gross margins for its Smart Sponge® products of over 50% as it achieves a critical mass in its business activity.  However it should be noted that ancillary and complimentary products and services offered to our customers would likely produce varying margins depending on the product or service and the market segment.

Operating expenses for the three months ended March 31, 2014 totaled $1.3 million, a decrease of approximately $96,000 over the same period of 2013 and a decrease of approximately $136,000 compared to the fourth quarter of 2013.  The lower operating expenses were primarily attributed to decreases in employee costs, legal expenses, public relations and government affairs, partly offset by increased research and development expenses associated with oil & gas field validation work.

Interest expense for the three months ended March 31, 2014 totaled $167,000, compared to $12,000 in the same period of 2013 and $82,000 in the fourth quarter of 2013.  The increase in interest expense is partially due to the additional $3.5 million of 6.5% secured convertible promissory notes issued in December 2013 ($1.5 million of which was used to repay other higher yielding short-term outstanding debt) and the issuance of $875,000 of 7.5% secured promissory notes in March 2014.  Also included in interest expense for the three months ended March 31, 2014 is imputed interest of approximately $93,000 resulting from the amortization of note discounts, deferred financing costs and beneficial conversion features related to the notes issued in December 2013 and March 2014.

At March 31, 2014, the Company reported cash and cash equivalents of $650,000, accounts receivable of $84,000 and inventory of $435,000.  Total assets during the first quarter decreased approximately $542,000 to $1.6 million as cash was consumed for operations, working capital and the field validation deployment of AbTech's first oil & gas mobile unit.  The monthly cash burn for the first three months of 2014 averaged approximately $475,000.  On March 31, 2014, the Company's short term debt totaled approximately $1.5 million, net of discounts, and long term debt totaled approximately $3.1 million, net of discounts.  In June 2013, AbTech entered into an agreement for a $2 million equity line of credit and as of today, the Company had made no draws on the equity line of credit.  During March 2014, the Company initiated a private offering of up to $2 million in a multi-advance credit facility from which the Company has received $875,000 in proceeds from the issuance of short-term secured promissory notes (non-convertible). The notes have an interest rate of 7.5% per annum and an accompanying 20% warrant coverage.

On March 31, 2014, AbTech had approximately 67.9 million shares of common stock outstanding, which did not change from the number of shares outstanding at December 31, 2013.  The Company's fully diluted share count increased by approximately 1.2 million shares during the first quarter of 2014 to approximately 100.6 million shares (inclusive of all options, warrants and convertible debt) due to 437,500 warrant shares issued with the secured promissory notes in a private placement in March 2014, the addition of a conversion right to a $500,000 note issued in 2013 representing 781,000 shares if converted, and an increase in director and consultant options totaling 444,000, offset by 500,000 warrants that expired during the quarter.  If all remaining outstanding options and warrants were exercised for cash, the Company would receive approximately $11.4 million in additional capital. As of March 31, 2014, the Company had federal tax loss carry forwards of approximately $40.2 million and state tax loss carry forwards of approximately $20.2 million, which expire through 2034.

Conference Call Details:


Date/Time:

Wednesday, May 14, 2014 – 4:30 p.m. (ET)

Telephone Number:

877-870-4263

International Dial-In Number:

412-317-0790

Canada Dial-In Number:

855-669-9657

Internet Access:

http://www.videonewswire.com/event.asp?id=99190


or


www.abtechindustries.com  and  https://twitter.com/AbTech_Ind

It is recommended that participants phone-in at least 10 minutes before the call is scheduled to begin. A replay of the conference call in its entirety will be available approximately one hour after its completion via the Internet Access link above.

Annual Shareholder Meeting Details:


Date/Time: 

Monday, July 14, 2014-10:00 a.m. (PT) – RSVP REQUIRED

Place:

4110 N. Scottsdale Road, Suite 235, Scottsdale, Arizona


A copy of the power point used during the presentation will be available beginning on July 14, 2014 at www.abtechindustries.com.

ABOUT ABTECH HOLDINGS, INC. (OTC QB: ABHD) AND ABTECH INDUSTRIES, INC.

AbTech Industries, Inc. (a subsidiary of Abtech Holdings, Inc.) is a full-service environmental technologies and engineering firm dedicated to providing innovative solutions to communities, industry and governments addressing issues of water pollution and contamination. Its products are based on polymer technologies capable of removing hydrocarbons, sediment and other foreign elements in stormwater runoff (ponds, lakes and marinas), flowing water (curbside drains, pipe outflows, rivers and oceans), and industrial process and wastewater. AbTech's offerings include the ground-breaking new antimicrobial technology called Smart Sponge® Plus. This technology is effective in reducing coliform bacteria found in stormwater, industrial wastewater, and municipal wastewater. Smart Sponge® Plus is registered with the Environmental Protection Agency (Registration #86256-1). AbTech's teams of water treatment technology experts, civil and environmental engineers, and field operations specialists develop solutions to improve the quality of our limited water resources. AEWS Engineering (a subsidiary of Abtech Holdings, Inc.), is an independent engineering civil and environmental engineering firm partnered with top research and engineering universities. By focusing on bringing new engineering and technology innovation to the water infrastructure sector, AEWS is positioned to be at the forefront of stormwater Best Management Practices development and to deliver the latest in design excellence to its customers. For more information please visit www.abtechindustries.com. More information on AEWS Engineering can be found at www.aewsengineering.com.

This news release contains "forward-looking statements" which are not purely historical and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, the development, costs and results of new business opportunities. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with new projects. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K for the most recent fiscal year, our quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission.

*** Financial Statements Follow ***

 

ABTECH HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS









March 31, 2014


December 31, 2013








(Unaudited)



ASSETS




Current assets:





    Cash and cash equivalents                    

$      649,517


$    1,212,984


    Accounts receivable – trade, net

83,711


178,307


    Inventories, net

434,984


403,439


    Deferred charges, net

110,626


109,721


    Prepaid expenses and other current assets

139,937


33,194


        Total current assets





1,418,775


1,937,645











    Fixed assets, net

64,806


60,423


    Security deposits

33,940


33,940


    Deferred charges, net

77,391


105,389


         Total assets





$   1,594,912


$   2,137,397





LIABILITIES & STOCKHOLDERS' DEFICIENCY




Current liabilities:





    Accounts payable                 

$     574,328


$     688,469


    Accounts payable – related party

6,118


5,911


    Loan from shareholders

9,000


9,000


    Notes payable, net of discounts

772,272


500,000


    Convertible promissory notes

750,000


250,000


    Capital lease obligation – current portion

3,975


3,927


    Customer deposits

41,584


43,192


    Accrued interest payable

107,702


36,062


    Accrued expenses

305,611


315,724

Total current liabilities        

2,570,590


1,852,285





Due to related party

89,140


90,564

Convertible promissory notes - noncurrent portion, net of discounts

3,057,147


2,996,237

Capital lease obligation – noncurrent portion

1,391


2,727


Total liabilities





5,718,268


4,941,813





Commitments and contingencies








Stockholders' equity (deficiency)





    Common stock, $0.001 par value; 300,000,000 authorized shares;





        67,883,879  shares issued and outstanding 





        at March 31, 2014 and December 31, 2013

67,883


67,883


Additional paid-in capital

43,568,038


43,372,392


Non-controlling interest

(2,312,218)


(2,151,627)


Accumulated deficit

(45,447,059)


(44,093,064)


Total stockholders' deficiency

(4,123,356)


(2,804,416)


Total liabilities and stockholders' deficiency    

$    1,594,912


$    2,137,397

 

ABTECH HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS






             Three Months ended

        March 31,



2014


2013






Net revenues



$       75,258



$       99,537

Cost of  revenues



103,214



98,720

Gross profit (loss)



(27,956)



817








Operating expenses







     Selling, general and administrative



986,544



1,246,761

     Research and development



333,465



169,396

Total operating expenses



1,320,009



1,416,157








Operating loss



(1,347,965)



(1,415,340)








Other income (expense)







     Interest expense



(166,683)



(11,862)

     Other income (expense)



62



607

Total other income (expense), net



(166,621)



(11,255)








Net loss before income taxes



(1,514,586)



(1,426,595)

Provision for income taxes



-



-

Net loss



(1,514,586)



(1,426,595)

Net loss attributable to non-controlling interest



(160,591)



(188,516)

Net loss attributable to controlling interest



$   (1,353,995)



$   (1,238,079)








Basic and diluted loss per common share



$            (0.02)



$            (0.02)

Basic and diluted weighted average number of shares outstanding



67,883,879



64,717,505

 

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