LiqTech International, Inc. Reports 2013 Second Quarter Financial And Operational Results

- Management to host conference call today at 11:00 am ET -

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Aug 14, 2013, 09:00 ET

BALLERUP, Denmark, Aug. 14, 2013 /PRNewswire/ -- LiqTech International, Inc. (LIQT) a clean technology company that manufactures and markets highly specialized filtration technologies, announced today its financial and operational results for second quarter 2013.

Financial highlights for the three months ended June 30, 2013

Net sales for the three month period ended June 30, 2013 were $2,805,921 compared to $3,953,335 for the same period in 2012, representing a decrease of $1,147,414 or 29.0%.
Diesel Particulate Filter ("DPF filter") sales decreased $979,422 or 38.9%, liquid filter sales decreased $348,773 or 25.2% and Kiln furniture sales increased $180,781 or 367.1% compared to the same period in 2012.
Gross profit for the three month period ended June 30, 2013 was $292,521 compared to $416,167 for the same period in 2012 representing a decrease of $123,646 or 29.7%.
The net loss attributable to LiqTech for the three month period ended June 30, 2013 was $1,308,102 compared to net loss of $552,509 for the same period in 2012, representing an increase of $755,593.
Included in the net loss for the three month period ended June 30, 2013 is non-cash compensation of $743,519, depreciation and amortization of $374,560, and other non-cash charges of $55,795, or total non-cash charges of $1,173,874.

Financial highlights for the six months ended June 30, 2013

Net sales for the six month period ended June 30, 2013 were $6,205,069 compared to $10,295,056 for the same period in 2012, representing a decrease of $4,089,987, or 39.7%.
DPF filter sales decreased $4,384,683 or 55.8%, liquid filter sales decreased $47,748 or 2.1% and Kiln furniture sales increased $342,444 or 226.1% compared to the same period in 2012.
Gross profit for the six month period ended June 30, 2013 was $854,544 compared to $2,505,851 for the same period in 2012 representing a decrease of $1,651,307 or 65.9%.
The net loss attributable to LiqTech for the six month period ended June 30, 2013 was $1,977,913 compared to net loss of $229,907 for the same period in 2012, representing an increase of $1,748,006.
Cash on hand for the six month period ended June 30, 2013 was $2,066,280 compared to $3,873,338 for the year ended December 31, 2012, representing a decrease of $1,807,058.
Working capital for the six month period ended June 30, 2013 was $6,626,966 compared to $8,069,595 for the year ended December 31, 2012, a decrease of $1,442,629.
Included in the net loss is non-cash compensation of $774,888, depreciation and amortization of $776,401, or other non-cash charges of $83,720, or total non-cash charges of $1,635,009.

Management Commentary

Mr. Finn Helmer, CEO, stated, "While we are disappointed in the current quarter's membrane sales, membranes interest is still growing and there are major requests regarding projects coming from all market segments - from produced water in the oil industry, desalinization systems for drinking water and for wastewater treatment. In the second quarter, we achieved incoming orders for liquid membranes at a rate that was three times higher than the same quarter last year. Further, our year-to-date order intake for the period ended June 30, 2013 was the same as for the whole year of 2012. This increasing liquid filter order rate resulted in a liquid filter backlog of approximately $3.1 million as of June 30, 2013, or approximately $1 million more than the reported liquid filter revenue for the six-month period ended June, 30, 2013.

"This market development scenario is similar to what occurred in my previous company, GIGA, where the company depended on several major projects that took a long time to materialize. However, one example where the acceptance cycle of a new technology is somewhat faster than the norm can be seen in our recent introduction of flatsheet membranes into the market. Flatsheet membranes are being used as a pre-filter for reverse osmosis filters generating drinking water from saltwater. The introduction to the marketplace of the LiqTech flatsheet membrane has been very well received and we have already quoted more than 10 major projects, which would translate into significant amount of revenue. Applications are mainly in drinking water but also for industrial waste water and process water. Over the next six months we expect that a number of these will develop into significant sales.

"The slowdown of the DPF filter business continued to decline in the second quarter compared to the first quarter and the same quarter a year earlier but we are seeing evidence that the second half of 2013 should be more positive. Kiln furniture results were very strong and our foothold in the market is increasing. We are putting additional resources in this market area and expect to show growing profits from the investment made over the past few years.

"During the last quarter LiqTech has entered a new Nanotechnology market, and we have developed the first samples of a 10 nanometer membrane together with a 4 nanometer membrane. The prototypes are part of a development project made in cooperation with several universities. We expect that the new membranes will open new markets for LiqTech when the products are ready for production over the next year.

"Generally speaking, market interest is growing in all membrane areas and we are currently seeing smaller orders from the major customers as they assess the benefits of our disruptive membrane technology in their processes. During my first four months at LiqTech, I have reviewed the technology, the customer base and the production capacity and based on what I have seen, I am confident that LiqTech has a bright future, even though current results are disappointing."

Conference Call Details

Interested parties may participate in the call by dialing (888) 669-0684 or (862) 255-5361. It is recommended to dial in approximately 10 to 15 minutes prior to the scheduled start time. The conference call will also be available on replay starting at 3:00 p.m. ET on August 14, 2013 and ending on August 28, 2013. To access the replay, please dial (888) 539-4649 and enter the replay code 94250#. The access number for the replay for international callers is (908) 379-8864 (replay code 94250#).

- Financial charts follow -

LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

	As of	As of
	June 30,	December 31,
	2013	2012
Current Assets:	UNAUDITED
Cash	$ 2,066,280	$ 3,873,338
Accounts receivable, net	1,943,316	2,855,184
Other receivables	247,730	371,001
Cost in excess of billing	254,717	217,586
Inventories	4,559,984	4,111,815
Prepaid expenses	49,606	130,560
Current deferred tax asset	280,251	267,332

Total Current Assets	9,401,884	11,826,816

Property and Equipment, net accumulated depreciation	6,136,593	6,649,817

Other Assets:
Long term receivable	-	118,258
Other investments	175,510	158,141
Long term tax asset	802,201	75,947
Other intangible assets	26,196	29,150
Deposits	180,792	182,020

Total Other Assets	1,184,699	563,516

Total Assets	$ 16,723,176	$ 19,040,149

LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

	As of	As of
	June 30,	December 31,
	2013	2012
Current Liabilities:	UNAUDITED
Current portion of capital lease obligations	$ 204,006	$ 203,503
Accounts payable	1,283,021	2,289,231
Accrued expenses	810,069	760,881
Billing in excess of cost	189,710	237,063
Accrued income taxes payable	1,000	1,000
Deferred revenue	287,112	265,543

Total Current Liabilities	2,774,918	3,757,221

Long-term capital lease obligations, less current portion	622,496	729,567

Total Long-Term Liabilities	622,496	729,567

Total Liabilities	3,397,414	4,486,788

Stockholders' Equity:
Common stock; par value $0,001, 100,000,000 shares authorized, 24,511,500 and 24,111,500 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively	24,512	24,112
Additional paid-in capital	14,857,805	12,658,405
Retained earnings	532,780	2,510,693
Deferred compensation	(1,550,389)	(125,477)
Other comprehensive income, net	(565,603)	(542,806)
Non-controlled interest in subsidiaries	26,657	28,434

Total Stockholders' Equity	13,325,762	14,553,361

Total Liabilities and Stockholders' Equity	$ 16,723,176	$ 19,040,149

LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES (UNAUDITED) CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Three Months Ended		For the Six Months Ended
	June 30,		June 30,
	2013	2012	2013	2012
Net Sales	$ 2,805,921	$ 3,953,335	$ 6,205,069	$ 10,295,056

Cost of Goods Sold	2,513,400	3,537,168	5,350,525	7,789,205

Gross Profit	292,521	416,167	854,544	2,505,851
Operating Expenses:
Selling expenses	715,592	599,459	1,289,517	1,259,377
General and administrative expenses	541,824	518,017	1,204,129	1,207,928
Non-cash compensation expenses	743,519	32,602	774,888	65,203
Research and development expenses	111,254	152,626	258,239	379,300

Total Operating Expense	2,112,189	1,302,704	3,526,773	2,911,808

Loss from Operations	(1,819,668)	(886,537)	(2,672,229)	(405,957)
Other Income (Expense)
Interest and other income	2,244	59,876	2,400	98,839
Interest (expense)	(12,952)	(41,372)	(24,657)	(125,888)
Gain (loss) on currency transactions	77,199	65,048	(36,974)	63,599
Loss on sale of fixed assets	(2,135)	-	(2,135)	-

Total Other Income (Expense)	64,356	83,552	(61,366)	36,550

Loss Before Income Taxes	(1,755,312)	(802,985)	(2,733,595)	(369,407)

Income Tax Expense (Income)	(444,659)	(250,476)	(741,523)	(139,500)

Net Loss	(1,310,653)	(552,509)	(1,992,072)	(229,907)

Less Net Loss Attributable To
Non-Controlled Interests in Subsidiaries	(2,551)	-	(14,159)	-

Net Loss Attributable To LiqTech	$ (1,308,102)	$ (552,509)	$ (1,977,913)	$ (229,907)

Basic Earnings Per Share	$ (0.05)	$ (0.02)	$ (0.08)	$ (0.01)
Weighted Average Common Shares Outstanding	24,359,852	24,111,500	24,236,362	23,173,137
Diluted Earnings Per Share	$ (0.05)	$ (0.02)	$ (0.08)	$ (0.01)
Weighted Average Common Shares
Outstanding Assuming Dilution	24,359,852	24,111,500	24,236,362	23,173,137

The accompanying notes are an integral part of these financial statements.

LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES (UNAUDITED) CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME

	For the Three Months		For the Six Months
	Ended June 30,		Ended June 30,
	2013	2012	2013	2012

Net (Loss)	(1,310,653)	(552,509)	(1,992,072)	(229,907)

Currency Translation, Net of Taxes	83,648	(377,454)	(22,799)	(159,879)

Other Comprehensive (Loss)	$ (1,227,005)	$ (929,963)	$ (2,014,871)	$ (389,786)

Comprehensive Income (Loss) Attributable To
Non-controlling Interest in Subsidiaries	11,392	-	(216)	(244)

Comprehensive (Loss) Attributable To LiqTech International Inc.	$ (1,238,397)	$ (929,963)	$ (2,014,655)	$ (389,542)

ABOUT LIQTECH INTERNATIONAL, INC. – (LIQT)

LiqTech International, Inc., a Nevada corporation, is a clean technology company that for more than a decade has developed and provided state-of-the-art technologies for gas and liquid purification using ceramic silicon carbide filters, particularly, highly specialized filters for the control of soot exhaust particles from diesel engines and for liquid filtration. It also manufactures kiln furniture. Using nanotechnology, LiqTech develops products using proprietary silicon carbide technology. LiqTech's products are based on unique silicon carbide membranes, which facilitate new applications and improve existing technologies. For more information, please visit www.liqtech.com.

Forward-Looking Statements 
This press release contains "forward-looking statements." Although the forward-looking statements in this release reflect the good faith judgment of management, forward-looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by us in the our reports filed with the Securities and Exchange Commission, including the risk factors that attempt to advise interested parties of the risks that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this release.

SOURCE LiqTech International, Inc.