LiqTech International, Inc. Reports 2015 Third Quarter Results -- Revenue Up 41% To $6.9 Million And Net Profit Up 79% To $0.6 Million

MANAGEMENT TO HOST CONFERENCE CALL TODAY AT 11:00 am EST

Nov 12, 2015, 09:00 ET from LiqTech International, Inc.

BALLERUP, Denmark, Nov. 12, 2015 /PRNewswire/ -- LiqTech International, Inc. (NYSE MKT: LIQT), a clean technology company that manufactures and markets highly specialized filtration products and systems, announced today its financial results for the three and nine months ended September 30, 2015.

Financial highlights for the three months ended September 30, 2015

  • Net sales for the three months ended September 30, 2015 were $6.9 million, compared to $4.9 million for the same period in 2014, representing an increase of $2.0 million or 40.8%.  Our results this year have been significantly impacted by currency translation effects.  As a result, third quarter 2015 net sales at constant currency were 85% higher than last year.  The increase in net sales was primarily driven by an increase in sales of membranes and systems of $1.3 million and an increase in sales of diesel particulate filters of $0.8 million.  The increase in sales of membranes and systems was a result of increased order inflow in the first 9 months that is now starting to materialize into revenue. The increase in sales of our diesel particulate filters was primarily driven by increased sales activities in China.
  • Gross profit for the three months ended September 30, 2015 was $2.3 million compared to $1.5 million in the same period of 2014, representing an increase of $0.8 million or 53.3%.  Gross profit margin was 33.4% compared to 29.8% in the same period of the preceding year. The increase in gross profit was primarily driven by higher sales activities compared to the same period in 2014. The increase in gross margin was primarily driven by higher sales of membranes and systems that carry a higher gross margin than our other products. Included in gross profit is depreciation of $0.4 million and $0.4 million for the three months ended September 30, 2015 and 2014, respectively.
  • Net profit attributable to LiqTech for the three months ended September 30, 2015 was $0.621 million, compared to $0.347 million in the same period last year, representing an increase of $0.274 million or 79.0%.

Financial highlights for the nine months ended September 30, 2015

  • Net sales for the nine months ended September 30, 2015 were $10.7 million compared to $12.1 million for the same period of 2014, representing a decrease of $1.4 million or 11.6%.  On a constant currency basis, year-to-date net sales were 14% higher than last year.  The decrease in net sales was primarily caused by a decrease in sales of diesel particulate filters of $1.0 million and a decrease in sales of membranes and systems of $0.4 million.  The decrease in net sales of our diesel particulate filters was mainly due to a decrease in mandates and general market activity for the first six months of 2015, partly offset by higher sales in the three months ended September 2015. The decrease in net sales of our membranes and systems was due largely to customer order placement delays for the first six months of 2015, partly offset by increased deliveries in the three months ended September 30, 2015.
  • Gross profit for the nine months ended September 30, 2015 was $1.7 million compared to $2.9 million for the same period of 2014, representing a decrease of $1.2 million or 41.4%.  The decrease in gross profit was due to low net sales compared to our fixed cost of goods sold in the first six months of 2015, partly offset by higher net sales in the three months ended September 2015.  Included in the gross profit is depreciation of $1.1 million and $1.3 million for the nine months ended September 30, 2015 and 2014, respectively.
  • Net loss attributable to LiqTech for the nine months ended September 30, 2015 was $2.3 million, compared to a loss of $1.2 million in the same period last year, representing an increased loss of $1.1 million or 91.7%. 
  • At September 30, 2015, the Company had cash and restricted cash of $2.3 million and working capital of $7.3 million.

Management Commentary

Shortly after our acquisition of Provital Solutions A/S in July 2014, we formed a new strategy for our membrane business. Having acquired a company with extensive experience in manufacturing and designing systems based on LiqTech membranes, we changed our focus from selling membranes to other system integrators into selling systems directly to end users. We also narrowed our focus to specific applications within the water, swimming pool, oil and gas and industrial markets, where we had already proven our technology.

We believe that the record order inflow of $18.3 million in the first nine months of 2015 shows that our change in strategy is proving successful.  We have significantly improved the size and quality of our sales pipeline and we have seen an increased level of interest and acceptance from our target markets. 

We are very pleased to see these positive developments in our membrane business.  We are equally pleased to see increased activity in our diesel particulate business – third quarter revenue from our diesel particulate filters was $2.3 million, up sequentially from $0.9 million in the second quarter.  Over the long term, we anticipate an improving outlook for our DPF filters but sales may vary meaningfully from quarter to quarter. 

Revenue of $6.9 million in the third quarter was the highest since the fourth quarter 2011 and the second highest in the history of the company.  The net profit attributable to LiqTech of $0.6 million marks a new record for the Company in a single quarter.

The Company collected a $1.2 million customer receivable in the beginning of the fourth quarter 2015.  Due to the production of several large orders in the third and fourth quarters of this year, cash and accounts receivable may experience significant swings; however, we expect our cash to be sufficient due to customer deposits and prepayments that will assist us in managing our working capital.

Based on these positive developments we believe that we are progressing towards our goal of establishing our silicon carbide filtration technology as an industrial standard in our target markets.

Conference Call Details

Interested parties may participate in the call by dialing (877) 407-8029 or (201) 689-8029. 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. EST on November 12, 2015 and ending on November 26, 2015. To access the replay, please dial (877) 660-6853 and enter the conference id# 13616802. The access number for the replay for international callers is (201) 612-7415.

Callers from Denmark can dial in using the following numbers:

Denmark (fixed) ATT        

80 25 21 64

Denmark (mobile) ATT       

80 25 19 17

Financial Tables Follow

LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS





ASSETS





As of


As of


September 30,


December 31,


2015


2014


UNAUDITED




Current Assets:






Cash

$

2,347,656


$

5,853,752

Restricted cash


-



218,879

Accounts receivable, net


3,917,945



1,992,206

Other receivables


268,294



344,331

Cost in excess of billing


480,188



1,172,658

Inventories


4,461,616



4,914,866

Prepaid expenses


3,212



55,990

Current deferred tax asset


127,350



109,637







Total Current Assets


11,606,261



14,662,319







Property and Equipment, net accumulated depreciation


3,734,669



4,524,386







Other Assets:






Other investments


5,594



6,085

Long term deferred tax asset


4,182,353



3,496,459

Goodwill


7,777,704



8,460,512

Other intangible assets


11,843



16,708

Deposits


247,671



259,070







Total Other Assets


12,225,165



12,238,834







Total Assets

$

27,566,095


$

31,425,539

  (Continued)

 


LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS







LIABILITIES





As of


As of


September 30,


December 31,


2015


2014

Current Liabilities:

UNAUDITED




Current portion of capital lease obligations

$

158,954


$

170,187

Accounts payable


2,579,026



2,336,942

Accrued expenses


1,223,645



1,439,735

Billing in excess of cost


40,051



-

Accrued income taxes payable


-



570

Deferred revenue / customers deposits


271,418



144,476







Total Current Liabilities


4,273,094



4,091,910







Long-term capital lease obligations, less current portion


203,694



368,614







Total Long-Term Liabilities


203,694



368,614







Total Liabilities


4,476,788



4,460,524







Stockholders' Equity:






Common stock; par value $0,001, 100,000,000 shares authorized, 39,532,035 and 39,404,782
shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively


39,532



39,405

Additional paid-in capital


35,991,082



35,632,410

Accumulated deficit


(7,726,730)



(5,382,852)

Deferred compensation


(599,454)



(504,748)

Other comprehensive income, net


(4,615,123)



(2,835,917)

Non-controlled interest in subsidiaries


-



16,717







Total Stockholders' Equity


23,089,307



26,965,015







Total Liabilities and Stockholders' Equity

$

27,566,095


$

31,425,539

 

 

LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES 

(UNAUDITED) CONSOLIDATED STATEMENTS OF OPERATIONS






For the Three Months Ended


For the Nine Months Ended


September 30,


September 30,


2015


2014


2015


2014

Net Sales

$

6,933,197


$

4,931,406


$

10,738,753


$

12,102,595















Cost of Goods Sold


4,618,603



3,464,284



9,029,567



9,229,131















Gross Profit


2,314,594



1,467,122



1,709,186



2,873,464















Operating Expenses:














Selling expenses


646,269



831,990



2,084,204



2,430,814

General and administrative expenses


656,090



738,761



2,155,218



2,174,942

Non-cash compensation expenses


106,448



(19,663)



264,094



372,960

Research and development expenses


171,157



83,113



536,614



223,532















Total Operating Expense


1,579,964



1,634,201



5,040,130



5,202,248















Income (Loss) from Operations


734,630



(167,079)



(3,330,944)



(2,328,784)















Other Income (Expense)














Interest and other income


48,978



16,032



98,680



29,777

Interest expense


(8,677)



(18,794)



(43,504)



(40,914)

Gain (loss) on investments


(10)



9



7,285



(832)

Gain (loss) on currency transactions


(34,834)



237,551



97,907



192,226















Total Other Income (Expense)


5,457



234,798



160,368



180,257















Income (Loss) Before Taxes


740,087



67,719



(3,170,576)



(2,148,527)















Income Tax Expense (Benefit)


118,678



(276,870)



(848,426)



(972,430)















Net Income (Loss)


621,409



344,589



(2,322,150)



(1,176,097)















Less Net Income (Loss) Attributable To Non-Controlled

Interests in Subsidiaries


(29)



(2,915)



21,731



(6,029)















Net Income (Loss) Attributable To LiqTech

$

621,438


$

347,504


$

(2,343,881)


$

(1,170,068)















Basic Earnings (Loss) Per Share

$

0.02


$

0.01


$

(0.06)


$

(0.04)















Weighted Average Common Shares Outstanding


39,519,705



35,613,164



39,471,745



30,043,493















Diluted Earnings (Loss) Per Share

$

0.02


$

0.01


$

(0.06)


$

(0.04)















Weighted Average Common Shares Outstanding
Assuming Dilution


39,531,786



36,034,570



39,471,745



30,043,493

ABOUT LIQTECH INTERNATIONAL, INC.

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. 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. In particular, Provital Solutions A/S (www.provital.dk), the Company's subsidiary, has developed a new standard of water filtration technology to meet the ever increasing demand for higher water quality. By incorporating LiqTech's SiC liquid membrane technology with its longstanding systems design experience and capabilities it offers solutions to the most difficult water pollution problem.

For more information, please visit www.liqtech.com 
Follow LiqTech on LinkedIn: http://www.linkedin.com/company/liqtech-international 
Follow LiqTech on Twitter: https://twitter.com/LiqTech

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.

CONTACT:     

Wolfe Axelrod Weinberger Associates, LLC
Stephen D. Axelrod, CFA/Don Weinberger
(212) 370-4500, (212) 370-4505 fax
steve@wolfeaxelrod.com, don@wolfeaxelrod.com

SOURCE LiqTech International, Inc.



RELATED LINKS

http://www.liqtech.com