Speedemissions, Inc. Reports Results for Third Quarter

Marketwired

ATLANTA, GA--(Marketwire - Nov 21, 2012) - Speedemissions, Inc. (OTCBB: SPMI), a leading vehicle emissions testing and safety inspections company with stores in Atlanta, Houston, St. Louis and Salt Lake City, today announced its financial results for the third quarter ending 9/30/2012.

Q3 2012:

  • Revenue decreased (5.4%) or $117K to $2,047,458 for the quarter versus $2,164,562 in 2011. Along with a slight drop in same store sales, a decrease in revenue was attributed to promotional discount programs which resulted in increased sales discounts of $75,476 over the prior year period.

  • Same store operating expenses decreased by $58K or (4.2%).

  • General & Administrative expenses increased $31K or 9.1% compared to Q3 2011. This increase was due to higher legal/accounting fees, franchise disclosure documents and development of the CARbonga iPhone application.

  • The Company incurred a net loss of $89,974, or ($0.00) per diluted share in the third quarter of 2012 compared to net loss of $9,132 during the third quarter of 2011. Comparatively, legal/accounting, franchise development and professional fees attributed to CARbonga increased $59K for the quarter.

YTD 9-Months ended September, 2012:

  • Revenue decreased $473K or (7.4%) to $5,955,326 through September, 2012 compared to $6,428,518 for the same period of 2011. During the same period of 2011, the company closed two underperforming stores. The revenue decrease was primarily due to a decline in same store sales of $390K or (6.1%), resulting from increased competition and pricing discounts.

  • Same store operating expenses decreased by $196K or (4.8%).

  • General and administrative expenses were decreased by $94K or (8.6%) compared to the same period in 2011.

  • A net loss of $281,723 was recorded in the nine month period ended September 30, 2012, compared to net loss of $245,551 during the nine month period ended September 30, 2011.

President and CEO, Rich Parlontieri, added, "We continue to be affected by increased competition, discounted test fees and pricing adjustments. However, we believe the investments we've made in the past four to five months by getting our Franchise business model approved, announcing expansion into emission repair for failed vehicles and the next generation of our CARbonga app product line will improve our top line. We, of course, must also continue to manage expenses as a means of returning to profitability."

About Speedemissions Inc. http://www.speedemissions.com;
About CARbonga: http://www.carbonga.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 required by law. The company is expanding the business through its newly introduced SpeedEmissions Car Care franchise unit, its emission repair business segment and its CARbonga app for smart phone users. CARbonga is the first app for direct customer auto diagnostics and safety information for their own vehicle or when buying a used car.

Speedemissions, Inc. is a national brand, offering their customers quick and efficient vehicle emissions testing and emission repair services (limited number of stores at this time). The company is in the Atlanta, Georgia; Houston, Texas; St. Louis, Missouri and Salt Lake City, Utah markets. Speedemissions owns the CARbonga app which allows the average person to detect automotive car problems via their smart phone.

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  
   
    September 30,
2012
    December 31,
2011
 
    (unaudited)        
Assets                
Current assets:                
  Cash   $ 133,688     $ 129,095  
  Note receivable - current portion     12,000       21,125  
  Certificate and merchandise inventory     62,315       59,822  
  Other current assets     120,877       59,320  
    Total current assets     328,880       269,362  
                 
Note receivable, net of current portion     73,179       79,914  
Property and equipment, at cost less accumulated depreciation and amortization     408,563       539,673  
Goodwill     1,240,152       1,240,152  
Other assets     104,363       104,363  
    Total assets   $ 2,155,137     $ 2,233,464  
Liabilities and Shareholders' Deficit                
Current liabilities:                
  Line of credit   $ 282,965     $ 90,000  
  Note payable     55,000       55,000  
  Accounts payable     244,601       220,625  
  Accrued liabilities     236,658       200,096  
  Current portion of capitalized lease obligations     6,489       40,659  
  Current portion of equipment financing obligations     6,251       24,780  
  Current portion - deferred rent     14,795       14,795  
    Total current liabilities     846,759       645,955  
Capitalized lease obligations, net of current portion     -       681  
Deferred rent     124,663       121,390  
Other long term liabilities     7,350       7,350  
    Total liabilities     978,772       775,376  
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     4,579,346       4,579,346  
Shareholders' deficit:                
  Common stock, $.001 par value, 250,000,000 shares authorized, 34,688,166 shares issued and outstanding at September 30, 2012 and December 31, 2011     34,618       34,618  
  Additional paid-in capital     15,918,329       15,918,329  
  Accumulated deficit     (19,355,928 )     (19,074,205 )
    Total shareholders' deficit     (3,402,981 )     (3,121,258 )
    Total liabilities and shareholders' deficit   $ 2,155,137     $ 2,233,464  
   
   
Speedemissions, Inc. and Subsidiaries  
Consolidated Statements of Operations  
(unaudited)  
   
    Three Months Ended
September 30
    Nine Months Ended
September 30
 
    2012     2011     2012     2011  
Revenue   $ 2,047,458     $ 2,164,562     $ 5,955,326     $ 6,428,518  
Costs of operations:                                
  Cost of emission certificates     452,375       469,756       1,321,871       1,420,251  
  Store operating expenses     1,310,257       1,368,170       3,904,588       4,193,946  
  General and administrative expenses     365,386       334,822       997,433       1,091,861  
  (Gain) loss on sale of non-strategic assets     -       (2,660 )     (2,458 )     (43,282 )
  Operating loss     (80,560 )     (5,526 )     (266,108 )     (234,258 )
Interest income (expense)                                
  Interest income     756       760       2,265       2,280  
  Interest expense     (9,170 )     (4,366 )     (17,880 )     (13,573 )
    Interest expense, net     (8,414 )     (3,606 )     (15,615 )     (11,293 )
  Net loss   $ (88,974 )   $ (9,132 )   $ (281,723 )   $ (245,551 )
Basic and diluted net loss per share   $ 0.00     $ (0.00 )   $ (0.01 )   $ (0.01 )
Weighted average common shares outstanding, basic and diluted     34,688,166       33,764,249       34,688,166       29,813,331  
   
   
Speedemissions, Inc. and Subsidiaries  
Consolidated Statements of Cash Flows  
(unaudited)  
   
    Nine Months Ended
September 30,
 
    2012     2011  
Cash flows from operating activities:                
  Net loss   $ (281,723 )   $ (245,551 )
  Adjustments to reconcile net loss to net cash used in operating activities:                
      Depreciation and amortization     136,666       155,180  
      (Gain) loss on sale of assets     (2,458 )     (43,282 )
      Stock issued for services     -       3,000  
      Share-based compensation     -       54,842  
      Changes in operating assets and liabilities:                
        Certificate and merchandise inventory     (2,493 )     8,779  
        Other current assets     (61,557 )     (24,283 )
        Other assets     -       200  
        Accounts payable and accrued liabilities     60,538       (45,734 )
        Other liabilities     3,273       (54,552 )
    Net cash used in operating activities     (147,754 )     (191,401 )
Cash flows from investing activities:                
  Proceeds from note receivable     15,860       12,127  
  Proceeds from sales of property and equipment     3,100       31,623  
  Purchases of property and equipment     (6,198 )     (10,938 )
    Net cash provided by investing activities     12,762       32,812  
Cash flows from financing activities:                
  Net proceeds from warrant exercise     -       64,000  
  Proceeds from line of credit     622,965       545,280  
  Payments on line of credit     (430,000 )     (485,000 )
  Payments on equipment financing obligations     (18,529 )     (15,043 )
  Payments on capitalized leases     (34,851 )     (32,984 )
    Net cash provided by financing activities     139,585       76,253  
Net (decrease) increase in cash     4,593       (82,336 )
Cash at beginning of period     129,095       261,600  
Cash at end of period   $ 133,688     $ 179,264  
Supplemental Information:                
Cash paid during the period for interest   $ 17,644     $ 13,573  
Supplemental Disclosure of Non-Cash Activity:                
Note receivable from sale of assets   $ -     $ 15,000  
Contact:
Company Contact
Speedemissions Inc.
(770) 306-7667

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