American Mold Guard CL B Wrt (MM) (NASDAQ:AMGIZ)
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American Mold Guard, Inc. (Nasdaq SC: AMGI, AMGIW,
AMGIZ), an industry leader in the field of mold prevention services,
today announced financial results for its second quarter ended June
30, 2006.
Second Quarter Results
The company reported second quarter 2006 net sales of $2.6
million, an increase of 105 percent from $1.3 million for the second
quarter of 2005. Net sales increased primarily due to higher demand
for the company's services and a price increase enacted in the
beginning of the year. Gross margin for the second quarter of 2006 was
$ 1.1 million, or 42.6 percent, an increase of 901 percent from the
$110,377 gross margin for the second quarter of 2005. The gross margin
increase was realized through less material usage and improved crew
productivity on higher sales volume, as well as from a price increase
that the company implemented in the beginning of the year.
The company reported a net loss for the second quarter of 2006 of
$3.55 million, or $1.57 per share, compared to a net loss of $1.39
million, or $1.50 per share, for the second quarter of 2005. Included
in the second quarter 2006 net loss is interest expense of $1.9
million, that resulted from the accelerated recognition of deferred
interest charges associated with current quarter debt repayments and
$27,107 of charges related to equity-based compensation as a result of
SFAS 123R. The second quarter 2006 net loss increase from the prior
year was primarily due to the increased cost of being a public
company, investments in new service centers, marketing of the company
brand and product and the write-off of unamortized interest expense
related to pre-IPO debt incurred by the company. The majority of the
debt was repaid in the second quarter of 2006. The per share net loss
information reflects the effect of the one-for-.340124209 reverse
stock split, effective April 7, 2006.
"We are executing on our plan to expand American Mold Guards mold
prevention service to customers, having opened five new service
centers this quarter" said Tom Blakeley, Chief Executive Officer. "I
am pleased that our year-to-date sales in 2006 almost approximate 2005
full-year sales and that we continued to increase company gross margin
through productivity improvements. With the IPO complete, the company
is now positioned to continue to expand its service coverage and
product offerings in an effort to accelerate our growth," concluded
Mr. Blakeley.
Third Quarter 2006 Outlook
For the third quarter of 2006, the company is estimating revenue
in the range of $3.1 to 3.6 million.
Completion of the Company's Initial Public Offering
On May 2, 2006, the company closed its initial public offering of
1,350,000 units at a price per unit of $13.00. Each unit consisted of
two shares of common stock, two Class A warrants and two Class B
warrants. The offering raised net proceeds of $16.0 million, after
underwriter discounts. On May 23, 2006, the representative of the
several underwriters of the initial public offering exercised an over-
allotment option and purchased an additional 100,000 units. The
exercise of the over-allotment option raised additional net proceeds
of $1.2 million, after underwriting discounts. On June 7, 2006, the
representative of the several underwriters again exercised the
over-allotment option and purchased 100,000 shares of Common Stock,
100,000 Class A warrants and 100,000 Class B warrants. This second
exercise of the over-allotment option raised additional net proceeds
of $.6 million, after underwriting discounts. The total gross proceeds
from the company's initial public offering was approximately $19.5
million and the company realized aggregate net proceeds of
approximately $17.8 million, after underwriting discounts. As noted in
the company's offering prospectus, significant amounts of the net
proceeds of the offering was used to repay outstanding debt of the
company and will be used for working capital purposes.
Conference Call and Webcast
American Mold Guard will discuss its second quarter 2006 results,
along with its revenue outlook for the third quarter of 2006, on a
conference call today beginning at 1:30 p.m. Pacific Daylight Time.
You can listen to the call by Domestic Dial at 866-406-5369 or you can
access via a live webcast at
http://www.vcall.com/IC/CEPage.asp?ID=106598. 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 July 25, 2006 including its operating results
for the quarter ended June 30, 2006. The company's web site can be
accessed at www.americanmoldguard.com under "Investor Relations /
Press Releases".
About American Mold Guard
American Mold Guard, Inc., founded in 2002, is an industry leader
in the field of mold prevention services. Its services are primarily
focused on the residential real estate construction industry in
California, Texas, Louisiana, Mississippi and Florida. Its customers
include many of the largest national and regional home builders.
Visit: www.americanmoldguard.com
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, future broad market acceptance of mold 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
our 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-Q
and the annual report on Form 10-K, 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.
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AMERICAN MOLD GUARD, INC.
CONDENSED CONSOLIDATED (UNAUDITED) STATEMENTS OF OPERATIONS
----------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2005 2006 2005 2006
----------------------------------------------------------------------
Revenue, Net $1,264,174 $2,591,968 $2,259,873 $5,353,622
Cost of Revenue
Direct Costs 1,129,028 1,449,341 1,836,123 3,013,296
Depreciation
Expense 24,769 38,056 45,041 71,614
----------------------- -----------------------
Total Cost of
revenue 1,153,797 1,487,397 1,881,164 3,084,910
Gross Margin 110,377 1,104,571 378,709 2,268,712
======================== =======================
Selling, general
and Administrative
expenses 1,267,119 2,738,263 2,331,949 4,302,568
------------------------ -----------------------
Loss from operations (1,156,742) (1,633,692) (1,953,240) (2,033,856)
Interest Expense,
net (230,875) (1,913,352) (394,714) (2,642,050)
------------------------ -----------------------
Loss before provision
for taxes (1,387,617) (3,547,044) (2,347,954) (4,675,906)
Provision for taxes 150 965 950 4,833
------------------------ -----------------------
Net Loss (1,387,767) (3,548,009) (2,348,904) (4,680,739)
======================== =======================
Dividends on cumulative
preferred stock 33,066 11,720 185,463 304,163
======================== =======================
Net Loss applicable
to common
shareholders (1,420,833) (3,559,729) (2,534,367) (4,984,902)
======================== =======================
Basic and diluted
net loss per share $(1.50) $(1.57) $(2.56) $(2.92)
======================== =======================
Dividends accumulated
for the year on
cumulative preferred
stock $(0.04) $(0.01) $(0.20) $(0.19)
======================== =======================
Net Loss attributable
to common stock per
share $(1.54) $(1.58) $(2.76) $(3.11)
======================== =======================
Weighted average
number of common
shares outstanding
basic and diluted 923,798 2,260,871 917,676 1,601,586
======================== =======================
AMERICAN MOLD GUARD, INC.
CONDENSED CONSOLIDATED (UNAUDITED) BALANCE SHEET
----------------------------------------------------------------------
December 31, June 30,
2005 2006
----------------------------------------------------------------------
ASSETS
Current Assets:
Cash & cash equivalents $67,782 $9,241,229
Accounts receivable, less allowance
for doubtful accounts 1,257,356 1,616,260
Inventories 38,039 61,320
Deferred Offering Costs 620,882 0
Deposits 115,935 349,573
Other Current Assets 80,122 58,658
------------- -------------
Total Current Assets 2,180,116 11,327,041
Property & Equipment 309,465 635,670
Intangible Assets 2,536 1,522
------------- -------------
TOTAL ASSETS $2,492,117 $11,964,232
============= =============
LIABILITIES AND SHAREHOLDERS DEFICIENCY
Current Liabilities
Accounts payable and accrued liabilities $1,908,415 $1,776,920
Lease Line of Credit - 294,539
Accrued payroll-related expenses 1,687,833 1,293,938
Short term notes payable 3,129,986 176,581
Accrued interest payable 372,326 126,229
------------- -------------
Total Current Liabilities 7,098,560 3,668,207
------------- -------------
Long-term liabilities
Long-term notes payable, net of discount 835,089 -
------------- -------------
Total Liabilities $7,933,649 $3,668,207
------------- -------------
Shareholders' Deficiency
Series A Preferred Stock 625,000 -
Series B Preferred Stock 859,000 -
Common Stock 1,475,262 16,578,041
Additional paid-in capital 2,005,289 6,804,807
Accumulated deficiency (10,406,083) (15,086,823)
------------- -------------
Total Shareholders' Deficiency (5,441,532) 8,296,025
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS'
DEFICIENCY $2,492,117 $11,964,232
============= =============
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