FOR: MIDWEST ENERGY EMISSIONS CORP.
OTCQB Symbol: MEEC
Date issue: May 16, 2017
Time in: 8:30 AM e
Attention:
Q1 2017 Revenues Increase 59% to $5.4 Million
LEWIS CENTER, OH –(Marketwired – May 16, 2017) – Midwest Energy Emissions
Corp. (OTCQB: MEEC) (“ME2C” or the “Company”), a leader in mercury emissions
control in North America, has provided its financial results for the first
quarter ended March 31, 2017.
/T/
——————————————————————–
First Quarter 2017 Results
——————————————————————–
Q1 2017 Q1 2016 CHANGE (%)
————————— ————– ————– ———-
Revenues $5.4 million $3.4 million 59%
————————— ————– ————– ———-
Operating Income (Loss) ($1.1) million ($0.3) million N/A%
————————— ————– ————– ———-
GAAP Net Income (Loss) ($1.4) million $0.9 million N/A%
————————— ————– ————– ———-
Adjusted EBITDA (non-GAAP)1 $0.1 million $0.0 million 806%
————————— ————– ————– ———-
Shares Outstanding (F/D) 74.2 million 47.4 million 57%
————————— ————– ————– ———-
/T/
1. We define Adjusted EBITDA (a non-GAAP financial measure) as net income
adjusted for interest and financing fees, income taxes, depreciation,
amortization, stock based compensation and other non-cash income and expenses.
Please see “Use of Non-GAAP Financial Measures” below.
Management Commentary
“We continued our steadfast progress in the first quarter of 2017, which is
evidenced by our revenue growth of 59% to $5.4 million,” said Richard
MacPherson, President and CEO of ME2C. “In addition to our first quarter
typically being the low watermark of the year due to many southwestern
utilities decreasing electricity generation during the colder months, we have
also experienced a slower than expected closing rate of new, long term
contracts.
“While this may be due to several factors, many of our competitors have
reduced their overall cost of product in response to our growing presence in
the marketplace, which has created a more competitive landscape and
hesitations in disrupting long term legacy contracts already in place.”
MacPherson continued, “That being said, we’ve maintained a robust sales
pipeline in excess of 20 EGUs across the U.S. and Canada, which we continue to
expand upon with new opportunities added regularly, while also pursuing
opportunities abroad. For the remainder of 2017, we are squarely focused on
leveraging our IP portfolio and converting opportunities into long-term,
recurring revenue contracts, while reducing unnecessary costs and maintaining
a high margin, profitable business. In addition, we look forward to the
positive effects on our sales from the acquisition of our patents in April
2017 from the Energy & Environmental Research Center Foundation. These patents
cover our proprietary two part process for mercury control, and should provide
new opportunities for meaningful licensing revenues throughout North America.
Despite the lowered guidance for the year, our pipeline of opportunities
remains intact, which ultimately should drive shareholder value over the long
term as we execute upon our strategic initiatives.”
Recent Corporate Highlights
In January 2017, the Company announced that it added a new product to its
proven, cost-effective mercury capture program that will reduce mercury
emissions by preventing scrubber reemission events. The product is
specifically designed for coal-fired power utilities with wet scrubbers to
help remove mercury, as well as other metals, from the scrubber. This new
product has been successfully demonstrated at several large coal-burning power
facilities and has consistently proven to reduce mercury reemission from wet
flue gas desulfurization systems, achieving greater than 95% mercury control,
resulting in stack mercury emissions well below MATS compliance limits. The
Company is moving forward aggressively with this product, as there are over
150 opportunities across the nation being targeted.
In March 2017, ME2C secured an order in excess of $1,000,000 for a new
injection system for a large fleet owner of electric generating units (EGUs)
which uses ME2C’s proprietary Sorbent Enhancement Additive (SEA⃤ó) Technology.
It is expected that this order will lead to several other opportunities
throughout this customer’s fleet.
In April 2017, ME2C secured a contract renewal valued at over $5.0 million in
the aggregate over the next two years from a current utility customer in the
Midwest region of the United States. The customer has been utilizing ME2C’s
proprietary Sorbent Enhancement Additive (SEA⃤ó) Technology since 2015 to
achieve and remain in full compliance with Mercury and Air Toxic Standards
(MATS).
In April 2017, the Company acquired in entirety all of the patents related to
mercury control from the Energy & Environmental Research Center Foundation
(EERCF), located in Grand Forks, North Dakota for $2.5 million and 925,000
shares of common stock. The technology was originally developed at the
University of North Dakota Energy & Environmental Research Center.
ME2C currently has over 20 potential customer EGU’s under consideration in
varying stages of testing, demonstration and contract negotiation.
First Quarter 2017 Financial Results
Total revenues in the first quarter of 2017 increased 59% to $5.4 million,
compared to $3.4 million in the first quarter of 2016. This growth is
primarily due to higher product sales over the prior year as a result of many
of the Company’s contracted EGUs in the first quarter of 2016 not beginning
MATS compliance activities until April 2016.
Operating loss in the first quarter of 2017 was $1.1 million, compared to an
operating loss of $0.3 million in the first quarter of 2016.
Net loss in the first quarter of 2017 was $1.4 million, or ($0.02) per diluted
share, compared to net income of $0.9 million, or $0.02 per diluted share, in
the first quarter of 2016. The net loss for the first quarter of 2017 was
primarily due to a smaller increase in the change in fair value of warrant
liability as recognized in the first quarter of 2016, as well as higher
selling, general and administrative expenses.
Adjusted EBITDA in the first quarter of 2017 was $145,000, compared to $16,000
in the same year-ago quarter. These improvements were primarily due to our
customers MATS compliance activities versus the previous year when MATS
compliance was not yet required at many of the Company’s customer sites.
On March 31, 2017, the Company had cash and cash equivalents of $4.4 million,
compared to $7.8 million on December 31, 2016.
Full Year 2017 Revenue Guidance
For the full year ending December 31, 2017, the Company has adjusted guidance
and now expects revenues of between $40 million to $45 million, an increase of
between 23% to 39%, when compared to revenue of $32.3 million for the full
year ended December 31, 2016. This guidance is based on current power demand
forecasts, plant projections and additional EGU’s expected to be secured.
Conference Call and Webcast
Management will host a conference call today, May 16, 2017 at 11:30 a.m.
Eastern time to discuss ME2C’s first quarter 2017 results, provide a corporate
update, and conclude with a Q&A from participants. To participate, please use
the following information:
Date: Tuesday, May 16, 2017
Time: 11:30 a.m. Eastern time
U.S. Dial-in: 1-888-430-8691
International Dial-in: 1-719-325-2177
Conference ID: 9190392
Webcast: http://public.viavid.com/index.php?id=124007
Please dial in at least 10 minutes before the start of the call to ensure
timely participation.
A playback of the call will be available through July 16, 2017. To listen,
call 1-844-512-2921 within the United States or 1-412-317-6671 when calling
internationally. Please use the replay pin number 9190392.
About Midwest Energy Emissions Corp. (ME2C)
Midwest Energy Emissions Corp. (OTCQB: MEEC) delivers patented and proprietary
solutions to the global coal-power industry to remove mercury from power plant
emissions, providing performance guarantees, and leading-edge emissions
services. The U.S. Environmental Protection Agency (EPA) MATS rule requires
that all coal- and oil-fired power plants in the U.S., larger than 25
mega-watts remove roughly 90% of mercury from their emissions starting April
15, 2015. ME2C has developed patented technology and proprietary products that
have been shown to achieve mercury removal levels compliant with MATS at a
significantly lower cost and with less operational impact than currently used
methods, while preserving the marketability of fly-ash for beneficial use. For
more information, please visit www.midwestemissions.com.
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding our financial
results, this press release includes references to Adjusted EBITDA, a Non-GAAP
financial measure. We view Adjusted EBITDA as an operating performance measure
and, as such, we believe that the GAAP financial measure most directly
comparable to it is net income (loss). We define Adjusted EBITDA as net income
adjusted for interest and financing fees, income taxes, depreciation,
amortization, stock based compensation, and other non-cash income and
expenses. We believe that Adjusted EBITDA provides us an important measure of
operating performance. Our use of Adjusted EBITDA has limitations as an
analytical tool, and this measure should not be considered in isolation or as
a substitute for an analysis of our results as reported under GAAP, as the
excluded items may have significant effects on our operating results and
financial condition. Additionally, our measure of Adjusted EBITDA may differ
from other companies’ measure of Adjusted EBITDA. When evaluating our
performance, Adjusted EBITDA should be considered with other financial
performance measures, including various cash flow metrics, net income and
other GAAP results. In the future, we may disclose different non-GAAP
financial measures in order to help our investors and others more meaningfully
evaluate and compare our future results of operations to our previously
reported results of operations.
Safe Harbor Statement
With the exception of historical information contained in this press release,
content herein may contain “forward-looking statements” that are made pursuant
to the Safe Harbor Provisions of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are generally identified by using words
such as “anticipate,” “believe,” “plan,” “expect,” “intend,” “will,” and
similar expressions, but these words are not the exclusive means of
identifying forward-looking statements. These statements are based on
management’s current expectations and are subject to uncertainty and changes
in circumstances. Investors are cautioned that forward-looking statements
involve risks and uncertainties that could cause actual results to differ
materially from the statements made. Matters that may cause actual results to
differ materially from those in the forward-looking statements include, among
other factors, the gain or loss of a major customer, change in environmental
regulations, disruption in supply of materials, capacity factor fluctuations
of power plant operations and power demands, a significant change in general
economic conditions in any of the regions where our customer utilities might
experience significant changes in electric demand, a significant disruption in
the supply of coal to our customer units, the loss of key management
personnel, availability of capital and any major litigation regarding the
Company. In addition, this release contains time-sensitive information that
reflects management’s best analysis only as of the date of this release. The
Company does not undertake any obligation to publicly update or revise any
forward-looking statements to reflect future events, information or
circumstances that arise after the date of this release. Further information
concerning issues that could materially affect financial performance related
to forward-looking statements contained in this release can be found in the
Company’s periodic filings with the Securities and Exchange Commission.
We prepare and publicly release yearly audited financial statements prepared
in accordance with GAAP. The following table shows our reconciliation of Net
Income to Adjusted EBITDA for the quarter ended March 31, 2017 and 2016,
respectively:
/T/
Quarter Ended March 31,
—————————-
2017 2016
————- ————-
(In thousands)
Net (loss) income $ (1,445) $ 908
Non-GAAP adjustments:
Depreciation and amortization 302 164
Interest 540 2,073
Taxes 10 1
Stock based compensation 946 179
Change in warrant liability (208) (3,309)
————– ————-
Adjusted EBITDA $ 145 $ 16
/T/
We are including below our unaudited reconciliation of Net Income to Adjusted
EBITDA on a quarterly basis for the quarters ended June 30, 2016, September
30, 2016, December 31, 2016 and March 31, 2017:
/T/
Quarter Ended (Unaudited)
——————————————-
3/31/2017 12/31/2016 9/30/2016 6/30/2016
——— ———- ——— ———
(In thousands)
Net (loss) income $ (1,445) $ (246) $ (9,302) $ (8,243)
Non-GAAP adjustments:
Depreciation and amortization 302 271 249 229
Interest 540 1,060 973 1,033
Taxes 10 (497) 20 3
Stock based compensation 946 191 385 404
Change in warrant liability (208) 439 9,985 7,566
Gain on restructuring – (407) – –
——————————————-
Adjusted EBITDA $ 145 $ 811 $ 2,310 $ 992
——————————————-
/T/
/T/
MIDWEST ENERGY EMISSIONS CORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2017 AND DECEMBER 31, 2016
(UNAUDITED)
March 31, 2017 December 31,
(Unaudited) 2016
————– ————-
ASSETS
Current assets
Cash and cash equivalents $ 4,378,550 $ 7,751,557
Accounts receivable 2,205,739 3,553,096
Inventory 1,240,893 609,072
Prepaid expenses and other assets 201,905 199,495
————– ————-
Total current assets 8,027,087 12,113,220
Property and equipment, net 2,938,955 2,569,354
Deferred Tax Asset 500,000 500,000
License, net 51,475 52,945
Customer acquisition costs, net 521,359 642,203
————– ————-
Total assets $ 12,038,876 $ 15,877,722
————– ————-
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued expenses $ 950,948 $ 4,363,553
Current portion of notes payable 2,125,000 1,500,000
Current portion of equipment notes payable 58,446 39,499
Customer credits 590,206 590,206
————– ————-
Total current liabilities 3,724,600 6,493,258
Notes payable, net of discount and issuance
costs 11,208,465 11,678,669
Convertible notes payable, net of discount
and issuance costs 1,185,041 1,142,154
Warrant liability 991,000 1,313,000
Accrued interest 38,750 78,750
Equipment notes payable 213,310 143,135
————– ————-
Total liabilities 17,361,166 20,848,966
Stockholders’ deficit
Preferred stock, $.001 par value: 2,000,000
shares authorized – –
Common stock; $.001 par value; 150,000,000
shares authorized;
73,707,128 shares issued and outstanding
as of March 31, 2017
73,509,663 shares issued and outstanding
as of December 31, 2016 73,707 73,510
Additional paid-in capital 50,932,511 49,838,469
Accumulated deficit (56,328,508) (54,883,223)
————– ————-
Total stockholders’ deficit (5,322,290) (4,971,244)
————– ————-
Total liabilities and stockholders’ deficit $ 12,038,876 $ 15,877,722
————– ————-
The accompanying notes are an integral part of these condensed consolidated
financial statements.
/T/
/T/
MIDWEST ENERGY EMISSIONS CORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2017 AND 2016
(UNAUDITED)
For the Three For the Three
Months Ended Months Ended
March 31, March 31,
2017 2016
————- ————-
Revenues
Product sales $ 5,284,234 $ 2,837,628
Equipment sales 7,160 164,400
Demonstrations and consulting services 136,000 371,283
————- ————-
Total revenues: 5,427,394 3,373,311
Costs and expenses:
Cost of sales 3,785,922 2,617,188
Selling, general and administrative expenses 2,694,282 1,040,590
————- ————-
Total costs and expenses 6,480,204 3,657,778
————- ————-
Operating loss (1,052,810) (284,467)
Other (expense) income
Interest expense (540,475) (2,073,144)
Letter of credit fees (60,000) (42,667)
Change in value of warrant liability 208,000 3,309,400
————- ————-
Total other (expense) income (392,475) 1,193,589
————- ————-
Net (loss) income before taxes (1,445,285) 909,122
————- ————-
Income tax expense – (828)
————- ————-
Net (loss) income $ (1,445,285) $ 908,294
————- ————-
Net (loss) income per common share – basic and
diluted: $ (0.02) $ 0.02
============= =============
Weighted average common shares outstanding 73,585,727 47,358,618
============= =============
The accompanying notes are an integral part of these condensed consolidated
financial statements.
/T/
– END RELEASE – 16/05/2017
For further information:
Company Contact:
Richard MacPherson
Chief Executive Officer
Midwest Energy Emissions Corp.
Main: 614-505-6115
rmacpherson@midwestemissions.com
Investor Relations Contact:
Greg Falesnik
Managing Director
MZ Group – MZ North America
Main: 949-385-6449
greg.falesnik@mzgroup.us
www.mzgroup.us
COMPANY:
FOR: MIDWEST ENERGY EMISSIONS CORP.
OTCQB Symbol: MEEC
INDUSTRY: Energy and Utilities – Coal, Energy and Utilities – Utilities,
Environment – Air Pollution Control, Environment – Regulations and Law
RELEASE ID: 20170516CC006
Press Release from Marketwired 1-866-736-3779
All press releases are written by the client and have NO affiliation with the news copy written by The Canadian Press. Any questions that arise due to the content or information provided in the press release should be directed to the company/organization
issuing the release, not to The Canadian Press.