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RDX Reports Record 3QTR Earnings

Third Quarter Revenue Increases 151% to $ 13.2 Million

3QTR Revenue Increases to $ 13.21 Million

3QTR Adjusted EBITDA $ 3.72 Million

3QTR Net Income of $ 904,000

SCOTTSDALE, AZ, Feb. 27, 2014 /PRNewswire/ -

Recent operating highlights:

  • Company now on an annualized revenue run rate greater than $ 50MM.
  • Company now on an annualized EBITDA run rate of approximately $ 13MM.
  • Strong demand forecast for all business segments for fiscal 2015.
  • Announces launch of new BlueDot Industrial Franchise Program with plans to open at least 40 locations in Fiscal 2015 and at 300 locations by 2016
  • Sold equipment into additional five operating BlueDot facilities. Now six BlueDots total.
  • Worked successfully through seasonality of fuel business and now ready to sign long term energy contracts with existing and new customers beginning in March.
  • Delivered profitable results in light of seasonality of energy. Worked to eliminate seasonality in energy sales for fiscal 2015.
  • Invested over $ 2MM in four new fuel micro-finishing plants for energy customers.
  • Conducted successful trials for planned regional municipal water treatment operations.
  • Signed contract and opened escrow on excess real estate in Santa Fe Springs, California.
  • Developing RDX Europe business plan. Results to be announced in March.
  • Developing RDX Canada business plan. Results to be announced in March.
  • Successfully ran new methyl-ester based fuel to produce higher quality fuel product.
  • Started remediation program for Santa Fe Springs facility.

Dennis Danzik, Chief Executive Officer of RDX, stated, "I am pleased to report another solid quarter of both top and bottom line growth.  Our revenues increased over 150 percent from the same period last year and we achieved over $3.7 million of adjusted EBITDA for the quarter.  As a result, we are now pacing at approximately $13 million of EBITDA on an annualized basis.  In addition, we continue to strengthen our balance sheet.

"We are now generating solid cash flow, which has allowed us to begin our company stock buy-back program, purchasing approximately 400,000 shares in the open market during the quarter. Our primary focus is driving shareholder value, and we are succeeding in this mission as evidenced by our strong growth, strict financial discipline, increased profitability and improved balance sheet."

The Company will host a business update conference call today, Thursday, February 27th at 11:00 a.m. Eastern Time. Interested parties can access the conference call by dialing 877-407-0778 for U.S. callers or 201-689-8565 for international callers, or listen via a live Internet webcast on the Company's website at www.rdxh2o.com .

A teleconference replay of the conference call will be available approximately one hour following the call, through midnight Thursday, March 13, 2014, and can be accessed by dialing 877-660-6853 (U.S. callers) or 201-612-7415 (international callers) and entering conference ID: 13577169. A webcast replay of the conference call will be accessible on the Company's website at www.rdxh2o.com for 90 days.

About RDX Technologies Corporation

RDX Technologies Corporation is a water treatment and energy technology company. The Company is applying proprietary technology to treat water generated from industrial and commercial waste water markets. These markets include a wide variety of clients across a broad spectrum of industries. The Company trades on the TSX Venture Exchange under the symbol "RDX", the OTCQX as "RGDEF" and the Frankfurt Stock Exchange as "RL7".

ON BEHALF OF THE BOARD OF DIRECTORS
"Dennis M. Danzik"
Dennis M. Danzik, CEO
[email protected]

"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release. This news release may contain forward-looking statements. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. Such information is subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward- looking information. Readers are cautioned not to place undue reliance on forward-looking information, as no assurances can be given as to future results, levels of activity or achievements."

RDX TECHNOLOGIES CORPORATION
(FORMERLY RIDGELINE ENERGY SERVICES, INC)
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION
(IN CANADIAN DOLLARS)

Earnings Before Interest, Taxes, and Amortization  

The Company's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). The following table calculates earnings before interest, taxes, and amortization (EBITDA) and Adjusted EBITDA, which are not measures determined in accordance with IFRS or accounting principles generally accepted in the United States ("US GAAP"), for the three and nine months ended December 31, 2013 and 2012:  

            Three Months Ended December 31,   Nine Months Ended December 31,
            2013 2012   2013 2012
                             
Net Income (loss) - continuing operations  $ 904,000  $ (1,589,000)    $ (2,530,000)  $ (6,598,000)
                             
  Interest and other finance costs   362,000   22,000     1,036,000   57,000
  Taxes   -   -     -   53,000
  Amortization (in cost of revenue)   1,166,000   178,000     3,152,000   465,000
  Amortization (in operating costs)   864,000   870,000     2,593,000   2,257,000
EBITDA   3,296,000   (519,000)     4,251,000   (3,766,000)
                             
  Share-based payment expense   161,000   405,000     278,000   925,000
  Foreign exchange gain on CWT notes payable   702,000   -     860,000   -
  Change in fair value of PTEC earn-out   49,000   (254,000)     (154,000)   (254,000)
  Gain on forgiveness of indebtedness   (407,000)   -     (528,000)   -
  Other income   (77,000)   (25,000)     (34,000)   (72,000)
Adjusted EBITDA   3,724,000   (393,000)     4,673,000   (3,167,000)


We believe that presenting EBITDA and Adjusted EBITDA are useful to investors because they provide important information concerning our operating performance exclusive of certain non-cash and other costs.  EBITDA and Adjusted EBITDA demonstrate our ability to execute our financial strategy, which includes reinvesting in waste water related capital assets to ensure a high level of product quality, investing in capital assets to facilitate growth in our energy business, repurchasing our common stock, and maintaining and improving our market position through business optimization.  These measures have limitations.  Although amortization and share-based payment expenses are considered operating costs in accordance with IFRS and US GAAP, they represent the allocation of non-cash costs generally associated with long-lived assets acquired or constructed in prior years and non-cash compensation primarily for our employees.  Our definition of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures presented by other companies.

 

RDX TECHNOLOGIES CORPORATION
(FORMERLY RIDGELINE ENERGY SERVICES INC.)
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(IN CANADIAN DOLLARS)
             
    December 31,   March 31,
    2013   2013
        Assets              
Current assets:                        
  Cash    $ 998,093    $ 1,336,478
  Trade and other receivables, net     14,117,810     7,695,442
  Accrued revenue     -     539,395
  Inventory, net     2,355,749     1,154,134
  Prepaid expenses and other current assets     1,290,483     663,401
             
  Total current assets     18,762,135     11,388,850
               
Restricted cash     85,225     159,771
Property, plant and equipment, net     50,325,505     27,548,066
Intangible assets     16,459,913     18,404,007
Goodwill     8,407,525     2,668,952
Other assets     6,549,879     5,715,018
               
Total assets    $ 100,590,182    $ 65,884,664
               
        Liabilities and Equity              
Current liabilities:                  
  Accounts payable    $ 3,696,467    $ 5,715,945
  Accrued expenses     6,752,589     6,323,559
  Income tax payable     -     5,067
  Notes payable, current portion     5,456,454     151,069
  Obligations under finance lease, current portion     91,040     92,328
               
  Total current liabilities     15,996,550     12,287,968
               
Notes payable, non-current portion     17,600,150     1,248,116
Obligations under finance lease, non-current portion     229,619     289,379
Santa Fe Springs purchase price payable     5,771,550     5,513,251
Environmental remediation liability     5,849,800     5,588,000
PTEC earn-out     176,250     330,000
Asset retirement obligations     -     58,234
               
  Total liabilities     45,623,919     25,314,948
               
Commitments and contingencies                
                 
Equity:            
  Share capital     79,926,718     66,732,800
  Warrants     2,543,829     2,162,794
  Contributed surplus     2,569,866     2,348,691
  Treasury stock, at cost (150,000 and nil common shares, respectively)     (36,780)     -
  Accumulated other comprehensive income     2,350,514     106,144
  Accumulated deficit     (32,387,794)     (30,780,713)
                       
Total equity     54,966,263     40,569,716
             
Total liabilities and equity    $ 100,590,182    $ 65,884,664

 

 
RDX TECHNOLOGIES CORPORATION
(FORMERLY RIDGELINE ENERGY SERVICES INC.)
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS)
(IN CANADIAN DOLLARS)
                             
        Three Months Ended December 31,     Nine Months Ended December 31,
        2013   2012   2013     2012
                             
Revenue  $ 13,211,269    $ 5,272,854    $ 31,985,182    $ 7,966,400
                         
Cost of revenue:                            
  Direct expenses   8,260,066     3,564,118     21,953,641     4,981,800
  Amortization   1,166,356     177,879     3,151,831     465,545
                         
Total cost of revenue   9,426,422     3,741,997     25,105,472     5,447,345
                             
Gross profit   3,784,847     1,530,857     6,879,710     2,519,055
                           
Operating expenses:                            
  General and administrative   1,227,277     2,101,624     5,358,560     6,152,060
  Share-based payment expense   161,499     405,256     278,487     924,444
  Amortization   863,476     869,536     2,593,142     2,257,656
                           
Total operating expenses   2,252,252     3,376,416     8,230,189     9,334,160
                         
Income (loss) from operations   1,532,595     (1,845,559)     (1,350,479)     (6,815,105)
                         
Other income (expense):                            
  Finance costs   (362,000)     (21,680)     (1,036,232)     (56,653)
  Foreign exchange loss on CWT notes payable   (702,000)     -     (860,000)     -
  Change in fair value of PTEC earn-out   (48,750)     253,800     153,750     253,800
  Gain on forgiveness of indebtedness   407,466     -     528,039     -
  Other income, net   76,749     24,847     35,398     72,432
                                 
Total other income (expense)   (628,535)     256,967     (1,179,045)     269,579
                                 
Income (loss) before tax   904,060     (1,588,592)     (2,529,524)     (6,545,526)
Income tax expense   -     -     -     52,635
                         
Income (loss) from continuing operations   904,060     (1,588,592)     (2,529,524)     (6,598,161)
Income from discontinued operations   -     807,459     922,443     1,278,827
                           
Net income (loss)  $ 904,060    $ (781,133)    $ (1,607,081)    $ (5,319,334)
                           
Basic and diluted income (loss) per share - continuing operations  $ 0.01    $ (0.02)    $ (0.02)    $ (0.05)
Basic and diluted income (loss) per share - discontinued operations   -     0.01     -     0.01
                           
Basic and diluted income (loss) per share  $ 0.01    $ (0.01)    $ (0.01)    $ (0.04)
                         
Weighted average number of common shares outstanding   169,275,016     132,968,849     167,714,674     125,705,621
                               
Comprehensive income (loss):                          
  Net income (loss)  $ 904,060    $ (781,133)    $ (1,607,081)    $ (5,319,334)
  Other comprehensive income (loss) - Item
that may be reclassified subsequently to earnings:
                     
  Foreign currency translation adjustments   1,839,677     60,830     2,244,370     (100,292)
                         
  Comprehensive income (loss)  $ 2,743,737    $ (720,303)    $ 637,289    $ (5,419,626)

 

SOURCE RDX Technologies Corporation

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