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. -0- *T 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 ============= ============= *T
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