Quarterly Revenue Tops $8.4 Million;
$16.9 Million Generated at Six-Month End
SANTA ROSA, Calif., Aug. 19, 2010 (GLOBE NEWSWIRE) -- American TonerServ Corp. (OTCBB:ASVP) ("ATS"), a leader in the highly fragmented $6.0 billion printer supplies and services industry, reports sequential revenue growth for the 2nd quarter and six-months ended June 30, 2010.
Financial highlights for the 2nd quarter ended June 30, 2010 include:
-
Revenue increased 14% to $8,366,924 compared with $7,356,376 reported for the second quarter of 2009
- Gross profit decreased 9% to $2,034,938 compared with $2,233,817 reported in the second quarter of 2009
Financial highlights for the six-months ended June 30, 2010 include:
-
Revenue increased 23.2% to $16,914,265 compared with $13,732,491 reported for the six-month period ended June 30, 2009.
- Gross profit decreased 3% to $4,111,435 compared with $4,215,222 reported for the six-month period ended June 30, 2009
Chuck Mache, CEO of American TonerServ, commented: "We are very pleased with ATS' continued revenue growth in the first half of 2010, especially during these difficult economic times. We're encouraged that all of our subsidiaries realized gains over 2009 during this period."
Mr. Mache continued: "Through the execution of our organic growth strategies, our gross profit decreased because of our conscious decision to add OEM cartridge sales which historically have had lower margins than our compatible cartridge business. We believe this will give us the best opportunity for future conversion to our compatible toner cartridges which are less costly to our customers and historically have better gross margins for the Company. Additionally, we lowered our pricing to a significant customer which resulted in an increase in compatible cartridge sales. We made this move based on our belief that it will result in a higher gross profits in the future. In preparation for such moves, we significantly reduced our overhead expenses at the headquarters and subsidiary levels."
About American TonerServ
American TonerServ (OTCBB:ASVP) is a leading marketer of compatible and original-equipment-manufactured toner cartridges. The company is strategically building a nationwide organization to efficiently serve the printing needs of small- and medium-sized businesses by executing on key organic growth initiatives designed to build sales distribution across the country. In the more than $6.0 billion recycled printer cartridge and printer services industry, the company offers top-quality, environmentally friendly products and local service teams to its customers. Please see www.AmericanTonerServ.com for more information.
The American Tonerserv Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7885
Forward Looking Information
Except for historical information contained herein, the matters set forth above may be forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ from those in the forward-looking statements. Words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the current beliefs of management, as well as assumptions made by and information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors such as the level of business and consumer spending, the amount of sales of the Company's products, the competitive environment within the industry, the ability of the Company to continue to expand its operations, the level of costs incurred in connection with the Company's expansion efforts, economic conditions in the industry and the financial strength of the Company's customers and suppliers. The Company does not undertake any obligation to update such forward-looking statements. Investors are also directed to consider all other risks and uncertainties.
| AMERICAN TONERSERV CORP. AND SUBSIDIARIES | ||||
| RESULTS OF OPERATIONS | ||||
| Three months ended | Six months ended | |||
| June 30, | June 30, | |||
| 2010 | 2009 | 2010 | 2009 | |
| Revenues: | ||||
| Toner and supplies | $7,402,682 | $6,352,595 | $14,911,221 | $11,717,620 |
| Service | 964,242 | 1,003,981 | 2,003,044 | 2,014,871 |
| Total revenues | 8,366,924 | 7,356,376 | 16,914,265 | 13,732,491 |
| Cost of sales: | ||||
| Toner | 5,891,014 | 4,644,588 | 11,839,567 | 8,814,812 |
| Service | 440,962 | 477,971 | 963,263 | 702,457 |
| Total cost of sales | 6,331,976 | 5,122,559 | 12,802,830 | 9,517,269 |
| Gross profit | 2,034,948 | 2,233,817 | 4,111,435 | 4,215,222 |
| Operating expenses: | ||||
| Salaries and wages | 797,573 | 872,044 | 1,647,707 | 1,749,613 |
| Professional fees and services | 235,540 | 494,652 | 456,199 | 783,309 |
| Sales and marketing | 647,668 | 610,748 | 1,448,842 | 1,100,500 |
| General and administrative | 482,350 | 500,250 | 1,030,122 | 987,530 |
| Amortization of intangible assets | 178,833 | 181,310 | 360,448 | 353,491 |
| Total operating expenses | 2,341,964 | 2,659,004 | 4,943,318 | 4,974,443 |
| Loss from operations | (307,016) | (425,187) | (831,883) | (759,221) |
| Other (expense) income: | ||||
| Change in fair value of warrant liability | 55,966 | 35,603 | 427,346 | 452,669 |
| Loss on extinguishment of debt | -- | -- | (1,454,245) | -- |
| Loss on disposal of assets | (117,539) | -- | (117,539) | -- |
| Fair value of convertible debt | -- | 250,000 | -- | 250,000 |
| Interest expense, net | (670,798) | (430,019) | (1,827,908) | (793,419) |
| Other income | -- | 1,151 | 455 | 3,905 |
| Net loss | $(1,039,387) | $(568,452) | $(3,803,774) | $ (846,066) |
| Net loss per share: | ||||
| Basic and diluted | $(0.01) | $(0.01) | $(0.05) | $(0.01) |
| Weighted average number of shares outstanding: | ||||
| Basic and diluted | 84,445,675 | 78,154,691 | 83,678,983 | 77,873,619 |
| BALANCE SHEET DATA | ||
| Condensed Consolidated Balance Sheet | ||
| June 30, | ||
| 2010 | December 31, | |
| (unaudited) | 2009 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | $3,678 | $92,872 |
| Short term restricted cash | 1,000,000 | -- |
| Accounts receivable, net | 3,844,877 | 3,795,301 |
| Inventory, net | 1,092,869 | 1,029,404 |
| Prepaid expenses and other current assets | 131,662 | 95,528 |
| Deferred compensation | 25,371 | 132,533 |
| Total current assets | 6,098,457 | 5,145,638 |
| Intangible assets, net | 3,047,428 | 3,604,035 |
| Goodwill | 6,935,468 | 7,127,999 |
| Property and equipment, net | 518,888 | 539,137 |
| Deferred financing costs | 487,026 | 583,916 |
| Other assets | 51,044 | 51,044 |
| Total assets | $17,138,311 | $17,051,769 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities | ||
| Cash overdraft | $152,795 | $ -- |
| Accounts payable and accrued expenses | 4,595,346 | 4,242,676 |
| Shareholder advances | 122,451 | 247,350 |
| Revolving line of credit | 2,211,386 | 1,751,818 |
| Notes payable - current portion, net | 2,228,304 | 1,687,577 |
| Notes payable - related parties, net | 404,822 | 632,653 |
| Convertible notes payable - current portion, net | 700,282 | 729,365 |
| Convertible notes payable - related parties, net | 687,177 | -- |
| Deferred revenue | 105,920 | 146,111 |
| Total current liabilities | 11,208,483 | 9,437,550 |
| Long-term liabilities | ||
| Convertible notes payable, net | 1,896,818 | 1,489,779 |
| Convertible notes payable - related parties, net | 810,606 | 1,672,986 |
| Notes payable, net | 416,017 | 692,432 |
| Note payable - related parties, net | 150,000 | 264,080 |
| Warrant liabilities | 256,351 | 683,697 |
| Total long-term liabilities | 3,529,792 | 4,802,974 |
| Total liabilities | 14,738,275 | 14,240,524 |
| Commitments and contingencies | ||
| Stockholders' equity: | ||
|
Series D and E Preferred stock, $0.001 par value 50,000,000 shares authorized; 7,801,200 shares issued and outstanding at June 30, 2010 and December 31, 2009, respectively |
7,801 | 7,801 |
|
Common stock, $0.001 par value 450,000,000 shares authorized; 85,587,137 and 78,625,995 shares issued and outstanding at June 30, 2010 and December 31, 2009, respectively |
85,587 | 78,626 |
| Additional paid-in capital | 31,547,670 | 28,162,066 |
| Accumulated deficit | (29,241,022) | (25,437,248) |
| Total stockholders' equity | 2,400,036 | 2,811,245 |
| Total liabilities and stockholders' equity | $17,138,311 | $17,051,769 |