BOCA RATON, Fla., May 20 /PRNewswire-FirstCall/ — Sunair Services Corporation (NYSE Amex: SNR) announced financial results for its second fiscal quarter ended March 31, 2009.
Revenues from continuing operations for the second quarter ended March 31, 2009 were $12.6 million, compared to revenues of $14.3 million for the second quarter of the prior year. The Company incurred a loss from continuing operations of $(1,086,685) for the second fiscal quarter ended March 31, 2009, or $(0.08) per basic and diluted share, compared to a loss of $(1,239,404) for the same quarter last year, or $(0.09) per basic and diluted share.
The Company incurred a tax affected income from discontinued operations of $275,000 for the second quarter of 2009, or $0.02 per basic and diluted share, compared to tax affected income of $172,208 from discontinued operations for the comparable period last year, or $0.01 per basic and diluted share.
The Company reported a net loss of $(811,685) for the second quarter ended March 31, 2009, or $(0.06) per basic and diluted share, compared to a net loss of $(1,067,196) for the same quarter last year, or $(0.08) per basic and diluted share.
Comments from Management
Jack I. Ruff, Chief Executive Officer and President of Sunair Services stated, “This is our third consecutive quarter of improved operating results over last year. Unfortunately our earnings results were negatively impacted in the second quarter by significant increased legal expenses due to a shareholder dispute. Despite this, our commitment to improving Sunair’s operations and profitability were demonstrated through our enhanced financial performance. We have instituted various initiatives that focus on revenue growth which will both help our Company in the current challenging business environment and strengthen Sunair’s long-term growth prospects. Our focus remains revenue growth, increasing profitability and deleveraging.”
ABOUT SUNAIR
Sunair Services Corporation, a Florida corporation, through its wholly owned subsidiary, Middleton Pest Control, Inc., with headquarters located in Orlando, Florida, provides pest control and lawn care services to both residential and commercial customers. Middleton provides essential pest control services and protection against termites and insects to homes and businesses. In addition, Middleton supplies lawn care services to homes and businesses, which includes fertilization treatments and protection against disease, weeds and insects for lawns and shrubs. For more information about Sunair, please visit http://www.sunairservices.com.
Information Regarding Forward Looking Statements
Some of the statements in this press release, including those that contain the words “anticipate,” “believe,” “plan,” “estimate,” “expect,” “should,” “intend” and other similar expressions, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements or those of our industry to be materially different from any future results, performance or achievements expressed or implied by those forward-looking statements. Among the factors that could cause actual results, performance or achievement to differ materially from those described or implied in the forward-looking statements include the success of the Company’s growth initiatives, demand for the Company’s lawn care and pest control services, general economic conditions, competition, potential technology changes, the risks inherent in new product and service introductions, the risks inherent in the entry into new geographic markets, and other factors included in Sunair’s filings with the SEC, including but not limited to the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2009. Copies of Sunair’s SEC filings are available from the SEC or may be obtained upon request from Sunair. Sunair does not undertake any obligation to update the information contained herein, which speaks only as of this date.
SUNAIR SERVICES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2009 AND SEPTEMBER 30, 2008
(UNAUDITED)
March 31, September 30,
2009 2008
---------- ----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $1,267,875 $2,974,382
Accounts receivable, net 1,905,884 2,597,447
Inventories, net 1,185,965 1,403,832
Prepaid and other current assets 631,856 2,829,535
------- ---------
Total Current Assets 4,991,580 9,805,196
--------- ---------
PROPERTY, PLANT, AND EQUIPMENT, net 1,601,888 1,907,213
OTHER ASSETS:
Software costs, net 439,849 246,979
Customer list, net 5,594,502 7,456,704
Goodwill 62,112,528 62,112,528
Other assets 227,751 254,790
------- -------
Total Other Assets 68,374,630 70,071,001
---------- ----------
TOTAL ASSETS $74,968,098 $81,783,410
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $1,218,066 $1,787,406
Accrued expenses 3,470,494 3,256,342
Unearned revenues 665,272 863,770
Customer deposits 2,855,478 3,149,715
Revolving line of credit, current portion - 4,100,000
Notes payable and capital leases,
current portion 2,574,012 2,306,189
--------- ---------
Total Current Liabilities 10,783,322 15,463,422
---------- ----------
LONG TERM LIABILITIES:
Notes payable and capital leases,
net of current portion 3,101,922 3,682,184
Note payable -related party 5,000,000 5,000,000
Revolving line of credit, net of
current portion 5,500,000 5,500,000
--------- ---------
Total Long Term Liabilities 13,601,922 14,182,184
---------- ----------
TOTAL LIABILITIES 24,385,244 29,645,606
---------- ----------
STOCKHOLDERS' EQUITY:
Preferred stock, no par value - -
Common stock, $.10 par value 1,309,110 1,309,110
Additional paid-in capital 52,872,519 52,756,311
Accumulated deficit (3,598,775) (1,927,617)
---------- ----------
Total Stockholders' Equity 50,582,854 52,137,804
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $74,968,098 $81,783,410
=========== ===========
SUNAIR SERVICES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE SIX MONTHS FOR THE THREE MONTHS
ENDED MARCH 31, ENDED MARCH 31,
2009 2008 2009 2008
---- ---- ---- ----
SALES $25,324,234 $27,815,388 $12,604,368 $14,337,757
COST OF SALES 9,604,002 10,855,628 4,552,309 5,615,361
--------- ---------- --------- ---------
GROSS PROFIT 15,720,232 16,959,760 8,052,059 8,722,396
SELLING,
GENERAL AND
ADMINISTRATIVE
EXPENSES 17,143,024 19,821,852 8,926,832 9,667,352
---------- ---------- --------- ---------
LOSS FROM
OPERATIONS (1,422,792) (2,862,092) (874,773) (944,956)
OTHER INCOME
(EXPENSES):
Interest income 1,852 108,726 151 62,689
Interest expense (476,559) (725,937) (213,534) (346,310)
(Loss) gain
on disposal
of assets (10,353) (6,157) 1,471 (10,827)
Gain on
extinguishment
of debt 25,000 - - -
------ ---- ---- ----
Total Other
Income
(Expenses) (460,060) (623,368) (211,912) (294,448)
-------- -------- -------- --------
LOSS FROM
OPERATIONS
BEFORE
INCOME TAXES (1,882,852) (3,485,460) (1,086,685) (1,239,404)
INCOME TAX
PROVISION - - - -
---- ---- ---- ----
LOSS FROM
CONTINUING
OPERATIONS (1,882,852) (3,485,460) (1,086,685) (1,239,404)
(LOSS) INCOME
FROM
DISCONTINUED
OPERATIONS,
NET 211,694 304,451 275,000 172,208
----------- ----------- --------- -----------
NET LOSS $(1,671,158) $(3,181,009) $(811,685) $(1,067,196)
=========== =========== ========= ===========
BASIC AND
DILUTED
(LOSS) INCOME
PER SHARE:
CONTINUING
OPERATIONS $(0.14) $(0.26) $(0.08) $(0.09)
====== ====== ====== ======
DISCONTINUED
OPERATIONS $0.01 $0.02 $0.02 $0.01
===== ===== ===== =====
NET LOSS $(0.13) $(0.24) $(0.06) $(0.08)
====== ====== ====== ======
WEIGHTED AVERAGE
SHARES
OUTSTANDING:
BASIC and
DILUTED 13,091,088 13,091,088 13,091,088 13,091,088
SUNAIR SERVICES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 2008 AND 2007
(UNAUDITED)
2008 2007
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,671,158) $(3,181,009)
Adjustments to reconcile net loss to
net cash provided by (used in)
operating activities:
Depreciation 417,499 454,946
Amortization 1,862,202 1,952,805
Bad debt reserve 107,646 168,194
Inventory reserve - (423,193)
Loss on sale of assets 10,353 6,157
Gain on extinguishment of debt (25,000) -
Stock-based compensation expense 116,208 203,087
(Increase) decrease in assets:
Accounts receivable 583,917 (1,382,957)
Inventories 217,867 202,980
Prepaid and other current assets 2,197,679 400,471
Other assets 27,039 3,875
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (355,188) (758,450)
Unearned revenue (198,498) 50,619
Customer deposits (294,237) 392,892
-------- -------
Net Cash Provided By (Used In)
Operating Activities 2,996,329 (1,909,583)
--------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant, and equipment (156,784) (289,352)
Software development costs (192,870) -
Cash paid for business acquisitions - (1,000,000)
Net proceeds from sale of assets 34,257 30,796
------ ------
Net Cash (Used In) Investing Activities (315,397) (1,258,556)
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of line of credit (net) (4,100,000) -
Proceeds from line of credit - 3,800,000
Repayment of notes payable and capital leases (287,439) (80,638)
-------- -------
Net Cash (Used In) Provided By
Financing Activities (4,387,439) 3,719,362
---------- ---------
Effect of exchange rate fluctuations on cash - (56,457)
---- -------
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,706,507) 494,766
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 2,974,382 2,781,838
--------- ---------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $1,267,875 $3,276,604
========== ==========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid during the period for interest $529,822 $676,228
======== ========
SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Debt incurred in acquisitions $- $600,000
==== ========
SOURCE Sunair Services Corporation