SPMI Speedmissions Inc (CE)

Speedemissions, Inc. (OTC Bulletin Board: SPMI - News), a leading vehicle emissions testing and safety inspections company with stores in Atlanta, Houston, St. Louis and Salt Lake City today announced its financial results for the third quarter ended September 30, 2011.

THIRD QUARTER 2011:

• Revenue decreased $149,254 or 6.5% to $2,164,562 in the third quarter of 2011 compared to $2,313,816 in the third quarter of 2010. The decrease in revenue was primarily due to the closure of two unprofitable stores in Texas during 2011 and a decrease in same store sales of 4.4%. The decrease in same store sales is mainly attributable to increased competition and discounting at our Georgia, Texas and Utah locations.
• Store operating expenses decreased $118,867 or 8.0% to $1,368,170 in the third quarter of 2011 compared to $1,487,037 in the third quarter of 2010. The decrease in store operating expenses was partially due to the closure of two unprofitable stores in 2011. Same store operating expenses decreased $66,786 in the third quarter of 2011 compared to the third quarter of 2010.
• General and administrative expenses decreased $45,479 or 12.0% in the third quarter of 2011 compared to the third quarter of 2010.
• The Company recognized net loss of $9,132, or $0.00 per basic and diluted share in the third quarter of 2011 compared to net income of $51,095, or $0.00 per basic and diluted share in the third quarter of 2010. Excluding the one-time gain of $106,881 from the settlement of a lawsuit, our net loss in the third quarter of 2010 was $55,786.

YEAR TO DATE 2011:

• Revenue decreased $834,145 or 11.5% to $6,428,518 in the nine months ended September 30, 2011 compared to $7,262,663 in the same period of 2010. The decrease in revenue over the comparable period was primarily due to the closure of four stores in Texas since June 30, 2010, which resulted in lower revenue during the period of $537,561, and a decrease in same store sales of 5.9%. The decrease in same store sales is mainly attributable to increased competition and discounting at our Georgia, Texas and Utah locations.
• Store operating expenses decreased $385,216 or 8.4% to $4,193,946 in the nine months ended September 30, 2011 compared to $4,579,162 in the same period of 2010. The decrease in store operating expenses was primarily due to the closure of four stores in Texas since June 30, 2010 and a decrease in same store operating expenses of $200,061 in the nine months ended September 30, 2011 compared to the same period of 2010.
• General and administrative expenses decreased $170,063 or 13.5%, during the nine months ended September 30, 2011 compared to the same period of 2010.
• The Company incurred a net loss of $245,551 or ($0.01) per basic and diluted share in the nine months ended September 30, 2011 compared to net loss of $103,869 or ($0.01) per basic and diluted share in the same period of 2010. Excluding the one-time gain of $106,881 from the settlement of a lawsuit, our net loss in the nine months ended September 30, 2010 was $210,750.

Richard A. Parlontieri, President and Chief Executive Officer of Speedemissions commented:

“While we're disappointed in the same store sales for the quarter, we are encouraged by the increase we've seen in St. Louis with store over store sales. A most promising sign given that three of the stores have been open for 3+ years. As a means to combat the increased competition in both Atlanta and Salt Lake, we've added two part-time Marketing Representatives. Their task is to expand our government, corporate and fleet dealer business. There's already been improvement in the Atlanta market because of these efforts. In addition, the selling of merchandise to customers whose vehicles fail their safety inspection for light bulbs, windshield wipers etc. continues to grow as we change to more of a selling culture with our store employees.”

About Speedemissions Inc. http://www.speedemissions.com

Speedemissions, Inc., based in Atlanta, Georgia, is a leading vehicle emissions testing and safety inspections company in the United States. We provide services in certain areas where auto testing is mandated by the Environmental Protection Agency (EPA). Since the emissions testing market is highly fragmented, Speedemissions expects to be the first company to create a national brand offering their customers quick and efficient vehicle emissions testing service. The current focus of the company is in the Atlanta, Georgia; Houston, Texas; St. Louis, Missouri and Salt Lake City, Utah markets.

Certain statements contained in this news release regarding matters that are not historical facts may be forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, uncertainties pertaining to continued market acceptance for Speedemissions' products and services, its ability to succeed in growing revenue, the effect of new competitors in its market, integration of acquired businesses, and other risk factors identified from time to time in its filings with the Securities and Exchange Commission.

Speedemissions, Inc. and Subsidiaries Consolidated Balance Sheets     September 30, December 31, 2011 2010 (unaudited) Assets Current assets: Cash $ 179,264 $ 261,600 Note receivable – current portion 19,500 12,000 Certificate and merchandise inventory 68,622 77,401 Other current assets   83,103     58,819     Total current assets 350,489 409,820 Note receivable, net of current portion 87,533 89,643 Property and equipment, net 580,433 728,016 Goodwill 2,349,066 2,349,066 Other assets   105,403     105,603     Total assets $ 3,472,924   $ 3,682,148     Liabilities and Shareholders’ Equity Current liabilities: Line of credit $ 60,280 $ - Accounts payable 143,012 182,499 Accrued liabilities 190,584 196,829 Current portion of capitalized lease obligations 48,680 44,632 Current portion of equipment financing obligations 24,272 21,778 Current portion - deferred rent   35,776     35,776     Total current liabilities 502,604 481,514 Capitalized lease obligations, net of current portion 4,307 41,339 Equipment financing obligations, net of current portion 6,251 23,788 Deferred rent 107,784 159,820 Note payable 55,000 55,000 Other long term liabilities   7,350     7,350     Total liabilities   683,296     768,811   Commitments and contingencies

Series A convertible, redeemable preferred stock, $.001 par value, 5,000,000 shares   authorized, 5,133 shares issued and outstanding; liquidation preference: $5,133,000

  4,579,346     4,579,346   Shareholders’ deficit:

Series B convertible preferred stock, $.001 par value, 3,000,000 shares authorized,   63,981 shares issued and outstanding with a liquidation preference of $164,306 at   September 30, 2011 and 215,981 shares issued and outstanding with a liquidation   preference of $554,642 at December 31, 2010

64 216

Common stock, $.001 par value, 250,000,000 shares authorized, 33,904,466 and   22,789,288 shares issued and outstanding at September 30, 2011 and December   31, 2010, respectively

33,834 22,789 Additional paid-in capital 15,917,549 15,806,600 Accumulated deficit   (17,741,165 )   (17,495,614 )   Total shareholders’ deficit   (1,789,718 )   (1,666,009 )   Total liabilities and shareholders’ deficit $ 3,472,924   $ 3,682,148     Speedemissions, Inc. and Subsidiaries Consolidated Statements of Operations (unaudited)    

Three Months EndedSeptember 30

 

Nine Months EndedSeptember 30

2011   2010 2011   2010 Revenue $ 2,164,562 $ 2,313,816 $ 6,428,518 $ 7,262,663 Costs of operations: Cost of emission certificates 469,756 498,599 1,420,251 1,607,340 Store operating expenses 1,368,170 1,487,037 4,193,946 4,579,162 General and administrative expenses 334,822 380,301 1,091,861 1,261,924 (Gain) loss on disposal of assets (2,660 ) - (43,282 ) 9,713 Gain from settlement of lawsuit   -     (106,881 )   -     (106,881 )   Operating loss (5,526 ) 54,760 (234,258 ) (88,595 ) Interest income (expense) Interest income 760 1,272 2,280 1,900 Interest expense   (4,366 )   (4,937 )   (13,573 )   (17,174 )   Interest expense, net   (3,606 )   (3,665 )   (11,293 )   (15,274 )   Net loss $ (9,132 ) $ 51,095   $ (245,551 ) $ (103,869 )   Basic net income (loss) per share $ 0.00   $ 0.00   $ (0.01 ) $ (0.01 )   Diluted net income (loss) per share $ 0.00   $ 0.00   $ (0.01 ) $ (0.01 )   Weighted average common shares outstanding, basic   33,764,249     13,179,213     29,813,331     9,570,761     Weighted average common shares outstanding, diluted   33,764,249     17,456,711     29,813,331     9,570,761     Speedemissions, Inc. and Subsidiaries Consolidated Statements of Cash Flows (unaudited)    

Nine Months Ended September 30,

2011 2010 Cash flows from operating activities: Net loss $ (245,551 ) $ (103,869 ) Adjustments to reconcile net loss to net cash from operating activities: Depreciation and amortization 155,180 206,088 (Gain) loss on disposal of assets (43,282 ) 9,713 Stock issued for services 3,000 - Share-based compensation 54,842 25,201 Gain from settlement of lawsuit - (106,881 ) Changes in operating assets and liabilities: Certificate and merchandise inventory 8,779 (18,633 ) Other current assets (24,283 ) (42,481 ) Other assets 200 (1,800 ) Accounts payable and accrued liabilities (45,734 ) 33,596 Other liabilities   (54,552 )   (30,781 )   Net cash used in operating activities   (191,401 )   (29,847 )   Cash flows from investing activities: Proceeds from note receivable 12,127 3,742 Proceeds from sales of property and equipment 31,623 20,000 Purchases of property and equipment   (10,938 )   (60,449 )   Net cash provided by (used in) investing activities   32,812     (36,707 )   Cash flows from financing activities: Net proceeds from warrant exercise 64,000 - Net proceeds from line of credit 60,280 - Payments on equipment financing obligations (15,043 ) (14,716 ) Payments on capitalized leases   (32,984 )   (44,547 )   Net cash provided by (used in) financing activities   76,253     (59,263 )   Net decrease in cash (82,336 ) (125,817 ) Cash at beginning of period   261,600     449,203     Cash at end of period $ 179,264   $ 323,386     Supplemental Information: Cash paid during the period for interest $ 13,573   $ 16,513     Supplemental Disclosure of Non-Cash Activity: Note receivable from disposal of assets $ 15,000   $ -