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LiqTech International Inc. Reports 2012 Fiscal Year-end Results

March 27, 2013

BALLERUP, Denmark, March 27, 2013 /PRNewswire/ – LiqTech International, Inc. (OTCQX:LIQT) a clean technology company that manufactures and markets highly specialized filtration technologies, announced today its financial and operational results for fiscal 2012.

Financial highlights for the year ended December 31, 2012

  • Net sales for the year ended December 31, 2012 were $16,921,838 compared to $21,192,177 for the year ended December 31, 2011, representing a decrease of $4,270,339 or 20 percent
  • Gross profit for the year ended December 31, 2012 was $2,704,125 compared to $5,027,811, representing a decrease of $2,323,686
  • Net income attributable to the Company for the year ended December 31, 2012 was a loss of $2,773,890 compared to a profit of $917,211 for the year ended December 31, 2011, representing a decrease of $3,691,101
  • Cash on hand for the year ended December 31, 2012 was $3,873,338 compared to $1,033,057 for the year ended December 31, 2011, representing an increase of $2,840,281, and an increase of $163,271 from the cash of $3,710,067 at September 30, 2012
  • Working capital for the year ended December 31, 2012 was $8,069,595 compared to $1,878,203 for the year ended December 31, 2011, an increase of $6,191,392
  • Over 97% of the total net loss for 2012 was due to non-cash charges for depreciation and amortization, bad debt expense, and stock option expense

Operational highlights for 2012

  • Raised net proceeds of $7.1 million in a common stock placement
  • Opened offices in Singapore and joined with the Singapore Public Utility Board in a wastewater program
  • Established sales in several new markets including Israel, Australia and India
  • Signed an exclusivity agreement with Constructora Conconcreto for LiqTech’s SiC membrane technology for water filtration in the Oil and Gas industry in Colombia and Venezuela
  • Signed a non-exclusive OEM supply agreement with Denovo in China for LiqTech’s SiC membrane technology. The OEM agreement includes progressive minimum order quantities for the years 2013-2016 for Denovo to maintain the supply agreement

2013 highlights to date

  • Signed an exclusive multi-year, multi-million agreement with FMC Technologies for unconventional shale oil/gas applications
  • Breakthrough in achieving liquid sterilization by using a LiqTech filter
  • Developed a new silicon carbide membrane flat sheet product
  • Developed a new silicon carbide membrane disc product

In discussing the 2012 results, Mr. Lasse Andreassen, CEO, stated, “LiqTech’s financial results reflect a continued pattern of neglect in enforcing mandates by the California Air Resources Board (“CARB”) where a projected 12,000 Diesel Particulate Filters (“DPF filters”) were due to be installed in 2012 with only a relatively small fraction of that amount actually installed.”

“While we still believe that the mandate will be enforced and we will continue to sell DPF filters to satisfy that ultimate demand, we are focusing on our disruptive Silicon Carbide membrane technology for liquids which represents a vast market opportunity to LiqTech.”

“We have discussed the lengthy testing period that our potential customers put our membranes through before reaching a decision; some take as long as several years, but the end result is worth the time. The recent announcement of our exclusive agreement with FMC Technologies for the use of our Silicon Carbide membranes in unconventional shale oil/gas applications entailed over a year of discussions and testing, but is just one example of the benefits of our patience and sales efforts.”

“When we first introduced our silicon carbide membrane technology to customers we met the usual resistance and skepticism that new disruptive technologies face but over the last several years the number of customers testing our membranes has grown from just a handful, but now numbers over 150. We have announced a number of those arrangements and agreements and we anticipate that number will continue to show significant growth.”

“We are extremely excited about the revenue opportunities that abound and expect the revenue potential from membrane sales to ramp up rapidly going forward. Consequently, in building for our future we faced some significant bumps in the road but we are more optimistic than ever about our future.”

-Financial charts follow-

                                                         LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES

                                                                  CONSOLIDATED BALANCE SHEETS

                                                                                                          As of                   As of

                                                                                                      December 31,            December 31,
                                                                                                      ------------            ------------

                                                                                                                         2012                    2011
                                                                                                                         ----                    ----

    Current Assets:

    Cash                                                                                                           $3,873,338              $1,033,057

    Accounts receivable, net                                                                                        2,855,184               5,299,569

    Other receivables                                                                                                 371,001               1,528,362

    Cost in excess of billing                                                                                         217,586                 256,161

    Inventories                                                                                                     4,111,815               2,980,583

    Prepaid expenses                                                                                                  130,560                 301,375

    Current deferred tax asset                                                                                        267,332                  17,786
                                                                                                                      -------                  ------

    Total Current Assets                                                                                           11,826,816              11,416,893
                                                                                                                   ----------              ----------

    Property and Equipment, net accumulated depreciation                                                            6,649,817               6,647,217
                                                                                                                    ---------               ---------

    Other Assets:

        Long term receivable                                                                                          118,258                       -

    Other investments                                                                                                 158,141                   6,483

    Long term tax asset                                                                                                75,947                       -

    Other intangible assets                                                                                            29,150                  34,167

    Deposits                                                                                                          182,020                 146,184

    Total Other Assets                                                                                                563,516                 186,834
                                                                                                                      -------                 -------

          Total Assets                                                                                            $19,040,149             $18,250,944
                                                                                                                  ===========             ===========

                                                                                         LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES

                                                                                                  CONSOLIDATED BALANCE SHEETS

                                                                                                                                                                                                                                     As of                 As of

                                                                                                                                                                                                                                 December 31,          December 31,
                                                                                                                                                                                                                                 ------------          ------------

                                                                                                                                                                                                                                              2012             2011
                                                                                                                                                                                                                                              ----             ----

    Current Liabilities:

        Lines of credit                                                                                                                                                                                                     $                    -       $1,259,936

    Notes payable - current portion                                                                                                                                                                                                              -          259,396

    Notes payable - related party, net of discount                                                                                                                                                                                               -        3,328,183

    Current portion of capital lease obligations                                                                                                                                                                                           203,503          191,444

    Accounts payable - trade                                                                                                                                                                                                             2,289,231        3,026,960

    Accrued expenses                                                                                                                                                                                                                       760,881        1,375,714

    Billing in excess of cost                                                                                                                                                                                                              237,063           93,347

        Accrued income taxes payable                                                                                                                                                                                                         1,000            3,710

        Deferred revenue                                                                                                                                                                                                                   265,543                -

    Total Current Liabilities                                                                                                                                                                                                            3,757,221        9,538,690
                                                                                                                                                                                                                                         ---------        ---------

        Notes payable and long-term debt, less current portion                                                                                                                                                                                   -          350,000

        Long-term capital lease obligations, less current portion                                                                                                                                                                          729,567          950,351

        Deferred tax liability                                                                                                                                                                                                                   -          668,484

    Total Long-Term Liabilities                                                                                                                                                                                                            729,567        1,968,835
                                                                                                                                                                                                                                           -------        ---------

    Total Liabilities                                                                                                                                                                                                                    4,486,788       11,507,525
                                                                                                                                                                                                                                         ---------       ----------

    Stockholders' Equity:

    Common stock; par value $0,001, 100,000,000 shares                                                                                                                                                                                      24,112           21,600

    authorized,  24,111,500 and  21,600,000 shares issued and

    outstanding  at  December 31, 2012 and  December 31, 2011,

    respectively

        Additional paid-in capital                                                                                                                                                                                                      12,658,405        5,603,517

        Retained earnings                                                                                                                                                                                                                2,510,693        5,284,583

        Deferred compensation                                                                                                                                                                                                             (125,477)        (268,282)

        Other comprehensive income, net                                                                                                                                                                                                   (542,806)        (596,011)

        Note receivable from a shareholder, net of discount                                                                                                                                                                                      -       (3,328,183)

        Non-controlled interest in subsidiaries                                                                                                                                                                                             28,434           26,195

    Total Stockholders' Equity                                                                                                                                                                                                          14,553,361        6,743,419
                                                                                                                                                                                                                                        ----------        ---------

    Total Liabilities and Stockholders' Equity                                                                                                                                                                                         $19,040,149      $18,250,944
                                                                                                                                                                                                                                       ===========      ===========
                                               LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES

                                                   CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                                            FOR THE YEAR ENDED

                                                                                               DECEMBER 31,

                                                                                                   2012               2011
                                                                                                   ----               ----

    Net Sales                                                                               $16,921,838        $21,192,177

    Cost of Goods Sold                                                                       14,217,713         16,164,366
                                                                                                                ----------

    Gross Profit                                                                              2,704,125          5,027,811
                                                                                              ---------          ---------

    Operating Expenses:

    Selling expenses                                                                          2,434,541          1,484,992

    General and administrative                                                                3,421,658          1,943,333

    Research and development                                                                    742,009            502,413

    Total Operating Expenses                                                                  6,598,208          3,930,738
                                                                                              ---------          ---------

    Income (Loss) from Operations                                                            (3,894,083)         1,097,073
                                                                                             ----------          ---------

    Other Income (Expense)

    Interest and other income                                                                   158,632            100,986

        Interest (expense)                                                                     (148,611)          (203,682)

    (Loss) on investments                                                                      (102,612)           (57,684)

    Gain on currency transactions                                                                48,145             10,271

        Gain (loss) on sale of fixed assets                                                        (889)           411,436

    Total Other Income (Expense)                                                                (45,335)           261,327
                                                                                                -------            -------

    Income Before Income Taxes                                                               (3,939,418)         1,358,400

    Income Tax Expense (Benefit)                                                             (1,165,528)           359,508
                                                                                             ----------            -------

    Net Income (Loss)                                                                        (2,773,890)           998,892

    Less Net Income Attributable To

    Non-Controlled Interests in Subsidiaries                                                          -             81,681
                                                                                                    ---

    Net Income (Loss) Attributable To LiqTech                                               $(2,773,890)          $917,211
                                                                                            -----------           --------

    Basic Earnings (Loss) Per Share                                                              $(0.12)             $0.06
                                                                                                 ------              -----

    Weighted Average Common Shares Outstanding                                               23,644,883         14,165,217
                                                                                             ----------         ----------

                                                                                                 $(0.12)             $0.06

    Diluted Earnings (Loss) Per Share

    Weighted Average Common Shares Outstanding

    Assuming Dilution                                                                        23,644,883         16,096,973
                                                                                             ----------         ----------

                                                     LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES

                                                CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME

                                                                                                      FOR THE YEAR ENDED

                                                                                                         DECEMBER 31,

                                                                                                             2012              2011
                                                                                                             ----              ----

    Net Income (Loss)                                                                                  (2,773,890)          998,892

    Currency Translation, Net of Taxes                                                                     53,205           327,323

    Other Comprehensive Income (Loss)                                                                 $(2,720,685)       $1,326,215
                                                                                                      -----------        ----------

    Comprehensive Income (Loss) Attributable To

     Non-controlling  Interest in Subsidiaries                                                              2,239            94,246

    Comprehensive Income (Loss) Attributable To                                                       $(2,722,924)       $1,231,969

    LiqTech International Inc.

ABOUT LIQTECH INTERNATIONAL, INC. – (OTCQX: LIQT)

LiqTech International, Inc., a Nevada corporation, is a clean technology company that for more than a decade has developed and provided state-of-the-art technologies for gas and liquid purification using ceramic silicon carbide filters, particularly, highly specialized filters for the control of soot exhaust particles from diesel engines and for liquid filtration. It also manufactures kiln furniture. Using nanotechnology, LiqTech develops products using proprietary silicon carbide technology. LiqTech’s products are based on unique silicon carbide membranes, which facilitate new applications and improve existing technologies. For more information, please visit www.liqtech.com.

Forward-Looking Statements?This press release contains “forward-looking statements.” Although the forward-looking statements in this release reflect the good faith judgment of management, forward-looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by us in the our reports filed with the Securities and Exchange Commission, including the risk factors that attempt to advise interested parties of the risks that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this release.

CONTACT:
Wolfe Axelrod Weinberger Associates, LLC
Stephen D. Axelrod, CFA/Adam Lowensteiner
(212) 370-4500, (212) 370-4505
steve@wolfeaxelrod.com, adam@wolfeaxelrod.com

SOURCE LiqTech International, Inc.


Source: PR Newswire