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LiqTech International, Inc. Reports 2013 Second Quarter Financial And Operational Results

August 14, 2013

- Management to host conference call today at 11:00 am ET -

BALLERUP, Denmark, Aug. 14, 2013 /PRNewswire/ — LiqTech International, Inc. (LIQT) a clean technology company that manufactures and markets highly specialized filtration technologies, announced today its financial and operational results for second quarter 2013.

Financial highlights for the three months ended June 30, 2013

    --  Net sales for the three month period ended June 30, 2013 were $2,805,921
        compared to $3,953,335 for the same period in 2012, representing a
        decrease of $1,147,414 or 29.0%.
    --  Diesel Particulate Filter ("DPF filter") sales decreased $979,422 or
        38.9%, liquid filter sales decreased $348,773 or 25.2% and Kiln
        furniture sales increased $180,781 or 367.1% compared to the same period
        in 2012.
    --  Gross profit for the three month period ended June 30, 2013 was $292,521
        compared to $416,167 for the same period in 2012 representing a decrease
        of $123,646 or 29.7%.
    --  The net loss attributable to LiqTech for the three month period ended
        June 30, 2013 was $1,308,102 compared to net loss of $552,509 for the
        same period in 2012, representing an increase of $755,593.
    --  Included in the net loss for the three month period ended June 30, 2013
        is non-cash compensation of $743,519, depreciation and amortization of
        $374,560, and other non-cash charges of $55,795, or total non-cash
        charges of $1,173,874.

Financial highlights for the six months ended June 30, 2013

    --  Net sales for the six month period ended June 30, 2013 were $6,205,069
        compared to $10,295,056 for the same period in 2012, representing a
        decrease of $4,089,987, or 39.7%.
    --  DPF filter sales decreased $4,384,683 or 55.8%, liquid filter sales
        decreased $47,748 or 2.1% and Kiln furniture sales increased $342,444 or
        226.1% compared to the same period in 2012.
    --  Gross profit for the six month period ended June 30, 2013 was $854,544
        compared to $2,505,851 for the same period in 2012 representing a
        decrease of $1,651,307 or 65.9%.
    --  The net loss attributable to LiqTech for the six month period ended June
        30, 2013 was $1,977,913 compared to net loss of $229,907 for the same
        period in 2012, representing an increase of $1,748,006.
    --  Cash on hand for the six month period ended June 30, 2013 was $2,066,280
        compared to $3,873,338 for the year ended December 31, 2012,
        representing a decrease of $1,807,058.
    --  Working capital for the six month period ended June 30, 2013 was
        $6,626,966 compared to $8,069,595 for the year ended December 31, 2012,
        a decrease of $1,442,629.
    --  Included in the net loss is non-cash compensation of $774,888,
        depreciation and amortization of $776,401, or other non-cash charges of
        $83,720, or total non-cash charges of $1,635,009.

Management Commentary

Mr. Finn Helmer, CEO, stated, “While we are disappointed in the current quarter’s membrane sales, membranes interest is still growing and there are major requests regarding projects coming from all market segments – from produced water in the oil industry, desalinization systems for drinking water and for wastewater treatment. In the second quarter, we achieved incoming orders for liquid membranes at a rate that was three times higher than the same quarter last year. Further, our year-to-date order intake for the period ended June 30, 2013 was the same as for the whole year of 2012. This increasing liquid filter order rate resulted in a liquid filter backlog of approximately $3.1 million as of June 30, 2013, or approximately $1 million more than the reported liquid filter revenue for the six-month period ended June, 30, 2013.

“This market development scenario is similar to what occurred in my previous company, GIGA, where the company depended on several major projects that took a long time to materialize. However, one example where the acceptance cycle of a new technology is somewhat faster than the norm can be seen in our recent introduction of flatsheet membranes into the market. Flatsheet membranes are being used as a pre-filter for reverse osmosis filters generating drinking water from saltwater. The introduction to the marketplace of the LiqTech flatsheet membrane has been very well received and we have already quoted more than 10 major projects, which would translate into significant amount of revenue. Applications are mainly in drinking water but also for industrial waste water and process water. Over the next six months we expect that a number of these will develop into significant sales.

“The slowdown of the DPF filter business continued to decline in the second quarter compared to the first quarter and the same quarter a year earlier but we are seeing evidence that the second half of 2013 should be more positive. Kiln furniture results were very strong and our foothold in the market is increasing. We are putting additional resources in this market area and expect to show growing profits from the investment made over the past few years.

“During the last quarter LiqTech has entered a new Nanotechnology market, and we have developed the first samples of a 10 nanometer membrane together with a 4 nanometer membrane. The prototypes are part of a development project made in cooperation with several universities. We expect that the new membranes will open new markets for LiqTech when the products are ready for production over the next year.

“Generally speaking, market interest is growing in all membrane areas and we are currently seeing smaller orders from the major customers as they assess the benefits of our disruptive membrane technology in their processes. During my first four months at LiqTech, I have reviewed the technology, the customer base and the production capacity and based on what I have seen, I am confident that LiqTech has a bright future, even though current results are disappointing.”

Conference Call Details

Interested parties may participate in the call by dialing (888) 669-0684 or (862) 255-5361. It is recommended to dial in approximately 10 to 15 minutes prior to the scheduled start time. The conference call will also be available on replay starting at 3:00 p.m. ET on August 14, 2013 and ending on August 28, 2013. To access the replay, please dial (888) 539-4649 and enter the replay code 94250#. The access number for the replay for international callers is (908) 379-8864 (replay code 94250#).

- Financial charts follow -


                                                         LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES

                                                                 CONSOLIDATED BALANCE SHEETS

                                                                                                        As of                     As of

                                                                                                       June 30,                December 31,
                                                                                                      --------                ------------

                                                                                                                         2013                      2012
                                                                                                                         ----                      ----

    Current Assets:                                                                                     UNAUDITED

    Cash                                                                                                           $2,066,280                $3,873,338

    Accounts receivable, net                                                                                        1,943,316                 2,855,184

    Other receivables                                                                                                 247,730                   371,001

    Cost in excess of billing                                                                                         254,717                   217,586

    Inventories                                                                                                     4,559,984                 4,111,815

    Prepaid expenses                                                                                                   49,606                   130,560

    Current deferred tax asset                                                                                        280,251                   267,332

          Total Current Assets                                                                                      9,401,884                11,826,816
                                                                                                                    ---------                ----------

    Property and Equipment, net accumulated depreciation                                                            6,136,593                 6,649,817
                                                                                                                    ---------                 ---------

    Other Assets:

        Long term receivable                                                                                                -                   118,258

    Other investments                                                                                                 175,510                   158,141

    Long term tax asset                                                                                               802,201                    75,947

    Other intangible assets                                                                                            26,196                    29,150

    Deposits                                                                                                          180,792                   182,020

          Total Other Assets                                                                                        1,184,699                   563,516
                                                                                                                    ---------                   -------

          Total Assets                                                                                            $16,723,176               $19,040,149
                                                                                                                  ===========               ===========


                                                                       LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES

                                                                                CONSOLIDATED BALANCE SHEETS

                                                                                                                      As of                      As of

                                                                                                                     June 30,                 December 31,
                                                                                                                    --------                 ------------

                                                                                                                                       2013                       2012
                                                                                                                                       ----                       ----

    Current Liabilities:                                                                                              UNAUDITED

    Current portion of capital lease obligations                                                                                   $204,006                   $203,503

    Accounts payable                                                                                                              1,283,021                  2,289,231

    Accrued expenses                                                                                                                810,069                    760,881

    Billing in excess of cost                                                                                                       189,710                    237,063

        Accrued income taxes payable                                                                                                  1,000                      1,000

        Deferred revenue                                                                                                            287,112                    265,543

          Total Current Liabilities                                                                                               2,774,918                  3,757,221
                                                                                                                                  ---------                  ---------

         Long-term capital lease obligations, less current portion                                                                  622,496                    729,567

          Total Long-Term Liabilities                                                                                               622,496                    729,567
                                                                                                                                    -------                    -------

          Total Liabilities                                                                                                       3,397,414                  4,486,788
                                                                                                                                  ---------                  ---------

    Stockholders' Equity:

        Common stock; par value $0,001, 100,000,000 shares authorized,                                                               24,512                     24,112

        24,511,500 and 24,111,500 shares issued and outstanding at

        June 30, 2013 and  December 31, 2012, respectively

    Additional paid-in capital                                                                                                   14,857,805                 12,658,405

    Retained earnings                                                                                                               532,780                  2,510,693

    Deferred compensation                                                                                                        (1,550,389)                  (125,477)

    Other comprehensive income, net                                                                                                (565,603)                  (542,806)

    Non-controlled interest in subsidiaries                                                                                          26,657                     28,434

          Total Stockholders' Equity                                                                                             13,325,762                 14,553,361
                                                                                                                                 ----------                 ----------

         Total Liabilities and Stockholders' Equity                                                                             $16,723,176                $19,040,149
                                                                                                                                ===========                ===========


                                                                   LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES

                                                                (UNAUDITED) CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                                                            For the Three Months Ended             For the Six Months Ended

                                                                                                                     June 30,                              June 30,

                                                                                                                      2013                   2012              2013                2012
                                                                                                                      ----                   ----              ----                ----

    Net Sales                                                                                                   $2,805,921             $3,953,335        $6,205,069         $10,295,056

    Cost of Goods Sold                                                                                           2,513,400              3,537,168         5,350,525           7,789,205
                                                                                                                 ---------              ---------                             ---------

    Gross Profit                                                                                                   292,521                416,167           854,544           2,505,851
                                                                                                                   -------                -------           -------           ---------

    Operating Expenses:

    Selling expenses                                                                                               715,592                599,459         1,289,517           1,259,377

    General and administrative expenses                                                                            541,824                518,017         1,204,129           1,207,928

    Non-cash compensation expenses                                                                                 743,519                 32,602           774,888              65,203

    Research and development expenses                                                                              111,254                152,626           258,239             379,300

          Total Operating Expense                                                                                2,112,189              1,302,704         3,526,773           2,911,808
                                                                                                                 ---------              ---------         ---------           ---------

    Loss from Operations                                                                                        (1,819,668)              (886,537)       (2,672,229)           (405,957)
                                                                                                                ----------               --------        ----------            --------

    Other Income (Expense)

    Interest and other income                                                                                        2,244                 59,876             2,400              98,839

        Interest (expense)                                                                                         (12,952)               (41,372)          (24,657)           (125,888)

    Gain (loss) on currency transactions                                                                            77,199                 65,048           (36,974)             63,599

        Loss on sale of fixed assets                                                                                (2,135)                     -            (2,135)                  -

          Total Other Income (Expense)                                                                              64,356                 83,552           (61,366)             36,550
                                                                                                                    ------                 ------           -------              ------

    Loss Before Income Taxes                                                                                    (1,755,312)              (802,985)       (2,733,595)           (369,407)

    Income Tax Expense (Income)                                                                                   (444,659)              (250,476)         (741,523)           (139,500)

    Net Loss                                                                                                    (1,310,653)              (552,509)       (1,992,072)           (229,907)

    Less Net Loss Attributable To

       Non-Controlled Interests in Subsidiaries                                                                     (2,551)                     -           (14,159)                  -

    Net Loss Attributable To LiqTech                                                                           $(1,308,102)             $(552,509)      $(1,977,913)          $(229,907)
                                                                                                               -----------              ---------       -----------           ---------

    Basic Earnings Per Share                                                                                        $(0.05)                $(0.02)           $(0.08)             $(0.01)
                                                                                                                    ------                 ------            ------              ------

    Weighted Average Common Shares Outstanding                                                                  24,359,852             24,111,500        24,236,362          23,173,137
                                                                                                                ----------             ----------        ----------          ----------

    Diluted Earnings Per Share                                                                                      $(0.05)                $(0.02)           $(0.08)             $(0.01)
                                                                                                                    ------                 ------            ------              ------

    Weighted Average Common Shares

       Outstanding Assuming Dilution                                                                            24,359,852             24,111,500        24,236,362          23,173,137
                                                                                                                ----------             ----------        ----------          ----------

                                                The accompanying notes are an integral part of these financial statements.


                                                LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES

                                                (UNAUDITED) CONSOLIDATED STATEMENTS OF OTHER

                                                            COMPREHENSIVE INCOME

                                                                                           For the Three Months            For the Six Months

                                                                                              Ended June 30,                 Ended June 30,

                                                                                                 2013                2012                2013       2012
                                                                                                 ----                ----                ----       ----

    Net (Loss)                                                                             (1,310,653)           (552,509)         (1,992,072)  (229,907)

    Currency Translation, Net of Taxes                                                         83,648            (377,454)            (22,799)  (159,879)

    Other Comprehensive (Loss)                                                            $(1,227,005)          $(929,963)        $(2,014,871) $(389,786)
                                                                                          -----------           ---------         -----------  ---------

    Comprehensive Income (Loss) Attributable To

     Non-controlling  Interest in Subsidiaries                                                 11,392                   -                (216)      (244)

    Comprehensive (Loss) Attributable To                                                  $(1,238,397)          $(929,963)        $(2,014,655) $(389,542)

     LiqTech International Inc.

ABOUT LIQTECH INTERNATIONAL, INC. – (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.

SOURCE LiqTech International, Inc.


Source: PR Newswire