LiqTech International, Inc. Reports 2014 First Quarter Financial And Operational Results

- Management to Conduct Conference Call today, May 15th at 11am ET -

News provided by

May 15, 2014, 09:15 ET

BALLERUP, Denmark, May 15, 2014 /PRNewswire/ -- LiqTech International, Inc., (NYSE: LIQT) a clean technology company that manufactures and markets highly specialized filtration technologies, announced today its financial and operational results for first quarter 2014.

2014 Q1 highlights

Sales of silicon carbide liquid membrane filters were 48% of total first quarter sales as we continue to gain traction in several key market segments.
Gross margins continue to improve as our new production processes are resulting in higher yields and lower manufacturing cost.
Current actions by CARB (California Air Resources Board) are expected to result in increasing orders for DPF filters this year.
We received a purchase order for approximately $300,000 for a prototype algae separation system based upon a new development in LiqTech silicon carbide liquid membrane technology.
The first production order for flat sheet silicon carbide liquid membranes was received from a customer in the Middle East. The initial flat sheet silicon carbide membranes order is for 250 m².
We were awarded a DPF filter order for $450,000 from Emigreen B.V. Netherland for application in the luxury boat market segment.

Financial highlights for the three months ended March 31, 2014

Net sales for the three-month period ended March 31, 2014 were $3,197,502 compared to $3,399,148 for the three-month period ended March 31, 2013, representing a decrease of $201,646 or 5.9 percent.
Gross profit for the three-month period ended March 31, 2014 was $555,128 compared to $562,023 for the three-month period ended March 31, 2013, representing a decrease of $6,895 or 1.2 percent.
Gross margin for the three-month period ended March 31, 2014 was 17.4% compared to 16.5% for the three-month period ended March 31, 2013.
Net income attributable to the Company for the three-month period ended March 31, 2014 was a loss of $755,435 compared to a loss of $669,811 for the three-month period ended March 31, 2013, representing a decrease of $85,624 or 12.8%.
Cash on hand for the three-month period ended March 31, 2014 was $3,729,115 compared to $4,884,275 for the year ended December 31, 2013, representing a decrease of $1,155,160.
Working capital for the three-month period ended March 31, 2014 was $7,019,740 compared to $7,692,669 for the year ended December 31, 2013, a decrease of $672,929.
Total net loss for the three-month period ended March 31, 2014 includes non-cash charges for depreciation and amortization and stock compensation expense for a total of $682,166.

In commenting on the first quarter, Finn Helmer, Chief Executive Officer, noted, "We saw continuing growth in the acceptance of our liquid membrane filters in the first quarter of 2014. Our sales of liquid membrane filters were up 28% in the first quarter this year compared to last year; the highest quarterly sales of liquid membranes since the beginning of 2012. DPF filter sales were down $368,000, or 19%, in the first quarter as compared to the prior year. The decline in DPF sales in the first quarter of 2014 resulted from lower sales in the USA, and did not include the $450,000 order from Emigreen B.V. Netherland announced on March 18, 2014 that will be delivered in the second quarter of 2014.

"As indicated in our last conference call, overall sales were lower than the fourth quarter of 2013, as expected, mainly due to a reduction in DPF sales in the US. In a board meeting at the end of April, CARB reaffirmed its commitment to air quality benefits originally envisioned by the CARB diesel truck and bus regulation roll-out. This is a very positive signal and we expect this to result in increasing orders for DPF filters this year.

"In the first quarter, we were pleased to see good sequential improvement in gross margin (nearly 18% in Q1 and adjusted for depreciation, the gross margin was nearly 32%) despite lower sales. The higher gross margin was due mainly to greater production efficiency. Also, in the first quarter we started to implement a new production process for liquid membranes that has resulted in improved yields and more uniform quality. This has also resulted in higher yields and 30%-40% lower cost. We are now able to double current production levels of liquid membranes with the same equipment.

"Saudi Arabia's interest in our flat sheet membranes increased in the first quarter of 2014. The Ministry of Water and Electricity has officially announced that ceramic flat sheet membranes is the technology of choice for Ground Water applications and our presence in this market can meet their requirements.

"We have decided to stop the production of Kiln furniture for external sale due to the fact that production volumes are not high enough to achieve an acceptable level of profit.

"We have seen significant progress in some of our market development activities. FMC is developing, as planned, their prototype fracking system and we expect to have the production release before year-end 2014. Given the production release this year, we expect that the first LiqTech liquid membranes will be delivered in third quarter. In China, the test in the South China Sea went so well that we will be invited to submit two tenders over the next six months for large production systems.

"We have seen growing interest in our liquid membrane filters in many market segments where we have delivered and installed test systems. In addition to the oil market, we have seen good interest in market areas such as: algae concentration, industrial waste water, pre-reverse osmosis filtration and scrubber water. In these market areas, we have customer tests underway that we expect to culminate in orders later this year. These are all market areas in which LiqTech liquid membrane filters have significant competitive advantages."

Conference Call Details

Interested parties may participate in the call by dialing (877) 407-8029; international callers dial (201) 689-8029. 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 May 15, 2014 and ending on May 29, 2014. To access the replay, please dial (877) 660-6853 and enter the (conference id# 13582314). The access number for the replay for international callers is (201) 612-7415 (conference id# 13582314).

-Financial charts follow-

LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	As of March 31,	As of December 31,
	2014	2013
Current Assets:
Cash	$ 3,729,115	$ 4,884,275
Accounts receivable, net	1,786,025	2,341,070
Other receivables	253,184	231,998
Cost in excess of billing	426,332	406,997
Inventories	4,755,048	4,258,606
Prepaid expenses	133,685	12,021
Current deferred tax asset	84,113	104,143

Total Current Assets	11,167,502	12,239,110

Property and Equipment, net accumulated depreciation	5,528,172	5,829,404

Other Assets:
Other investments	6,879	6,882
Long term tax asset	2,241,854	1,863,349
Other intangible assets	23,230	24,687
Deposits	274,966	271,916

Total Other Assets	2,546,929	2,166,834

Total Assets	$ 19,242,603	$ 20,235,348

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

LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	As of March 31,	As of December 31,
	2014	2013
Current Liabilities:
Current portion of capital lease obligations	$ 201,946	$ 208,419
Accounts payable	1,644,370	1,586,962
Accrued expenses	979,417	1,440,522
Billing in excess of cost	103,512	96,104
Accrued income taxes payable	2,000	2,000
Deferred revenue / customers deposit	1,216,517	1,212,434

Total Current Liabilities	4,147,762	4,546,441

Long-term capital lease obligations, less current portion	505,368	554,360

Total Long-Term Liabilities	505,368	554,360

Total Liabilities	4,653,130	5,100,801

Stockholders' Equity:
Common stock; par value $0,001, 100,000,000 shares authorized, 27,212,500 and 27,212,500 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively

	27,213	27,213
Additional paid-in capital	19,103,303	18,700,574
Accumulated deficit	(3,072,220)	(2,316,784)
Deferred compensation	(1,190,760)	(1,008,450)
Other comprehensive income, net	(300,762)	(292,565)
Non-controlled interest in subsidiaries	22,699	24,559

Total Stockholders' Equity	14,589,473	15,134,547

Total Liabilities and Stockholders' Equity	$ 19,242,603	$ 20,235,348

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

LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Three Months Ended
	March 31
	2014	2013
Net Sales	$ 3,197,502	$ 3,399,148
Cost of Goods Sold	2,642,374	2,837,125

Gross Profit	555,128	562,023
Operating Expenses:
Selling expenses	669,547	573,925
General and administrative expenses	672,657	662,305
Non-cash compensation expenses	220,418	31,369
Research and development expenses	100,586	146,985

Total Operating Expense	1,663,208	1,414,584

Loss from Operations	(1,108,080)	(852,561)
Other Income (Expense)
Interest and other income	3,195	156
Interest expense	(11,521)	(11,705)
Loss on investments	(2,119)	-
Gain (loss) on currency transactions	2,787	(114,173)

Total Other Expense	(7,658)	(125,722)

Loss Before Income Taxes	(1,115,738)	(978,283)

Income Tax Benefit	(358,442)	(296,864)

Net Loss	(757,296)	(681,419)

Less Net Loss Attributable To Non-Controlled Interests in Subsidiaries	(1,861)	(11,608)

Net Loss Attributable To LiqTech	$ (755,435)	$ (669,811)
Basic Loss Per Share	$ (0.03)	$ (0.03)
Weighted Average Common Shares Outstanding	27,212,500	24,111,500
Diluted Loss Per Share	$ (0.03)	$ (0.03)
Weighted Average Common Shares Outstanding Assuming Dilution	27,212,500	24,111,500

The accompanying notes are an integral part of these financial statements

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.

Follow LiqTech on LinkedIn: http://www.linkedin.com/company/liqtech-international
Follow LiqTech on Twitter: https://twitter.com/LiqTech

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.