Company Reaches Positive Earnings Per Share From Continuing
Operations and the Fourth Consecutive Quarter of Improving
Performance BOCA RATON, Fla., Aug. 14 /PRNewswire-FirstCall/ --
Sunair Services Corporation (NYSE Amex: SNR) announced financial
results for its third fiscal quarter ended June 30, 2009. Revenues
from continuing operations for the third quarter ended June 30,
2009 were $13.1 million, compared to revenues of $14.7 million for
the third quarter of the prior year. The Company had income from
continuing operations of $116,324 for the third fiscal quarter
ended June 30, 2009, or $0.01 per basic and diluted share, compared
to a loss of $(860,438) for the same quarter last year, or $(0.06)
per basic and diluted share. Sunair had no income from discontinued
operations for the third quarter of 2009, compared to tax affected
income of $569,918 from discontinued operations for the comparable
period last year, or $0.04 per basic and diluted share. The Company
reported a net income of $116,324 for the third quarter ended June
30, 2009, or $0.01 per basic and diluted share, compared to a net
loss of $(290,520) for the same quarter last year, or $(0.02) per
basic and diluted share. Comments from Management Jack I. Ruff,
Chief Executive Officer and President of Sunair Services stated,
"Since becoming CEO, this is our fourth consecutive quarter of
improved operating results over last year. The Company had positive
earnings per share from continuing operations for the first time
since June 2005. We are continuing to improve Sunair's operational
efficiencies resulting in increased profitability and improved
financial performance. We are seeing improvement in all aspects of
our financial performance; our gross profit increased 3.6% from
61.2% to 64.8% while our operating expenses decreased 1.9% from
64.6% of revenue to 62.7%. While both national and local
competitors are having issues with customer retention, we are
increasing our customer count on a monthly basis. We continue to
focus on various initiatives aimed at organic revenue growth and
expanding margins which continue to increase shareholder value,
help our Company in the current challenging business environment,
as well as strengthen Sunair's long-term growth prospects. Our
focus remains on 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 JUNE 30, 2009 AND SEPTEMBER 30, 2008
(UNAUDITED) June 30, September 30, 2009 2008 ASSETS CURRENT ASSETS:
Cash and cash equivalents $1,615,681 $2,974,382 Accounts
receivable, net 2,102,393 2,597,447 Inventories, net 1,036,135
1,403,832 Prepaid and other current assets 589,085 2,829,535 Total
Current Assets 5,343,294 9,805,196 PROPERTY, PLANT, AND EQUIPMENT,
net 1,447,217 1,907,213 OTHER ASSETS: Software costs 539,830
246,979 Customer list, net 4,663,401 7,456,704 Goodwill 62,112,528
62,112,528 Other assets 234,919 254,790 Total Other Assets
67,550,678 70,071,001 TOTAL ASSETS $74,341,189 $81,783,410 The
accompanying notes are an integral part of these unaudited
condensed consolidated financial statements. June 30, September 30,
2009 2008 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES:
Accounts payable $1,341,138 $1,787,406 Accrued expenses 3,138,754
3,256,342 Unearned revenues 597,217 863,770 Customer deposits
2,902,711 3,149,715 Revolving line of credit, current portion -
4,100,000 Notes payable and capital leases, current portion
4,007,998 2,306,189 Total Current Liabilities 11,987,818 15,463,422
LONG TERM LIABILITIES: Notes payable and capital leases, net of
current portion 1,580,214 3,682,184 Note payable -related party
5,000,000 5,000,000 Revolving line of credit, net of current
portion 5,000,000 5,500,000 Total Long Term Liabilities 11,580,214
14,182,184 TOTAL LIABILITIES 23,568,032 29,645,606 COMMITMENTS
& CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred stock, no par
value, 8,000,000 - - shares authorized, none issued and outstanding
Common stock, $.10 par value, 100,000,000 shares authorized,
13,091,088 shares issued and outstanding at June 30, 2009 and
September 30, 2008, respectively 1,309,110 1,309,110 Additional
paid-in capital 52,946,498 52,756,311 Accumulated deficit
(3,482,451) (1,927,617) Total Stockholders' Equity 50,773,157
52,137,804 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $74,341,189
$81,783,410 The accompanying notes are an integral part of these
unaudited condensed consolidated financial statements. SUNAIR
SERVICES CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30, 2009
AND 2008 (UNAUDITED) 2009 2008 SALES $38,450,322 $42,479,822 COST
OF SALES 14,222,619 16,548,557 GROSS PROFIT 24,227,703 25,931,265
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 25,375,918 29,294,668
LOSS FROM OPERATIONS (1,148,215) (3,363,403) OTHER INCOME
(EXPENSES): Interest expense (675,310) (1,115,079) Interest income
1,852 127,513 Gain on disposal of assets 145 5,069 Gain on
extinguishment of debt 55,000 - Total Other Expenses (618,313)
(982,497) LOSS FROM OPERATIONS BEFORE INCOME TAXES (1,766,528)
(4,345,900) INCOME TAX PROVISION - - LOSS FROM CONTINUING
OPERATIONS (1,766,528) (4,345,900) INCOME FROM DISCONTINUED
OPERATIONS, NET OF INCOME TAX BENEFIT OF $0 and $0 IN 2009 and
2008, RESPECTIVELY 211,694 874,368 NET LOSS $(1,554,834)
$(3,471,532) BASIC AND DILUTED (LOSS) INCOME PER SHARE: CONTINUING
OPERATIONS $(0.13) $(0.33) DISCONTINUED OPERATIONS $0.01 $0.07 NET
LOSS $(0.12) $(0.26) WEIGHTED AVERAGE SHARES OUTSTANDING: BASIC and
DILUTED 13,091,088 13,091,088 The accompanying notes are an
integral part of these unaudited condensed consolidated financial
statements. SUNAIR SERVICES CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED
JUNE 30, 2009 AND 2008 (UNAUDITED) 2009 2008 SALES $13,126,088
$14,664,435 COST OF SALES 4,618,617 5,692,928 GROSS PROFIT
8,507,471 8,971,507 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
8,232,894 9,472,816 INCOME (LOSS) FROM OPERATIONS 274,577 (501,309)
OTHER INCOME (EXPENSES): Interest income - 18,787 Interest expense
(198,751) (389,142) Gain on disposal of assets 10,498 11,226 Gain
on extinguishment of debt 30,000 - Total Other Income (Expenses)
(158,253) (359,129) INCOME (LOSS) FROM OPERATIONS BEFORE INCOME
TAXES 116,324 (860,438) INCOME TAX PROVISION - - INCOME (LOSS) FROM
CONTINUING OPERATIONS 116,324 (860,438) INCOME FROM DISCONTINUED
OPERATIONS, NET OF INCOME TAX BENEFIT OF $0 and $0 IN 2009 and
2008, RESPECTIVELY - 569,918 NET INCOME (LOSS) $116,324 $(290,520)
BASIC AND DILUTED INCOME (LOSS) PER SHARE: CONTINUING OPERATIONS $
0.01 $ (0.06) DISCONTINUED OPERATIONS $ - $ 0.04 NET INCOME (LOSS)
$ 0.01 $ (0.02) WEIGHTED AVERAGE SHARES OUTSTANDING: BASIC
13,091,088 13,091,088 DILUTED 13,099,143 13,091,088 The
accompanying notes are an integral part of these unaudited
condensed consolidated financial statements. SUNAIR SERVICES
CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS FOR THE NINE MONTHS ENDED JUNE 30, 2009 AND 2008
(UNAUDITED) 2009 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Net
loss $(1,554,834) $(3,471,532) Adjustments to reconcile net loss to
net cash provided by (used in) operating activities: Depreciation
620,988 669,212 Amortization 2,793,303 2,927,177 Bad debt reserve
142,296 266,008 Inventory reserve - (380,858) Gain on sale of
assets - (5,069) Gain on extinguishment of debt (55,000) -
Stock-based compensation expense 190,187 385,239 (Increase)
decrease in assets: Accounts receivable 352,758 (2,525,786)
Inventories 367,697 (68,803) Prepaid and other current assets
2,240,450 (71,495) Other assets 19,871 (10,317) Increase (decrease)
in liabilities: Accounts payable and accrued expenses (563,856)
234,501 Unearned revenue (266,553) 62,622 Customer deposits
(247,004) 371,571 Net Cash Provided By (Used In) Operating
Activities 4,040,303 (1,617,530) CASH FLOWS FROM INVESTING
ACTIVITIES: Purchase of property, plant, and equipment (206,274)
(550,093) Software development costs (292,851) - Cash paid for
business acquisitions - (1,000,000) Net proceeds from sale of
assets 45,282 52,684 Net Cash (Used In) Investing Activities
(453,843) (1,497,409) The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
SUNAIR SERVICES CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED JUNE 30, 2009
AND 2008 (UNAUDITED) 2009 2008 CASH FLOWS FROM FINANCING
ACTIVITIES: Repayment of line of credit (net) (4,600,000) (932,797)
Proceeds from line of credit - 3,800,000 Repayment of notes payable
and capital leases (345,161) (360,618) Net Cash (Used In) Provided
By Financing Activities (4,945,161) 2,506,585 Effect of exchange
rate fluctuations on cash - (50,631) NET DECREASE IN CASH AND CASH
EQUIVALENTS (1,358,701) (658,985) CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 2,974,382 2,781,838 CASH AND CASH EQUIVALENTS,
END OF PERIOD $1,615,681 $2,122,853 SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION: Cash paid during the period for interest $765,754
$1,139,933 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES: Debt incurred in acquisitions $ - $600,000
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements. DATASOURCE: Sunair
Services Corporation CONTACT: Edward Carriero, Sunair Services
Corporation, +1-561-208-7400, x7365 Web Site:
http://www.sunairservices.com/
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