Budget Waste Inc. (“BWI”) formally (Other OTC:BDGW.PK) and now Gray Creek Mining (OTC BB:GYCK.OB) (currently in the process of changing its name to BWI Holdings, Inc.), a waste solutions company headquartered in Western Canada that provides complete waste and recycling services to commercial, residential and industrial clients, announces today its financial results for the second quarter ended September 30, 2008.
The Company previously announced and filed on Pink Sheets (PK-BDGW) its consolidated financial statements for the six months ended September 30, 2008. Those statements should be read in conjunction with this press release. A summary of the operating results is presented below.
Mr. Jim Can, CEO, states, “Overall, this was a good quarter for BWI. We are very pleased that the first six months of the year produced the largest operating income yet, with a gross profit of 29.8% and earnings before interest, depreciation and taxes (“EBITDA”) of roughly $948,000. The higher gross margins and EBITDA were a direct result of us watching our costs and margins as revenue stabilized and the economy moved into more turbulent times.”
For the three and six months ended September 30, 2008, the Company reported revenues of $3,364,000 and $6,741,000 respectively, compared to $4,584,000 and $7,969,000 for the three and six months ended September 30, 2007. A small decrease considering the tightening of the residential and commercial development markets.
The gross margins for the quarter and six months ended September 30, 2008 were $1,079,000 and $2,006,000, respectively, representing 32.1% and 29.8% of revenue. The comparative amounts were $1,231,000 or 26.9% of revenue for the three months and $1,749,000 or 21.9% of revenue for the six months ended September 30, 2007. The increase in gross margins was mainly as a result of finally transitioning the operating methodologies of the many acquisitions in 2006 and 2007 into the cost control model implemented by the Company.
Selling, general and administrative (“S,G&A”) expenses decreased to $1,100,000 for the three months ended September 30, 2008 from $1,372,000 in the comparative period in 2007, a decrease of 19.8%. For the six months ended September 30, 2008, S,G&A was down to $2,389,000 from $2,638,000 in the same period in 2007, a decrease of 9.4%. The largest decreases in S,G&A expenses were realized in the second quarter of 2008.
Non-cash charges, such as depreciation and amortization, decreased to $313,000 in the second quarter and $664,000 in the six months ended September 30, 2008 from $486,000 and $837,000 for 2007. To help improve the Company’s cash flow position certain surplus assets were disposed of that resulted in substantial gains reported in the second quarter.
The Company realized a modest net income of $15,000 for the second quarter and $70,000 for the six months ended September 30, 2008. However, this was a substantial increase in profitability considering the magnitude of the losses incurred in prior years while integrating and consolidating many different companies in 2007 and 2006.
Cash used in operations during the six months ended September 30, 2008 was roughly $81,000 which included the payment of $464,000 of trade payables as compared to $29,000 for the six months ended September 30, 2007. $369,000 was used to acquire equipment and $441,000 was used to repay debt and obligations under capital leases. This resulted in a cash deficiency that was provided primarily by increases in amounts due to related parties and shareholders.
Management believes that its focus on retiring debt as rapidly as possible will provide tangible benefits in future, as this reduction in debt will result in reduced financing charges in each successive quarter. Management will also continue to monitor and control its costs as the economy, in the short term, remains stagnated. Overall, the Company is moving in a very positive direction.