SPMI - Earnings Results Impress The Guru

SPMI released its annual earnings report today after the bell and posted earnings of $.01 a share excluding a goodwill charge. The company had almost $100k in net income and used cash flows to pay down debt and reduce liabilities.

SPMI closed the trading session at $.085 a share. Here is some of the per share information that I gleaned from today's 10K filing. These are some amazing figures for a sub $1.00 stock:

Revenue: $1.40 a share
Assets: $1.18 a share
Cash: $.065 a share

The company press release about the 10K filing has a run down of 2009 highlights, which you can see at the end of this post. Below are a few of my own and the reasons why this stock could see some more upside in 2010.

SPMI closed the trading session at $.085

• The market cap for SPMI after today's close is just under $600,000.
• Revenues for 2009 were $9.8 million or $1.40 a share
• Total Assets at the end of 2009 $5.9 Million or $1.18 a share
  
• They ended 2009 with $449k in cash. Cash per share $.065
• Net Income increased to $86,694 in 2009 compared to a loss from continuing operations of $134,801 in 2008 for a total increase in net income of $221,495 year over year.
  
• They have reduced liabilities by 34% since 2008.
• They plan.. " to use the cash flows provided by operations to open between one and three new stores in 2010 and to enhance our ability to pursue other opportunities to increase our business."

Notice how they plan on expanding their business using cash flow, not debt issuance, not equity exchanges, but from the utilization of the companies cash. For a stock trading at $.085 to be able to say that is quite impressive in my book. Not only are they making money, they are using that money for expansion.

It is quite apparent that SPMI is at the stage where it no longer is reliant upon outside forces to fund their business and growth plans. They have also taken the responsible step of writing off the impairment on the Mr. Sticker acquisition, which accounted for the $(.53) headline number :

The Company determined that goodwill recorded from the acquisition of the assets of Mr. Sticker, Inc. was impaired due to a decline in operating performance and anticipated future performance at the stores located in Texas.

Recognizing and accounting for this impairment will only help the bottom line down the road, instead of doing what many companies do and kick the proverbial can down the road.

SPMI's last earning report brought a bevy of buying that took the stock over $.30 a share. With this after hours release I think many investors will have time to look it over and find many positives, just as I did. Considering the value SPMI brings its shareholders on a per share basis, the fact that they grew net income by over $200,000 this year, and the opening of new revenue producing stores, SPMI is an undiscovered penny stock that I can see trending higher over the course of the year.

Add it it your watch list.

March 30, 2010 05:15 PM Eastern Daylight Time

Speedemissions, Inc. Reports Fourth Quarter & December 31, 2009 Year End Results

ATLANTA--(BUSINESS WIRE)--Speedemissions, Inc. (OTC Bulletin Board: SPMI - News), a leading vehicle emissions testing and safety inspections company with testing stores in Atlanta, Houston, St. Louis and Salt Lake City today announced its financial results for the fourth quarter and year ended December 31, 2009.

2009 Highlights:

• Income from continuing operations excluding the 2009 goodwill impairment expense of $2,873,766 increased to $86,694 in 2009 compared to a loss from continuing operations of $134,801 in 2008.
• Revenue increased 1.4% to $9,916,678 for the year ended December 31, 2009 compared to revenue of $9,779,942 for year ended December 31, 2008. The increase in revenue was led by a 2.6% increase in same store sales over the comparable period of 2008.
• General and administrative expenses decreased 20.2% to $1,411,296 during the year ended December 31, 2009 compared to $1,768,519 in the same period of the prior year.
• Net loss for the year ended December 31, 2009 was $2,787,072 or ($0.53) per basic and diluted share compared to a net loss of $495,776 or ($0.10) per basic and diluted share in 2008. Excluding the goodwill impairment expense, the Company earned $0.01 per diluted share in the year ended December 31, 2009 compared to a loss of ($0.10) per basic and diluted share in 2008.
• Since December 31, 2008, the Company used cash provided by operations to decrease its current liabilities by 42.0% and its total liabilities by 34.4%.

Richard A. Parlontieri, President and Chief Executive Officer of Speedemissions commented:

“We’re pleased that we were able to increase revenue, improve our income from continuing operations and reduce our total liabilities in this most challenging economic environment. We expect to use the cash flows provided by operations to open between one and three new stores in 2010 and to enhance our ability to pursue other opportunities to increase our business.”

Revenue in the fourth quarter of 2009 totaled $2,259,078, a decrease of 1.7%, compared with revenue of $2,298,475 in the same period last year. On a same-store basis, Speedemissions, Inc.’s fourth quarter sales were down 2.3%. This was in line with the Company’s expectations as its fourth quarter revenue from its Texas operations in 2008 included tests postponed in September 2008 as a result of Hurricane Ike.

Excluding the goodwill impairment expense of $2,873,766, the Company’s net loss in the fourth quarter ended December 31, 2009 was $118,907 or ($0.02) per diluted share compared to a net loss of $171,266 or ($0.03) per basic and diluted share in the comparable period of 2008. Net loss for the fourth quarter was $2,992,673 or ($0.56) per basic and diluted share compared to a loss of $171,266 or ($0.03) per basic and diluted share in the comparable period of 2008.

About Speedemissions Inc. http://www.speedemissions.com

Speedemissions, Inc., based in Atlanta, Georgia, is a leading vehicle emissions testing and safety inspections company in the United States. We provide services in certain areas where auto testing is mandated by the Environmental Protection Agency (EPA). Since the emissions testing market is highly fragmented, Speedemissions expects to be the first company to create a national brand offering their customers quick and efficient vehicle emissions testing service. The current focus of the company is in the Atlanta, Georgia; Houston, Texas; St. Louis, Missouri and Salt Lake City, Utah markets.

Certain statements contained in this news release regarding matters that are not historical facts may be forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, uncertainties pertaining to continued market acceptance for Speedemissions' products and services, its ability to succeed in growing revenue, the effect of new competitors in its market, integration of acquired businesses, and other risk factors identified from time to time in its filings with the Securities and Exchange Commission.