David Waldman - Crescendo Communications, IR
Dennis Danzik - CEO
RDX Technologies Corporation (OTCQX:RGDEF) Business Update Conference Call July 17, 2014 10:00 AM ET
Greetings, and welcome to the RDX Technologies Business Update Call. At this time, all participants are in a listen-only mode. (Operator Instructions) As a reminder, this conference is being recorded.
I'd now like to turn the conference over to your host, David Waldman. Thank you, sir. Please go ahead.
Thank you for joining us on this business update call for RDX Technologies Corporation. With us on the call today is Dennis Danzik, Chief Executive Officer, who will not be answering any questions at the conclusion of today's call due to the fact that he's not completed the audit, but if anyone has questions after the call, please contact Crescendo Communications at 212-671-1020.
Before we begin, let me take a minute to note that this conference call may contain forward-looking statements. Forward-looking statements address future events and conditions, and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.
Such information is subject to known and unknown risks, uncertainties, and other factors that could influence actual results or events, and cause actual results or events to differ materially from those stated, anticipated, or implied in the forward-looking information. Listeners are cautioned not to place undue reliance on forward-looking information as no assurances can be given to future results, levels of activity, or achievements.
With that out of the way, let me now turn the call over to Dennis Danzik, Chief Executive Officer. Please go ahead, Dennis.
Thank you very much, David, and good morning everyone. It's been quite some time since our last business update. We wanted to be fair since we're in the process of completing the year-end audit. That involves a lot of complexity, including real estate sales and some additional [closely post-dated] (ph) audits and real estate purchases, as well as some fourth quarter cleanup items. We thought it was fair to give the general business update. And off late in the last three weeks, we've been getting a lot of call volume and obviously a lot of people wanting to know where we stand and what gains or non-gains have been made with the business over the last few months. So with that, we obviously are not, because we're still in the process of getting our audit done, going to answer any questions, but on the next call we will have a Q&A.
The purpose of the call is just the general status of the business and project update. Our current cash is approximately $6.5 million. That includes some additional franchise cash payments and Escrow of approximately $1.5 million, which we expect to be released to the company tomorrow. Of the proceeds from Santa Fe's Spring sale and income derived from other activities, we have paid down approximately a little over $1.1 million in debt. We paid $1.2 million in property taxes. Of course, some of that was inherited from the Lakeland bankruptcy. Those are now fully paid.
And we also paid down an additional $1.1 million in vendor debt. I'm proud to announce our current trade debt is now paid down below $3.5 million, which is quite an accomplishment in the last year since that was in excess of $12 million at the end of the fiscal year last year.
We've gotten a lot of questions about our fourth quarter, are we going to do balance sheet cleanup and write-downs? We're going to take advantage of that, and those details will be released obviously in our year-end, but it's our intention to get this fiscal year where our balance sheet is in shape, and [where] we have taken any write downs on equipment or things like that from legacy business tasks.
The Santa Fe Spring Field, as most people know, is now closed. That was owned by Ridgeline Energy Services Company. The remediation continues on that site. Doug Bean has done a superior job of managing that remediation, and legacy water is now down below 10 million gallons. We are down to the bottoms of the remaining tanks, which obviously are the most difficult legacy water to treat as well as sludge, so that is moving along albeit slowly, but we are doing that in 400,000 to 500,000 gallon batches at a time per week, so it is declining rapidly.
And of course, there is -- that means additional revenue to us each time that we demolish an additional petroleum tank on the site, which are -- the large ones are working anywhere from $40,000 to $65,000 a piece to us in additional revenue.
We will have a status on the development of the remaining two acres in about four weeks. We are going to do a detailed call on that, and the Blue Dot program in the Western part of the United States, which continues to expand. We’ve gotten a few calls on the new California refinery that we bought from Paladin Capital Group. We are very proud to have them on as a shareholder. The plant has a 10 million nameplate capacity, is in very, very good shape. That plant is not that old. It is a high quality methyl-ester plant that got designed originally in Germany. It has some hydrofracking capability, which obviously we are going to take advantage of.
We do have a few areas that are bidding actually for the location of that facility, and it is close to a couple of oil field customers that want to drive energy up in Northern California, so we look forward to getting things moved, and the move has already started, and we are currently in the process of making sure that all of our parts and pieces are in good shape. And so far so good, it was great. And we are looking for getting that moved and getting that up and running. Target base for that is probably mid-October to mid-November of this calendar year.
The next subject is franchise development. We are now seeing expected contrast in the following area. In the state of Ohio, we have currently drafted a contract with 14 locations, and we expect that contract to be executed within three weeks. It also includes a small area of North Western Kentucky. Virginia, five locations, and we expect that contract to be executed in four to five weeks. Arizona, nine locations; we expect that contract to be executed next week.
With the execution of these contracts, each one will be detailed in a news release including the financial impact and benefits to the company, and the length of development for each of those specific areas.
The next subject is Europe. As some of you know and a lot of questions about this on what are we doing in the development of Europe. Kevin Bridges, our CFO and myself will be retuning to the United Kingdom and Poland on August 1. We have two offers, two written offers, which include a substantial cash component for eight locations in Europe and a manufacturing facility to be located in Poland.
We expect to accept one of those two written offers and that a contract will be executed by August 8. If there is any delay in that, we will hold an immediate conference call after our return on August 6, , (inaudible) delay in that, but right now that looks like it's certain.
Our next release, which will be August 12 via webcast is an update – a specific updates on our out-of-country sales contracts for individual system components. This includes reactor components and Microscreen reactors.
We are going to hold a webcast that will be announced on August 8, and it will take place -- we will have the time, actually it will take place on August 12 more than likely during market hours, and we will have a whole video presentation. We expect that webcast to last approximately 30 minutes.
On August 7, we will have a webcast on our fuel testing. We currently have four fuel burn tests that are being conducted. Three of them by major fuel users in the United States, which we will present a video of how these fuel burn tests actually operate. So, on August 7, we will be able to team in and actually see the step by step process that we go through to initiate a new customer, and what type of air quality, I get a lot of questions on this.
What do you actually do to sign a fuel customer? As we stated before, our average fuel customers are approximately two million gallons per year, so these are large revenue accounts for us, and obviously we want them to be long-term. We are giving a good discount on a commodity energy, and we want our customers to be onboard with us for many years.
So we go to the minor expense, it's not a great expense. But it's a good deal of time for our Energy division, which is headed by Scott Havrisik to go out and show the customer exactly how to handle our fuel, what temperatures to operate at, and then what they can expect from air quality testing. We are actually going to videotape a couple of these. And I think that everybody will be very impressed on August 7 by who the customers are, and exactly how this is accomplished, so I encourage everybody to tune in on August 7.
Beginning mid-September, we will be doing a monthly webcast update. The reason that we are going to do that is that we will be able to obviously add video and actually show manufacturing steps and show exactly what each of these components are that we manufacture in the wastewater industry, both for the industrial side of our business and the oil and gas side of our business. I think people find it really educational and it really fine tunes the information that we have out there to the public as the business starts to grow again during this second quarter of our fiscal year. We'll be announcing the start of those monthly webcasts on August 31, and they'll not always be hosted by me. The first one will be, but it's our intention to highlight our staff and our team members, so you will see various engineering heads, head of the people that run our energy division, and each month we're going to feature exactly what we're doing in business. We'll have some financial specifics of how each division is performing, but it's a little bit more entertaining way for people to get information, and it's timely, it’s monthly.
When we did the monthly update last year during the transition, people really appreciated them, and it was a great way to get information out. We didn't have so many questions, and a lot of questions coming off of these (indiscernible) which obviously we don't have the time or energy to really pay attention to, so this is a great way to get information out, and I hope everybody will join in on those webcasts. The format is really well done, and there's some great information in there.
So, I look forward to the next press releases. I hope that answers most people's question, which is really where we're at on a cash basis, are we going to do a financing, equity financing, the answer is again absolutely not. We're not interested in any type of equity finance. Are we interested in taking on more debt? We are. We just completed our first debt deal, which was $3 million, and we're obviously looking to expand that so that we can grow our business on a brick-by-brick, debt-by-debt basis, end debt that makes sense, and it's an opportunity for the company.
Last but not least, we're looking to build our financial corporation, which helps our franchises, franchisees, finance our purchases, and help us grow our businesses, and we're pursuing that as a separate task that does (inaudible)have any impact on the business. We've had a lot of bankers and investors that are eager to take a look at how we're building the company through franchise and operator opportunities since we look to expand that, an enjoyable way to grow our business, and it puts us in contact with better and better quality operators and franchises.
So with that, I'll hand the call back over to David Waldman, and I thank everybody and look forward to announcing the next update call within approximately two to three weeks.
Hello. Thank you everybody again for your time this morning, and we look forward to speaking with you again shortly.
This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.
[No Q&A for this event].
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