Speedemissions, Inc. Provides Update to Shareholders
ATLANTA, GA -- (Marketwired) -- 02/07/17 -- Speedemissions, Inc. (OTC PINK: SPMI), a leading vehicle emissions testing and safety inspections company operating 22 stores in the Atlanta, St. Louis and Salt Lake City markets, and developer of CARbonga-SRI, the revolutionary automobile diagnostic iPhone app, and BuyCarSafety.com's ADVISR (Automotive Vehicle Information Safety Report) is pleased to provide shareholders with an update on the Company's business development and developing opportunities.
To our Valued Shareholders:
As we begin our 17th year of business, and 14th year as a publicly-traded company, I'd like to provide you with a summary of our 2016 activity, and then our outlook for Speedemissions, Inc. in 2017 and beyond.
What began as an idea with one emission testing store in one city has now reached 22 company-owned stores in three major cities; Atlanta, St. Louis and Salt Lake City. We're a real company, with real customers, currently generating $3.4 million in annual vehicle emission/safety inspection revenue, and exploring several additional strategic opportunities, which could add significantly to that. Store growth has been achieved on two platforms, organic store development and targeted acquisitions. We remain committed to increasing store revenue in our core business by providing the best service possible.
To add value and to diversify our business, the Company expanded into the automotive technology market with the development of the iPhone app CARbonga-SRI (Safety/Recall and Technical Service Bulletin information, or "TSB") and the e-commerce website, www.BuyCarSafety.com.
CARbonga-SRI and BuyCarSafety.com are designed to capture a portion of the annual 45 million used car buyer market. By accessing either one of these products, in a matter of seconds, the used car buyer is notified as to whether the make and model they're about to purchase is under a National Highway Transportation Safety Administration ("NHTSA") mandated safety recall. Annually, over 2.5 million of these cars under recall notice are never repaired, and are being sold to unsuspecting buyers.
Another critically valuable attribute of CARbonga-SRI and BuyCarSafety.com is that they give the potential buyer access to every Technical Service Bulletin ("TSB") issued by the manufacturer, such as safety problems and issues with a vehicle's engine, electrical equipment, brakes, and fuel systems, to name a few. This critical information could spare them from buying a "problem" used car -- or even a dangerous car.
While we've made progress in the safety recall alert market, there is still much work to do as we separate ourselves from the clutter in this space. We're cautiously optimistic that the plans on which we're working will yield meaningful results in the future.
Operationally, Speedemissions was presented with some difficult and unplanned challenges over the past 18-24 months. There were store leases that could not be renewed, a significant pricing issue, the closing of underperforming locations, and a safety inspection law amendment. These unexpected events had a significant and rippling effect on our business.
However, we haven't been in business for 16 years, performed over 2.25 million vehicle emission tests and 1.25 million safety inspections without having weathered hurdles. We've stabilized operations through increasing same-store test volume while reducing store operation expenses, and general and administrative expense. These measures have provided noteworthy financial progress for the company and have resulted in four consecutive quarters of positive EBITDA1 for the first time in over three years.
Now, let's talk about increasing shareholder value, which remains our primary focus and guides our decision making. We continue our focus in developing a strong, sustainable and profitable company that, in turn, should reward both our long-term and new shareholders alike. But, to accomplish these goals, we will need to do more than just build on our emission testing stores model.
For the past twelve months we have judiciously reviewed a number of opportunities that we believe could help increase revenues and income. As a result of our due diligence, we've identified a highly-fragmented segment of the automotive industry that has the potential to add a new revenue channel to Speedemissions. It's an existing industry that has historically offered steady and stable year-over-year growth and could provide healthy gross margins and solid EBITDA. We have engaged the services of an investment banking firm to assist us, and we anticipate significant progress with this initiative over the next 3-6 months.
Besides the opportunity noted in the previous paragraph, Speedemissions has been working with a strategic partner on an innovative and efficient new method to process certain required automobile documentation for millions of car owners within certain states. We anticipate being able to introduce this program by the end of the first quarter.
As CEO of Speedemissions, I am very excited about the opportunities that we have identified and that we are preparing to advance. I want to say thank you to all of our dedicated employees for their hard work and loyalty to the Company -- and to our shareholders, we humbly appreciate your continued support. To our consultants, thank you for your contributions and faith in our ability to execute.
In closing, as a testament to our commitment of quality service and 100% customer satisfaction, I would like to also express sincere gratitude and appreciation to the 150,000+ customers who entrusted Speedemissions with their vehicle's emission test and safety inspections in 2016.
We look forward to providing additional updates as they are available.
Sincerely,
Rich Parlontieri
President/Chief Executive Officer
Speedemissions, Inc. the
