RDX Reports Record First Quarter Revenues and Record First Quarter EBITDA

Q1 Fiscal 2015 Revenue Increases 92% to $13.4 Million;
Achieves EBITDA of $1.4 Million

SCOTTSDALE, AZ and CALGARY, AB, Sept. 2, 2014 /CNW/ - RDX Technologies Corporation ("RDX" or the "Company") (TSXV: RDX, OTCQX: RGDEF, FSE:RL7), a water treatment and energy technology company, today announced financial results for its fiscal first quarter ending June 30, 2014.

Q1 Fiscal 2015 highlights (year-over-year):

• Revenues increased 92% to $13.4 million from $7.0 million
• EBITDA improved to $1.4 million from a loss of $2.1 million
• RDX grew its Environmental and Reclamation business to record levels, which included an excess land sale and related water treatment at Santa Fe Springs

Dennis M. Danzik, Chief Executive Officer of RDX, stated, "The RDX growth trend continues as we demonstrated our ability to successfully acquire and monetize underperforming assets. In addition to the real estate sale from Santa Fe Springs, we generated significant revenues related to reclamation and water treatment at the site.  As a result, our revenues increased by 92% this quarter compared to the same period last year, and we achieved $1.4 million of EBITDA, compared to a loss of $2.1 million for the same period last year.  At the same time, we enhanced our cash position and ended the quarter with over $5 million of cash at the end of the quarter.  RDX continues to seek out and evaluate other similar real estate and reclamation opportunities that would benefit from our technologies. Real estate development of properties trapped by environmental challenges, that hold underperforming assets, has become a part of our core business. "

"RDX has moved far beyond its initial locations in California and Missouri. We remain on track to achieve our goal of opening 40 new franchise locations in fiscal 2015, and to open a total of at least 300 locations through the end of fiscal 2018.  Demand for franchises has been extremely strong, as evidenced by our recent agreement with Pontus Energy, LLC of Cincinnati, Ohio for sixteen RDX franchises to be located within the State of Ohio, Monroe County Michigan, and the counties of Boone, Kenton, Campbell, Gallatin, Grant, and Pendleton in the State of Kentucky. The total value of the agreement is USD $19.9 million.  We are now in the final stages of completing federal and state registration requirements to allow us to open our franchises.  Once these filings are complete, we plan to immediately commence equipment sales and support the franchise operations."

"We are also making significant headway securing major energy customers.   In fact, our fuel was recently recognized publicly by Omega Proteins for helping cut energy costs, and decreasing fossil fuel consumption by up to 80 percent at their Reedville, Va., facility. We see a virtually limitless market for our fuel as we are in the unique position of having a financial hedge on the single largest traded energy commodity in the world, diesel fuel. This allows us to sell diesel equivalent energy at a substantial discount to our customers. "

Mr. Danzik continued, "Overall, we are extremely encouraged by the outlook for the business.  Response from the market, including both prospective energy customers and franchisees, has been overwhelmingly positive.  We have developed a highly scalable business model and look forward to driving significant value for shareholders."

Conference Call – The RDX Growth Model

The Company will host a business update conference call entitled "The RDX Growth Model" which will provide more detail regarding the first quarter and expectations for fiscal 2015, as well as upcoming RDX real estate developments, a franchise update, and an energy sales update. The call will be hosted by RDX CEO Dennis M. Danzik and will feature several key RDX division management speakers as well as franchise operators, on Thursday, October  9th^th at 10:00 a.m. Eastern Time.  The Company will provide dial in information ahead of the scheduled call.

ON BEHALF OF THE BOARD OF DIRECTORS
"Dennis M. Danzik"
Dennis M. Danzik, CEO
[email protected]

"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release. This news release 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. Readers are cautioned not to place undue reliance on forward-looking information, as no assurances can be given as to future results, levels of activity or achievements."

(tables follow)

RDX TECHNOLOGIES CORPORATION
(Formerly Ridgeline Energy Services Inc.)
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(IN CANADIAN DOLLARS)
						June 30,		June 30,
						2014		2013
Environmental and reclamation segment
	Revenue					$         3,775,693		$                      -
	Sale of land					8,978,890		-
	Total revenue					12,754,583		-
	Cost of revenue					9,012,967		-
	Gross profit - Environmental and reclamation segment					3,741,616		-
Other operating segments
	Revenue					648,706		6,967,033
	Cost of revenue:
		Direct expenses				2,056,877		5,908,608
		Amortization				948,988		919,855
	Total cost of revenue					3,005,865		6,828,463
	Gross profit - Other operating segments					(2,357,159)		138,570
Total gross profit						1,384,457		138,570
Operating expenses:
	General and administrative					1,825,813		2,439,052
	Share-based payment expense					10,675		184,723
	Amortization					857,398		861,013
Total operating expenses						2,693,886		3,484,788
Loss from operations						(1,309,429)		(3,346,218)
Other income (expense):
	Finance costs					(581,469)		(302,487)
	Foreign exchange loss on CWT notes payable					754,000		(612,000)
	Change in fair value of PTEC earn-out					202,500		90,000
	Gain on forgiveness of indebtedness					2,962		-
	Other income (expense), net					(11,332)		4,407
Total other income (expense)						366,661		(820,080)
Loss before tax						(942,768)		(4,166,298)
Income tax expense						61,468		-
Loss from continuing operations						(1,004,236)		(4,166,298)
Income from discontinued operations						-		506,098
Net loss						$       (1,004,236)		$       (3,660,200)
Basic and diluted loss per share -
	continuing operations					$                (0.01)		$                (0.02)
Basic and diluted income per share -
	discontinued operations					-		-
Basic and diluted loss per share						$                (0.01)		$                (0.02)
Weighted average number of
	common shares outstanding					169,149,750		164,712,554
Comprehensive loss:
	Net loss					$       (1,004,236)		$       (3,660,200)
	Other comprehensive income - Item that may be
	reclassified subsequently to earnings:
	Foreign currency translation adjustments					(1,726,713)		1,546,956
	Comprehensive loss					$       (2,730,949)		$       (2,113,244)

RDX TECHNOLOGIES CORPORATION
(Formerly Ridgeline Energy Services Inc.)
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(IN CANADIAN DOLLARS)
						June 30,		March 31,
						2014		2014
				Assets
Current assets:
	Cash					$         5,359,739		$         1,350,546
	Trade and other receivables, net					9,009,275		9,394,277
	Inventory, net					2,638,101		2,111,043
	Prepaid expenses and other current assets					1,703,313		1,622,856
						18,710,428		14,478,722
	Santa Fe Springs assets held for sale					357,513		17,295,173
	Total current assets					19,067,941		31,773,895
Restricted cash						459,033		88,655
Property, plant and equipment, net						38,422,008		37,769,000
Maintenance parts						1,147,935		1,189,140
Intangible assets						14,793,942		15,672,666
Goodwill						8,434,402		8,737,155
Other assets						1,194,324		1,138,373
Total assets						$       83,519,585		$       96,368,884
				Liabilities and Equity
Current liabilities:
	Accounts payable					$         3,945,424		$         4,294,210
	Accrued liabilities					7,943,014		8,876,029
	Notes payable, current portion, net of discount of $406,527					24,310,792		23,504,751
	Obligations under finance lease, current portion					95,473		96,755
						36,294,703		36,771,745
	Liabilities related to Santa Fe Springs assets held for sale					106,700		11,634,861
	Total current liabilities					36,401,403		48,406,606
Notes payable, non-current portion						544,828		1,011,348
Obligations under finance lease, non-current portion						192,825		219,335
Deferred tax liability						294,169		237,940
Environmental remediation liability						533,500		552,650
PTEC earn-out						225,000		427,500
	Total liabilities					38,191,725		50,855,379
Commitments and contingencies
Equity:
	Share capital					82,371,100		79,785,679
	Warrants					2,543,829		2,543,829
	Contributed surplus					2,496,813		2,536,930
	Accumulated other comprehensive income					2,905,894		4,632,607
	Accumulated deficit					(44,989,776)		(43,985,540)
Total equity						45,327,860		45,513,505
Total liabilities and equity						$       83,519,585		$       96,368,884

RDX TECHNOLOGIES CORPORATION
(Formerly Ridgeline Energy Services Inc.)
INTERIM UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION
(IN CANADIAN DOLLARS)
Earnings Before Interest, Taxes, and Amortization
The Company's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). The following table calculates earnings before interest, taxes, and amortization (EBITDA) and Adjusted EBITDA, which are not measures determined in accordance with IFRS or accounting principles generally accepted in the United States ("US GAAP"), for the three months ended June 30, 2014 and 2013:
									Three Months Ended June 30,
									2014		2013
Net loss - continuing operations									$         (1,004,000)		$         (4,166,000)
Interest and other finance costs									582,000		302,000
Taxes									61,000		-
Amortization (in cost of revenue)									949,000		920,000
Amortization (in operating costs)									857,000		861,000
EBITDA									1,445,000		(2,083,000)
Share-based payment expense									11,000		185,000
Foreign exchange loss on CWT notes payable									(754,000)		612,000
Change in fair value of PTEC earn-out and note payable									(203,000)		(90,000)
Gain on forgiveness of indebtedness									(3,000)		-
Other expense (income)									12,000		(5,000)
Adjusted EBITDA									$              508,000		$         (1,381,000)
We believe that presenting EBITDA and Adjusted EBITDA are useful to investors because they provide important information concerning our operating performance exclusive of certain non-cash and other costs.  EBITDA and Adjusted EBITDA demonstrate our ability to execute our financial strategy, which includes reinvesting in waster water related capital assets to ensure a high level of product quality, investing in capital assets to facilitate growth in our energy business, repurchasing our common stock, and maintaining and improving our market position through business optimization.  These measures have limitations.  Although amortization and share-based payment expenses are considered operating costs in accordance with IFRS and US GAAP, they represent the allocation of non-cash costs generally associated with long-lived assets acquired or constructed in prior years and non-cash compensation primarily for our employees.  Our definition of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures presented by other companies.

SOURCE: RDX Technologies Corporation

David Waldman at Crescendo Communications, [phone], [email protected]