Systemone 8-K SystemOne Technologies Reports Second Quarter 2004 Results

Exhibit 99.1

Press Release

SystemOne Technologies Reports Second Quarter 2004 Results

MIAMI, Florida, August 9, 2004—SystemOne Technologies Inc. (OTC BB:STEK.OB) today reported its second quarter 2004 operating results.

Revenues for the three months ended June 30, 2004 were $358,000 compared to revenues of $5,686,000 in the corresponding period of 2003, a 93.7% decrease. The Company reported an operating loss for the three months ended June 30, 2004 of $897,000 compared with an operating profit of $1,305,000 in the corresponding period of 2003. The Company’s net loss for the three months ended June 30, 2004 was $1,202,000 or a loss of 24 cents per share, compared with a net profit of $647,000 or a profit of 13 cents per share, in the corresponding period of 2003. The Company’s net loss to common stock after preferred dividends for the three months ended June 30, 2004 was $1,705,000 or a loss of 34 cents per share, compared with a net profit of $96,000 or a profit of 2 cents per share, in the corresponding period of 2003.

Revenues for the six months ended June 30, 2004 were $842,000 compared to revenues of $11,310,000 in the corresponding period of 2003, a 92.6% decrease. The Company reported an operating loss for the six months ended June 30, 2004 of $1,722,000 compared with an operating profit of $2,799,000 in the corresponding period of 2003. The Company’s net profit for the six months ended June 30, 2004 was $11,663,000 or a profit of $2.35 per share, compared with a net profit of $1,446,000 or a profit of 29 cents per share, in the corresponding period of 2003. The Company’s net profit to common stock after preferred dividends for the six months ended June 30, 2004 was $10,578,000 or a profit of $2.13 per share, compared with a net profit of $343,000 or a profit of 7 cents per share, in the corresponding period of 2003.

Chief Executive Officer Paul I. Mansur stated, “We are progressing with the development of a national third party distribution network as the Company transitions from its exclusive distribution arrangement with Safety-Kleen. We have appointed 18 distributors to date, another 7 distributor appointments are pending and we plan to complete the development of a national distribution network totaling about 35-40 distributors by year end.”

Founded in 1990, SystemOne Technologies designs, manufactures, sells and supports a full range of self contained, recycling industrial parts washing products for use in the automotive, aviation, marine and general industrial markets. The Company has been awarded 11 U.S. patents and 13 foreign patents for its products which incorporate innovative, proprietary resource recovery and waste minimization technologies. The Company is headquartered in Miami, Florida.

This press release contains forward-looking statements regarding future events and the future performance of SystemOne Technologies that involves risks and uncertainties that could cause actual events to differ materially including the Company’s ability to successfully complete the development of its national third party distribution network. We refer you to the documents that SystemOne Technologies files from time to time with the Securities and Exchange Commission which contain important factors that could cause its results to differ from its current expectations.

CONTACT: SystemOne Technologies Inc.
Paul I. Mansur, Chief Executive Officer, 305/593-8015

SYSTEMONE TECHNOLOGIES INC.
CONDENSED BALANCE SHEETS

(In thousands, except share and per share data)

	June 30,			December 31,
	2004			2003
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	5,253		$	8,359
Receivables, net of allowance of $2 and $0		136			7
Inventories		2,350			1,745
Prepaid and other assets		194			386
Assets held for sale		39			39
Total current assets		7,972			10,536
Property and equipment, net		453			540
Other assets		76			197
Total assets	$	8,501		$	11,273
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	1,163		$	1,165
Warranty accrual		210			241
Deferred revenue		36			64
Current installments of long-term debt and obligations under capital leases		8			31
Total current liabilities		1,417			1,501
Long-term debt		14,874			29,150
Warranty accrual, non-current		101			176
Total liabilities		16,392			30,827
Commitments and contingencies
Redeemable convertible preferred stock, $1.00 par value per share. Authorized 1,500,000 shares, 205,396 issued and outstanding (197,376 in 2003), at liquidation value		20,540			19,738
Less unamortized discount		—			(283	)
Net redeemable convertible preferred stock		20,540			19,455
Stockholders’ deficit:
Common stock, $0.001 par value per share. Authorized 25,000,000 shares, issued and outstanding 4,960,087		5			5
Additional paid-in capital		20,723			20,723
Deficit		(49,159	)		(59,737	)
Total stockholders’ deficit		(28,431	)		(39,009	)
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit	$	8,501		$	11,273

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SYSTEMONE TECHNOLOGIES INC.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Unaudited)

(In thousands, except share and per share data)

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2004			2003			2004			2003
Revenue	$	358		$	5,686		$	842		$	11,310
Cost of goods sold		335			3,498			823			6,877
Gross profit		23			2,188			19			4,433
Operating expenses:
Selling, general and administrative		811			789			1,538			1,443
Research and development		109			94			203			191
Total operating expenses		920			883			1,741			1,634
Operating (loss) income		(897	)		1,305			(1,722	)		2,799
Other (expense) income:
Safety-Kleen termination fee income		—			—			4,000			—
Gain on Notes repurchase		—			—			10,217			—
Interest expense		(341	)		(772	)		(697	)		(1,570	)
Interest income		11			131			25			250
Other (expense) income, net		(330	)		(641	)		13,545			(1,320	)
(Loss) income before income tax provision		(1,227	)		664			11,823			1,479
Income tax benefit (provision)		25			(17	)		(160	)		(33	)
Net (loss) income		(1,202	)		647			11,663			1,446
Dividends and accretion of discount on redeemable convertible preferred stock		(503	)		(551	)		(1,085	)		(1,103	)
Net (loss) income available to common shares	$	(1,705	)	$	96		$	10,578		$	343
Basic net (loss) income per common share	$	(.34	)	$	.02		$	2.13		$	.07
Diluted net (loss) income per common share	$	(.34	)	$	.02		$	1.04		$	.06

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