Just the kind of info you don't want issued at market close on a friday
CET Environmental Services, Inc. Gives Shareholders Company Update; Plan Of Action to Meet Challenges and Capitalize on the Future
ENGLEWOOD, Colo., Feb. 25 /PRNewswire/ -- CET Environmental Services, Inc. (Amex: ENV) announces a Company update and it is undertaking a variety of strategic initiatives to move the Company forward and to build upon its assets.
Steven H. Davis, President and CEO of CET Environmental Services, Inc. said, "Since the announcement of lifting the EPA suspension in November last year, all CET employees have been working very diligently to regain our good relationships with key Federal and Commercial clients, as well as deal with the downsizing and transition of offices. I would like to give our shareholders an update, in addition to discussing strategic initiatives and opportunities for the future."
Bank Debt and Financing
National Bank of Canada has been fully repaid. New financing proposals have been received, but to date, the Board has not found a proposal acceptable.
Litigation against AquaSource, Inc. The settlement is completed. AquaSource Inc. will pay CET $650,000 by March 1, 2000 and $708,000 will be collected from Monfort.
Engineering and Construction
CET continues to complete the brownfield remediation and development activities at former explosives manufacturing site in Hercules, CA. This has been a very successful project. There remains approximately $13 million of work to be completed this year.
The Santa Clarita, CA project continues to be an ongoing opportunity for CET, but on a purchase order basis. CET is negotiating a Construction Management contract for the entire development, which is estimated to be $130 million.
Environmental Protection Agency (EPA)
Even though the EPA suspension was lifted in November 1999, the EPA continues its investigation of CET. As of this date, CET is not aware of any wrong doings.
In January, the EPA renewed its third option period of its existing contract with CET. Since then, the EPA has issued new delivery orders to CET and more are expected.
CET is still under contract to IT Corporation to sell the EPA contract and the Seattle office. To date, no decision has been forthcoming from the EPA.
Federal Programs
CET is negotiating the Purchase and Sale Agreement for the sale of its non-EPA federal contracts, its non-RFI commercial contracts and its Tustin, CA. office. It is anticipated that this transaction will close by March 31.
Water Business
CET continues to increase its backlog in the water infrastructure construction and maintenance business. For example, CET has been awarded a contract to upgrade the water treatment system for two Denver area water districts. The growth of the Denver area has created many opportunities to upgrade and expand existing water districts and construct facilities for new water districts. CET plans to continue to increase its backlog in this area.
CET is researching acquisitions to expand its service offerings and market share. Specifically, CET wants to enter the operation and maintenance of water/wastewater facilities, new technology applications and water treatment equipment distribution.
Fourth Quarter '99 and Year 2000
The Company expects to be profitable for the fourth quarter, but revenues will be less than for the fourth quarter of 1998. Expected profits for the quarter would have been more, except for the lack of EPA business during the suspension and the costs associated with the closure/downsizing of the New Orleans and Houston offices.
Fiscal Year 2000 is expected to produce revenue of $30 million plus. It is anticipated one third of the revenues will come from the EPA.
Mr. Davis concluded, "Every effort is being made to meet the challenges noted above and capitalize on the growth and profit opportunities that could have a significant financial effect on the Company in the future." |
