Here's the 4Q financial summary from the end of March. I like the $150 million in potential business they have in the pipeline. Assuming the technology is as effective as claimed, one would have to think they will win a reasonable chunk of the business. Writedowns should be done now.
By Bridge News
Toronto--Mar 29--Canada's Eli Eco Logic, a waste disposal company based in
Rockwood, Ontario, says its net loss for the year ended Dec 31 was Cdn $14.1
million compared to $15.9 million for 1997. Before restructuring charges, Eli
Eco's 1998 net loss was $5.7 million or 38c a share compared with $13.2 million
or $1.21 a share for 1997.
* * *
The following is the text of today's announcement with emphasis added by
Bridge News. BridgeStation links to company data have been inserted at the end:
ELI ECO LOGIC INC. ("ECO LOGIC" OR THE "COMPANY") ANNOUNCED TODAY ITS
RESULTS FOR THE YEAR ENDED DECEMBER 31, 1998. REVENUE FOR THE YEAR WAS
$5,587,033 (1997 - $3,976,869). THE LOSS FROM OPERATIONS FOR THE YEAR WAS
$5,672,624 (1997 - $13,247,395) OR $0.38 PER SHARE (1997 - $1.21). AFTER
ACCOUNTING FOR RESTRUCTURING COSTS ($280,083) AND ATTENDANT CAPITAL
RE-EVALUATION ($8,033,037) DURING 1998, THE LOSS FOR THE YEAR WAS $14,065,744
(1997 - $15,882,293). AT DECEMBER 31, 1998, ECO LOGIC HAD CURRENT ASSETS OF
$3,596,476 (1997 - $9,682,639), CASH OF $536,322 (1997
-$7,640,006), TOTAL ASSETS OF $11,002,958 (1997 -$25,449,716), CURRENT
LIABILITIES OF $1,758,667 (1997 - $3,046,502), LONG-TERM DEBT OF $230,841 (1997
- $239,188), AND SHAREHOLDERS' EQUITY OF $9,013,450 (1997 - $22,164,026). ECO
LOGIC HAD 15,087,806 COMMON SHARES ISSUED AND OUTSTANDING AT DECEMBER 31, 1998
(1997 -14,787,806).
Dr. Fred T. Arnold, Vice Chairman and Chief Executive Officer, reported that
the results reflect progress along the Company's restructured path.
"Our strategy has been to improve the Australia operation, fill order
pipelines and reduce costs to make this a profitable technology business. The
important first steps have been accomplished.
Operating losses were reduced from their 1997 level by $7.6 million, which
was a reduction of 58%. While losses for the year totaled $5.6 million, the
quarterly pattern was encouraging, and demonstrated our ability to define and
implement change. From a loss of $3.0 million in the first quarter, the losses
were reduced to $1.0 million, $1.1 million and $0.5 million in subsequent
quarters.
We've turned the corner with our full-scale plant in Western Australia.
Revenues from our Australian operation were up 94% from 1997, and during 1998,
performance improved each quarter. The Australian operation achieved very close
to break-even position in terms of cash in the final quarter of the year. With
the recent $2-plus million contract from Western Power, substantially improved
liquid waste processing capacity, and the second stage of the SHE Pacific
contract, the Company is in a position to move forward to significant revenue
from the Australian markets.
Our Japanese partners continue to make progress in the permit process in
Japan and are keen to pursue new markets in addition to the ones for which they
are curr
e
ntly licensed, and we will assist them paving the way for solid long-term
business.
Individually and with partners in the pursuit of US Army chemical weapon
demilitarization business, where we are working on five solicited and
unsolicited bids, ECO LOGIC has continued to reinforce the ability of the
technology to efficiently reinforce and support the customer's weapon
destruction objectives.
The value of our technology and its ability to provide effective solutions
continues to be endorsed by commercial and government customers alike. The
Company now has a bid pipeline with more than $150 million in revenue
potential. Though we may not win them all, our technology is unique and
critical to every one of those prospects.
Last year at this time, and at various junctures throughout 1998, we
discussed the Company's requirement to change its operating philosophy and
practices. The previous owner/operator plan, which resulted in substantial
operating losses, was abandoned. In early 1998, we adopted a business strategy
that allowed
the corporation to avoid a majority of the financial operating risk that led
to losses in previous years. We emphasized actions to reduce costs and increase
revenue in the short run, and improve capital allocation processes and bottom
line performance in the long run. Our long run objectives can be accomplished
through fulfilment of a business backlog that was constructed during 1998,
which is:
- Based on the proven and accepted advantages of our patented process,
- Customer financed,
- Fulfilled through partnership with licensees and other partners.
During the year we constructed two new portable gas phase chemical reduction
units. One was for our Japanese partners in support of their permitting
activities and the other was for the US Army, to further demonstrate the
technology's ability to support chemical weapon destruction programs. Each
incorporated specific design and engineering changes to improve upon its
predecessor, and each resulted in enhanced performance. At the same time, the
total cost for design, engineering, manufacturing and construction declined.
The Company has demonstrated its ability to deploy substantially improved
generations of its patented technology. The original full-scale plants, which
incorporated first generation technology and many amendments through
operational field improvements in Australia, do not reflect the efficient
process the Company can deliver in 1999. These assets represent an
overvaluation the Company's balance sheet, and as part of the Company's
re-structuring, we have incurred a one-time charge of $8.0 million to represent
a more accurate current value of first generation equipment."
Mr. Robert M. Franklin, ECO LOGIC's Chairman, reported that 1998 was a year of
fundamental change for the company, and that the results met expectations.
"When the corporation's Board of Directors elected to institute management
changes, we charged Fred Arnold with defining a strategy in the high return
areas of hazardous waste destruction where the Company's technology has unique
advantages. The Company's original management decision to field its solutions
in a commercial environment of fixed price and schedule was premature and
costly. This lead to accumulated losses that continued to burden operating
performance and share price. With the painful adjustments to the balance sheet
behind us, cost controls in place, and recent marketing success, we anticipate
continued improvement during 1999."
ECO LOGIC'S business is to solve toxic chemical problems in a safe,
permanent, cost effective manner. The Company's patented process is an
innovative technology that converts on-site, organic, hazardous waste into
reusable or disposable products. This non-incineration process has gained high
public and regulatory acceptance. ECO LOGIC's world-wide hazardous waste
cleanup market includes PCBs, hexachlorobenzene (HCB), pesticides, dioxins,
contaminated electrical equipment, contaminated soils, chemical warfare agents,
and most petrochemical wastes.
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FOR FURTHER INFORMATION PLEASE CONTACT:
ELI Eco Logic Inc. Barbara Ware (519) 856-9591 ext. 204 Website:
http:\\www.eco-logic-intl.com Email: corporate@eco-logic-intl.com
INDUSTRY: EVT SUBJECT: NWS
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