Ok, here is the real deal for 1999, released last week. As I expected, a bunch more writedowns to clean the slate moving forward. Interesting that the company sees its waste stream diversion in the commercial sector as its best opportunity.
ELI Eco Logic Inc.: 1999 Year End Results
13:21 EST Thursday, April 20, 2000
ROCKWOOD, ONTARIO--ELI Eco Logic Inc. ("Eco Logic" or the "Company") (TSE-ELI) announced today its
results for the year ended December 31, 1999. Revenue for the year was $5,069,916 (1998 - $5,587,033). The loss
from operations for the year was $4,253,812 (1998 - $5,752,624) or $0.24 per share (1998 - $0.38). After
accounting for restructuring costs ($17,185), write down of capital assets ($1,260,393) and loss on disposal of assets
($1,350,981) during 1999, the loss for the year was $6,882,371 (1998 - $14,065,744). At December 31, 1999, Eco
Logic had current assets of $1,825,180 (1998 - $3,596,476), cash of $328,220 (1998 - 536,322), total assets of
$4,268,750 (1998 -$11,002,958), current liabilities of $979,963 (1998 - $1,758,667), long-term debt of $nil (1998 -
$239,659), and shareholders' equity of $3,288,787 (1998 - $9,013,450). Eco Logic had 18,879,758 common shares
issued and outstanding at December 31, 1999 (1998 - 15,087,806).
Dr. Fred T. Arnold, Vice Chairman and Chief Executive Officer, reported that "The results reflect the reality of a
business re-positioning process, which was difficult but necessary, and which is now yielding positive results.
Our strategy has been to re-invent the Company from one that performs hazardous waste destruction services to one
that transfers its proven Gas Phase Chemical Reduction (GPCR) technology to others in the waste management
industry. We believe that this will enable us to improve our bench mark commercial operation in Australia, to fill order
pipelines and to reduce costs. The important first steps toward these goals have been accomplished.
In 1999, we reduced our operating losses by $1.5 million from their 1998 levels and by $9.1 million from their 1997
levels, for a total reduction of 70%. While losses for the year totaled $4.3 million, the trend of lower annual losses since
1996 evidenced our ability to implement change, and that the change has contributed to improved operating results for
the current year.
We continue to see improvements in our full-scale, GPCR benchmark plant in Western Australia. Revenues from our
Australian operation were up 31% from 1998, and during 1999, performance improved each quarter. The Australian
subsidiary operated at very close to break-even in terms of cash for the entire year, an objective we adopted for that
operating subsidiary. The Australian subsidiary completed the $2 million-plus contract with a power utility, served the
needs of other public and private customers with on-time, on-budget delivery of services, supported our marketing and
fulfillment plans to address other waste destruction opportunities in Australia, and helped cement the recently announced,
new joint venture in Japan.
We are now entering the third stage of a five-stage engagement for the destruction of a large stockpile of
hexachlorobenzene (HCB) for Orica in Australia (previously described in press releases dated Oct 5/98, Mar 23/99 &
Oct 14/99).
Pursuant to our new business model we are meeting this customer's needs by collaborating with Kvaerner Process, a
leading international engineering firm to enhance our ability to respond to large, complex jobs, and in so doing have
vetted and certified our business strategy.
Our Japanese partners for PCB destruction continued to make progress in the permit process, but encountered
procedural delays in the issuance of a final, third stage permit that will enable site selection and construction for the first
plant. We have recently entered into a letter of agreement concerning a joint venture in Japan (press release dated Mar
28/00) that positions our GPCR technology for maximum penetration of the Japanese hazardous organic waste market.
Eco Logic has continued to reinforce the ability of the GPCR technology to efficiently support the US Army's chemical
weapon destruction objectives. The Company recently received confirmation of the suitability of its technology for this
market with its receipt of a (CDN)$4.8 million prime contract in February (press releases dated Feb 7/00 & Feb 24/00)
as a part of an integrated, complete solution for safe and efficient weapon destruction. We will be delivering a third
generation mobile GPCR unit to the Army's facility at Aberdeen, Maryland in May, where work will continue for the
remainder of the year. This market presents a number of attractive, long-term opportunities for the Company.
During 1999 we began to define and penetrate a market niche, which in the future may represent the Company's
greatest opportunity. In this niche our technology is used to destroy unavoidable, hazardous by-products of
manufacturing before they mingle with the broader waste stream of an enterprise. The UN's Persistent Organic Pollutant
(POP) initiative, which distinguished our technology, and the recently enacted USEPA Persistent Bioaccumulative and
Toxic (PBT) program, both highlight the importance of pollution prevention for over twenty chemicals for which GPCR
has demonstrated superior destruction efficiency. In past months, the Company entered into contracts with industrial
customers, one from the US and the other from Canada, to demonstrate the ability of GPCR technology to destroy
waste and re-generate activated carbon filters as an add-on to industrial plants and processes. Results of these tests
were successful, and in one instance, demonstrated a potential internal rate of return of over 50% as compared with the
next best alternative. The obvious environmental advantages, the regulatory ease with which GPCR can be implemented,
and the attractive financial returns for customers make this market ideal for a business based upon technology transfer
that yields recurring license revenue. We expect substantial progress in this market during 2000.
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 which yielded many operational field
improvements in Australia, do not offer the efficiencies that the Company delivers today and will continue to develop in
the future. Recognizing this reality, as part of the Company's re-structuring, we have incurred a final charge of $1.3
million to represent a more accurate current value of first generation equipment."
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
market includes pollution prevention for POPs chemicals and hazardous waste destruction for PCBs,
hexachlorobenzene (HCB), pesticides, dioxins, contaminated electrical equipment, contaminated soils, chemical warfare
agents, and most petrochemical wastes. |
