U.S. Plastic Lumber Corp. Announces Fourth Quarter and Year 2000 Operating Results and Status of Its Restructuring Plan
BOCA RATON, Fla.--(BUSINESS WIRE)--April 3, 2001--U.S. Plastic Lumber Corp. (Nasdaq:USPL) today announced its operating results for the fourth quarter and full year of 2000. In addition, the Company announced that it has made significant progress in improving margins by reducing costs resulting from the closing and idling of four plants and other cost-cutting measures included in its restructuring plan which was announced in January, 2001. U.S. Plastic Lumber also announced that it has held discussions with prospective buyers who have expressed interest in the Company's environmental recycling division, Clean Earth Inc., however, no definitive purchase agreement has been reached at this time.
Revenues for the fourth quarter of 2000 were $49 million compared with $36 million for the same quarter in 1999, an increase of 36%. Revenues from the plastic lumber division were below expectations primarily due to the impact of exiting the resin trading business, which historically has been a lower margin business. Revenues from the environmental recycling division were above expectations due to higher revenues from dredging operations as well as increased revenues from the construction services group, primarily from large Brownsfield clean-up projects. USPL reported an operating loss for the fourth quarter of 2000 of $5.4 million, excluding restructuring charges of $3.2 million, compared to fourth quarter operating income of $4 million for the same period in 1999. The operating loss in the plastic lumber division includes, inventory adjustments of $1.3 million to reduce inventory values to the lower of cost or market and $600,000 that was written off due to inventory obsolescence policies. Additionally, the Company increased its allowance for bad debt by approximately $600,000. Operating income held steady at $3.2 million in the environmental recycling division, as compared to 1999.
Revenues for twelve months ended December 31, 2000 were $173.7 million compared to $138.5 million for the same period in 1999. Revenues for the plastic lumber division for the twelve months ended December 31, 2000 were $73.2 million versus $53.0 million, an increase of 38% while revenues for the environmental recycling division were $100.5 million versus $85.5 million, an increase of 18%. The operating loss for the twelve months ended December 31, 2000, excluding restructuring charges of $3.2 million, was $2.7 million compared to operating income of $17.8 million for the same period in 1999. The operating loss for the plastic lumber division for the twelve months ended December 31, 2000, excluding restructuring charges of $3.2 million, was $8.4 million compared to operating income of $7.6 million for the same period last year primarily due to product returns in the third quarter, start-up costs associated with new manufacturing facilities and significantly higher material costs. Operating income in the environmental recycling division for twelve months ended was $9.2 million compared to $12.4 million. The decrease in operating income in 2000 resulted from significantly higher energy costs as well as dredging start up costs which occurred in the first half of 2000.
On January 10, 2001, the Company announced that it was reorganizing its manufacturing operations by closing or idling four plants. The results of these efforts will save USPL approximately $2.4 million of fixed costs during the year 2001. In addition, the relocation of the processing lines into existing plants will improve the operating margins in those facilities and create greater manufacturing efficiencies. Corresponding with the plant closures, USPL is de-emphasizing its recycled resin operations, having exited the resin trading business, which was traditionally a much lower margin business.
Mark Alsentzer, Chairman, CEO and President of USPL stated, "While we are pleased with the revenue increases in both the plastic lumber and environmental recycling businesses, we are disappointed in the operating results in the plastic lumber division for the second half of 2000. In the latter part of the third quarter, USPL made several high level management changes in the plastic lumber division, appointing a new President and Senior Vice President of Operations. Since that time, significant efforts have been made to reduce costs and improve integration between our facilities and improve profitability. We have closed and idled four plants and are looking at exiting other non-core businesses that would result in improved profitability. We have taken drastic steps to reduce operating costs in our remaining facilities, including a reduction in headcount from approximately 800 to fewer than 500 at the end of February 2001 and the reduction of numerous other fixed operating costs."
Tom McEvoy, President of USPL, Ltd., added, "The changes that we have instituted to reduce costs are beginning to bear significant fruit. We have already seen significant margin improvements in all of our production facilities." McEvoy added, "Decking sales have shown a dramatic growth in the early part of 2001, indicating that sales for SmartDeck(R) and Carefree(R) should well exceed the 2000 results."
Mark Alsentzer, Chairman, CEO and President, added, "Our environmental recycling division continues to perform well. The division achieved its operating budget for the year 2000 and finished with a strong backlog going into 2001." Alsentzer added, "We have held discussions with several prospective buyers who have expressed significant interest in the environmental recycling division, Clean Earth Inc., however, we have not reached any agreement yet and of course there can be no assurances that an agreement will be reached."
U.S. Plastic Lumber Corp. has two main business lines: the manufacture of plastic lumber, packaging and other value added products from recycled plastic, and the operation of interrelated environmental recycling services. U.S. Plastic Lumber is the nation's largest producer of recycled plastic lumber. Headquartered in Boca Raton, Florida, USPL is a highly integrated, nationwide processor of a wide range of products made from recycled plastic feedstocks. USPL creates high quality, competitive building materials, furnishings, and industrial supplies by processing plastic waste streams into purified, consistent products. USPL's products are environmentally responsible and are both aesthetically pleasing and maintenance friendly. They include such brand names as Carefree Decking(R), SmartDeck(R), RecycleDesign(TM), Trimax(R), Earth Care(TM), and OEM products including Cyclewood(R). USPL currently operates eight plastic manufacturing centers.
Certain statements and information included in this press release constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. When used in this press release, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "projected," "intends to" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks, known and unknown, and uncertainties, including but not limited to economic conditions, dependence on management, dilution to shareholders, lack of capital, changes in laws or regulations, the affects of rapid growth upon the Company and the ability of management to effectively respond to the growth, demand for products and services of the Company, newly developing technologies, its ability to compete, conflicts of interest in related party transactions, regulatory matters, protection of technology, lack of industry standards, the effects of competition, and the ability of the Company to obtain additional financing. Such factors could materially adversely affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed within this press release. Additional discussion of such factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations is contained in the Company's SEC filings.
U.S. PLASTIC LUMBER CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 2000 AND 1999
(in thousands except share and per share data)
Q4 Q4
2000 1999
---------- ----------
Revenues, Net
Plastic Lumber Division $ 13,917 $ 14,459
Environmental Recycling Division 35,075 21,514
---------- ----------
Total Revenues 48,992 35,973
Cost of Sales and Services Performed
Plastic Lumber Division 15,444 10,310
Environmental Recycling Division 28,780 15,208
---------- ----------
Total cost of sales and services
performed 44,224 25,518
Depreciation and Amortization
Plastic Lumber Division 756 653
Environmental Recycling Division 952 938
Corporate 122 144
---------- ----------
Total depreciation and
amortization 1,830 1,735
Selling, General and Administrative
Plastic Lumber Division 4,880 1,901
Environmental Recycling Division 2,050 2,199
Corporate 1,367 606
---------- ----------
Total general, administrative and
selling 8,297 4,706
Operating (loss) income (a)
Plastic Lumber Division (7,163) 1,595
Environmental Recycling Division 3,293 3,169
Corporate (1,489) (749)
---------- ----------
Total operating (loss) income (5,359) 4,015
Restructuring and Asset Impairment
Charges 3,185 --
Merger Expenses -- 440
Other Income 61 31
Interest expense, net of other items 2,555 1,088
Provision (benefit) for Income Taxes (837) 455
---------- ----------
(Loss) Earnings before extraordinary
item (10,252) 2,063
Extraordinary loss on extinguishment of
debt, net of taxes 89 --
---------- ----------
Net (loss) earnings (10,341) 2,063
Preferred stock dividend earned 637 --
---------- ----------
Net (Loss) income attributable to
common stockholders (10,978) $ 2,063
---------- ----------
---------- ----------
EBITDA (a)
Plastic Lumber Division $ (6,255) $ 2,248
Environmental Recycling Division 4,194 4,107
Corporate (1,367) (574)
---------- ----------
Total EBITDA $ (3,428) $ 5,781
---------- ----------
---------- ----------
Net (Loss) income per common share
- Basic:
Earnings before extraordinary item $ (0.31) $ 0.06
Loss on early extinguishment of debt (0.00) --
---------- ----------
Net earnings per common share -
Basic $ (0.32) $ 0.06
---------- ----------
---------- ----------
Net (Loss) income per common share
- Diluted:
Earnings before extraordinary item $ (0.31) $ 0.06
Loss on early extinguishment of debt (0.00) --
---------- ----------
Net earnings per common share -
Basic $ (0.32) $ 0.06
---------- ----------
---------- ----------
Weighted average common shares
outstanding:
Basic 34,833,583 32,693,892
Diluted 34,833,583 35,097,013
(a) Operating income and EBITDA exclude restructuring, inventory and
equipment revaluation and merger charges
U. S. PLASTIC LUMBER CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
YEARS ENDED December 31, 2000 AND 1999
(in thousands except per share data)
Year Year
2000 1999
---------- ----------
Revenues, Net
Plastic Lumber Division $ 73,214 $ 53,046
Environmental Recycling Division 100,530 85,498
---------- ----------
Total Revenues 173,744 138,544
Cost of Sales and Services Performed
Plastic Lumber Division 64,055 34,359
Environmental Recycling Division 80,213 62,117
---------- ----------
Total cost of sales and services
performed 144,268 96,476
Depreciation and Amortization
Plastic Lumber Division 3,171 2,551
Environmental Recycling Division 3,242 2,525
Corporate 451 293
---------- ----------
Total depreciation and amortization 6,864 5,369
Selling, General and Administrative
Plastic Lumber Division 14,350 8,487
Environmental Recycling Division 7,885 8,503
Corporate 3,059 1,881
---------- ----------
Total general, administrative and
selling 25,294 18,871
Operating (Loss) Income (a)
Plastic Lumber Division (8,362) 7,649
Environmental Recycling Division 9,190 12,353
Corporate (3,510) (2,174)
---------- ----------
Total operating (loss) income (2,682) 17,828
Restructuring and Asset Impairment
Charges 3,185 5,745
Merger Expenses -- 1,845
Other (Expense) Income 269 106
Interest expense, net of other items 7,037 5,465
Provision (benefit) for Income Taxes (1,188) 1,731
---------- ----------
(Loss) Earnings before extraordinary
item (11,447) 3,148
Extraordinary loss on extinguishment
of debt, net of taxes 1,028 --
---------- ----------
Net (Loss) earnings (12,475) 3,148
Preferred stock dividend earned 820 317
---------- ----------
Net (Loss) income attributable to
common stockholders $(13,295) $ 2,831
---------- ----------
---------- ----------
EBITDA (a)
Plastic Lumber Division $ (5,191) $ 10,200
Environmental Recycling Division 12,432 14,878
Corporate (2,790) (1,775)
---------- ----------
Total EBITDA $ 4,451 $ 23,303
---------- ----------
---------- ----------
Net (Loss) income per common share
- Basic:
Earnings before extraordinary item $ (0.36) $ 0.10
Loss on early extinguishment of debt (0.03) --
---------- ----------
Net earnings per common share -
Basic $ (0.39) $ 0.10
---------- ----------
---------- ----------
Net (Loss) income per common share
- Diluted:
Earnings before extraordinary item $ (0.36) $ 0.09
Loss on early extinguishment of debt (0.03) --
---------- ----------
Net earnings per common share -
Basic $ (0.39) $ 0.09
---------- ----------
---------- ----------
Weighted average common shares
outstanding:
Basic 34,297,292 28,171,655
Diluted 34,297,292 30,199,499
(a) Operating income and EBITDA exclude restructuring, inventory and
equipment revaluation and merger charges
U. S. PLASTIC LUMBER CORP. AND SUBSIDIARIES
SELECTED BALANCE SHEET ITEMS
YEARS ENDED DECEMBER 31, 2000 AND 1999
(in thousands )
December 31 December 31
2000 1999
---------- ----------
Working Capital $ 10,965 $ 12,189
Property, Plant & Equipment, net 100,545 80,424
Long Term Debt 66,626 48,822
Stockholders equity 85,742 83,010
Total Assets $200,411 $166,311
CONTACT:
U.S. Plastic Lumber Corp., Boca Raton
Mark S. Alsentzer or John W. Poling, 561/394-3511
KEYWORD: FLORIDA |
