U.S. Plastic Lumber Corp. Announces Third Quarter and First Nine Months 2003 Operating Results
Ocala Plant Re-Opens On a Limited Basis With Full Production Anticipated By First Q
BOCA RATON, Fla., Nov 14, 2003 (BUSINESS WIRE) -- U.S. Plastic Lumber Corp. (OTCBB:USPL) today announced its operating results for the three and nine months ended September 30, 2003.
In addition, the Company today announced that it has recently re-opened the Ocala facility on a limited production basis; which the company announced in August was temporarily shut down due to an explosion outside the plant. The Company anticipates the facility to be at full production by the end of January 2004.
Revenues for the third quarter of 2003 were $8.0 million compared with $10.6 million for the same quarter in 2002, a decrease of 25%. The decrease was mainly due to lower sales of the Company's building products and the sale of the Cornerboard packaging division in May of 2003. Net loss for the quarter was $4.4 million, or $0.07 per basic and diluted share, as compared to a net loss in the third quarter of 2002 of $2.9 million, or $0.06 per basic and diluted share. The 2002 results reflect income from discontinued operations of $4.6 million, as the Company completed the sale of its environmental recycling and remediation business on September 9, 2002. Net loss in 2003 includes $353,000 of income related to the discontinued operation. Loss from continuing operations for the three months ending September 30, 2003 was $4.7 million, or $0.07 per basic and diluted share, as compared to loss from continuing operations of $7.5 million, or $0.15 per basic and diluted share, for the comparable period of a year ago. The 2003 results from continuing operations reflect lower interest and selling, general and administrative (SG&A) expenses, partially offset by higher warranty claims of approximately $1.8 million and no restructuring charges.
Revenues for the first nine months of 2003 were $28.9 million compared with $39.8 million for the same period in 2002, a decrease of 27%. The Company attributed part of this decrease to not having sufficient inventory to meet the demand for its building products during the first nine months of 2003, mainly due to cash constraints and slower production rates of some of its newly formulated decking products. Revenues were also negatively impacted by the sale of the Cornerboard packaging division in May of 2003. Loss from continuing operations was $5.1 million, or $0.08 per basic and diluted share, as compared to loss from continuing operations of $14.9 million, or $0.34 per basic and diluted share, for the first nine months of 2002. In the second quarter of 2003, the Company recorded a gain on the sale of the Cornerboard division of $4.3 million. USPL continued to benefit from substantially lower interest expense in 2003 as a result of the restructuring of the balance sheet in the second half of 2002, which resulted in lower debt levels and the elimination of certain non-cash interest charges; which had materially impacted the Company's earnings in 2002. In addition, SG&A decreased by approximately $3.0 million for the first nine months of 2003 as compared to 2002, due to cost reduction initiatives that began in late 2002 and have continued into 2003. These savings have been largely offset by increases to the Company's accrual for warranty claims related to our previously announced product recall in the nine-month period in 2003 of approximately $2.2 million, which are reflected in Cost of Goods Sold. Net loss for the first nine months of 2003 was $4.4 million, or $0.07 per basic and diluted share, as compared to $9.4 million, or $0.21 per basic and diluted share, for the first nine months of 2002. USPL recorded $703,000 of income from discontinued operations for the first nine months of 2003, compared with income from discontinued operations of $5,460,000 during the comparable period of 2002.
Mark Alsentzer, Chairman, CEO and President of USPL said, "We are pleased to see the improvements as a result of the cost reduction initiatives that we implemented at the end of last year. Although we have made significant progress year-to-date in reducing our SG&A expenses and our interest expense, our near-term results have been impacted by the Company's working capital constraints. The company is aggressively pursuing opportunities to further improve its balance sheet and its access to capital to enable it to meet the growing product demand and improve its overall operating performance. In addition, the Company is working diligently with its insurance carrier to return the Ocala plant to full operations in the first quarter of 2004. We believe that the demand for alternative wood products has never been stronger and reductions in costs position the Company well to re-gain profitability with increasing sales."
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