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Non-Tech : RECY Looking Good... A
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To: Braddock Bull who wrote (3682)1/4/1998 12:22:00 AM
From: Tim Oliver  Read Replies (1) of 7006
 
RECY filed a similar extension for their Sept. quarter at the end of
December 1996 and reported their Sept. quarter earnings about
two weeks later. I don't think it has anything to do with being too
busy. In the previous quarter, they announced that they'd have
positive earnings two weeks after the quarter closed along with
a stock buyback. Long term investors probably already know this
game...hopefully there's lots of them in RECY now so there aren't
too many surprised people when they have negative earnings.

No acquisitions were made in the Sept. quarter, but two letters
of intent were made (the first of the six recent acquisitions). There's
all sorts of things that could have thrown them out of whack.
A large competitor in Texas recently changed their inventory
accounting method which threw their operating income numbers
way off. The revenues are right on though for RECY....about $62 million for F1997.

The real story is the six recent acquisitions that have revenues that
are three times what RECY will report for F1997 in a couple of weeks.
Since August, they've brought on two experts in acquisitions, one
being the COO of a $1.7 billion competitor, and they've reduced
their cost of capital since then and opened up the floodgates after
playing around in the little leagues.

As a comparison of how good these new guys are....MTLM had
revenues of about $100 million for the QUARTER ended Sept. 30
and EBITDA of $5 million. The six new acquisitions that RECY just
paid for had almost $200 million revenues for the YEAR ended Sept.
30, and EBITDA of $25 million. RECY paid $151 million for the
six acquisitions last month, but MTLM has had a market cap of
over $250 million since last summer.

Tim
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