Here's the news...not great, but at least the company is still optimistic about the future.
-----------------------------------------------------------------
Eco Logic Announces 1998 Second Quarter Results and U.S.
Army Decision
ROCKWOOD, ONTARIO--ELI Eco Logic Inc. ("ECO LOGIC" or the
"Company") (TSE - ELI) today announced its results for the three
month period ended June 30, 1998. Revenue for the three month
period from April 1, 1998 to June 30, 1998 was $2,338,734 (1997 -
$1,638,931). The net loss for the three month period was
$1,020,078 (1997 - $2,903,584) or $0.07 per share (1997 - $0.37
per share). After accounting for the dilution effects of the
rights offering completed in the third quarter of 1997, the loss
per share during the second quarter of 1998 declined approximately
65 percent over the loss per share for the comparable period in
1997. For the six months ended June 30, 1998, revenue was
$2,439,052 (1997 - $2,812,381) resulting in a loss of $3,976,094
or $0.26 per share (1997 - $5,878,227 or $0.76 per share). After
accounting for the dilution effects of the rights offering
completed in the third quarter of 1997, the loss per share during
the first half of 1998 declined approximately 33 percent over the
loss per share for the comparable period in 1997.
At June 30, 1998, the Company had current assets of $4,587,846
(1997 - $2,729,518), total assets of $21,521,513 (1997 -
$19,964,345) current liabilities of $2,124,460 (1997 -
$10,574,485) long term debt of $235,344 (1997 - $243,139), and
shareholders' equity of $19,161,709 (1997 - $9,146,721). On June
30, 1998, there were 15,087,804 common shares issued and
outstanding.
During the second quarter, the Company worked under amendments to
its previously issued contract from the US Army to design, procure
and begin construction of a portable Gas Phase Chemical Reduction
unit to demonstrate the destruction of chemical weapon munitions
and related hazardous material for the Assembled Chemical Weapon
Assessment (ACWA) Program. As the expenses associated with this
initiative cannot be billed until a later date, inventory values
in the form of work in progress grew during the period to $717,061
(1997 - $534,434).
ECO LOGIC's Chief Executive Officer, Dr. Fred T. Arnold, said that
the Company achieved encouraging progress in three areas which he
earlier identified as strategically important to the Company. "We
emphasized improved capital decisions and cost control, and
achieved tangible results. Expenses for the first half of the
year were $6.4 million against $8.7 for the same period last year.
Plant development costs were down from $1.7 to $1.1 million. In
Australia, we hired a General Manager who substantially extends
our experience and knowledge base for continuing operations, and
we transacted more business in Australia during the quarter than
in any previous period.
We committed to working aggressively to construct a backlog of
business opportunity in markets where our current capabilities
allow us a distinct competitive advantage in satisfying customer
requirements. We made significant progress in this area, and the
unweighted value of more than ten initiatives for which we are now
bidding exceeds $100 million dollars. We will not win all this
work, and other opportunities will be forthcoming, but these
developments represent very solid achievements as we look to the
future for the Company. In addition, we accomplished this while
slightly decreasing our marketing and business development expense
(from $476,387 in 1997 to $447,679 for the first of this year).
As we evaluate the likelihood and timing of success for future
business we face and manage significant levels of uncertainty.
Within this context, the U.S. Army released news late last evening
in connection with the ACWA program that was disappointing. The
U.S. Army informed our prime contractor, Lockheed Martin Advanced
Environmental Systems, that the Lockheed Martin Team was not among
those to advance to the next stage at this juncture in the ACWA
selection process. The U.S. Army has confirmed to ECO LOGIC its
continuing efforts to find and commit funding that would allow
near term selection of one or more of the other teams in the ACWA
competition, and that the initial selection announcement did not
disqualify any team from a future award under the on-going ACWA
competition. The U.S. Army also confirmed to ECO LOGIC this
morning, that it was earnest in its desire to locate funding that
will enable it to carry additional technologies through the
demonstration phase. At this point we continue to believe that
the Company is a member of a team that provides the promise of
superior technology for the US Army's chemical weapon
demilitarisation initiatives and we will continue to support our
prime contractor in this procurement.
Finally, we stated that we would extend our capabilities and
market access through strategic relationships. We have used this
strategy for most of the work currently under proposal, and I
think that it has offered three important advantages. First, it
has opened markets and opportunities with which we were previously
unfamiliar or unqualified. Second, it has reduced our average
cost of business development. Third, it has improved our chances
of winning new work - our proposals and ability to deliver on
future commitments are significantly improved, and demonstrably so
in several cases, through partnership.
As we progress through the second half of the year, we will
continue to focus on our long term financing requirements, and we
will maintain our commitment managing and executing in a fashion
that creates value for the future."
ECO LOGIC's business is to solve toxic chemical problems in a
safe, permanent, cost effective manner. The ECO LOGIC 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 worldwide hazardous waste cleanup market includes PCBs,
electrical equipment, contaminated soils, chemical warfare agents,
petrochemical wastes, and certain low-level radioactive wastes. |
