Recycling Industries, Inc. Reports Record 3rd Quarter
Revenue, Operating Income, and EBITDA
ENGLEWOOD, Colo., Aug. 6 /PRNewswire/ -- Recycling Industries, Inc., (Nasdaq:
RECY - news), a company engaged in the consolidation, operation, and integration
of metal recycling companies, today announced record revenue for its fiscal 1998
third quarter ending June 30, 1998 of $73.7 million, up 332% over 1997,
operating income of $5.9 million, up 429% over 1997, EBITDA of $8.4 million
(11.4%) up 364% over 1997 for its fiscal 1998 third quarter ended June 30, 1998
and net earnings of $22,000 or $0.00 diluted earnings per share. The third
quarter of 1998 includes a one-time charge of $150,000 related to costs associated
with the Company's High Yield Debt offering that was deferred. The Company
operates 42 metals recycling facilities in 12 states and has a $360 million annual
revenue run rate from existing operations as of June 30,1998. The Company's
financial performance is summarized in the following table.
Quarter Ended and Year-to-Date June 30, 1998 Highlights ($000s)
Three months ended June 30,
1998 %age of Sales 1997 %age of Sales
Revenues $73,742 100.0% $17,056 100.0%
Gross profit 11,002 14.9% 2,422 14.2%
SG&A 5,088 6.9% 1,305 7.7%
Operating income 5,914 8.0% 1,117 6.6%
Interest expense 5,878 8.0% 622 3.7%
Earnings before income
taxes and
extraordinary charge 36 0.1% 495 2.9%
Earnings before
extraordinary charge 22 0.0% 795 4.7%
Net earnings (loss) 22 0.0% 795 4.7%
EBITDA 8,413 11.4% 1,813 10.6%
Nine months ended June 30,
1998 %age of Sales 1997 %age of Sales
Revenues $174,859 100.0% $40,558 100.0%
Gross Profit 26,366 15.1% 6,111 15.1%
SG&A 11,981 6.9% 3,968 9.8%
Operating income 14,385 8.2% 2,143 5.3%
Interest expense 13,062 7.5% 1,477 3.6%
Earnings before income
taxes and
extraordinary charge1,323 0.8% 666 1.6%
Earnings before
extraordinary charge 816 0.5% 1,261 3.1%
Net earnings (loss) (1,598) (0.9%) 1,261 3.1%
EBITDA 20,439 11.7% 3,916 9.7%
Thomas J. Wiens, Chairman and CEO, stated, ''We are very proud of the operating
results for this quarter. Our company has been able to manage our costs efficiently
and maintain our margins in spite of a significant reduction in the price of scrap
metal during the quarter. The market prices of various grades of ferrous scrap
metal and certain non-ferrous metals have dropped to levels we have not seen since
the early nineties. In spite of this dramatic fall in the sales price of our end
products, we have been able to maintain an 11.4% EBITDA margin. We achieved
this by carefully monitoring our business on a daily basis, managing our inventory
turns, successfully and quickly integrating our recent acquisitions, implementing
our strategy of sharing 'best management practices' throughout our 42 operating
facilities, and taking advantage of economies of scale in transportation, raw
material collection, processing, and SG&A. We have only just begun to see the
positive impact of these factors. Our challenge has been to create a business model
that distinguishes our company within the industry and that mitigates, although
does not eliminate, the effects of price changes on our business.''
''In late May and early June, the Company completed five acquisitions. We
anticipate that these recently acquired operations will contribute substantially to
our financial performance next quarter and will provide our company with a
strategic advantage in our efforts to move closer to our source of supply of raw
materials and move further up the value chain.''
''Our acquisition pipeline remains full and we are proceeding with targeted
acquisitions cautiously. We are reviewing each of these transactions to confirm
their expected strategic and financial benefits. The Company continues to explore
various financing alternatives to fund its planned and future acquisitions and
reduce its interest costs.''
The statements included in this press release concerning predictions of economic
performance and management's plans and objectives constitute forward- looking
statements made pursuant to the safe harbor provisions of Section 21E of the
Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act
of 1933, as amended. These statements involve risks and uncertainties that could
cause actual results to differ materially from the forward-looking statements.
Factors which could cause or contribute to such differences include, but are not
limited to, factors detailed in the Company's Securities and Exchange Commission
filings; downturns in the Company's primary markets; disruptions in the Company's
operations from acts of God or extended maintenance; transportation difficulties;
the termination of previously announced acquisitions; and the unavailability of
financing to complete management's plans and objectives and previously
announced acquisitions.
RECYCLING INDUSTRIES, INC.
REPORT OF OPERATIONS
($000, except per share amounts)
The following is a report of earnings for: Recycling Industries, Inc., 9780 S.
Meridian Blvd., Suite 180, Englewood, CO 80112
For the three and nine months ended June 30, 1998 and 1997:
Three months ended June 30,
1998 Percent of 1997 Percent of
(Unaudited) Sales (Unaudited) Sales
Net sales $73,742 100.0% $17,056 100.0%
Cost of sales and
operating expenses 62,740 85.1% 14,634 85.8%
Gross profit 11,002 14.9% 2,422 14.2%
Selling, general and
administrative expenses 5,088 6.9% 1,305 7.7%
Operating income 5,914 8.0% 1,117 6.6%
Interest expense 5,878 8.0% 622 3.7%
Earnings before income
taxes and extraordinary
charge 36 0.1% 495 2.9%
Provision (benefit) for
income taxes 14 0.0% (300) (1.8%)
Earnings before extraordinary
charge 22 0.0% 795 4.7%
Extraordinary charge
on early extinguishment
of debt, net of tax -- -- -- --
Net earnings (loss) $22 0.0% $795 4.7%
Net earnings (loss) $22 0.0% $795 4.7%
Preferred stock dividends 10 0.0% 72 0.4%
Net earnings available to
common shareholders $12 0.0% $723 4.2%
Basic earnings (loss) per common share:
Before extraordinary
item $0.00 -- $0.05 --
Extraordinary item -- -- -- --
Basic earnings (loss)
per common share $0.00 -- $0.05 --
Weighted average common
shares outstanding 20,883,000 -- 13,903,000 --
Diluted earnings (loss)
per common share
Before extraordinary
item $0.00 -- $0.04 --
Extraordinary item -- -- -- --
Diluted earnings (loss)
per common share $0.00 -- $0.04 --
Weighted average common
shares outstanding 31,489,000 -- 16,220,000 --
EBITDA $8,413 11.4% $1,813 10.6%
Nine months ended June 30,
1998 Percent of 1997 Percent of
(Unaudited) Sales (Unaudited) Sales
Net sales $174,859 100.0% $40,558 100.0%
Cost of sales and
operating expenses 148,493 84.9% 34,447 84.9%
Gross profit 26,366 15.1% 6,111 15.1%
Selling, general and
administrative
expenses 11,981 6.9% 3,968 9.8%
Operating income 14,385 8.2% 2,143 5.3%
Interest expense 13,062 7.5% 1,477 3.6%
Earnings before income
taxes and extraordinary
charge 1,323 0.8% 666 1.6%
Provision (benefit) for
income taxes 507 0.3% (595) (1.5%)
Earnings before
extraordinary charge 816 0.5% 1,261 3.1%
Extraordinary charge on
early extinguishment
of debt, net of tax 2,414 1.4% -- --
Net earnings (loss) ($1,598) (0.9%) $1,261 3.1%
Net earnings (loss) ($1,598) (0.9%) $1,261 3.1%
Preferred stock
dividends 369 0.2% 353 0.9%
Net earnings available
to common
shareholders ($1,967) (1.1%) $908 2.2%
Basic earnings (loss)
per common share:
Before extraordinary
item $0.02 -- $0.07 --
Extraordinary item (0.13) -- -- --
Basic earnings (loss)
per common share ($0.11) -- $0.07 --
Weighted average common
shares
outstanding 18,115,000 -- 13,859,000 --
Diluted earnings (loss)
per common share
Before extraordinary
item $0.02 -- $0.06 --
Extraordinary item (0.09) -- -- --
Diluted earnings
(loss) per common
share ($0.07) -- $0.06 --
Weighted average
common shares
outstanding 27,238,000 -- 14,521,000 --
EBITDA $20,439 11.7% $3,916 9.7%
RECYCLING INDUSTRIES, INC.
BALANCE SHEET
($000, except per share amounts)
June 30, September 30,
1998 1997
(Unaudited) (Audited)
Assets
Current assets $65,927 $15,004
PP&E, net 174,645 33,227
Other assets 83,244 6,848
Total assets $323,816 $55,079
Liabilities
Current liabilities $14,363 $4,148
Current maturities of
long-term debt 3,277 3,300
Long-term debt 218,053 29,456
Other long-term liabilities 11,013 -
Total liabilities 246,706 36,904
Commitments and Contingent Liabilities
Redeemable common stock 1,500 1,500
Stockholders' Equity 75,610 16,675
Total Liabilities &
Stockholders' Equity $323,816 $55,079
The EBITDA calculation (which is not a measure of financial performance under
generally accepted accounting principles) was included as certain investors use the
data to determine the Company's ability to service its indebtedness. EBITDA is not a
substitute for income from continuing operations, net income, or cash flows
presentation under generally accepted accounting principles.
SOURCE: Recycling Industries, Inc.
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