Fix-Corp Third Quarter Revenues Up 32% Over Last Year, Nine-Month Revenues Up 110% Over Previous Year, Special One Time Charge Taken in the Third Quarter
BEACHWOOD, Ohio, Nov. 16 /PRNewswire/ -- Fix-Corp International, Inc. (OTC BULLETIN BOARD: FIXC) today announced that third quarter sales amounted to $3,533,518, an increase of 32% over the $2,668,108 for the 1997 quarter. Nine-month sales of $12,598,193 represent an increase of 110% over the $6,010,223 for the same period last year. Year-to-date gross profit, as a percent of sales, was 53% for the nine months ended September 30, 1998, as compared to 41% for the year ago period.
The Company has provided a special charge of $1,000,000 for doubtful accounts in the third quarter to cover any potential loss that might incur from amounts due on previous sales. Fix-Corp has stopped selling pallets to one of its initial major customers due to the uncertainty of this party's ability to perform under the terms of their contract.
Roger Kittelson, Chief Financial Officer states, "This provision for doubtful accounts is believed by management to adequately provide for any potential losses from these transactions. It is also believed that the Company will be able to resell these pallets during the fourth quarter at prices that would recover a portion or all of this provision. The Company's management team has taken a direct marketing approach and direct control over the sales of the plastic pallets. In addition, sales people have been hired, both in-house and as independent reps. The Company has also entered into new sales and marketing agreements/partnerships with organizations with proven abilities to sell and distribute this type of product on a global basis. It is anticipated that sales of pallets should increase significantly during the fourth quarter and into 1999. Through the first half of the fourth quarter, pallet sales already exceed the entire sales amount for the third quarter."
Operating expenses increased as a result of the $1,000,000 special provision, increased charges for depreciation and amortization and other expenses relating to the increase in investments in plant and equipment and operations during 1998. Depreciation amounted to $446,240 for the third quarter of 1998 as compared to $225,000 for 1997. Depreciation for the first nine months of 1998 was $1,087,362 as compared to $511,500 for the same period last year.
Net income (loss) for the third quarter amounted to ($1,458,352) ((0.048) per share), after the $1,000,000 ((0.033) per share) special charge and the increased depreciation expense, as compared to a net loss of ($220,032) ((0.009) per share), for the same quarter of 1997. Net income (loss) for the nine months ended September 30, 1998 was ($908,826) ((0.030) per share), after the $1,000,000 special charge and the increased depreciation expense in 1998, and compares to a net loss of ($593,181) ((0.026) per share) for the same period last year.
The volume of sales of recycled plastic resin increased by 2% in the third quarter of 1998 as compared to the 1997 third quarter; however, sales dollars were actually 12% lower. This is a result of the significant decrease in prices since last year caused by the decline in oil prices worldwide that has affected the selling prices of all commodities derived from petroleum.
Kittelson continues, "Production levels for resin as well as pallets were not what we had initially expected in the third quarter. Sales of resin were 26% less in this quarter as compared to the preceding quarter, as a result of a Company decision to reduce resin production levels in July and August, a period of low market value (as explained above), thus accommodating improvements made to equipment and processes. Production levels were increased again in September and are expected to remain at peak levels during the fourth quarter and throughout 1999."
"Regarding pallets, the Florida plant did not come on stream as quickly as had been forecast due to delays in obtaining local operating permits and a longer start-up period for new equipment adjustments. In addition, after achieving full pallet production in September, a breakdown of the injection- molding machine has occurred, halting operations temporarily. The lost profits resulting from this 'down time' will be recovered under the Company's business interruption insurance and production will resume in the latter part of November."
Kittelson concludes, "Fix-Corp has entered an international marketplace with a product that has been well received. We are structuring this company for the long term and designing a product line that is clearly superior as well as cost effective. Recognizing tremendous opportunity in material handling and logistics, and occupying a unique position in environmental cleanup and recycling, Fix-Corp is building on the cutting edge by leading the way with business solutions for a better environment while reducing overall costs for its customers at the same time."
Fix-Corp International, Inc. is an international environmental-based recycler of post-consumer high density polyethylene (HDPE) and producer of recycled post-consumer plastic resin for use in the manufacture of high- performance plastic pallets through wholly owned subsidiaries Fixcor Industries, Inc. and Pallet Technology, Inc. The Company is also under worldwide licensing agreement with AlliedSignal to reclaim and recycle both oil and plastic from post-consumer HDPE motor oil containers through its wholly owned subsidiary Fixcor Recovery Systems, Inc. The Company is based in the Cleveland suburb of Beachwood, Ohio and can be found on the World Wide Web at www.fix-corp.com.
PLEASE NOTE: Some statements in this news release are forward-looking, subject to certain risks and uncertainties. These risks and uncertainties include, but are not limited to: economic conditions, changes in laws and regulations, demand for products and services of the company, and the effects of competition. These risks and uncertainties could significantly affect anticipated results in the future and actual results may differ materially from any representations made herein.
SOURCE Fix-Corp International, Inc.
CO: Fix-Corp International, Inc.
ST: Ohio
IN: CHM
SU: ERN
11/16/98 15:05 EST prnewswire.com
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