USBC to discontinue agriculture and real estate business.
USA Biomass Corporation PRESS RELEASE
52300 Enterprise Way
Coachella, CA 92236 For Release: March 9, 1999
USA BiomassContact: Barry Goverman, Vice President
&n! bsp; (781) 341-1348
&n! bsp; bgoverman@usabiomass.com
Investor Relations Counsel: Philippe Niemetz
&n! bsp; WPH Consultants Ltd.
&n! bsp; (800) 477-7570
&n! bsp; wphconsultants@msn.com
USA Biomass Corporation Approves Plan to Focus on Biomass and Waste Transport Business;
Reports Year End Results
Coachella, California - March 9, 1999 -- USA Biomass Corporation ("USA Biomass", or "the Company", Nasdaq: USBCE"), formerly AMCOR Capital Corporation, announced today that on December 22, 1998, its Board of Directors approved a plan to discontinue the Company's agricultural and real estate activities and focus on its biomass and waste transport operations. Implementation of this plan is in process and has had a material impact on the Company's financial statements. Also, the Company changed its August 31 fiscal year to a calendar year.
The catalyst for this major change in the Company's direction is a long-term, exclusive solid waste transportation contract with Waste Management, Inc. (NYSE:WMI), which commenced in October 1998 and is expected to be fully implemented by mid-year. The Company has acquired a fleet of 40 transport trucks to service this contract.
The Company also announced results of operations for the four-month transition period ended December 31, 1998 and for the fiscal year ended August 31, 1998. Revenues from continuing operations for the four-month transition period ending December 31, 1998 were $2,021,000, up 398% from the comparable prior year period's revenue of $406,000. This resulted in a loss of $951,000 ($ .12 per share) compared to a loss of $641,000 ($ .09 per share) for the same period last year. Over two thirds of the current period's loss resulted from TransPacific Environmental's tree maintenance operations, which the Company has sold and is scheduled to close later this month. Revenue during the 1998 transition period includes $895,000 from the Waste Management contract, of which $ 405,000 was recorded in December 1998. The Waste Management transport operations realized a $51,000 profit in its first start-up quarter.
For its fiscal year ended August 31, 1998, the Company reported a consolidated loss of $15.8 million ($2.19 per share) compared to a net income of $2.2 million ($.29 per share) the prior year. The Fiscal 1998 loss includes $10 million from now discontinued operations, due principally to the write-down of real estate. Continuing operations resulted in a loss of $5.8 million ($.88 per share) as compared to a loss of $2.1 million ($ .41 per share) the previous period. The loss was largely due to the acquisition of TransPacific Environmental and administrative costs incurred as a result of making a transition to a new biomass and waste transport concern.
Pursuant to the Company's Plan of Discontinued Operations, it intends to liquidate $18 million of real estate during 1999, which is expected to generate $10 million of net proceeds; USA Biomass intends to use the proceeds for working capital and expansion. One such asset is a golf course/subdivision located in San Antonio, Texas, for which the Company has entered into a contract of sale for $11.5 million. The closing is scheduled for April 20, 1999, with net proceeds to the Company of approximately $5 million.
USA Biomass Chairman and Chief Executive Officer, Fred Behrens noted that: "As we move ahead, we are confident that revenues and earnings from our new core biomass operations will continue to grow strongly." Mr. Behrens also noted that the Company's strategic alliance with Waste Management, Inc. will provide multiple opportunities to expand its solid waste transportation and related operations." The Company is currently bidding on additional contracts and is exploring several acquisition candidates.
USA Biomass' Internet site can be found at www.usabiomass.com.
This press release contains forward-looking statements pursuant to the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. With the exception of historical information, the matters discussed in this press release are "forward-looking statements" that involve a number of risks and uncertainties. The actual future results of the Company could differ significantly from those statements due to factors including, but not limited to: risks associated with the ability to profitably perform on its contracts; managing the Company's growth; the continuation in the growth of the Company's biomass business, the continuation in general economic conditions; and factors discussed in the Company's Form 10-KSB for the fiscal year ended August 31, 1998 and its Form 10-QSB for December 31, 1998. |
