1998 yearly results announced:
NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: ELI ECO LOGIC INC.
TSE SYMBOL: ELI
MARCH 29, 1999
ELI Eco Logic Inc. - 1998 Year End Results
ROCKWOOD, ONTARIO--ELI Eco Logic Inc. ("ECO LOGIC" or the
"Company") announced today its results for the year ended December
31, 1998. Revenue for the year was $5,587,033 (1997 -
$3,976,869). The loss from operations for the year was $5,672,624
(1997 - $13,247,395) or $0.38 per share (1997 - $1.21). After
accounting for restructuring costs ($280,083) and attendant
capital re-evaluation ($8,033,037) during 1998, the loss for the
year was $14,065,744 (1997 - $15,882,293). At December 31, 1998,
ECO LOGIC had current assets of $3,596,476 (1997 - $9,682,639),
cash of $536,322 (1997 -$7,640,006), total assets of $11,002,958
(1997 -$25,449,716), current liabilities of $1,758,667 (1997 -
$3,046,502), long-term debt of $230,841 (1997 - $239,188), and
shareholders' equity of $9,013,450 (1997 - $22,164,026). ECO
LOGIC had 15,087,806 common shares issued and outstanding at
December 31, 1998 (1997 -14,787,806).
Dr. Fred T. Arnold, Vice Chairman and Chief Executive Officer,
reported that the results reflect progress along the Company's
restructured path.
"Our strategy has been to improve the Australia operation, fill
order pipelines and reduce costs to make this a profitable
technology business. The important first steps have been
accomplished.
Operating losses were reduced from their 1997 level by $7.6
million, which was a reduction of 58%. While losses for the year
totaled $5.6 million, the quarterly pattern was encouraging, and
demonstrated our ability to define and implement change. From a
loss of $3.0 million in the first quarter, the losses were reduced
to $1.0 million, $1.1 million and $0.5 million in subsequent
quarters.
We've turned the corner with our full-scale plant in Western
Australia. Revenues from our Australian operation were up 94%
from 1997, and during 1998, performance improved each quarter. The
Australian operation achieved very close to break-even position in
terms of cash in the final quarter of the year. With the recent
$2-plus million contract from Western Power, substantially
improved liquid waste processing capacity, and the second stage of
the SHE Pacific contract, the Company is in a position to move
forward to significant revenue from the Australian markets.
Our Japanese partners continue to make progress in the permit
process in Japan and are keen to pursue new markets in addition to
the ones for which they are currently licensed, and we will assist
them paving the way for solid long-term business.
Individually and with partners in the pursuit of US Army chemical
weapon demilitarization business, where we are working on five
solicited and unsolicited bids, ECO LOGIC has continued to
reinforce the ability of the technology to efficiently reinforce
and support the customer's weapon destruction objectives.
The value of our technology and its ability to provide effective
solutions continues to be endorsed by commercial and government
customers alike. The Company now has a bid pipeline with more
than $150 million in revenue potential. Though we may not win
them all, our technology is unique and critical to every one of
those prospects.
Last year at this time, and at various junctures throughout 1998,
we discussed the Company's requirement to change its operating
philosophy and practices. The previous owner/operator plan, which
resulted in substantial operating losses, was abandoned. In early
1998, we adopted a business strategy that allowed
the corporation to avoid a majority of the financial operating
risk that led to losses in previous years. We emphasized actions
to reduce costs and increase revenue in the short run, and improve
capital allocation processes and bottom line performance in the
long run. Our long run objectives can be accomplished through
fulfilment of a business backlog that was constructed during 1998,
which is:
- Based on the proven and accepted advantages of our patented
process,
- Customer financed,
- Fulfilled through partnership with licensees and other partners.
During the year we constructed two new portable gas phase chemical
reduction units. One was for our Japanese partners in support of
their permitting activities and the other was for the US Army, to
further demonstrate the technology's ability to support chemical
weapon destruction programs. Each incorporated specific design
and engineering changes to improve upon its predecessor, and each
resulted in enhanced performance. At the same time, the total
cost for design, engineering, manufacturing and construction
declined.
The Company has demonstrated its ability to deploy substantially
improved generations of its patented technology. The original
full-scale plants, which incorporated first generation technology
and many amendments through operational field improvements in
Australia, do not reflect the efficient process the Company can
deliver in 1999. These assets represent an overvaluation the
Company's balance sheet, and as part of the Company's
re-structuring, we have incurred a one-time charge of $8.0 million
to represent a more accurate current value of first generation
equipment."
Mr. Robert M. Franklin, ECO LOGIC's Chairman, reported that 1998
was a year of fundamental change for the company, and that the
results met expectations.
"When the corporation's Board of Directors elected to institute
management changes, we charged Fred Arnold with defining a
strategy in the high return areas of hazardous waste destruction
where the Company's technology has unique advantages. The
Company's original management decision to field its solutions in a
commercial environment of fixed price and schedule was premature
and costly. This lead to accumulated losses that continued to
burden operating performance and share price. With the painful
adjustments to the balance sheet behind us, cost controls in
place, and recent marketing success, we anticipate continued
improvement during 1999."
ECO LOGIC'S business is to solve toxic chemical problems in a
safe, permanent, cost effective manner. The Company's patented
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 world-wide hazardous waste
cleanup market includes PCBs, hexachlorobenzene (HCB), pesticides,
dioxins, contaminated electrical equipment, contaminated soils,
chemical warfare agents, and most petrochemical wastes.
Regards.
Joe |
