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Non-Tech : RECY Looking Good... A -- Ignore unavailable to you. Want to Upgrade?

To: Paul W who wrote (4929)	5/13/1998 10:20:00 AM
From: Phil Jacobson	Read Replies (1) \| Respond to of 7006

All: I was disappointed that net earnings actually dropped. Keep in mind that companies like to charge as much as possible to those "one time" extraordinary items to improve the operating result line. At my old company we used to have to roll as many expenses for failed programs as possible into "restructuring charges". It's very easy to do this, especially for a company growing as fast as RECY. My opinion is these deals, while difficult to integrate immediately still should have allowed reported net to increase. That's the number where all acquisitive companies are supposed to show improvement. I'm troubled that the number showed a drop despite the opportunity they probably afforded themselves to charge some of the operating expenses to restructuring. The way I read the report, several of the companies they bought seem to have become less efficient than they were before. I've written before that this stock has to go up right now in order for the acquisitions to be accretive to P/E. The report, while looking OK, gives me the feeling there is more difficulty ahead at this stage of their development than I thought there would be. Risk is up so I sold...made some profits but not what I was hoping for. Good luck to all... Phil