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

To: Sandra who wrote (5001)	5/19/1998 8:25:00 AM
From: Brewmeister	Read Replies (1) \| Respond to of 7006

Good morning gang. I also listened to the call, but had to run so could not post my notes. Overall, I thought it was very positive - even, possibly, to the point of RECY management playing a bit of spin doctor on the refinancing issue. Tom Wiens addressed this quickly. He stated he wanted to address "the delay of financing - how it will not delay the acquisition schedule.." (or very similar) He indicated that the interest rates just got too high too fast - particularly with all the other high yield bond activity the last few weeks (equal to all activity the last few months). They are keeping their options open with regard to financing and will remain opportunitistic with the high yield bonds. They are disciplined. Won't do something for the sake of doing it. Will wait till it makes sense. Current financing( with esisting lenders): Increase subdebt from 60M to 110M Increased Senior line up to 200M This provides a total of 310M of debt They have drawn 60M of sub debt and 106M of sr. debt to date. This leaves 144M of debt left for acquisitions. He indiacte they have a good relationship with these debt holders and might be able to get a bit more if necessary. The one down side here is cost. The sub debt is at 13%.. This is why they hoped for high yield bonds at 9.5%. A big difference. They also indicated that the blended rate of debt was about 10%. When indicating the pace will not slow down, he indicated that they should begin closing some more delas in the end of this month. Acquisition pipeline remainse full. Believe they will get to 1/2B run rate soon and 800M to 1B is possible by year end (did it not used to be a simple $1B?) Skip Rouster spoke - very please with integration Jim covered inventory turns. Good improvements to help manage their margins. Looking a national projects to reduce cost. One is energy - they spend $6M a year. In this new environment, the big users can get better deals. This is a true opportunity (IMHO) They are regionalizing functions for further SG&A savings. Have closed and office and done some consolidation. This should continues. They are pleased with scrap volume and processing cost, but can do more. Upside potential is there for the future. Response to a few questions: Yes, some increased demand from overseas, but has not yet translated into higher scrap prices. April - pricing flat May - up a bit June - expect to soften They seemed to answer Jim's Y2K questions adequately. Seems like they got it covered. Interest expenses - up a bit in the quarter with new debt on line - should come down a bit. EBITDA - 11.8% is in line with history. New projects should improve margin. Acquisition multiples - "still buying at 3.8 to 4.5/5 time working capital. Historically. 4.2 times - expect same range. Others (Eg, metals management) not causing cost of acquisitions to rise. Plenty out there - over 3000 family owned scrap businesses. Some other stuff I did not follow from some women from Sun America. She seemed a bit on the attack concerning EBITDA. RECY had an answer - not sure it was what she was looking for. IRS looking at 1996 - no problems expected. Other business improvements They will continue to evaluate how to vertically integrate in non-ferrous. "evaluate how to get higher quality product out" Inventory turns - history 3 to 5 times. Goal 12. (nice improvement) Currently have 19 locations in 10 states. After next acquisitions, will have 45 sites in 12 states. (Note - 16 come from Ferex). They are not concerned about managing this many sites - Ferex already does (for example). They are working with several analysts and expect more street coverage in the future. Their plan is "on track" They are "sticking to our knitting" Any insider buying: "Just wrote a check for $3,125,000 to excercise and hold options" No one is selling When asked if they could continue acqusitions at a torrid pace, they indicate the 3000 scrap companies and that at a $1B rune rate, they only have a 5% market share. Lots of opportunity. Jim, I missed their statement of a much bigger share goal. Are you sure???? They also reiterated that they only buy companies that are immediately accretive. They are looking for ways to expand services and get higher in the value chain. That's about it from this end. Again, I thought very positive on their part. Only real downside I see is the interest on sub debt. But, I owuld guess they will deal with this when the time is right. Regards, dan

To: Sandra who wrote (5001)	5/19/1998 8:38:00 AM
From: SJ - Stephen	Read Replies (1) \| Respond to of 7006

Sandra ,, Jim,, I can't find my notes from the first conference call,,, but I also remember Piper Jeffrey was also there. I also agree with you Sandra that this stock is good for trading and also a core holding. Jim, Thanks for the note taking,, couldn't listen in. Is there a replay number??? Also,,, I am not discouraged. I think this mgmt, is working to keep their costs in line. The bond rate went too high, thus they are looking at their other means of credit for financing. SJ