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Gold/Mining/Energy : American Eco (ECGOF, ECX on Toronto exchange) -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (2589)	7/3/1998 1:18:00 PM
From: david james	Read Replies (1) \| Respond to of 2841

S-4 filing ..... Well, it looks like we can finally get some details of why the company has been struggling. They just filed an S-4 registration for their bonds, and within the filing (look at the first income statement), the break down the earnings between their two recent acquisitions (Chempower and CCG) and the rest of Eco. freeedgar.com In 1997, Chempower lost $5.2 mill on revs of just under 14 mill. This has been a horrible acquisition. A number of us have been talking about EIFH as a potential drain, but here is the real drain. That is a loss of around 28 cents a share. All the other subs together earned more than $1.36 in 1997 before the loss of Chem. This acquisition has been horribly dilutive to put it mildly. If they had not acquired acquired Chempower, we would probably be closer to 12 mill shares oustanding and the earnings would have been closer to $24 mill - or about $2.00/share. The revenues on Chempower were also very low - only around $14 mill. The revenues did not kick in until around mid year, but it was expected that they would have revenues in the range of $60 mill. Clearly there are some problems there. Many of us expected that Chem would add 5 cents or so to earnings. In reality they were subtracting 10 to 15 cents per quarter from earnings. CCG also lost about $1 mill in 97. I believe that one was also supposed to be accretive. I can only assume one or both are still losing money to account for the low earnings first quarter (and probably second quarter). Hopefully now that this info is out there, the company will make some statement about how they are expected to do in the last half of the year. I suppose on a positive note, the rest of Eco seems to be quite healthy once you take away these two new subs. If they can just get these two subs to a break even point, the rest of Eco is apparently making 25 to 30 cents a quarter - possibly more with these two new contracts. David