SPRINGDALE, Ark., March 30, 2009 (GLOBE NEWSWIRE) -- Advanced Environmental Recycling Technologies, Inc. (Nasdaq:AERT), a leading manufacturer of Green building products, today filed its annual report with the Securities and Exchange Commission on Form 10-K. Net sales for the year ended December 31, 2008 were $87.4 million, up 4% from $84.2 million for the year ended December 31, 2007. Sales for the fourth quarter of 2008 were $14.3 million, up 32% from $10.8 million in the fourth quarter of 2007.
2008 NET LOSS
The net loss for the year ended December 31, 2008, before infrequent or unusual charges, was $3.7 million. The total of significant, infrequent, or unusual charges was $32.2 million as detailed below:
$ Millions
----------
Class action claims resolution
& associated Plaintiff and Defense costs 5.6
MoistureShield marketing campaign 2.0
Asset impairment & other reserves 6.1
Tax valuation allowance 18.5
----------
Total 32.2
==========
Thus, the net loss applicable to common stock for 2008 was $35.9 million or $0.75 per share as compared to a loss of $9.5 million or $0.20 per share for 2007.
MANAGEMENT ANALYSIS
Commenting on the company's 2008 results, AERT CEO, Joe Brooks, explained, "2008 has been deemed by many analysts as the worst year for home building and remodeling since the Great Depression. AERT addressed many difficult situations head on in this very tough and depressed economic environment. On a positive note, although bruised and battered, AERT has weathered the storm and is now moving forward in 2009. In fact, our business is strengthening, and our Springdale South plant is now scheduled to start up after Easter.
"The perfect storm of multiple negative events resulted in an enormous amount of one-time charges and write downs as we shuttered three plants and resolved and settled class action allegations over deck cleaning issues as a result of our continued focus on customer satisfaction. Operations are now consolidated and improving in Springdale and Lowell, Arkansas with our new plastic recycling facility also on target to start up in the near future. Substantial costs and overhead have been eliminated from a year on year basis and our new management team led by President, Tim Morrison, and CFO, Brian Hanna, is focused on increasing sales and returning AERT to profitability in the near future. We are also very appreciative of the encouragement and support from our lenders, financial backers, customers, and vendors who continue to work with AERT during this difficult economic period."
Brooks concluded, "All of us at AERT are committed to fighting through this challenging period. We believe in the resiliency of the American people and the American economy, and as the American consumer confidence slowly improves, AERT is well positioned to positively assist the remodeling recovery by providing high quality Green building products at affordable prices. AERT will utilize recycled materials and technology to save energy and resources and provide more value for the consumer dollar."
The financial statements shown below are qualified in their entirety by the Company's filing with the Securities and Exchange Commission on Form 10-K for the year ended December 31, 2008, including, but not limited to the auditor's report, management discussion, analysis, and notes.
ADVANCED ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC.
BALANCE SHEETS
------------ ------------
December 31, December 31,
2008 2007
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 1,238,488 $ 1,716,481
Restricted cash 7,630,625 11,461,950
Restricted certificate of deposit -- 871,468
Trade accounts receivable, net of
allowance of $615,882 at December 31,
2008 and $0 at December 31, 2007 1,574,058 1,866,621
Inventories 10,551,344 23,622,586
Prepaid expenses 933,268 892,462
------------ ------------
Total current assets 21,927,783 40,431,568
------------ ------------
Land, buildings and equipment:
Land 1,988,638 1,988,638
Buildings and leasehold improvements 9,213,134 10,008,257
Machinery and equipment 46,680,586 51,690,169
Transportation equipment 1,124,681 1,148,046
Office equipment 2,800,938 1,169,213
Construction in progress 5,810,491 4,218,303
------------ ------------
Total land, buildings and equipment 67,618,468 70,222,626
Less accumulated depreciation 33,004,057 31,380,005
------------ ------------
Net land, buildings and equipment 34,614,411 38,842,621
------------ ------------
Other assets:
Deferred tax asset -- 8,851,412
Debt issuance costs, net of accumulated
amortization of $1,327,896 at
December 31, 2008 and $1,052,949 at
December 31, 2007 3,150,757 3,042,645
Debt service reserve fund 2,100,599 3,391,500
Other assets, net of accumulated
amortization of $449,883 at
December 31, 2008 and $421,310 at
December 31, 2007 371,247 361,557
------------ ------------
Total other assets 5,622,603 15,647,114
------------ ------------
Total assets $ 62,164,797 $ 94,921,303
============ ============
The accompanying notes are an integral part of these financial
statements.
ADVANCED ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC.
BALANCE SHEETS
------------ ------------
December 31, December 31,
2008 2007
------------ ------------
Liabilities and Stockholders' Equity
(Deficit)
Current liabilities:
Accounts payable - trade $ 10,699,771 $ 9,274,134
Accounts payable - related parties 487,581 350,882
Current maturities of long-term debt 9,290,277 9,582,145
Current maturities of capital lease
obligations 214,579 224,840
Accruals related to expected settlement
of class action lawsuit 4,649,784 --
Other accrued liabilities 6,305,039 6,084,345
Working capital line of credit 10,579,475 12,303,378
Notes payable 366,581 385,229
------------ ------------
Total current liabilities 42,593,087 38,204,953
------------ ------------
Long-term debt, less current maturities 23,244,236 25,707,959
Capital lease obligations, less current
maturities 581,726 796,305
------------ ------------
23,825,962 26,504,264
------------ ------------
Accrued dividends on convertible preferred
stock 143,280 136,957
------------ ------------
Commitments and contingencies (see Note 13)
Stockholders' equity (deficit):
Preferred stock, $.01 par value; 5,000,000
shares authorized, 788,182 and 757,576
shares issued and outstanding at
December 31, 2008 and 2007, respectively 7,882 7,576
Class A common stock, $.01 par value;
100,000,000 shares authorized; 47,423,680
and 46,314,250 issued and outstanding at
December 31, 2008 and 2007, respectively 474,237 463,143
Class B convertible common stock, $.01 par
value; 7,500,000 shares authorized;
1,465,530 shares issued and outstanding
at December 31, 2008 and 2007 14,655 14,655
Warrants outstanding; 3,787,880 at
December 31, 2008 and 2007 1,533,578 1,533,578
Additional paid-in capital 52,306,080 50,872,462
Accumulated deficit (58,733,964) (22,816,285)
------------ ------------
Total stockholders' equity (deficit) (4,397,532) 30,075,129
------------ ------------
Total liabilities and stockholders' equity
(deficit) $ 62,164,797 $ 94,921,303
============ ============
The accompanying notes are an integral part of these financial
statements.
ADVANCED ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS
--------------------------
Year Ended December 31,
--------------------------
2008 2007
------------ ------------
Net sales $ 87,397,541 $ 84,217,088
Cost of goods sold 78,316,711 76,347,726
Estimated liability for claims resolution
from class action settlement 2,869,784 --
------------ ------------
Gross margin 6,211,046 7,869,362
Selling and administrative costs 20,529,774 16,634,606
(Gain) loss from fixed asset impairment
and disposition 5,515,599 (7,920)
------------ ------------
Operating loss (19,834,327) (8,757,324)
------------ ------------
Other income (expense):
Estimated liability from expected class
action settlement (1,962,775) --
Late registration fees (682,259) --
Interest income 43,913 183,409
Interest expense (3,824,902) (3,956,935)
------------ ------------
Net other expense (6,426,023) (3,773,526)
------------ ------------
Loss before dividends, income tax and
extraordinary item (26,260,350) (12,530,850)
Dividends on preferred stock (826,484) (1,080,795)
------------ ------------
Loss before income tax and extraordinary
item (27,086,834) (13,611,645)
Income tax (benefit) provision 8,830,845 (3,662,082)
------------ ------------
Loss before extraordinary item (35,917,679) (9,949,563)
Extraordinary gain on involuntary
conversion of non-monetary assets due to
fire (net of income tax) -- 432,403
------------ ------------
Net loss applicable to common stock $(35,917,679) $ (9,517,160)
============ ============
Loss per share of common stock before
extraordinary item (basic and diluted) $ (0.75) $ (0.21)
============ ============
Extraordinary gain per share of common
stock (basic and diluted) -- $ 0.01
============
Loss per share of common stock after
extraordinary item (basic and diluted) $ (0.75) $ (0.20)
============ ============
Weighted average number of common shares
outstanding (basic and diluted) 47,937,520 47,030,850
============ ============
About Advanced Environmental Recycling Technologies, Inc.
Since 1989, AERT (Nasdaq:AERT) has pioneered the use of recycled polyethylene plastic in the manufacture of composite building materials. With its constantly evolving portfolio of patented and proprietary recycling technologies, AERT has been widely recognized as a leader in resource conservation innovation and received the EPA Award for Environmental Excellence for its process of converting scrap plastic to composite outdoor decking. AERT converts reclaimed plastic and wood fiber waste into quality outdoor decking systems, fence systems, and door and window components. The Company is the exclusive manufacturer of Weyerhaeuser ChoiceDek(r) decking, which is available in multiple colors and is sold in all Lowe's Home Improvement stores. See http://www.choicedek.com for more information. AERT's MoistureShield(r) decking program is expanding and products are available in many parts of the U.S. now, with national distribution planned for 2009. See http://www.moistureshield.com for product information or to find a regional distributor or dealer. AERT operates manufacturing facilities in Springdale and Lowell with a state-of-the-art recycling facility under construction in Watts, Oklahoma. This LEED certified recycling facility is expected to be operational in the second quarter of 2009. For more information on the Company, visit http://www.aertinc.com.
The AERT, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4905
Certain statements in this news release regarding projected results of operations, or, projected results of financial plans or future strategies and initiatives, including, but not limited to, projections of revenue, projections of profitability, any and all future expectation, and plans for future activities may and should be regarded as "forward-looking statements" within the meaning of the Securities Litigation Reform Act. These statements involve, among other things, known and unknown risks, uncertainties and other factors that may cause AERT, Inc.'s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. AERT currently is considering, but may or may not in the future implement any or all of the items and issues listed in any planned budget or strategic initiative, due to, among other things, known and unknown risks, uncertainties and other factors.
AERT, Inc. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, change in strategy, or otherwise. The above-mentioned listing of risks and uncertainties is not inclusive. For a more detailed discussion of some, but not all, of the risks and uncertainties that may affect AERT, Inc., see AERT, Inc.'s filing with the Securities and Exchange Commission, including its Annual Report on Form 10-K, for the fiscal year ended December 31, 2008.