Waste Recovery Reports Closing of Industrial Revenue Bonds and Q2 Results
19 August 1998
Waste Recovery Reports Closing of Illinois Industrial Revenue Bonds and Second Quarter Financial Results
DALLAS, Aug. 19 -- Waste Recovery, Inc.
(OTC Bulletin Board: WRII) (WRI or the Company), the leading American
processor of scrap tires and producer of tire-derived fuel (TDF), reported
that it has concluded the sale of $6,675,000 of industrial revenue bonds
through two issuing authorities in Illinois, the Southwestern Illinois
Development Authority (SWIDA), and the Upper Illinois River Valley Development
Authority (UIRVDA). Proceeds from the sales will be used to retire two
existing issues of debt. The new bonds, like the original $8.8 million issued
in 1994, will carry the moral obligation guarantee of the State of Illinois.
The new issues have a coupon of 5.9% on the tax-exempt portion, vs. 6.5%
on the old bonds. The new bonds have average lives of approximately 10 years,
with a final maturity of 14 years and five months, compared with remaining
average lives of approximately three years and a final maturity of five years
and five months on the old bonds.
Each bond issue is secured by a tire-recycling facility, one located
approximately 70 miles southeast of Chicago in Marseilles, Illinois (the
UIRVDA issue) and one located approximately five miles northeast of St. Louis,
Missouri, in Dupo, Illinois (the SWIDA issue). During the first half of 1998,
both facilities were damaged by fire in separate incidents, and are presently
being rebuilt. The Company anticipates that both facilities will be back in
operation in accordance with original projections, the Dupo facility
operational sometime in October, and the Marseilles facility operational by
year end.
"Despite extraordinary adversity in 1998, our Illinois operations should
be fully operational by the first of next year" said David Greenstein,
President and CEO of WRI. "This fact is attributable to the tenacity of the
management team, and the faith that the Governor's Office of the State of
Illinois has shown in our ability to provide an environmentally sound solution
to the State's tire disposal problem. The restructuring of this debt should
have a positive impact on WRI's liquidity going forward. The combination of
the lower interest rates and extended maturities has the effect of reducing
annual debt service requirements on the new bonds by approximately 50% from
the $1.3 million annual requirement of the retired bonds. With this added
incentive, we intend to redouble our efforts towards achievement of profitable
operations".
In a separate matter, the Company announced that it will report a loss of
$1,208,205 for the second quarter of 1998 ending June 30, or seven cents per
share. These numbers compare with a loss of $111,695 or one cent per share
for the comparable period in 1997. For the six months ended June 30, 1998,
the Company reported a loss of $2,718,767, compared with a loss of $766,556 in
the comparable 1997 period. Per share results for both periods are reported
after the deduction of undeclared preferred dividends.
Total revenues for the 1998 second quarter were $6,312,538 vs. $7,598,450
for the second quarter of 1997. Product sales in the 1998 period were
essentially unchanged at $1,238,120 from the $1,231,538 level for the 1997
period, while disposal fees declined to $5,074,418 from the $6,366,942 level
of 1997.
"These results are very disappointing, particularly in light of the
expectations we had for 1998 at the beginning of this year", said
Mr. Greenstein. "While most of the loss is attributable to the two fires in
Illinois, we have still not brought tire flow, production, and product sales
into balance at our other plants. We are taking every step possible to review
our operational structure and capitalization with the goal of eliminating
these shortcomings as soon as possible."
Certain statements in this release constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995
(the "Reform Act"). Such forward-looking statements involve known and unknown
risks, uncertainties and other facts that may cause the actual results,
performance or achievements of Waste Recovery, Inc. to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, the
following: general economic and business conditions; competition; success of
operating initiatives; operating costs; adverse publicity; quality of
management; availability; terms and development of capital; business abilities
and judgment of personnel; availability of qualified personnel; changes in, or
the failure to comply with government regulations; and other factors
referenced in the Company's 1997 Annual Report and Form 10-K. The use in this
release of such words as "believes", "anticipates", "expects", "intends" and
similar expressions are intended to identify forward-looking statements, but
are not the exclusive means of identifying such statements.
For the three months ended, For the six months ended,
6-30-98 6-30-97 6-30-98 6-30-97
Revenues $6,312,538 $7,598,450 $12,423,672 $13,452,909
Net loss ($1,208,205) ($111,695) ($2,718,767) ($766,556)
Net loss per share(A) ($0.07) ($0.01) ($0.16) ($0.05)
Average shares
outstanding 17,390,563 13,633,946 17,334,892 11,856,758
(A) Includes the effect of undeclared preferred dividends.