AERT Announces Oct. 13, 2000, Bond Financing Update.Business Editors SPRINGDALE, Ark.--(BUSINESS WIRE)--Oct. 13, 2000 Advanced Environmental Recycling Technologies Recycling technology Methods for reducing solid waste by reusing discarded materials to make new products. The three integral phases of recycling are the collection of recyclable materials, manufacture or reprocessing of these materials into new products, and Inc. (Nasdaq:AERTA AERTA Army Environmental User Requirements and Technology Assessments (US Army) ) announced to the called City of Springdale City Council meeting at 12:30 p.m. today the following transcript of the remarks made by Joe G. Brooks, Chairman: "STATEMENT TO SPRINGDALE CITY COUNCIL Mr. Mayor, Honorable Members of Springdale City Council: Hello. I am Joe G. Brooks, Chairman of AERT AERT Advanced Environmental Recycling Technologies, Inc AERT Animal Emergency Response Team , and thank you for meeting with us here today. As you are aware, a year ago AERT, with the support of the City of Springdale and the State of Arkansas, closed $16.5 million of tax-exempt industrial revenue bonds into escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. , which was designed to roll out as the company, AERT, completed its expansion and increased its business and resultant cash flows available for debt service. The revenue bonds were purchased and are held by a large east coast institutional investor Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. who is supportive of AERT and follows the company closely. This same bondholder Bondholder A firm often has stockholders and bondholders. In a liquidation, the bondholders have first priority. bondholder An individual or institution that owns bonds in a corporation or other organization. will be rolling and repurchasing the bonds today. Due to a last-minute technicality, we are here today seeking your approval. Our fund manager has been patient and has allowed the company the time to address the concerns of both the AERT neighborhood on Jefferson and surrounding streets, as well as our customers' ever-increasing needs for low maintenance exterior composite building materials Building materials used in the construction industry to create . These categories of materials and products are used by and construction project managers to specify the materials and methods used for . . With construction funding tight, last year AERT, under my direction, with support from the Board of Directors, switched gears in mid-stream and delayed starting up a third production line, and instead installed a more extensive and elaborate dust collection, baghouse and air filtration system at the plant. Implementation of this state-of-the-art environmental control system, combined with the well-documented difficulties associated with an extensive raw material transfer and control system, delayed the Springdale plant's ability to produce and ship product, and the resultant cash flows and profitability from operations. The Springdale facility has improved and increased productivity and efficiencies significantly over the past year. In addition, I am proud to report that the vast majority of the purgings and regrind created during startup, have been recycled back through the system into saleable sale·a·ble adj. Variant of salable. saleable or US salable Adjective fit for selling or capable of being sold saleability or US product. We have distributed a sheet that shows the Springdale facility's progress year to date as compared to a year ago. Also, please note that the last quarter is unaudited and has not yet been reviewed by Arthur Andersen For the U.S. Supreme Court case commonly known as Arthur Andersen, see . Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms (the other four are PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG), performing . Through August 2000, cash flows available for debt service was approximately $1.8 million. Now, when you look at the debt service requirements of the whole $16.5 million, or an estimated $104,250 per month or $1,250,000 per year, AERT is generating 1.5 times coverage on the whole amount, even without the additional lines and plants which these funds were intended to build. Through the end of August, AERT was at 2 times coverage on $10 million in debt, and that is the comfort level for our bondholder (i.e., a minimum cash flow level of 2 times debt service requirements). Now in September, sales were $2.2 million, up from $1.9 million a year ago, but below the anticipated $2.75 million we had hoped for. That is due to the following reasons: (1) Our efforts to develop and retool re·tool v. re·tooled, re·tool·ing, re·tools v.tr. 1. To fit out (a factory, for example) with a new set of machinery and tools for making a different product. 2. a line and our millwork department to produce the new exterior fascia fascia (făsh`ēə), fibrous tissue network located between the skin and the underlying structure of muscle and bone. Fascia is composed of two layers, a superficial layer and a deep layer. trim product, which I have here with me today; and (2) Temporary fall-off of decking deliveries which is being restored in the current month. We have observed several of our key OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and nationwide indicator accounts slow their purchases over the last several months as housing activity has softened in certain markets. Our focus at AERT in conjunction with our strategic partner, Weyerhaeuser, has been to move towards a diversified product family of exterior low-maintenance products. It has been our well-documented intention to increase our sales of industrial products and broaden and diversify our product mix. We have also been test marketing the home improvement segment over the last several years, which I have been reluctant to enter into until recently, until AERT, as a company, understood this market well enough to compete. Our focus has been OEM and contractor oriented o·ri·ent n. 1. Orient The countries of Asia, especially of eastern Asia. 2. a. The luster characteristic of a pearl of high quality. b. A pearl having exceptional luster. 3. . However, I am pleased to report, based upon positive field tests in conjunction with Weyerhaeuser BMD BMD In currencies, this is the abbreviation for the Bermudian Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. , we now have a home improvement program which I believe will do very well in this market segment over the upcoming year. With this in mind, AERT, in conjunction with our strategic partner Weyerhaeuser, will be doubling the amount of retail distribution for AERT products over the next six months and I am pleased to report most of this increase will come from Springdale. I am not ready to report or disclose the specifics of this program yet, as it will be announced publicly around the second week of November in conjunction with our strategic partner, Weyerhaeuser BMD. In closing, AERT is now in a position to properly and positively utilize the bond proceeds to literally skyrocket sky·rock·et n. A firework that ascends high into the air where it explodes in a brilliant cascade of flares and starlike sparks. intr. & tr.v. our business. We have been fortunate to manage our growth up to this point without having to draw down these additional funds. Now with consumers' ever-increasing purchasing requirements for low-maintenance building materials, we believe our strategic alliance with Weyerhaeuser -- the nation's premier building materials distributor and supplier, combined with a diversified family of high quality exterior low-maintenance building materials, will yield AERT a significant competitive advantage in the market place. In short, AERT is Ready to Rumble; and we look forward to significantly increasing our business over the upcoming year. Thank you for your past support and helping AERT grow. Are there any questions?" Certain of the statements made in this press release by Joe G. Brooks are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Act of 1995. Such statements involve certain risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and other factors that could cause or contribute to actual results differing materially from such forward-looking statements are discussed in greater detail in the Company's Securities Commission Filings. |
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