INDUSTRY OUTLOOK: AERT Optimistic

COMPANY POSITIVE DESPITE FIRST-QUARTER NET LOSS

— A new distributor and recycling center gives AERT’s Joe Brooks a reason to be cautiously optimistic.

Brooks is chairman of the board and chief executive officer for Springdale-based Advanced Environmental Recycling Technologies, a plastic recycler and manufacturer of green building products.

Brooks shared his outlook with shareholders Tuesday during the first quarter conference call.

That optimism comes despite a first quarter net loss of $400,000, said Brian Hanna, chief financial officer. He said the loss is an improvement over the $1.6 million net loss a year ago.

“Home sales are up and the economy is moving, but everyone has one eye looking over their back,” Brooks said after the call.

The company announced Friday it entered into an agreement with BlueLinx Corp. for distributing ChoiceDek decking and accessories to Lowe’s. The distributor change is a result of Weyerhaeuser Company’s decision to move away from nonlumber products. Weyerhaeuser was AERT’s largest customer.

“I think it will help us. BlueLix allows us to respond faster to customers needs,” Brooks said.

The recycling center began operations in Watts, Okla., in February. Watts is about 5 miles southwest of Siloam Springs.

Brooks said the facility creates diversification opportunities because recycled products can be sold to other retailers.

On March 31, the company had a working capital deficit of $23.5 million and a stockholders deficit of $9.3 million.

Brooks said the company plans to reduce costs to maximize shareholder value.

The company is also working with lender Liberty Bank of Arkansas to restructure debts.

Shares of AERT (AERT:OB) closed Tuesday at 43 cents, unchanged for Monday. For the past 52 weeks the share price has ranged from a 70-cent high and a 20-cent low.

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