LITTLE ROCK — Springdale-based Advanced Environmental Recycling Technologies’ third-quarter earnings grew by $1.5 million over last year, the company reported.
AERT’s $500,000 profit for the quarter that ended Sept. 30 was up from a $1 million loss in the same quarter last year.
The company released quarterly earnings after markets closed Thursday, and management held a conference call Friday.
AERT has plants in Springdale and Lowell and manufactures building material from recycled plastic and waste-wood fiber. The company also has a plastics recycling plant near Watts, Okla.
Brian Hanna, chief financial officer, said cost containment led to the gain. AERT reduced administration costs by $700,000.
“Our strategy over the past few years has been to rationalize our business and find a more economical way of managing the business,” he said. “We looked at how we could do more with less and are seeing some of the results now.”
Joe Brooks, chief executive officer, said the company employs approximately 450 and has avoided a major layoff.
“We can control expenses by holding down overtime and through raw material costs,” he said.
Hanna said employment shrunk slightly through attrition.
The company also secured a $15 million loan with Birmingham, Ala.-based AloStar Bank of Commerce on Thursday. Hanna said $7 million is a short-term loan and $8 million is a revolving credit line.
The short-term loan is being used to pay off existing loans with Liberty Bank and the purchase of new equipment.
“The loans give us some flexibility to deal with the seasonality of the decking business,” he said.
Brooks said continued expansion of the Watts plant will help the company become more diverse.
“We are nearing competition of a plastic recycling system that will allow AERT to sell plastic resins on a much larger scale,” he said.
An early customer of the recycled resin is a plastic caulk tubing company in Oklahoma. Brooks said the tubes made from the recycled products are stronger and more sustainable.
AERT’s total quarterly sales were even with last year at $17.8 million, but are up 25 percent year to date. The company has $63.1 million in net sales for the year compared with $50.5 million last year.
Shares of AERT, which trade over the counter, closed at 11 cents Friday, down 1 cent or 10.8 percent from Thursday. The shares have traded between 6 cents and 15 cents during the past 52 weeks.
Business, Pages 31 on 11/17/2012