AERT Grows Sales, Shrinks Loss

AERT sales jumped almost 26 percent in 2012, helping the company shrink losses.

The Springdale-based company had 2012 sales of $74.6 million compared with $59.3 million in 2011. It lost $2 million last year versus $8 million in 2011.

Joe Brooks, chief executive officer, said “2012 was a significant year for AERT as the company is returning to a solid foundation.” Brooks made the remark Monday during a 2012 earnings conference call.

By The Numbers

Advanced Environmental Recycling Technologies

Following are 2012 yearly earnings compared with 2011.

2011 2012

Net sales $59.3 million $74.6 million

Gross margin $3.9 million $13.3 million

Net income (loss) ($8 million) ($2 million)

Source: Securities And Exchange Commission

Advanced Environmental Recycling Technologies is a plastic recycler and manufacturer of green building products. The company combines recycled plastic and waste wood fiber to make window and door components, decking and fence materials at plants in Springdale and Lowell. AERT also has a plastics recycling plant outside Watts, Okla.

Tim Morrison, AERT president, said increased sales volume and operating efficiency helped the company’s bottom line.

“We were able to produce more with the same number of people,” he said.

AERT employed 371 people at the end of 2012 and has 474 workers now to meet seasonal needs, Morrison said.

Increased international sales and new customers for the MoistureShield line were main factors increasing sales, he said. MoistureShield is AERT’s wholesale line.

ChoiceDek, the company’s retail line sold at Lowe’s, also grew sales following a $4.6 million inventory refresh in 2011. Taking the old products out of stores accounted for more than half the company’s loss in 2011.

“Our team’s ongoing focus on bringing new products to market, such as new colors and a new line of handrail components to Lowe’s is very exciting,” Morrison said.

The new handrails are going on the shelves now, he said.

Another financial burden AERT completes this year is a class-action lawsuit involving customer complaints about mold and mildew issues on ChoiceDek outdoor decking. The product originally was marketed as being maintenance-free.

AERT began processing claims in March 2009.

Brian Hanna, chief financial officer, said the company has paid about $2 million a year as part of the settlement, and the final payments this year will be close to $1 million.

The company also secured a $15 million loan with Birmingham, Ala.-based AloStar Bank of Commerce late last year. 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.

“This new loan allows us to plan and grow into the future,” Hanna said. “It removes the uncertainty that was out there.”

AERT (OTC BB: AERT) shares closed at 21 cents Monday, down 3 cents or 12.5 percent from Friday. Stocks traded between 4 cents and 25 cents during the past 52 weeks.

Upcoming Events