SPRINGDALE — Advanced Environmental Recycling Technologies saw sales drop nearly 8 percent last year, and company leaders said a fatal fire in one of its plants is largely to blame.
The Springdale-based plastic recycler and manufacturer of green building products held its annual shareholder meeting at company headquarters Thursday.
“The fire shook us up pretty badly,” said Tim Morrison, chief executive officer.
Employee Matthew Chwirka died from injuries suffered in a July 17 fire at one of the Springdale buildings. AERT runs four production lines in a pair of buildings at 801 Jefferson St.
The company also has a plant in Lowell and a plastics recycling plant near Watts, Okla.
AERT combines plastic and wood fiber to make window and door components, decking and fence material.
The fire started when dust from a mixer ignited.
Brian Hanna, chief financial officer, said it took more than a month to get all the lines running again, and production didn’t return to pre-fire levels until the end of 2013.
Morrison said the plant was closed so federal officials could investigate and AERT could implement new safety procedures.
The federal Occupational Safety and Health Administration fined AERT $44,000 in the fatal fire. Morrison said the company is having the Springdale Fire Marshal’s office come into the plant quarterly to check on conditions.
“If there are any questions about anything, Mr. Morrison does not hesitate to act on it,” said Duane Miller, Springdale fire marshal. “He doesn’t try to avoid changes and just says ‘We’ll take care of it.’”
Miller said dust buildup was a main concern at the plant but has greatly improved since AERT has designated employees to work solely on housekeeping.
Hanna said other safety changes include $100,000 spent on safety gear for employees.
AERT had a net loss of $1.4 million in 2013, an improvement of $500,000 over 2012 earnings.
Sales started slowly this year and were down about $2 million from the first quarter of 2013. Quarterly sales were $16.7 million.
Morrison said the long winter much of the county experienced this year hurt most companies associated with home building. He said he expects pent-up demand to increase sales going forward.
Hanna said AERT built up inventory to $3 million to help meet increased summer demand.
The company is also adding products and creating a production line dedicated to research and development, Morrison said.
“It will help us increase our R&D pace,” he said.
New products had to be tested on a regular line in the past, slowing production of established products.
One new line, MoistureShield Pro, uses composite boards covered by a vinyl layer, also called capstock products. The product is in early production stages.
Capstock is a new decking process that is heavily marketed right now and is drawing a lot of customer interest, Morrison said. The product is fade-, scratch- and mold-resistant and easy to clean, but he said it also has a plastic feel and may get hot.
Morrison said it’s important for the company to introduce this new line while continuing to sell the wood-plastic composite products.
“We need to educate the consumers about both products,” he said.
AERT is also diversifying by selling third-party products including lighting, aluminum handrails, cleaning products and hidden fasteners.
“People like buying packaged deals,” Morrison said. “This will add straight to our bottom line.”
AERT (OTC BB: AERT) shares closed at 13 cents Thursday, unchanged from Wednesday. Stocks traded between 9 cents and 21 cents during the past 52 weeks.