Unassociated Document
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the
quarterly period ended March 31, 2009
or
£
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
Commission
File Number 1-10367
Advanced
Environmental Recycling Technologies, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
(State
or other jurisdiction of
incorporation
or organization)
|
|
71-0675758
(I.R.S.
Employer Identification No.)
|
914
N. Jefferson Street
Post
Office Box 1237
Springdale,
Arkansas
(Address
of principal executive offices)
|
|
72765
(Zip
Code)
|
(479) 756-7400
(Registrant’s
telephone number, including area code)
Indicate
by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past
90 days. YES: þ
NO:
|
Indicate by
check mark whether the registrant has submitted electronically and posted
on its corporate Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such
files).YES: NO:
|
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
Large
accelerated
filer Accelerated
filer
Non-accelerated
filer Smaller
reporting company þ
(Do not
check if a smaller reporting company)
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes No þ
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date. As of May 6, 2009, the
number of shares outstanding of the Registrant’s Class A common stock,
which is the class registered under the Securities Exchange Act of 1934, was
48,769,049 and the number of shares outstanding of the Registrant’s Class B
Common Stock was 1,465,530.
PART
I — FINANCIAL INFORMATION
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Page
|
Item
1. |
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Financial
Statements.
|
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Balance
Sheets, March 31, 2009 (unaudited) and December 31,
2008.
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1
|
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Statements
of Operations (unaudited) Three Months Ended March 31, 2009 and
2008.
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3
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Statements
of Cash Flows (unaudited) Three Months Ended March 31, 2009 and
2008.
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4
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Notes
to Financial Statements.
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5
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Item
2.
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Management's
Discussion and Analysis of Financial Condition and Results of
Operations. |
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11
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Item
4.
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Controls
and Procedures.
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14
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PART
II — OTHER INFORMATION
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Item
1.
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Legal
Proceedings.
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14
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Item
6.
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Exhibits.
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14
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Signatures
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15
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Index
to Exhibits
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16
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PART
I – FINANCIAL INFORMATION
Item
1. Financial Statements
ADVANCED
ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC.
BALANCE
SHEETS
(in
thousands, except share and per share data)
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2009
|
|
|
2008
|
|
Assets
|
|
(unaudited)
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$ |
164 |
|
|
$ |
1,238 |
|
Restricted
cash
|
|
|
4,841 |
|
|
|
7,631 |
|
Trade
accounts receivable, net of allowance of $123 at March 31,
2009
|
|
|
|
|
|
|
|
|
and
$616 at December 31, 2008
|
|
|
4,895 |
|
|
|
1,574 |
|
Inventories
|
|
|
8,309 |
|
|
|
10,551 |
|
Prepaid
expenses
|
|
|
464 |
|
|
|
933 |
|
Total
current assets
|
|
|
18,673 |
|
|
|
21,927 |
|
|
|
|
|
|
|
|
|
|
Land,
buildings and equipment:
|
|
|
|
|
|
|
|
|
Land
|
|
|
1,989 |
|
|
|
1,989 |
|
Buildings
and leasehold improvements
|
|
|
9,213 |
|
|
|
9,213 |
|
Machinery
and equipment
|
|
|
46,735 |
|
|
|
46,681 |
|
Transportation
equipment
|
|
|
860 |
|
|
|
1,125 |
|
Office
equipment
|
|
|
2,801 |
|
|
|
2,801 |
|
Construction
in progress
|
|
|
8,654 |
|
|
|
5,810 |
|
Total
land, buildings and equipment
|
|
|
70,252 |
|
|
|
67,619 |
|
Less
accumulated depreciation
|
|
|
34,050 |
|
|
|
33,004 |
|
Net
land, buildings and equipment
|
|
|
36,202 |
|
|
|
34,615 |
|
|
|
|
|
|
|
|
|
|
Other
assets:
|
|
|
|
|
|
|
|
|
Debt
issuance costs, net of accumulated amortization of $1,380
|
|
|
|
|
|
|
|
|
at
March 31, 2009 and $1,328 at December 31, 2008
|
|
|
3,098 |
|
|
|
3,151 |
|
Debt
service reserve fund
|
|
|
2,101 |
|
|
|
2,101 |
|
Other
assets, net of accumulated amortization of $457 at
|
|
|
|
|
|
|
|
|
March
31, 2009 and $450 at December 31, 2008
|
|
|
420 |
|
|
|
371 |
|
Total
other assets
|
|
|
5,619 |
|
|
|
5,623 |
|
Total
assets
|
|
$ |
60,494 |
|
|
$ |
62,165 |
|
The
accompanying notes are an integral part of these financial
statements.
ADVANCED
ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC.
BALANCE
SHEETS
(in
thousands, except share and per share data)
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2009
|
|
|
2008
|
|
Liabilities
and Stockholders' Deficit
|
|
(unaudited)
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable – trade
|
|
$ |
10,608 |
|
|
$ |
10,700 |
|
Accounts
payable – related parties
|
|
|
610 |
|
|
|
487 |
|
Current
maturities of long-term debt
|
|
|
9,345 |
|
|
|
9,290 |
|
Current
maturities of capital lease obligations
|
|
|
218 |
|
|
|
215 |
|
Accruals
related to expected settlement of class action lawsuit
|
|
|
4,191 |
|
|
|
4,650 |
|
Other
accrued liabilities
|
|
|
7,187 |
|
|
|
6,305 |
|
Working
capital line of credit
|
|
|
10,079 |
|
|
|
10,579 |
|
Notes
payable
|
|
|
32 |
|
|
|
367 |
|
Total
current liabilities
|
|
|
42,270 |
|
|
|
42,593 |
|
|
|
|
|
|
|
|
|
|
Long-term
debt, less current maturities
|
|
|
23,242 |
|
|
|
23,244 |
|
Capital
lease obligations, less current maturities
|
|
|
526 |
|
|
|
582 |
|
|
|
|
23,768 |
|
|
|
23,826 |
|
|
|
|
|
|
|
|
|
|
Accrued
dividends on convertible preferred stock
|
|
|
351 |
|
|
|
143 |
|
|
|
|
|
|
|
|
|
|
Commitments
and contingencies (see Note 9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
deficit:
|
|
|
|
|
|
|
|
|
Preferred
stock, $.01 par value; 5,000,000 shares authorized, 788,182
shares
|
|
|
|
|
|
|
|
|
issued
and outstanding at March 31, 2009 and December 31, 2008
|
|
|
8 |
|
|
|
8 |
|
Class
A common stock, $.01 par value; 100,000,000 shares authorized;
47,423,680
|
|
|
|
|
|
|
|
|
shares
issued and outstanding at March 31, 2009 and December 31,
2008
|
|
|
474 |
|
|
|
474 |
|
Class
B convertible common stock, $.01 par value; 7,500,000 shares
authorized;
|
|
|
|
|
|
|
|
|
1,465,530
shares issued and outstanding at March 31, 2009 and December 31,
2008
|
|
|
15 |
|
|
|
15 |
|
Warrants
outstanding; 3,787,880 at March 31, 2009 and December 31,
2008
|
|
|
1,534 |
|
|
|
1,534 |
|
Additional
paid-in capital
|
|
|
52,437 |
|
|
|
52,306 |
|
Accumulated
deficit
|
|
|
(60,363 |
) |
|
|
(58,734 |
) |
Total
stockholders' deficit
|
|
|
(5,895 |
) |
|
|
(4,397 |
) |
Total
liabilities and stockholders' deficit
|
|
$ |
60,494 |
|
|
$ |
62,165 |
|
The
accompanying notes are an integral part of these financial
statements.
ADVANCED
ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC.
STATEMENTS
OF OPERATIONS
(unaudited)
(in
thousands, except share and per share data)
|
|
Three
Months Ended March 31,
|
|
|
|
2009
|
|
|
2008
|
|
Net
sales
|
|
$ |
16,646 |
|
|
$ |
29,363 |
|
Cost
of goods sold
|
|
|
13,996 |
|
|
|
23,514 |
|
Gross
margin
|
|
|
2,650 |
|
|
|
5,849 |
|
|
|
|
|
|
|
|
|
|
Selling
and administrative costs
|
|
|
3,204 |
|
|
|
6,089 |
|
(Gain)
loss from asset impairment and disposition
|
|
|
(29 |
) |
|
|
483 |
|
Operating
loss
|
|
|
(525 |
) |
|
|
(723 |
) |
|
|
|
|
|
|
|
|
|
Net
interest expense
|
|
|
(896 |
) |
|
|
(1,254 |
) |
Loss
before dividends and income tax
|
|
|
(1,421 |
) |
|
|
(1,977 |
) |
Dividends
on preferred stock
|
|
|
(208 |
) |
|
|
(200 |
) |
Loss
before income tax
|
|
|
(1,629 |
) |
|
|
(2,177 |
) |
Income
tax benefit
|
|
|
- |
|
|
|
(759 |
) |
Net
loss applicable to common stock
|
|
$ |
(1,629 |
) |
|
$ |
(1,418 |
) |
|
|
|
|
|
|
|
|
|
Loss
per share of common stock (basic and diluted)
|
|
$ |
(0.03 |
) |
|
$ |
(0.03 |
) |
Weighted
average common shares outstanding (basic and diluted)
|
|
|
48,889,210 |
|
|
|
47,779,780 |
|
The
accompanying notes are an integral part of these financial
statements.
ADVANCED
ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC.
STATEMENTS
OF CASH FLOWS
(unaudited)
(in
thousands)
|
|
Three
Months Ended March 31,
|
|
|
|
2009
|
|
|
2008
|
|
Cash
flows from operating activities:
|
|
|
|
|
|
|
Net
loss applicable to common stock
|
|
$ |
(1,629 |
) |
|
$ |
(1,418 |
) |
Adjustments
to reconcile net loss to net cash provided by (used in)
|
|
|
|
|
|
|
|
|
operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
1,501 |
|
|
|
1,531 |
|
Dividends
on preferred stock
|
|
|
208 |
|
|
|
200 |
|
Deferred
tax benefit
|
|
|
- |
|
|
|
(759 |
) |
(Gain)
loss from fixed asset impairment and disposition
|
|
|
(29 |
) |
|
|
483 |
|
(Increase)
decrease in other assets
|
|
|
(56 |
) |
|
|
873 |
|
Decrease
in cash restricted for letter of credit and interest costs
|
|
|
- |
|
|
|
179 |
|
Changes
in current assets and current liabilities
|
|
|
(62 |
) |
|
|
1,521 |
|
Net
cash provided by (used in) operating activities
|
|
|
(67 |
) |
|
|
2,610 |
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchases
of land, buildings and equipment
|
|
|
(2,899 |
) |
|
|
(889 |
) |
Proceeds
from disposition of equipment
|
|
|
29 |
|
|
|
- |
|
Net
cash used in investing activities
|
|
|
(2,870 |
) |
|
|
(889 |
) |
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities:
|
|
|
|
|
|
|
|
|
Net
borrowings (payments) on line of credit
|
|
|
(500 |
) |
|
|
154 |
|
Payments
on notes
|
|
|
(375 |
) |
|
|
(2,771 |
) |
Payments
on capital lease obligations
|
|
|
(52 |
) |
|
|
(65 |
) |
Decrease
in cash restricted for payment of debt and construction
|
|
|
2,790 |
|
|
|
1,072 |
|
Debt
acquisition costs
|
|
|
- |
|
|
|
(403 |
) |
Net
cash provided by (used in) financing activities
|
|
|
1,863 |
|
|
|
(2,013 |
) |
|
|
|
|
|
|
|
|
|
Decrease
in cash and cash equivalents
|
|
|
(1,074 |
) |
|
|
(292 |
) |
Cash
and cash equivalents, beginning of period
|
|
|
1,238 |
|
|
|
1,716 |
|
Cash
and cash equivalents, end of period
|
|
$ |
164 |
|
|
$ |
1,424 |
|
The
accompanying notes are an integral part of these financial
statements.
Note
1: Unaudited Information
Advanced
Environmental Recycling Technologies, Inc. (the Company or AERT) has prepared
the financial statements included herein without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission (SEC). However, all
adjustments have been made to the accompanying financial statements which are,
in the opinion of the Company’s management, of a normal recurring nature and
necessary for a fair presentation of the Company’s operating results. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the disclosures are adequate
to make the information presented herein not misleading. It is recommended that
these financial statements be read in conjunction with the financial statements
and the notes thereto included in the Company’s latest annual report on Form
10-K.
Note
2: Description of the Company
AERT,
founded in 1988, recycles polyethylene plastic and develops, manufactures, and
markets composite building materials that are used in place of traditional wood
or plastic products for exterior applications in building and remodeling homes
and for certain other industrial or commercial building purposes. The Company’s
products are made primarily from approximately equal amounts of waste wood
fiber, which have been cleaned, sized and reprocessed, and recycled polyethylene
plastics which have been cleaned, processed, and reformulated utilizing the
Company’s patented and proprietary technologies. Its products have been
extensively tested, and are sold by leading national companies such as the
Weyerhaeuser Company (Weyerhaeuser), Lowe’s Companies, Inc. (Lowe’s) and
Therma-Tru Corporation. The Company’s products are primarily used in renovation
and remodeling by consumers, homebuilders, and contractors as a low maintenance,
exterior, green (environmentally responsible) building alternative for decking,
railing, and trim products. AERT operates manufacturing and recycling facilities
in Springdale and Lowell, Arkansas. It also operates a warehouse and reload
complex in Lowell, Arkansas. The Company owns a second composite extrusion
facility (Springdale South) in Springdale that has been temporarily idled since
July 2008 due to the current recession and downturn in building activity.
Operations at the facility will resume when demand for the Company’s products
increases. The Company determined at the end of 2008 that it would not resume
operations at its Junction, Texas extrusion facility.
Note
3: Future Operations
The
financial statements of the Company have been prepared on the basis of
accounting principles applicable to a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. At March 31, 2009, the Company had a working capital deficit of
$23.6 million and a stockholders’ deficit of $5.9 million. In addition to its
$0.5 million loss from operations for the quarter ended March 31, 2009, the
Company incurred losses from operations of $19.8 million and $8.8 million for
the years ended December 31, 2008 and 2007, respectively. The Company has
limited additional financial resources available to support its operations and
has relied over the last year on extensions of certain of its financings by its
lenders. The Company will require additional financial resources in order to
fund maturities of debt and other obligations as they become due. These factors,
among others, raise substantial doubt about the ability of the Company to
continue as a going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might result should
the Company be unable to continue as a going concern. The ability of the Company
to continue as a going concern is dependent upon the ongoing support of its
creditors, investors and customers, and its ability to successfully mass produce
and market its products at economically feasible levels.
The
Company plans to resolve its current liquidity issue and structure its
operations to generate positive cash flow in 2009, while improving profits in
the future to maximize shareholder value. The Company’s immediate liquidity
issue is being addressed by:
1)
|
Implementing additional cost
reductions: A substantial amount of cost has already been
eliminated from the Company’s operations and additional cost reductions
are being identified and
implemented.
|
2)
|
Pursuing additional funding to
provide liquidity while restructuring the business: In addition to
retaining consultants to seek potential sources for asset-based loans, the
Company is pursuing a USDA loan guarantee and investigating grants for
companies that produce environmentally responsible green products, as well
as seeking less traditional debt and equity financing
opportunities.
|
3)
|
Restructuring existing debt to
improve short-term liquidity: The Company’s line of credit has been
extended by Liberty Bank through June 15, 2009, and the Company plans to
seek extensions for other loans maturing in 2009. Additionally, the
Company has been granted certain loan concessions by Allstate, the holder
of the Company’s bonds, which has maintained its support by continuing to
fund the construction of the Company’s Watts plastic recycling
facility.
|
Note
4: Statements of Cash Flows
In order
to determine net cash provided by (used in) operating activities, net loss has
been adjusted by, among other things, changes in current assets and current
liabilities, excluding changes in cash, current maturities of long-term debt and
current notes payable. Those changes, shown as an (increase) decrease in
current assets and an increase (decrease) in current liabilities, are as
follows for the three months ended March 31 (in thousands):
|
|
2009
|
|
2008
|
|
|
(unaudited)
|
|
(unaudited)
|
Receivables
|
|
$
|
(3,321)
|
|
|
$
|
(5,291)
|
|
Inventories
|
|
|
2,242
|
|
|
|
6,077
|
|
Prepaid
expenses and other
|
|
|
469
|
|
|
|
602
|
|
Accounts
payable – trade and related parties
|
|
|
31
|
|
|
|
(6)
|
|
Accrued
liabilities
|
|
|
517
|
|
|
|
139
|
|
|
|
$
|
(62)
|
|
|
$
|
1,521
|
|
Cash
paid for interest
|
|
$
|
476
|
|
|
$
|
919
|
|
Supplemental Disclosures of Non-Cash
Investing and Financing Activities (in thousands):
|
|
2009
|
|
2008
|
|
|
(unaudited)
|
|
(unaudited)
|
Notes
payable for equipment
|
|
$
|
-
|
|
|
$
|
210
|
|
Dividends
on preferred stock paid in preferred stock
|
|
|
-
|
|
|
|
200
|
|
Note
5: Significant Accounting Policies
Revenue
Recognition Policy
The
Company recognizes revenue in accordance with SEC Staff Accounting Bulletin No.
104, Revenue Recognition in
Financial Statements (SAB 104). Under SAB 104, revenue is
recognized when the title and risk of loss have passed to the customer, there is
persuasive evidence of an arrangement, delivery has occurred or services have
been rendered, the sales price is determinable and collectability is reasonably
assured. The Company typically recognizes revenue at the time product
is shipped or when segregated and billed under a bill and hold
arrangement. Sales are recorded net of discounts, rebates and
returns, which were $0.2 million and $0.3 million for the quarters ended March
31, 2009 and 2008, respectively.
Estimates
of expected sales discounts are calculated by applying the appropriate sales
discount rate to all unpaid invoices that are eligible for the
discount. The Company’s sales prices are determinable given that its
sales discount rates are fixed and given the predictability with which customers
take sales discounts.
Shipping
and Handling
In
accordance with Emerging Issues Task Force (EITF) Issue 00-10, Accounting for Shipping and
Handling Fees and Costs, the Company
records shipping fees billed to customers in net sales and records the related
expenses in cost of goods sold.
Inventories
Inventories
are stated at the lower of cost (first-in, first-out method) or market.
Material, labor, and factory overhead necessary to produce the inventories are
included in their cost. Inventories consisted of the following (in
thousands):
|
|
March
31, 2009
|
|
December
31, 2008
|
|
|
(unaudited)
|
|
|
Parts
and supplies
|
|
$
|
1,712
|
|
|
$
|
1,794
|
|
Raw
materials
|
|
|
2,972
|
|
|
|
3,607
|
|
Work
in process
|
|
|
1,035
|
|
|
|
2,093
|
|
Finished
goods
|
|
|
2,590
|
|
|
|
3,057
|
|
|
|
$
|
8,309
|
|
|
$
|
10,551
|
|
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Concentration
Risk
The
Company’s revenues are derived principally from national and regional building
products distributors and Weyerhaeuser, the Company’s primary decking customer,
which maintains a national vendor managed inventory program for Lowe’s. The
inventory is strategically located in distribution centers throughout the United
States, from which the ChoiceDek® brand of
decking products are sold. The Company extends unsecured credit to its
customers. The Company’s concentration in the building materials
industry has the potential to impact its exposure to credit risk because changes
in economic or other conditions in the construction industry may similarly
affect its customers. Weyerhaeuser is the only customer from which the Company
derived more than 10% of its revenue. Gross sales to Weyerhaeuser comprised
approximately 74% and 78% of total gross sales for the quarters ended March 31,
2009 and 2008, respectively.
Research
and Development
Expenditures
relating to the development of new products and processes, including significant
improvements to existing products, are expensed as incurred.
Stock-Based
Compensation
In 2005,
the Company modified its employee/director equity compensation policies to
generally provide restricted stock unit awards rather than stock options. The
Company measures the cost of employee and director services received in exchange
for an award of equity instruments based on the grant-date fair value of the
award. Restricted stock unit awards are expensed as earned as a portion of
compensation costs. No restricted stock awards were granted in the
first quarter of 2009.
Recent
Accounting Pronouncements
In March
2008, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 161, Disclosures
about Derivative Instruments and Hedging Activities — an amendment of FASB
Statement No. 133 (SFAS 161). SFAS 161 requires enhanced disclosures
about an entity’s derivative and hedging activities, including qualitative
disclosures about objectives and strategies for using derivatives, quantitative
disclosures about fair value amounts of and gains and losses on derivative
instruments, and disclosures about credit-risk-related contingent features in
derivative agreements. The Company adopted SFAS 161 as of January 1, 2009. The
adoption of SFAS 161 did not have a material effect on its financial statements
and related disclosures.
In April
2009, the Financial
Accounting Standards Board issued FASB Staff Position No. FAS 107-1 and
APB 28-1, Interim Disclosure
about Fair Value of Financial Instruments (FSP 107-1). FSP 107-1 amends
FASB Statement No. 107, Disclosures about Fair Value of
Financial Instruments, to require disclosures about fair value of
financial instruments for interim reporting periods of publicly traded companies
as well as in annual financial statements. FSP 107-1 also amends APB Opinion No.
28, Interim Financial
Reporting, to require those disclosures in summarized financial
information at interim reporting periods. FSP 107-1 is effective for interim
reporting periods ending after June 15, 2009. The Company does not expect the
adoption of FSP 107-1 to have a material effect on its financial statements and
related disclosures.
Note
6: Income Taxes
The
Company had no current income tax provision for the quarter ended March 31, 2009
due to its net loss for the period. The Company’s effective income tax rate for
the quarter ended March 31, 2008 was 35%. As of March 31, 2009, the Company had
net operating loss carryforwards that are available to reduce future taxable
income and will expire in 2009 through 2029 if not utilized. As there is
insufficient certainty that the Company will be able to generate adequate future
taxable income to enable it to realize its net operating loss carryforwards
prior to expiration, the Company carries a valuation allowance to recognize its
deferred tax assets only to the extent of its deferred tax liabilities. As a
result, no income tax benefit has been recorded for the quarter ended March 31,
2009.
Based
upon a review of its income tax filing positions, the Company believes that its
positions would be sustained upon an audit and does not anticipate any
adjustments that would result in a material change to its financial position.
Therefore, no reserves for uncertain income tax positions have been recorded.
The Company recognizes interest related to income taxes as interest expense and
penalties as operating expenses.
The
Company is no longer subject to tax examinations by tax authorities for years
before 2006. The Internal Revenue Service commenced an examination of the
Company’s federal income tax return for 2006 in the fourth quarter of 2008. It
is anticipated that the examination will be completed by the end of 2009. The
Company does not expect any adjustments as a result of the examination that
would have a material impact on its financial position.
Note
7: Earnings Per Share
The
Company calculates and discloses earnings per share (EPS) in accordance with
Statement of Financial Accounting Standards No. 128, Earnings Per Share (SFAS
128). SFAS 128 requires dual presentation of basic and diluted EPS on
the face of the statements of operations and requires a reconciliation of the
numerator and denominator of the basic EPS computation to the numerator and
denominator of the diluted EPS computation. Basic EPS excludes
dilution and is computed by dividing income available to common stockholders by
the weighted-average number of common shares outstanding for the
period. Diluted EPS reflects the potential dilution that could occur
if securities or other contracts to issue common stock were exercised or
converted into common stock or resulted in the issuance of common stock that
then shared in the earnings of the Company.
In
computing diluted EPS, only potential common shares that are dilutive – those
that reduce earnings per share or increase loss per share – are
included. Exercise of options and warrants or conversion of
convertible securities is not assumed if the result would be antidilutive, such
as when a loss from continuing operations is reported. The "control
number" for determining whether including potential common shares in the diluted
EPS computation would be antidilutive is income from continuing
operations. As a result, if there were a loss from continuing
operations, diluted EPS would be computed in the same manner as basic EPS is
computed, even if an entity has net income after adjusting for discontinued
operations, an extraordinary item or the cumulative effect of an accounting
change. The Company incurred
losses from continuing operations for the three months ended March 31, 2009 and
2008. Therefore, basic EPS and diluted EPS were computed in the same manner for
those periods.
Although
not included in the diluted EPS calculation due to being antidilutive, the
Company has potentially dilutive options and warrants. The total number of
shares of common stock issuable pursuant to options and warrants at March 31,
2009 and 2008 were 5,061,880 and 5,309,380, respectively. Although these
financial instruments were not included due to being antidilutive, such
financial instruments may become dilutive and would then need to be included in
future calculations of diluted EPS.
Note
8: Debt
Line
of Credit
The
Company’s line of credit agreement with Liberty Bank of Arkansas is currently
scheduled to expire June 15, 2009. The line is secured by inventory, accounts
receivable, chattel paper, general intangibles and other current assets, as well
as by fixtures and equipment, and bears interest at a rate of 9%. The maximum
amount that may be drawn on the line at one time is the lesser of $11.4 million
and the borrowing base. At March 31, 2009, the line of credit balance of $10.1
million exceeded the borrowing base of $7.2 million, leaving no funds available
to borrow on the line of credit. The borrowing base is equal to the sum of
approximately 85% of our qualifying accounts receivable, 75% of finished goods
inventory and 50% of all other inventory, excluding parts and supplies. The full
amount of the line is guaranteed as to payment by our largest stockholder,
Marjorie Brooks, and by Joe Brooks, the Company’s chairman and chief executive
officer, and Steve Brooks, the Company’s chief operating officer. The credit
facility includes a debt service coverage ratio, current ratio, and accounts
payable and accounts receivable aging covenants substantially similar to those
under our 2007 and 2008 bond agreements, and customary restrictions on dividends
and the incurrence of additional debt or liens, among other
matters.
Allstate
Note
Our
Allstate note in the amount of $5.9 million at March 31, 2009, has a face amount
of $5.7 million, and a 5% premium on the note is due at maturity. The effective
interest rate on the note is 16.2%. At March 31, 2009, there was $0.1 million of
unamortized discount on the note.
Note
9: Commitments and Contingencies
Class Action
Lawsuits
As part
of the settlement, the defendants have agreed not to use the terms “minimum
maintenance,” “low maintenance,” “easy to maintain,” or “virtually maintenance
free” in ChoiceDek®
marketing materials. AERT is required to provide additional cleaning
instructions on the ChoiceDek® website
to assist customers with cleaning their decks. AERT has provided national notice
of the settlement to putative class members and has established a call center to
answer customer questions regarding ChoiceDek®. AERT is
self-administering a claim resolution process whereby eligible deck owners may
file a claim for significant mold spotting by September 10, 2009. If eligible,
deck owners who timely file a claim for significant mold spotting may receive
relief such as deck cleanings and applications of a mold inhibitor, gift cards
for use at Lowe’s, replacement materials, and/or refunds under certain criteria.
An arbitration provision is included in the settlement agreement, which provides
for disputes arising from the claim resolution process.
At March
31, 2009, AERT had accrued expenses of $4.2 million associated with the
settlement of the class action lawsuit. The estimate included $2.8 million
remaining for the claims resolution process and $1.4 million remaining to be
paid for plaintiffs’ attorney fees over 2009 and 2010. The claim resolution
process will have an annual net cost limitation to AERT of $2.0 million until
the claim resolution process is completed.
On April
18, 2008, AERT filed suit against its umbrella liability insurer, American
International Specialty Lines Insurance Company (“AISLIC”), to obtain a defense
against the then-pending class action lawsuits (discussed above) (the
“Jamruk/Pelletz Lawsuits”) under one or more umbrella liability insurance
policies issued by AISLIC and to recover AERT’s past defense costs, interest,
and other damages and attorneys’ fees relating to AISLIC’s denial of coverage
for the Jamruk/Pelletz Lawsuits. After the settlement of the Jamruk/Pelletz
Lawsuits was approved in January 2009, AERT amended its claims against AISLIC to
also seek recovery for amounts to be paid by AERT in connection with the
settlement. AERT’s claims against AISLIC are currently pending in the United
States District Court for the Northern District of Texas, Dallas
Division.
Energy
Unlimited, Inc. vs. AERT, Inc.
This case
originally started as a suit on account by Energy Unlimited, Inc. against AERT
to collect the balance it asserts to be owed on work performed on the Springdale
South facility material handling and drying systems. The claim was in the
original amount of $0.2 million. AERT contends that the design and installation
by Energy Unlimited, Inc. was faulty resulting in a series of explosions and the
subsequent need to undertake refabrication of the material handling and drying
systems. AERT has filed a counter claim for its out of pocket loss relating to
an explosion occurring on April 2, 2007 and for the cost to fix and complete the
material handling and drying systems properly in the amount of $1.2 million.
This matter is in the final phase of discovery, and trial is set for August
2009. AERT intends to vigorously defend the initial claim and pursue its counter
claim based on the faulty design, improper installation, and serious safety
defects of the material handling and drying systems by Energy Unlimited,
Inc.
Nicholson
Kovac, Inc. v. Advanced Environmental Recycling Technologies, Inc.
Nicholson
Kovac, Inc., AERT’s previous advertising agency, initiated a suit in Superior
Court of Washington for King County against AERT in March 2009 for non-payment
of fees totaling $0.9 million. AERT disputes the allegations and will respond
within the allotted timeframe.
Other
Matters
AERT is
involved from time to time in other litigation arising from the normal course of
business. In management's opinion, this other litigation is not
expected to materially impact the Company's results of operations or financial
condition.
Construction Agreement
The
Company has entered into an agreement with a construction contractor to
construct its Watts plastic recycling plant. The total cost of construction
under the agreement is estimated to be $3.5 million, of which $2.9 million had
been incurred and recognized through March 31, 2009.
Note
10: Subsequent Event
On April
2, 2009, the Company was notified by NASDAQ that it is out of compliance with
the stockholders’ equity requirement for continued listing set forth in
Marketplace Rule 4310(c)(3). The Company has submitted a plan to NASDAQ
outlining its intention to regain compliance with the rule, and is exploring
options to raise additional capital.
Additionally,
NASDAQ extended its temporary suspension of the rules requiring a minimum
closing bid price of $1 per share. The Company will now have until September 19,
2009 to re-establish compliance with the rule.
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
Three
Months Ended March 31, 2009 Compared to Three Months Ended March 31,
2008
The
following table sets forth selected information from our statements of
operations.
|
|
Three
Months Ended March 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
%
Change
|
|
Net
sales
|
|
$ |
16,646 |
|
|
$ |
29,363 |
|
|
|
-43.3 |
% |
Cost
of goods sold
|
|
|
13,996 |
|
|
|
23,514 |
|
|
|
-40.5 |
% |
%
of net sales
|
|
|
84.1 |
% |
|
|
80.1 |
% |
|
|
4.0 |
% |
Gross
margin
|
|
|
2,650 |
|
|
|
5,849 |
|
|
|
-54.7 |
% |
%
of net sales
|
|
|
15.9 |
% |
|
|
19.9 |
% |
|
|
-4.0 |
% |
Selling
and administrative costs
|
|
|
3,204 |
|
|
|
6,089 |
|
|
|
-47.4 |
% |
%
of net sales
|
|
|
19.2 |
% |
|
|
20.7 |
% |
|
|
-1.5 |
% |
(Gain)
loss from asset impairment and disposition
|
|
|
(29 |
) |
|
|
483 |
|
|
|
* |
|
Operating
loss
|
|
|
(525 |
) |
|
|
(723 |
) |
|
|
-27.4 |
% |
%
of net sales
|
|
|
-3.2 |
% |
|
|
-2.5 |
% |
|
|
-0.7 |
% |
Net
interest expense
|
|
|
(896 |
) |
|
|
(1,254 |
) |
|
|
-28.5 |
% |
Loss
before dividends and income tax
|
|
|
(1,421 |
) |
|
|
(1,977 |
) |
|
|
-28.1 |
% |
%
of net sales
|
|
|
-8.5 |
% |
|
|
-6.7 |
% |
|
|
-1.8 |
% |
Dividends
on preferred stock
|
|
|
(208 |
) |
|
|
(200 |
) |
|
|
4.0 |
% |
Loss
before income tax
|
|
|
(1,629 |
) |
|
|
(2,177 |
) |
|
|
-25.2 |
% |
%
of net sales
|
|
|
-9.8 |
% |
|
|
-7.4 |
% |
|
|
-2.4 |
% |
Income
tax benefit
|
|
|
- |
|
|
|
(759 |
) |
|
|
-100.0 |
% |
%
of net sales
|
|
|
0.0 |
% |
|
|
-2.6 |
% |
|
|
-2.6 |
% |
Net
loss applicable to common stock
|
|
$ |
(1,629 |
) |
|
$ |
(1,418 |
) |
|
|
14.9 |
% |
%
of net sales
|
|
|
-9.8 |
% |
|
|
-4.8 |
% |
|
|
-5.0 |
% |
____________________________________
* Not
meaningful as a percentage change.
Net Sales
First quarter 2009 net
sales were $16.6 million, down $12.8 million, or 43%, from first quarter 2008
net sales of $29.4 million. It appears that the purchasing pattern of the
distribution network has changed from that exhibited in prior years. Rather than
the normal buildup during the first quarter, many are waiting until consumer
demand drives inventory purchases. This change combined with weak new home
construction and remodeling markets, as well as difficult general economic
conditions, resulted in less demand to restock the distribution channel
in the first quarter of 2009. This caused a decline in sales for 2009 when
compared to 2008. We anticipated much of this slowdown and had reduced capacity
and spending to offset the reduction. We ended the quarter with a sales backlog
as production was restricted due to the ice storm that moved through Northwest
Arkansas in late January, which caused disruptions in our supply of raw
materials, electrical outages, equipment failure and substantial downtime at our
production facilities.
Cost
of Goods Sold and Gross Margin
Cost of
goods sold in dollars was lower in the first quarter of 2009 compared to the
first quarter of 2008 due to lower sales and our cost-cutting measures
implemented in 2008 and 2009, which include closing and consolidating
operations. However, cost of goods sold as a percent of sales increased to 84%
for the first quarter of 2009 from 80% in the first quarter of 2008. Our gross
margin decreased in the first quarter of 2009 to 16% from 20% in the first
quarter of 2008. The gross margin percentage decrease is due primarily to the
reduced sales volume, which resulted in lower absorption of fixed manufacturing
costs. Additionally, the ice storm in Northwest Arkansas in late January, which
disrupted our operations, resulting in downtime and inefficiencies, contributed
to the margin decline.
In addition to our
cost-cutting measures, we intend to lower our plastic raw material costs
with the addition of a new plastic recycling facility near Watts, Oklahoma,
which we expect will commence operations in the third quarter of
2009.
Selling
and Administrative Costs
Selling
and administrative costs were down $2.9 million in the first quarter of 2009
compared to the first quarter of 2008, and were down to 19% of sales from 21%.
The decrease was due to cost reductions implemented in 2008 and a continued
focus on reducing costs in 2009. We have significantly
reduced our advertising and sales spending, restricted travel and reduced our
selling and administrative headcount, among other cost reductions. The
categories of compensation and benefits, advertising and promotion, travel and
entertainment, professional fees, and commissions together made up 75% of total
selling and administrative costs in the first quarter of 2009.
Earnings
We
incurred a loss from operations of $0.5 million in the first quarter of 2009,
which is an earnings increase of $0.2 million from 2008, despite lower sales.
Our net loss for the first quarter of 2009 was $1.6 million, compared to a net
loss for the first quarter of 2008 of $1.4 million. Though interest expense was
lower in 2009 than in 2008, earnings decreased due to a lower margin and our
valuation allowance for net deferred tax assets, which prevented us from
recognizing an income tax benefit for the net operating loss carryforward
generated during the quarter.
Liquidity
and Capital Resources
Cash
Flows
Cash
Flows from Operations
Cash used
in operations in the first quarter of 2009 was $0.1 million compared to cash
provided by operations of $2.6 million in 2008, a $2.7 million decrease in cash
provided by operations. In the first quarter of 2009, cash used in the increase
of accounts receivable was offset by cash provided by sales of inventory and an
increase in accounts payable and accrued liabilities. In the first quarter of
2008, net cash provided by operations was due primarily to sales of
inventory.
Cash
Flows from Investing Activities
Cash used
in investing activities in the first quarter of 2009 increased $2.0 million
compared to the same period in 2008. The increase in capital expenditures was
due to the construction of our Watts plastic recycling facility.
Cash
Flows from Financing Activities
Cash
provided by financing activities was $1.9 million in the first quarter of 2009
compared to cash used in financing activities of $2.0 million in the first
quarter of 2008. The $3.9 million change in cash from financing activities was
due primarily to the following:
·
|
In
the first quarter of 2008 we paid $1.8 million more on our debt than in
2009 due primarily to a bond refinancing that required we pay down or pay
off certain loans.
|
·
|
We
were able to use $1.7 million more in restricted cash in 2009 than in
2008. In the first quarter of 2009 we received $2.8 million from our bond
project fund for the construction of our Watts plastic recycling facility,
whereas we received $1.0 million as part of our first quarter 2008 bond
refinancing through the lowering of debt service reserve fund
requirements.
|
·
|
In
the first quarter of 2008 we paid $0.4 million for debt issuance costs
related to our bonds.
|
At March
31, 2009, we had a working capital deficit of $23.6 million compared to a
working capital deficit of $20.7 million at December 31, 2008. The increase in
our deficit in 2009 was primarily the result of our loss from operations and the
use of restricted cash to construct our Watts facility. Components of working
capital that fluctuated significantly include restricted cash, accounts
receivable and inventory.
The
decrease in restricted cash of $2.8 million was due to the use of our Watts bond
project fund to pay for the construction of our Watts plastic recycling
facility. The total inventory decrease in the first quarter of 2009 was $2.2
million. Due to the cyclical nature of our business, inventories are usually
higher at year end as we build inventory for the coming building and remodeling
season in the spring and summer. Those inventories are reduced as our sales
increase during the building season. Accounts receivable increased due to the
cyclical increase in first quarter 2009 sales compared to fourth quarter 2008
sales and due to extended payment terms offered to our customers in the first
quarter in conjunction with our winter dating program.
Debt
The
Company continues to explore financing options, including various financial
assistance programs sponsored by state and federal governments.
Our line
of credit agreement with Liberty Bank of Arkansas is currently scheduled to
expire June 15, 2009, and we are seeking alternate financing to replace the line
of credit. The line is secured by inventory, accounts receivable, chattel paper,
general intangibles and other current assets, as well as by fixtures and
equipment, and bears interest at a rate of 9%. The full amount of the line is
guaranteed as to payment by our largest stockholder, Marjorie Brooks, and by Joe
Brooks, our chairman and chief executive officer, and Steve Brooks, our chief
operating officer. Ms. Brooks increased the collateral under her guarantee upon
the most recent renewal of the line of credit. Ms. Brooks is collateralized by a
subordinate lien on all of our assets subject to priority liens of Allstate and
Liberty Bank. The credit facility includes a debt service coverage ratio,
current ratio, and accounts payable and accounts receivable aging covenants
substantially similar to those under our 2007 and 2008 bond agreements, and
customary restrictions on dividends and the incurrence of additional debt or
liens, among other matters.
Bonds
We
received a deferral of four monthly principal and interest payments on our
Series 2007 and 2008 bonds from Allstate, the bond purchaser, totaling $0.9
million. Payments will resume June 15, 2009.
Debt
Covenants
Under our
2007 and 2008 bond agreements, AERT covenants that it will maintain certain
financial ratios (listed in the chart below). If we fail to comply with, or to
secure a waiver for, certain of the covenants, the bond trustee would have the
option of demanding immediate repayment of the bonds. In such an event, it could
be difficult for us to refinance the bonds, which would give the bond trustee
the option to take us into bankruptcy. Our line of credit contains all of the
financial covenants listed below, with the exception of the debt to equity
covenant. In the case of noncompliance with certain of the covenants, the bank
loan could also immediately become due and payable at any time and the bank
lender could foreclose on the property used to secure the debt, which could
force us into a bankruptcy proceeding before we can refinance this
indebtedness.
We were
not in compliance with the debt service coverage, current ratio and accounts
payable covenants as of March 31, 2009. The bond purchaser waived the debt
service coverage covenant through July 1, 2009, and waived the current ratio and
accounts payable covenants through July 1, 2010. Failure to comply with the debt
service coverage covenant does not allow the holder of the bonds to demand
repayment of the loan. The bank lender for our line of credit has not waived the
covenants, and as such we are in default on that loan. However, the bank has not
demanded repayment of the loan, though it has the right to do so at any
time.
Our
Allstate notes payable have cross-default provisions that caused them to be in
technical default at March 31, 2009 due to our non-compliance with the loan
covenants discussed above. The covenants were waived by Allstate Investments,
which is the investor in the bonds and the holder of the Allstate
loans.
Bonds
Payable and Allstate Notes Payable Debt Covenants
|
|
March 31, 2009
|
|
|
Compliance
|
Long-term
debt service coverage ratio for last four quarters of at least 2.00 to
1.00
|
|
|
-3.83 |
|
|
No
– waived
|
Current
ratio of not less than 1.00 to 1.00
|
|
|
0.44 |
|
|
No
– waived
|
Not
more than 10% of accounts payable in excess of 75 days past invoice
date
|
|
|
50 |
% |
|
No
– waived
|
Not
more than 20% of accounts receivable in excess of 90 days past invoice
date
|
|
|
6 |
% |
|
Yes
|
Uncertainties,
Issues and Risks
There
are many factors that could adversely affect AERT’s business and results of
operations. These factors include, but are not limited to, general
economic conditions, decline in demand for our products, business or industry
changes, critical accounting policies, government rules and regulations,
environmental concerns, litigation, new products / product transition, product
obsolescence, competition, acts of war, terrorism, public health issues,
concentration of customer base, loss of a significant customer, availability of
raw material (plastic) at a reasonable price, management’s failure to execute
effectively, inability to obtain adequate financing (i.e. working capital),
equipment breakdowns, low stock price, and fluctuations in quarterly
performance.
Forward-Looking
Information
An
investment in our securities involves a high degree of risk. Prior to
making an investment, prospective investors should carefully consider the
following factors, among others, and seek professional advice. In
addition, this Form 10-Q contains certain "forward-looking statements" within
the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. Such forward-looking statements, which are often identified by
words such as "believes", "anticipates", "expects", "estimates", "should",
"may", "will" and similar expressions, represent our expectations or beliefs
concerning future events. Numerous assumptions, risks, and
uncertainties could cause actual results to differ materially from the results
discussed in the forward-looking statements. Prospective purchasers
of our securities should carefully consider the information contained herein or
in the documents incorporated herein by reference.
The
foregoing discussion contains certain estimates, predictions, projections and
other forward-looking statements (within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934)
that involve various risks and uncertainties. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect management’s current judgment regarding the
direction of the business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, or other future
performance suggested herein. Some important factors (but not
necessarily all factors) that could affect the sales volumes, growth strategies,
future profitability and operating results, or that otherwise could cause actual
results to differ materially from those expressed in any forward-looking
statement include the following: market, political or other forces affecting the
pricing and availability of plastics and other raw materials; accidents or other
unscheduled shutdowns affecting us, our suppliers’ or our customers' plants,
machinery, or equipment; competition from products and services offered by other
enterprises; our ability to refinance short-term indebtedness; state and federal
environmental, economic, safety and other policies and regulations, any changes
therein, and any legal or regulatory delays or other factors beyond our control;
execution of planned capital projects; weather conditions affecting our
operations or the areas in which our products are marketed; adverse rulings,
judgments, or settlements in litigation or other legal matters. We
undertake no obligation to publicly release the result of any revisions to any
such forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
Item 4.
Controls and Procedures.
Our chief
executive officer, Joe G. Brooks, who is our principal executive officer, and
our chief financial officer, J. R. Brian Hanna, who is our principal financial
officer, have reviewed and evaluated the disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934) that we have in place as of March 31, 2009 with respect to, among other
things, the timely accumulation and communication of information to management
and the recording, processing, summarizing and reporting thereof for the purpose
of preparing and filing this quarterly report on Form 10-Q. Based
upon their review, the aforementioned executive officers have concluded that our
disclosure controls and procedures were effective as of March 31,
2009.
During
the quarter ended March 31, 2009, there have been no changes in our internal
controls over financial reporting that have materially affected, or that are
reasonably likely to materially affect, our internal controls over financial
reporting.
PART
II – OTHER INFORMATION.
Item 1. Legal Proceedings
– (See Note 9: Commitments and Contingencies)
Item 6.
Exhibits.
The exhibits listed in the accompanying
Index to Exhibits are filed and incorporated by reference as part of this
report.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
|
|
|
|
|
ADVANCED
ENVIRONMENTAL
|
|
|
RECYCLING
TECHNOLOGIES, INC.
|
|
|
|
|
|
By:
/s/ Joe G. Brooks
|
|
|
|
|
|
Joe
G. Brooks,
|
|
|
Chairman
and Chief Executive Officer
|
|
|
(principal
executive officer)
|
|
|
|
|
|
/s/
J. R. Brian Hanna
|
|
|
|
|
|
J.
R. Brian Hanna,
|
|
|
Chief
Financial Officer
(principal
financial officer)
|
Date: May
11, 2009
Index
to Exhibits
Exhibit
|
|
|
Number
|
|
Description
|
|
|
|
31.1
|
|
Certification
per Sarbanes-Oxley Act of 2002 (Section 302) by the Company's chairman and
chief executive officer.
|
|
|
|
31.2
|
|
Certification
per Sarbanes-Oxley Act of 2002 (Section 302) by the Company’s chief
financial officer.
|
|
|
|
32.1
|
|
Certification
per Sarbanes-Oxley Act of 2002 (Section 906) by the Company's chairman and
chief executive officer.
|
|
|
|
32.2
|
|
Certification
per Sarbanes-Oxley Act of 2002 (Section 906) by the Company's chief
financial officer.
|