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Monday November 22, 4:29 pm ET
Urecoats Reports Third Quarter Results
DEERFIELD BEACH, Fla., Nov. 22 /PRNewswire-FirstCall/
-- Urecoats Industries Inc. ("Urecoats")
(Amex: URT - News) announces today a net loss of $2.2
million, or $0.077 per share, for the quarter ended
September 30, 2004 as compared to a net loss of $1.8
million or $0.117 per share, for the quarter ended
September 30, 2003. Revenue for the quarter ended
September 30, 2004 was $0.5 million, as compared to
$0.6 million for the quarter ended September 30, 2003.
"The Company's decision to discontinue the operations
of its RSM Technologies, Inc. subsidiary definitely
impacted negatively the net operating results of the
Company for the third quarter ended September 30,
2004," stated Michael T. Adams, President of
Urecoats Industries Inc. "The other major event
for the third quarter of 2004 revolved around Infiniti
Products, Inc. completing the manufacturing facility
for certain of its product lines and marks the beginning
of the Company's foray into the paints and coatings
industry as a manufacturer," concluded Mr. Adams.
Condensed Consolidated Statement of
Operations (Selected Data)
(Unaudited)
| For The Three Months Ended
September 30, |
| |
2004 |
2003 |
Revenue |
$ 521,852 |
$ 603,888 |
|
|
|
Cost of Sales: |
|
|
Coatings, Sealants and Other Products |
384,654 |
440,423 |
Warranty Costs, Freight and |
|
|
Other Cost of Sale |
23,817 |
23,804 |
Total Costs of Sales |
408,471 |
464,227 |
Gross Profit (Loss) |
113,381 |
139,661 |
Operating Expenses: |
|
|
Selling, General and Administrative |
353,515 |
714,403 |
Other Operating Expenses |
254,543 |
218,105 |
Total Operating Expenses |
608,058 |
932,508 |
|
|
|
Net Operating Loss |
(494,677) |
(792,847) |
|
|
|
Discontinued Operations: |
|
|
Net Loss from Discontinued Operations |
(637,997) |
(1,009,217) |
Net Loss from Abandonment of
Assets |
(1,107,466) |
-- |
|
|
|
Net Loss |
$(2,240,140) |
$(1,802,064) |
|
|
|
Net Loss Per Common Share-Basic |
|
|
and Diluted |
|
|
Continuing Operations |
$(0.017) |
$(0.056) |
Discontinued Operations |
(0.060) |
(0.061) |
Total |
$(0.077) |
$(0.117) |
|
|
|
Weighted Average Shares Outstanding |
28,921,173 |
16,568,377 |
Business Segments
Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise
and Related information," requires disclosure
of net profit or loss, certain specific revenue and
expense items and certain asset items by reportable
segments and how reportable segments are determined.
This statement defines a reportable segment as a component
of an entity about which separate financial information
is produced internally, that is evaluated by the chief
decision-maker to assess performance and allocate
resources.
Effective January 1, 2004, the Company determined
that it had three distinct business segments. These
three business segments were defined as Corporate,
RSM Products and Infiniti Products. On November 5,
2004, the Company discontinued the operations of the
RSM Products business segment and thus as of the date
of this report the Company has two remaining business
segments. The business segment financial data reflected
in the table below was derived from the Company's
condensed consolidated financial position and condensed
consolidated results of operations as follows:
Corporate was derived from the financial data of
Urecoats Industries Inc.; Infiniti Products was derived
from the financial data of Infiniti Products, Inc.
The following table reflects certain business segment
financial data as of and for the nine months ended
September 30, 2004:
| |
Corporate |
Infiniti
Products |
Total |
Revenue: |
$- |
$1,569,378 |
$1,569,378 |
Gross Profit |
$- |
$ 361,994 |
$ 361,394 |
Operating Loss |
$(1,759,538) |
$(326,999) |
$(2,086,537) |
Capital Expenditures |
|
|
|
(Net of Capital Leases) |
$27,635 |
$ 128,622 |
$ 156,257 |
Depreciation and |
|
|
|
Amortization Expense |
$56,442 |
$ 1,650 |
$ 58,092 |
Identifiable Assets |
$ 1,048,179 |
$ 619,990 |
$ 1,668,169 |
Financial Condition, Liquidity and Capital Resources
The Company had $62,803 of cash on hand at September
30, 2004 as compared to $35,385 at December 31, 2003,
which represents an increase of $27,418. During the
nine months ended September 30, 2004, the Company's
working capital deficit increased by approximately
$4,526,322 to $7,228,977. This increase in the working
capital deficit was primarily due to a $4,825,000
increase in the level of funding from the Chairman,
a $238,623 decrease in accounts payable and accrued
expenses, and an $96,269 increase in prepaid expenses
and other current assets.
The Company has, is currently, and will in the foreseeable
future continue to rely principally on the Chairman,
to fund the Company's operational cash flow requirements
although no formal commitment, as of the date of this
report, has been received from the Chairman to continue
such funding. The Company is attempting, on a best
efforts basis, to obtain additional funding through
private placements of debt and/or equity securities
to supplement or potentially replace the funding the
Company currently or in the foreseeable future will
require from the Chairman to continue as a going concern.
There can be no assurance that the Company will be
able to obtain additional funding through private
placements of debt and/or equity securities at any
point in the future, or if obtainable, on terms that
are commercially feasible. The Chairman, from January
1, 2004 to the date of this report, has funded substantially
all of the Company's operating cash requirements and
during the period January 1, 2004 to September 30,
2004 this funding has aggregated approximately $4.83
million.
The Company's ability to continue as a going concern
is dependent on the Company's ability to successfully
execute its business plan, which includes increasing
revenues so as to exceed the Company's operating costs
and expenses, as well as, increasing operational cash
flow, continued funding of the Company's operations
by the Chairman, and/or obtaining additional funding
from private placements of debt and/or equity securities.
If the Company is unsuccessful in achieving one or
more of the above mentioned goals, the Company's ability
to continue as a going concern would be adversely
impacted and more likely than not would cause the
Company to cease operations.
Going Concern Qualification
The report of the Company's independent registered
public accounting firm on the Company's consolidated
financial statements as of and for the year ended
December 31, 2003, expressed substantial doubt about
the Company's ability to continue as a going concern.
Factors contributing to this substantial doubt include
recurring losses from operations and net working capital
deficiencies.
As mentioned in the Financial Condition, Liquidity
and Capital Resources section above, the Company is
dependent on the continued funding currently being
received from the Chairman to continue operations.
The discontinuance of such funding and the unavailability
of financing to replace such funding would more likely
than not cause the Company to cease operations.
About Infiniti Products, Inc.
Infiniti Products, Inc. develops, markets, sells,
manufactures, and distributes coatings, paints, and
sealants to the construction, paint, roofing, and
waterproofing industries.
About Urecoats Industries Inc.
Urecoats Industries Inc. is a holding company with
one wholly-owned subsidiary, Infiniti Products, Inc.,
with continuing operations.
Forward-looking Statements
This press release contains forward-looking statements,
as defined by the Private Securities Litigation Reform
Act of 1995. Actual results may differ materially
from those anticipated as a result of various risks
and uncertainties, including, but not limited to,
the following: the ability of the Company to continue
as a going concern; the ability of the Company to
maintain sufficient financing to fund its operations,
the outcome and timing of the Company's efforts to
restructure its business; the ability of the Company
to obtain and maintain normal terms with its vendors
and dealers; the potential adverse impact of the discontinuance
of a business segment on the Company's continuing
operations; the ability of the Company to fund and
execute its business plan; the ability of the Company
to attract, motivate and/or retain key executives
and employees; the ability of the Company to attract
and retain customers; risks and uncertainties relating
to market acceptance of the Company's products; competition;
the effectiveness of the Company's sales teams; as
well as those risks and uncertainties discussed from
time to time in the Company's periodic reports filed
with the Securities and Exchange Commission. Readers
are cautioned not to place undue reliance on these
forward-looking statements which speak only as of
the date hereof. The Company undertakes no obligation
to publish revised forward-looking statements to reflect
events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events, except
as required by law.
Press Contact: Andrew J. Kaplan
(732) 747-0702
FAX (732) 758-1837
Email: smallkap@aol.com
Company Contact: Michael T. Adams
President
(954) 428-8686
Website: http://www.urecoats.com
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