KBF POLLUTION MANAGEMENT, INC.
One Jasper Street
Paterson, New Jersey 07522
800.366.1426 973.942.7700
Fax 973.942.7527
www.kbf-pmi.com
KBF Pollution Management Announces Second Quarter 2003 Financial Results
Paterson, New Jersey, August 26, 2003 - KBF Pollution Management, Inc. (OTCBB:
KBFP) ("KBF"), a premier waste recovery company that recycles and mines
commodities from industrial wastes with green technologies, today announced its
financial results for the second quarter ended June 30, 2003.
Total revenue increased 281 percent in the current second quarter to $3.1
million from approximately $806,000 for the same period in the previous year.
The increase was primarily the result of the Company's recent acquisitions
completed during the quarter, and include two months of consolidated operations.
The Company's second quarter revenue was also favorably impacted by operational
synergies developed after completion of these acquisitions. The Company intends
to further exploit these combined market opportunities to fuel long-term growth
under the Veridium brand, following its planned consolidation of the Company and
its recent acquisitions into Veridium Corporation in September 2003.
Total cost of revenue for the three months ended June 30, 2003 increased to $2.3
million, which include non-recurring costs associated with the integration of
the Company's various acquisitions completed during the period. This compares to
$688,000 for the same period in 2002. The Company's gross profit margin
increased to 24% as compared to 15% from the same period in 2002. The increase
in gross profit is attributable to the traditionally higher gross margins
associated with the businesses acquired during the period as compared to the
Company's pre-acquisition recycling operations, which have been historically
administered at or near their break-even volumes. The Company's GAAP net loss
for the current second quarter was $860,000 as compared to $296,000 for the same
period in 2002. The increased loss was principally attributable to expenses
related to the Company's recent acquisitions.
The Company's aggregate general and administrative, selling and research and
development expenses for the three months ended June 30, 2003 increased to
approximately $1.2 million as compared to approximately $392,000 for the same
period in 2002. Included in these increases are non-recurring expenses
associated with the integration of the Company's various acquisitions completed
during the period and the rationalization of the Company's combined new
operations. The Company anticipates that these expenses will increase in the
short term and then decline, as a percentage of total revenue, as the Company
completes its corporate restructuring plan, the integration of its various
acquisitions, and normalizes its selling expenses for its new expanded
operations. The Company additionally reported accounts receivable of $3.2
million as of June 30, 2003, the average day sales outstanding of which was
under 60 days. The increase reflects the addition of the assets of the
acquisitions completed during the second quarter.
Business Outlook
Kevin Kreisler, the Company's president and chief executive officer, remarked,
"Our management team expects the Company's loss to decrease and reach
profitability as we complete the integration of our acquired operations and the
benefits of these acquisitions impact revenue. We intend to develop our market
organically and acquisitively with a focus on maximizing gross margin and
achieving positive results." Mr. Kreisler continued, "The acquisitions have not
only improved our revenue stream, but also added highly experienced
professionals to our management team. As we consolidate our strengths under
Veridium Corporation with the completion of our upcoming merger, we expect to
combine our industry knowledge and our proprietary green technologies to further
penetrate the market."
Upon completion of the Company's merger with its wholly owned subsidiary,
Veridium Corporation, the Company will establish itself as a premier
environmental services provider that uses state-of-the-art green technologies to
recycle and mine commodities from industrial hazardous wastes. The Company's
Form 10-QSB for the second quarter ended June 30, 2003 is available online at
www.kbf-pmi.com.
The Company additionally disclosed that its recent acquisition of Vulcan Waste
Systems, Inc. from Kerns Manufacturing, Inc. is subject to rescission by the
Company due to the failure by Vulcan to deliver compliant assets under the terms
of the relevant asset purchase agreements, and is the subject of an action filed
in August 2003 for breach of contract.
About Veridium Corporation
Founded on the premise that environmentally superior results can be
cost-effective, Veridium is setting a new standard for environmental service
with its focus on the use of state of the art green technologies to recycle,
reuse and mine commodities from industrial hazardous wastes. Veridium's patented
and proprietary technologies allow it to offer a much broader array of
competitively priced industrial hazardous waste recycling services than any
other recycling service provider in existence. The Company expects to complete
its merger with Veridium in September 2003. Veridium is currently a wholly-owned
subsidiary of KBF Pollution Management, Inc.
Veridium's mission is to minimize and eliminate the need for disposal and reduce
the burden on natural resources by recycling, reusing and mining all reusable
resources from industrial hazardous wastes in a safe, compliant and profitable
manner. More information on Veridium and its business model is available online
at www.veridium.com.
Safe Harbor Statement
The foregoing discussion contains forward-looking statements that are based on
current expectations. Actual results, including the timing and amount of
anticipated revenues, any implications with respect to shareholder wealth, or
the Company's ability to scale its operations, may differ due to such factors
as: regulatory delays; dealings with governmental and foreign entities; economic
and other conditions affecting the financial ability of actual and prospective
clients; and, other risks generally affecting the financing of projects.
Additional risks associated with KBF's business can be found in its Annual
Report on Form 10-KSB for the year ended December 31, 2002, and other periodic
filings with the SEC. KBF Pollution Management, Inc. trades on the over the
counter bulletin board maintained by the NASD under the symbol "KBFP."
For more information, please contact:
Corporate Relations Investor Relations:
KBF Pollution Management, Inc. Joe Zappulla
Phone: 800-366-1426 Wall Street Investor Relations Corp.
Fax: 973-942-7527 212-714-2445
investorrelations@kbf-pmi.com jzappulla@wallstreetir.com
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