AERT Aeries Technology Inc

Advanced Environmental Recycling Technologies, Inc. (NASDAQ: AERT), a plastics recycler and leading manufacturer of Green building products, will be filing its annual report on Friday with the Securities and Exchange Commission on Form 10-K. Sales for the year ending December 31, 2007 were $82.2 million, down 16% from $97.8 million for the prior period ending December 31, 2006. Sales for the quarter ending December 31, 2007 were $9.7 million, down 54% from $21.3 million in the prior period ending December 31, 2006. CASH POSITION UP AT YEAR END The Company�s cash position at year-end was $13.2M versus $2.95M at year-end 2006 due to equity and debt offerings completed in October and December 2007, respectively. 2008 Q1 SALES $29.7 MILLION +30% Gross Sales for the quarter ending March 31, 2008 were $29.9 million (Unaudited), up 30% from $23 million reported for the previous year first quarter ended March 31, 2007. 2007 NET LOSS Net loss for the period ending December 31, 2007 was $(9.5 million) or $(.20) per share and resulted from a combination of a loss from operations, a reclassification of deferred tax benefits, a write down of inventory related to the exit of our painted window sill business, and a one time charge for preferred stock conversion features of a recent $10 million preferred stock equity offering. MANAGEMENT ANALYSIS & OUTLOOK Commenting on the Company's 2007 results and 2008 prospects, AERT CEO Joe Brooks explained, "We're not happy to report a loss, but amidst the tough year in the building industry AERT held its own, and even experienced increased sales at the retail level with several customers." Citing the beginning of a turnaround he went on, "Our $29.9 million in Q1 sales shows that our recovery is already underway, thanks in part to our recently initiated Green marketing campaign." "We are extremely encouraged by this initial glimpse into 2008 and combined with increasing demand from abroad, we anticipate a much brighter outlook for growth and profitability going forward,� he concluded. CFO Departure In a separate statement, CEO Joe Brooks announced that Robert Thayer, Chief Financial Officer, has resigned from the Company effective April 11, 2008. Eric Barnes, the current Chief Accounting Officer will assume the duties previously held by Mr. Thayer. The financial statements shown below are qualified in their entirety by the Company's filing with the Securities and Exchange Commission on Form 10-K for the year ended December 31, 2007, including, but not limited to the auditor's report, management discussion, analysis and notes. � � � December 31, December 31, 2007 2006 ASSETS Current assets: Cash and cash equivalents $ 1,716,481 $ 2,164,532 Restricted cash 11,461,950 787,191 Restricted certificate of deposit 871,468 - Trade accounts receivable, net of allowance of $1,162,500 at December 31, 2007 and $374,894 at December 31, 2006 640,668 3,789,302 Other accounts receivable 63,453 760,970 Inventories 23,622,586 14,515,845 Prepaid expenses 892,462 1,018,657 Deferred tax asset - 1,163,017 Total current assets 39,269,068 24,199,514 � Land, buildings and equipment: Land 1,988,638 1,988,638 Buildings and leasehold improvements 10,008,257 5,979,223 Machinery and equipment 51,690,169 39,475,682 Transportation equipment 1,148,046 1,243,556 Office equipment 1,169,213 801,231 Construction in progress 4,218,303 14,762,153 Total land, buildings and equipment 70,222,626 64,250,483 Less accumulated depreciation 31,380,005 26,728,540 Net land, buildings and equipment 38,842,621 37,521,943 � Other assets: Deferred tax asset 8,851,412 4,293,912 Debt issuance costs, net of accumulated amortization of $1,052,949 at December 31, 2007 and $790,532 at December 31, 2006 3,042,645 2,814,390 Debt service reserve fund 3,391,500 2,040,000 Restricted certificate of deposit - 829,961 Other assets, net of accumulated amortization of $421,310 at December 31, 2007 and $392,736 at December 31, 2006 361,557 350,246 Total other assets 15,647,114 10,328,509 Total assets $ 93,758,803 $ 72,049,966 LIABILITIES AND STOCKHOLDERS' EQUITY � � � December 31, 2007 December 31, 2006 Current liabilities: Accounts payable � trade $ 9,274,134 $ 10,861,648 Accounts payable � related parties 350,882 494,831 Current maturities of long-term debt 9,582,145 1,580,357 Current maturities of capital lease obligations 224,840 93,255 Accrued payroll expense 553,376 575,782 Litigation loss payable 655,769 655,769 Other accrued liabilities 3,712,700 1,933,821 Working capital line of credit 12,303,378 10,060,000 Notes payable � related parties - 1,000,000 Notes payable � other 385,229 � 410,181 � Total current liabilities 37,042,453 � 27,665,644 � � Long-term debt, less current maturities 25,707,959 16,803,644 Capital lease obligations, less current maturities 796,305 � 24,073 � 26,504,264 � 16,827,717 � � Accrued dividends on convertible preferred stock 136,957 � - � � Commitments and contingencies � Stockholders' equity: Preferred stock, $.01 par value; 5,000,000 shares authorized, 757,576 shares issued and outstanding at December 31, 2007 7,576 - Class A common stock, $.01 par value; 75,000,000 shares authorized; 46,314,250 and 43,041,164 shares issued and outstanding at December 31, 2007 and 2006, respectively 463,143 430,412 Class B convertible common stock, $.01 par value; 7,500,000 shares authorized; 1,465,530 shares issued and outstanding at December 31, 2007 and 2006 14,655 14,655 Warrants outstanding; 3,787,880 at December 31, 2007 and 4,606,132 at December 31, 2006 1,533,578 2,519,389 Additional paid-in capital 50,872,462 37,891,274 Accumulated deficit (22,816,285 ) (13,299,125 ) Total stockholders' equity 30,075,129 � 27,556,605 � Total liabilities and stockholders' equity $ 93,758,803 � $ 72,049,966 � INCOME STATEMENT Year Ended December 31, 2007 � 2006 � 2005 Net sales $ 82,209,963 $ 97,840,126 $ 87,312,560 Cost of goods sold 74,340,601 � 77,594,965 � 66,389,964 � Gross margin 7,869,362 20,245,161 20,922,596 Selling and administrative costs 16,368,725 16,407,400 14,595,854 Research and development 265,881 � 285,858 � 110,134 � 16,634,606 � 16,693,258 � 14,705,988 � Operating income (loss) (8,765,244 ) 3,551,903 6,216,608 Other income (expense): Net litigation contingency - - (610,206 ) Gain (loss) on disposition of equipment 7,920 58,285 (26,122 ) Interest income 183,409 202,724 90,908 Interest expense (3,956,935 ) (2,844,327 ) (2,087,818 ) Net other expense (3,765,606 ) (2,583,318 ) (2,633,238 ) Income (loss) before extraordinary item, income taxes and accrued dividends on preferred stock (12,530,850 ) 968,585 3,583,370 Preferred stock dividends resulting from beneficial conversion feature (943,838 ) - - Accrued dividends on preferred stock (136,957 ) - � (235,367 ) Income (loss) before extraordinary item and income taxes (13,611,645 ) 968,585 3,348,003 Income tax benefit (3,662,082 ) (835,937 ) (4,449,682 ) Income (loss) before extraordinary item (9,949,563 ) 1,804,522 7,797,685 Extraordinary gain on involuntary conversion of non-monetary assets due to fire (net of income tax) 432,403 � - � - � Net income (loss) applicable to common stock $ (9,517,160 ) $ 1,804,522 � $ 7,797,685 � Income (loss) per share of common stock before extraordinary item (Basic) $ (0.21 ) $ 0.04 � $ 0.22 � Income (loss) per share of common stock before extraordinary item (Diluted) $ (0.21 ) $ 0.04 � $ 0.19 � Extraordinary gain per share of common stock (Basic) $ 0.01 � - � - � Extraordinary gain per share of common stock (Diluted) $ 0.01 � - � - � Income (loss) per share of common stock after extraordinary item (Basic) $ (0.20 ) $ 0.04 � $ 0.22 � Income (loss) per share of common stock after extraordinary item (Diluted) $ (0.20 ) $ 0.04 � $ 0.19 � Weighted average number of common shares outstanding (Basic) 47,030,850 � 41,990,150 � 35,861,060 � Weighted average number of common shares outstanding (Diluted) 47,030,850 � 45,881,498 � 40,475,244 � Certain statements in this news release regarding projected results of operations, or, projected results of financial plans or future strategies and initiatives, including, but not limited to, projections of revenue, projections of profitability, any and all future expectation, and plans for future activities may and should be regarded as "forward-looking statements" within the meaning of the Securities Litigation Reform Act. These statements involve, among other things, known and unknown risks, uncertainties and other factors that may cause AERT, Inc.'s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. AERT currently is considering, but may or may not in the future implement any or all of the items and issues listed in any planned budget or strategic initiative, due to, among other things, known and unknown risks, uncertainties and other factors. AERT, Inc. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, change in strategy, or otherwise. The above-mentioned listing of risks and uncertainties is not inclusive. For a more detailed discussion of some, but not all, of the risks and uncertainties that may affect AERT, Inc., see AERT, Inc.'s filing with the Securities and Exchange Commission, including its Annual Report on Form 10-K, for the fiscal year ended December 31, 2007 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2007. About Advanced Environmental Recycling Technologies, Inc. Since 1989, AERT (NASDAQ CM:AERT) has pioneered the use of recycled polyethylene plastic in the manufacture of composite building materials. With its constantly evolving portfolio of patented and proprietary recycling technologies, AERT has been widely recognized as a leader in resource conservation innovation and received the EPA Award for Environmental Excellence for its process of converting scrap plastic to composite outdoor decking. AERT converts reclaimed plastic and wood fiber waste into quality outdoor decking systems, fence systems, and door and window components. The Company is the exclusive manufacturer of Weyerhaeuser ChoiceDek� decking, which is available in multiple colors and is sold in all Lowe�s Home Improvement stores. See www.choicedek.com for more information. AERT�s MoistureShield� decking program is expanding and products are available in many parts of the U.S. now, with national distribution planned for 2008. See www.moistureshield.com for product information or to find a regional distributor or dealer. AERT operates manufacturing facilities in Springdale and Lowell, with a raw materials facility in Junction, Texas and a state-of-the-art recycling facility under construction in Watts, Oklahoma. This LEED certified recycling facility is expected to be operational in the first quarter of 2009. For more information on the Company, visit www.aertinc.com.