EXHIBIT 99.2
Copyright 2000 PR Newswire Association, Inc.
PR Newswire
August 11, 2000, Friday
SECTION: FINANCIAL NEWS
DISTRIBUTION: TO BUSINESS AND ENVIRONMENTAL EDITORS
LENGTH: 1212 words
HEADLINE: Capital Environmental for the Second Quarter Reports: Loss of $0.06
Per Share, Revenue Increase of 34% Versus 1999, EBITDA of 18.5% of Revenue After
Adjusting for Approximately $1.6 Million of Unusual Items
DATELINE: BURLINGTON, Ontario, Aug. 11
BODY:
Capital Environmental Resource Inc. (Nasdaq: CERI) today reported a
second quarter loss of $0.06 per share (fully diluted) compared to net earnings
per share of $0.14 per share (fully diluted) for the comparable 1999 quarter.
Revenue for the quarter ended June 30, 2000 was $30.7 million, compared with
$22.9 million for the year earlier period, an increase of 34%. Operating income
decreased 43% to $1.4 million, or 4.6% of revenue, from $2.5 million or 11.1% of
revenue for the year earlier period. A loss of $411,000 occurred in the second
quarter of 2000 compared to net income of $666,000 in the second quarter of
1999. EBITDA decreased to $4.1 million, or 13.4% of revenue, from $4.3 million
or 18.8% of revenue, a decrease of 4% (EBITDA is defined as net income plus
income taxes, net interest expense, depreciation and amortization).
For the six-month period ended June 30, 2000, the Company incurred a
loss of $72,000 or $0.01 per share (fully diluted) from net income of $1.1
million, or $0.25 per share (fully diluted) for the comparable period last year.
Revenue increased 40% to $57.0 million from $40.8 million for the same period
last year. Operating income decreased 9% to $4.1 million, or 7.2% of revenue,
from $4.5 million or 11.1% of revenue for the comparable period last year.
Year-to-date EBITDA increased to $9.3 million from $7.8 million, an increase of
18%.
During the quarter the Company incurred unusual items of approximately
$1.6 million.
These unusual items related primarily to write-off of acquisition costs
for uncompleted acquisitions, various accruals, restructuring costs and
unresolved costs associated with a disputed agreement.
Bruce Cummings, Chairman of the Board noted, "While we are disappointed
with the results of the second quarter, the operating fundamentals of the
Company remain sound. After adjusting for approximately $1.6 million of unusual
items incurred in the quarter, operations generated EBITDA of $5.7 million or
18.5% of revenue. Additionally, while revenues were somewhat behind budget they
did increase 34% year over year".
Based on the second quarter results, the Company is in breach of one of
the covenants in its credit facility agreements. The Company is in discussions
with its lenders and believes it will be able to reach an agreement to waive the
breach. In the event the Company is unable to obtain the waiver, the lenders
have the option to accelerate repayment of the loans.
<PAGE>
The Company's earnings per share for the second quarter, as compared to
the same period in 1999, were additionally impacted by the dilutive effect of
the Company's initial public offering completed in June 1999 and the cost of
being publicly traded. Industry-wide factors reducing profitability include the
continued high price of fuel and heavier than normal rainfall in a majority of
the Company's market areas.
As a result of certain events, which have transpired in the second
quarter, and to reduce costs and improve long-term profitability, the Company
expects to incur certain restructuring charges in the third quarter. These
additional costs are expected to relate to reductions in the scope of the
Company's acquisition program, negotiations with the Company's lenders and other
measures that will be taken to improve profitability.
As a result of the Company's failure to maintain compliance with the
minimum $5.00 bid price a $15.0 million market value of public float
requirements for continued listing on the Nasdaq National Market, the Company
has been notified today that its common shares will be transferred from the
Nasdaq National Market to the Nasdaq Small Cap Market effective at the open of
business August 16, 2000.
Capital will hold a conference call on Monday, August 14, 2000 at 4
p.m. (EST). Chairman, Bruce Cummings, and Chief Financial Officer, David
Langille, will discuss Capital's second quarter results. If you wish to
participate in this call, please phone 1-800-478-9326. For participants in
Toronto and those outside of North America, please call (416) 695-5801. A replay
of the call will be available until Monday, August 21, 2000 by phoning
800-408-3053 or (416) 695-5800 and entering reservation 540327.
Capital Environmental Resource Inc. is a regional integrated solid
waste services company that provides collection, transfer, disposal and
recycling services in secondary markets in Canada and the northern United
States. The Company's web site is http://www.capitalenvironmental.com.
The matters discussed in this news release include certain
forward-looking statements that involve risks and uncertainties, which could
cause actual results to differ materially from those forward-looking statements,
including the risks and uncertainties detailed in the Company's filings with the
Securities and Exchange Commission. The Company makes no commitment to disclose
any revisions to forward-looking statements, or any facts, events or
circumstances after the date of this release that may bear upon forward-looking
statements.
All currency references are in United States dollars.
<TABLE>
<CAPTION>
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Capital Environmental Resource Inc.
Condensed Consolidated Statement of Operations
(In thousands of U.S. dollars, except share and per share data)
----------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30 June 30
2000 1999 2000 1999
---------------------------------------- -------------------- ------------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Revenues $30,668 $22,927 $57,030 $40,803
---------------------------------------- -------------------- ------------------- ----------------- ------------------
Operating expenses:
Cost of operations 21,218 15,681 38,213 27,693
---------------------------------------- -------------------- ------------------- ----------------- ------------------
Selling, general 5,330 2,946 9,551 5,284
and administrative
expenses
---------------------------------------- -------------------- ------------------- ----------------- ------------------
Depreciation and
amortization
expense 2,695 1,758 5,166 3,291
---------------------------------------- -------------------- ------------------- ----------------- ------------------
Income from 1,425 2,542 4,100 4,535
operations
---------------------------------------- -------------------- ------------------- ----------------- ------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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Capital Environmental Resource Inc.
Condensed Consolidated Statement of Operations
(In thousands of U.S. dollars, except share and per share data)
----------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30 June 30
2000 1999 2000 1999
---------------------------------------- -------------------- ------------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Interest and 2,240 1,501 4,250 2,751
financing expense
---------------------------------------- -------------------- ------------------- ----------------- ------------------
Income (loss) before (815) 1,041 (150) 1,784
income taxes
---------------------------------------- -------------------- ------------------- ----------------- ------------------
Income tax provision (404) 375 (78) 642
(recovery)
---------------------------------------- -------------------- ------------------- ----------------- ------------------
Net income (loss) $(411) $666 $(72) $1,142
for the period
---------------------------------------- -------------------- ------------------- ----------------- ------------------
Basic net income $(0.06) $0.20 $(0.01) $0.39
(loss) per
common share
---------------------------------------- -------------------- ------------------- ----------------- ------------------
Diluted net income $(0.06) $0.14 $(0.01) $0.25
(loss) per
common share
---------------------------------------- -------------------- ------------------- ----------------- ------------------
Weighted average
number of common
shares outstanding
Basic 7,196,627 3,421,380 7,196,627 2,939,975
---------------------------------------- -------------------- ------------------- ----------------- ------------------
Diluted 7,288,821 4,884,081 7,301,202 4,592,533
---------------------------------------- -------------------- ------------------- ----------------- ------------------
Supplemental information: $4,120 $4,300 $9,266 $7,826
EBITDA
----------------------------------------------------------------------------------------------------------------------
</TABLE>
SOURCE Capital Environmental Resource Inc.
CONTACT: David Langille, EVP and CFO of Capital Environmental Resource Inc.,
905-319-6047
URL: http://www.prnewswire.com
LANGUAGE: ENGLISH
LOAD-DATE: August 12, 2000
