Pallet Management Systems Inc. reports third quarter results; opening of new facility; new affiliate in Kentucky

Business Wire, May 10, 1996

BOCA RATON, Fla.--(BUSINESS WIRE)--May 10, 1996--Pallet Management Systems Inc. (NASDAQ/BB:PALT) Friday reported the results for its third fiscal quarter and nine months ended March 30, 1996.

For the quarter ended March 30, 1996 net sales decreased by approximately 46% to $4,686,409 from the $8,685,658 for the comparable 1995 period. For the nine months ended March 30, 1996 sales decreased by approximately 47% to $12,909,778 from the $24,369,647 reported in the comparable prior period. The sales decrease is attributable to the unusually high number of new pallet sales to one customer during the prior periods.

The company experienced a net loss of $440,657, or $.13 per share, during the quarter ended March 30, 1996 compared to a profit of $69,223, or $.02 per share, recorded for the same period last year. For the nine months ended March 30, 1996 the company reported a net loss of $983,706, or $.29 per share, compared with net earnings of $657,887, or $.21 per share, for the same period last year. These losses resulted from costs associated with opening new facilities and expansion of existing facilities.

John Lucy III, chairman of Pallet Management Systems, commented: "During the last month of the quarter the company experienced a sharp increase in sales of new pallets which has continued into the fourth quarter. For the quarter, revenues from pallet remediation, depot, and repair services and sales of used pallets increased by 43% to $1,826,000 from the $1,280,000 recorded for the same period last year. Our long-term strategy is to continue to aggressively increase our recycling services."

On April 1, the company commenced pallet processing operations at a new 62,000 square foot facility with 5.5 acres of yard storage in Lakeland, Fla. This facility will service several customer contracts in the area. The company is also in the process of expanding its Orlando, Fla. facility by building of a 15,000 square foot repair and storage facility.

The company also announced that it has added to its affiliate network by signing an agreement with a recycling company in Lexington, Ky. This agreement will enable the company to service its national customers which have locations in the Lexington area.

In the more than $6 billion U.S. pallet industry, Pallet Management Systems is a pioneer and leader in pallet management and recycling with operations along the East Coast of the United States, and is currently in the process of expanding nationwide. -0-