SmallCapVoice.com

TREVOSE, Pa., Aug. 4 /PRNewswire-FirstCall/ — Pure Earth, Inc. (OTC Bulletin Board: PREA) is a leading provider of innovative, unique, and sustainable solutions to alternate energy and recovery services in the United States.

Pure Earth’s corporate objective is the management of complex projects to maximize the beneficial energy, land resource reuse, and recycling potential of various materials throughout the United States. Its success in removal and reutilization of materials from urban construction projects and recycling of petrochemical materials into energy has translated into additional exciting sustainable opportunities in the alternative energy and environmental beneficial reuse markets.

Pure Earth is currently targeting several potential strategic external acquisitions and internal initiatives to maintain an aggressive corporate growth strategy going forward. Pure Earth’s management experience, bonding capacity and access to capital markets through its publicly traded status provides the ability to deliver performance to its clients on difficult, long-term projects. The past success of Pure Earth’s management team provides further assurance to its clients of its role as a trusted partner in working to solve difficult sustainability issues currently and into the future.

Pure Earth was formed in 2006 by Mark Alsentzer, an engineer by trade who successfully built and sold two previous environmental services companies, Clean Earth, Inc. and Stout Environmental, Inc.

FUTURE EARNINGS GROWTH DRIVERS

Refinery Business

Pure Earth is extremely excited to take advantage of the Province of Ontario’s Land Disposal Restriction Program (LDR), which goes into effect January 1, 2010. With Ontario’s new LDR program, refiners will no longer be able to use Canada as a disposal source for their untreated wastes. This will allow Pure Earth to capture untreated, hazardous waste for treatment that historically, for cost reasons, was shipped to Canadian landfills for disposal. Pure Earth has recently secured two multi-year contracts with major refineries in the Northeast, and is in the process of securing contracts with other refineries that will no longer be able to ship untreated waste to Canada. This should have a potentially significant impact on revenue as Pure Earth is one of only a handful of permitted facilities that allow processing and recycling of this untreated waste and offer an attractive price point to refineries versus the more costly option of incineration.

Alternative Energy

Pure Earth has identified a process of recycling of waste that had originally been destined for landfills to be treated and transformed into a reusable, alternative fuel that can be sold back to various industries. A specific and targeted application can be used with cement kilns. This process has been successfully developed and utilized in Europe and Pure Earth believes it can successfully bring this process to the US markets. Pure Earth currently has one facility under agreement to install this process in 2010. Management believes this facility may be the first of its kind in the United States. This technology is important because it will decrease the release of CO2 into the atmosphere typically associated with the burning of traditional fossil fuels. With the rising cost of fossil fuels and the current governmental administration developing carbon policies to reduce our generation’s carbon “footprint,” Pure Earth is taking the lead in the industry to becoming a more environmentally friendly waste recycling company.

Brownfields

Pure Earth has recently begun to expand its Brownfield development business that was originally started in Pennsylvania. Currently Pure Earth has access to two Brownfields expected to be coming on-line in the third and fourth quarters of 2009 in the Northeastern United States. These Brownfields, plus the potential for further Brownfield site acquisitions, could dramatically increase the volume of business that Pure Earth handles and act as a significant contributor to the Pure Earth revenue stream.

FINANCIALS

    Pure Earth, Inc. Consolidated Historical and Projected
        Estimates of Selected Future Operating Results
                          2007-2011

                       Year        Year
    Selected          Ending      Ending        Year        Year        Year
     Statement      12/31/2007  12/31/2008     Ending      Ending      Ending
     of Operations    Actual      Actual    12/31/2009  12/31/2010  12/31/2011
     Information      Results     Results    Projected   Projected   Projected
                      -------     -------    ---------   ---------   ---------
      Revenue      $59,398,879 $62,738,161 $50,059,197 $67,317,853 $77,415,531
      Cost of
       Revenues
       (including
       depreciation)46,149,312  51,636,084  41,640,557  50,635,856  57,810,185
                    ----------  ----------  ----------  ----------  ----------
      Gross Profit  13,249,567  11,102,077   8,418,640  16,681,997  19,605,346
      Operating
       Expenses,
       Interest
       Expense, and
       Other
       Expense
       (Income)      9,656,258  15,699,422  13,026,218  14,803,858  15,367,177
                     ---------  ----------  ----------  ----------  ----------
      Pre-tax Net
       Income (Loss) 3,593,309  (4,597,345) (4,607,578)  1,878,139   4,238,168

      Income Tax
       Provision
       (Benefit)     1,564,279  (2,057,585) (1,843,031)    751,256   1,695,267
                     ---------  ----------   ----------    -------   ---------
      Net Income
       (Loss)        2,029,030  (2,539,760) (2,764,547)  1,126,883   2,542,901
                     ---------  ----------   ----------  ---------   ---------

      EBITDA         6,914,515     328,314   1,018,989   8,125,757  10,935,473

      Non-Recurring
       Expenses
       (Income)
       (a)(b)                0   1,237,940    (505,474)          0           0
                           ---   ---------     --------        ---         ---
      Adjusted
       EBITDA       $6,914,515  $1,566,254    $513,515  $8,125,757 $10,935,473

      WEIGHTED
       AVERAGE
       DILUTED
       SHARES
       OUTSTANDING  16,662,029  17,427,847  18,598,618  18,598,618  18,598,618
      NET INCOME
       (LOSS) PER
       SHARE - DILUTED   $0.12      ($0.17)     ($0.15)      $0.06       $0.14

    (a) Nonrecurring expenses (income) for the year ending December 31, 2008,
        consists of $1.6 million in impairment charges, $0.3 million relating
        to the write-off of unrealized acquisition costs, $0.5 million for the
        write-off of bad debt, and $1.2 million of income relating to the
        change in fair value of outstanding warrants.

    (b) Projected nonrecurring expenses (income) for the year ending December
        31, 2009, consists of $0.3 million of expense for the write-off of bad
        debt, and $0.8 million of income relating to the extinguishment of
        related party debt.

    The following table presents a reconciliation of net income(loss), which
    is our most directly comparable GAAP operating performance measure, to
    EBITDA:

                       Year        Year
                      Ending      Ending       Year        Year        Year
                    12/31/2007  12/31/2008    Ending      Ending      Ending
                      Actual      Actual    12/31/2009  12/31/2010  12/31/2011
                      Results     Results    Projected   Projected   Projected
                      -------     -------    ---------   ---------   ---------
    EBITDA          $6,914,515    $328,314  $1,018,989  $8,125,757 $10,935,473
    Depreciation
     and
     amortization    2,479,102   3,027,789   3,216,058   3,471,058   3,504,261
      Interest
       expense, net    930,157   1,897,870   2,410,509   2,776,560   3,193,044
      Gain on
       extinguishment
       of convertible
       debt            (88,053)          0           0           0           0
      Provision for
       (benefit from)
       income taxes  1,564,279  (2,057,585) (1,843,031)    751,256   1,695,267
                     ---------   ----------  ----------    -------   ---------
    Net income
     (loss)         $2,029,030 ($2,539,760)($2,764,547) $1,126,883  $2,542,901

FINANCIAL COMMENTARY AND MANAGEMENT’S ASSUMPTIONS USED TO DERIVE PROJECTIONS

Pure Earth’s management believes that the business prospects mentioned above and cost cutting measures currently taking place will position the company to exceed revenue and net income levels that were achieved prior to the current economic downturn. Pure Earth also sees potential positive impact from new government policies that focus on “green initiatives” and economic stimulus packages. Pure Earth’s projections were prepared based upon its historical sales volumes and related costs coupled with adjustments for management’s estimate of the current marketplace demand for our products and services and the addition of the future earnings growth drivers described above. The following provides an overview of our key assumptions for each of the years:

2009: The projections for 2009 are based upon preliminary results through June 30, 2009 and projected results for the third and fourth quarters. Pure Earth expects to have increased revenues for the second half of 2009. These results are expected to be driven by existing core businesses and are consistent with Pure Earth’s historical performance in 2007 and 2008, prior to the economic downturn in the fourth quarter of 2008. The operating expenses for the third and fourth quarters also reflect cost savings that were implemented during the first half of 2009 including salary reductions and an overall decrease in employee headcount.

2010: The major assumptions for 2010 are based on a 20% increase in revenues from the future earnings growth drivers outlined on the previous page, plus an additional 14% increase in revenues derived from its core businesses thru assistance from the economic stimulus package. Pure Earth also anticipates that other new opportunities outside the growth drivers may become available and have an additional positive impact on 2010 results.

2011: The projections for 2011 were derived by assuming the existing base business and the three earnings growth drivers added in 2010 will continue to provide revenues in 2011 at a rate of 115% of the 2010 results. The increase in 2011 is based upon the following: the continued growth of the company’s core businesses, the impact of the economic stimulus package, and the company’s ability to capitalize on the addition of refinery and alternative energy businesses, and the further development of Brownfield sites.

DISCLOSURES REGARDING FORWARD LOOKING STATEMENTS AND PROJECTED FINANCIAL INFORMATION

This Financial Tear Sheet contains forward-looking statements. Forward-looking statements may include, without limitation, statements relating to the Company’s plans, strategies, objectives, expectations and intentions. Words such as “believes,” “forecasts,” “intends,” “possible,” “future,” “estimates,” “anticipates,” “expects,” “plans,” “should,” “could,” “will,” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements involve known and unknown risks and uncertainties and other factors that could cause actual results or outcomes to differ materially from those expressed in, or implied by, the forward-looking statements. The Company’s ability to predict or project future results or the effect of events on its operating results is inherently uncertain. The occurrence of the events described and the achievement of the expected results depend on many events, some or all of which are predictable or within the Company’s control, but many of which are not in its control. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved. Important factors that could cause actual performance or results to differ materially from those expressed in, or implied by, forward-looking statements are discussed in the Company’s Form 10-K for the year ended December 31, 2008, as filed with the SEC on March 31, 2009, and as may be updated by the Company’s Forms 10-Q or other filings made with the Securities and Exchange Commission. In addition to the risks and uncertainties described elsewhere in this Financial Tear Sheet, these factors may include, without limitation, industry competition, conditions, performance and consolidation; risks associated with the construction and real estate industries; the Company’s ability to grow its business through the formation and acquisition of complementary businesses; legislative and regulatory developments; the Company’s ability to comply with applicable federal, state and local environmental laws and permit requirements; weather conditions, including extremely harsh weather or natural disasters which may cause the Company to temporarily cease some or all of operations; and the effects of adverse general economic conditions, both within the United States and globally. The projected financial information provided above reflects management’s projections as to possible future results based on a number of assumptions that are inherently uncertain. The assumptions involve significant elements of subjective judgment and analysis, and no representation can be made as to their attainability. The Company’s registered independent public accounting firm has not examined, reviewed or compiled the projected financial information, and accordingly assume no responsibility for it. The projections were not prepared with a view to compliance with published guidelines established by the American Institute of Certified Public Accountants. There can be no assurance that the projections or the results described above will be realized. It can be expected that actual results will vary from those set forth in the projections, and the variations may be material and adverse.

Comments are closed.