EarthCare Announces Operating Results for First Quarter of 2001; Solid Waste Revenue Increases By 37%

ARCHIVED 2002–2016: Originally distributed via the eWire press wire service. Preserved as historical record.

EarthCare Announces Operating Results for First Quarter of 2001;

Solid Waste Revenue Increases By 37%

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EarthCare Announces Operating Results for First Quarter of 2001;

Solid Waste Revenue Increases By 37%

TEXAS, DALLAS, May. 15 -/E-Wire/-- EarthCare Company (Nasdaq: ECCO) today announced its operating results for the first quarter of 2001. EarthCare reported revenue from its continuing EarthCare Solid Waste Division of $5.6 million for the first quarter of 2001, a 37% increase from the pro forma revenues for the same quarter last year. EarthCare's operating loss during the first quarter of 2001 amounted to $460,000, a 14% decline from its pro forma operating loss of $582,000 for the same quarter last year. The improvement in the operating loss was a result of the improved operating results of its EarthCare Solid Waste Division and relatively flat corporate expenses. The Company reported a net loss from continuing operations of $1.8 million in the first quarter of 2001, or $0.12 per share, as compared to a pro forma loss from continuing operations of $1.0 million in the first quarter of 2000, or $0.07 per share. The increase in the loss is primarily due to increased interest expense due to a higher level of debt outstanding during the first quarter of 2001.

On a historical basis, EarthCare reported an operating loss from continuing operations of $0.9 million in the first quarter of 2000 and a net loss from continuing operations of $1.0 million in the first quarter of 2000, or $.09 per share. EarthCare's continuing operations in the first quarter of 2000 consisted only of its corporate office. The operating results for its discontinued EarthLiquids and EarthAmerica divisions are not included in these operating results. The pro forma results of operations for the first quarter of 2000 consist of EarthCare's Solid Waste operations in Florida and its corporate office.

"We are extremely pleased with the growth of our solid waste business in Florida. This growth shows that we can obtain strong operating results by focusing on internal growth and customer service in our existing markets," said Donald Moorehead, Chairman and Chief Executive Officer of EarthCare. "We are continuing our efforts to restructure our debt and equity capital and with our plans to find strategic alternatives for our EarthAmerica and EarthLiquids divisions."

EarthCare also announced that it is not in compliance with certain covenants in its senior credit agreement, specifically the company did not complete the sale of its EarthAmerica division by April 30, 2001; it did not attain the minimum level of EBITDA required for the first quarter of 2001; and the required collateral for its credit agreement has not yet been fully provided. EarthCare is currently negotiating with its senior lenders for a waiver and amendment to its credit agreement and, until such waiver and amendment is completed, is in default under its credit agreement. EarthCare and its senior lenders have entered into a letter of agreement effective April 30, 2001, whereby EarthCare may continue to borrow and repay amounts under its senior credit agreement.

Statements made in this press release that express EarthCare's or management's intentions, plans, beliefs, expectations or predictions of future events, including preliminary estimates of financial results and guidance for future periods, are forward-looking statements. The words "believe," "expect," "intend," "estimate," "anticipate," "will" and similar expressions are intended to further identify such forward-looking statements. It is important to note that the company's actual results or performance could differ materially from those anticipated or projected in such forward-looking statements. Other factors that could cause EarthCare's actual results or performance to differ materially include risks and uncertainties relating to EarthCare's financial condition, market demand and acceptance of EarthCare's services, competition, as well as the risks discussed under the heading "Risk Factors" in EarthCare's annual report on Form 10-K for the year ended December 31, 2000, as filed with the Securities and Exchange Commission. The forward-looking statements contained herein represent the judgment of EarthCare as of the date of this press release, and EarthCare expressly disclaims any intent, obligation or undertaking to update or revise such forward-looking statements to reflect any change in EarthCare's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

EarthCare Company Condensed Consolidated Statements of Operations

Three months ended March 31, 2001 2000 2000 Historical Pro Forma Historical

Revenues $5,614,588 $4,101,618 $280,000

Expenses: Cost of operations 3,680,887 2,977,062 --- Selling, general and administrative 1,860,914 1,394,767 1,102,460 Depreciation and amortization 532,749 312,250 55,377 Operating expenses 6,074,550 4,684,079 1,157,837

Operating loss (459,962) (582,461) (877,837)

Interest expense 1,329,721 393,295 170,795

Net loss before income tax provision (benefit) (1,789,683) (975,756) (1,048,632)

Income tax provision (benefit) --- --- ---

Loss from continuing operations (1,789,683) (975,756) (1,048,632)

Discontinued operations: Income (loss) from discontinued operations: EarthAmerica (1,814,039) (363,175) (363,175) EarthLiquids 422,719 114,121 114,121 Allen Tate --- (560,892) (560,892) Loss from discontinued operations (1,391,320) (809,946) (809,946)

Net loss (3,181,003) (1,785,702) (1,858,578) Dividends and accretion of discount on 10% Preferred (37,646) --- ---

Net loss available to common stockholders $(3,218,649) $(1,785,702) $(1,858,578)

Net loss per share - basic and diluted: Continuing operations $(0.12) $(0.07) $(0.09) Discontinued operations (0.10) (0.06) (0.07) Dividends, accretion of discount on preferred --- --- --- Net loss $(0.22) $(0.12) $(0.16)

Weighted average number of common shares 14,571,078 14,571,078 11,608,473

EarthCare Company Condensed Consolidated Balance Sheets

March 31, December 31, 2001 2000 (Unaudited) ASSETS

Current assets: Cash and cash equivalents $1,406,842 $1,784,361 Accounts receivable, net of allowance for doubtful accounts of $648,000 and $610,000, respectively 3,455,704 2,450,983 Prepaid expenses and other current assets 1,592,475 734,866 Net assets of discontinued operations 53,517,492 56,801,400 Total current assets 59,972,513 61,771,610

Property, plant and equipment, net 16,025,667 15,472,481 Intangible assets, net 7,204,631 7,311,210 Other long-term assets 5,968,716 4,050,065

Total assets $89,171,527 $88,605,366

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities: Accounts payable $2,650,953 $2,099,158 Accrued liabilities 18,370,955 15,972,512 Current portion of long-term debt 63,380,688 63,177,353 Total current liabilities 84,402,596 81,249,023

Long-term debt 39,451,863 38,965,666

Commitments and contingencies

Mandatory redeemable convertible preferred stock 10,837,824 10,800,248

Stockholders' equity (deficit): Preferred stock, $.0001 par value; 30,000,000 shares authorized, none issued --- --- Common stock, $.0001 par value; 70,000,000 shares authorized, 14,670,114 and 14,569,348 shares issued, respectively 1,467 1,457 Additional paid-in capital 60,120,613 60,013,157 Accumulated deficit (105,642,836) (102,424,185) Total stockholders' equity (deficit) (45,520,756) (42,409,571)

Total liabilities and stockholders' equity (deficit) $89,171,527 $88,605,366

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