USPL - U.S. Plastic Lumber (USPL)

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U. S. PLASTIC LUMBER CORP. ANNOUNCES SECOND QUARTER AND FIRST SIX MONTHS 2003 OPERATING RESULTS


Contact:

Mark S. Alsentzer, CEO
Michael D. Schmidt, Chief Financial Officer
561-394-3511

BOCA RATON, Fla.--(BUSINESS WIRE)--Aug. 14, 2003--U.S. Plastic Lumber Corp. (OTCBB:USPL.OB) today announced its operating results for the three and six months ended June 30, 2003. The results and discussion that follow pertain solely to the Company's continuing Plastic Lumber operations, as USPL completed the previously announced sale of its environmental recycling and remediation business, Clean Earth, Inc., ("CEI") on September 9, 2002.

Revenues for the second quarter of 2003 were $9.7 million compared with $14.9 million for the same quarter in 2002, a decrease of 35%. The decrease was mainly due to lower sales of the Company's building products and the sale of the Cornerboard operations in May of 2003. Income from continuing operations was $1.9 million, or $0.03 per basic and diluted share, as compared to loss from continuing operations of $4.1 million, or $0.09 per basic and diluted share, in the second quarter of 2002. In the second quarter of 2003, the Company recorded a gain on the sale of the cornerboard operation of $4.3 million. Excluding this one-time item, loss from continuing operations would have been approximately $2.4 million, or $0.04 per basic and diluted share, as reduction in gross margins in 2003 were more than offset by significantly lower interest expense and selling, general and administrative ("SG&A") expenses. Net income for the second quarter of 2003 was $2.2 million, or $0.03 per basic and diluted share, compared to a net loss of $3.7 million, or $0.08 per basic and diluted share, for the second quarter of 2002. In the second quarter of 2003, USPL recorded $350,000 of income from discontinued operations as a result of the settlement of litigation with the purchaser of CEI. Income from discontinued operations was $419,000 in the second quarter of 2002.

Revenues for the first six months of 2003 were $20.9 million compared with $29.1 million for the same period in 2002, a decrease of 28%. The Company attributed part of this decrease to not having sufficient inventory to meet the demand for its building products during the first six months of 2003, mainly due to cash constraints and slower production rates of some of its newly formulated decking products. Revenues were also negatively impacted by the sale of the Cornerboard operations in May of 2003. Loss from continuing operations was $0.4 million, or $0.01 per basic and diluted share, as compared to loss from continuing operations of $7.4 million, or $0.18 per basic and diluted share, for the first six months of 2002. Excluding the gain on the sale of the cornerboard division, loss from continuing operations would have been approximately $4.7 million, or $0.07 per basic and diluted share. USPL continued to benefit from substantially lower interest expense in 2003 as a result of the restructuring of the balance sheet in the second half of 2002, which resulted in lower debt levels and the elimination of certain non-cash interest charges; which had materially impacted the Company's earnings in 2002. In addition, SG&A decreased by approximately $1.8 million for the first six months of 2003 as compared to 2002, due to cost reduction initiatives that began in late 2002 and have continued into 2003. Net loss for the first six months of 2003 was $66,000, or $0.00 per basic and diluted share, compared to $6.5 million, or $0.16 per basic and diluted share, for the first six months of 2002, as USPL recorded $350,000 of income from discontinued operations for the first six months of 2003, compared with income from discontinued operations was $903,000 during the comparable period of 2002.

Mark Alsentzer, Chairman, CEO and President of USPL said, "While USPL has made substantial progress to improve its balance sheet over the last two quarters, the focus for the remainder of 2003 is to increase sales across all of our product lines, which in turn should improve our gross margins. Over the past two quarters, we have reduced our Selling, General and Administrative Expense and significantly lowered our interest expense as a result of paying down debt. We believe that the strengthening demand for alternative wood products combined with our improved balance sheet and reduced cost structure, position the Company well to improve sales and enable the Company to re-gain profitability."

As previously announced, USPL completed the sale of its cornerboard operation in May of 2003. The net proceeds of approximately $8.2 million were used to pay down debt and for general working capital purposes. Although the Company did receive a default notice on July 10, 2003 from its senior lender, Guaranty Business Credit Corporation ("GBCC"), for failure to meet EBITDA-related financial covenants, GBCC is continuing to work with the Company as it explores various strategic alternatives to restructure its debt with GBCC.

U.S. Plastic Lumber Corp. is engaged in the manufacture of plastic lumber, returnable packaging and other value added products from recycled plastic. U.S. Plastic Lumber is the nation's largest producer of 100% HDPE recycled plastic lumber. Headquartered in Boca Raton, Florida, USPL is a highly integrated, nationwide processor of a wide range of products made from recycled plastic feedstocks. USPL creates high quality, competitive building materials, furnishings, and industrial supplies by processing plastic waste streams into purified, consistent products. USPL's products are environmentally responsible and are both aesthetically pleasing and maintenance friendly. They include such brand names as Carefree Xteriors(R), RecycleDesign(TM), Trimax(R), Earth Care(TM), and OEM products including Cyclewood(R). USPL currently operates three plastic manufacturing centers.

Certain statements and information included in this press release constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. When used in this press release, the words or phrases "will likely result", "are expected to", "will continue", "is anticipated", "estimate", "projected", "intends to" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks, known and unknown, and uncertainties, including but not limited to risks associated with the Company's credit facilities and liquidity, the ability to obtain adequate financing on commercially acceptable terms, economic conditions, demand for products and services of the Company, newly developing technologies, the Company's ability to compete, regulatory matters, protection of the Company's proprietary technology, the effects of competition from entities with greater financial resources than that possessed by the Company and shareholder dilution. Such factors could materially adversely affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed within this press release. Additional discussion of such factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations is contained in the Company's SEC filings.


U.S. PLASTIC LUMBER CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended June 30, 2003 and 2002
(Dollars in thousands except share and per share amounts)

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2003 2002
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Revenues, net: $ 9,708 $ 14,924

Cost of goods sold 8,897 12,036
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Gross Profit 811 2,888

Selling, General and Administrative 2,722 3,840
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Operating Loss (1,911) (952)

Other (expense) income (17) 114
Gain (loss) on sale of assets 4,326 (3)
Interest expense 531 3,253
Provision for income taxes - -
----------- -----------

Income (loss) from continuing
operations 1,867 (4,094)

Discontinued operations:
Income from operations discontinued
environmental recycling segment 350 419
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Income from discontinued operations 350 419

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Net Income (loss) $ 2,217 $ (3,675)
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Income (loss) per common share - Basic:
Loss from continuing operations $ 0.03 $ (0.09)
Income (loss) from discontinued
operations - 0.01
----------- -----------
Net loss per common share $ 0.03 $ (0.08)
=========== ===========

Income (loss) per common share - Diluted:
Loss from continuing operations $ 0.03 $ (0.09)
Income from discontinued operations - 0.01
----------- -----------
Income (loss) per common share $ 0.03 $ (0.08)
=========== ===========

Weighted average common shares outstanding -
Basic 64,451,743 44,322,988
Weighted average common shares outstanding -
Diluted 67,713,264 44,322,988


U.S. PLASTIC LUMBER CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
Six Months Ended June 30, 2003 and 2002
(Dollars in thousands except share and per share amounts)

----------- -----------
2003 2002
----------- -----------
Revenues, net: $ 20,924 $ 29,128

Cost of goods sold 19,424 23,083
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Gross Profit 1,500 6,045

Selling, General and Administrative 5,195 7,043
----------- -----------

Operating Loss (3,695) (998)

Other income (14) 180
Gain (loss) on sale of assets 4,410 (3)
Interest expense 1,117 6,567
Provision for income taxes - -
----------- -----------

Loss from continuing operations (416) (7,388)

Discontinued operations:
Income (Loss) from operations discontinued
environmental recycling segment 350 903
----------- -----------
Income (loss) from discontinued
operations 350 903

Net loss (66) (6,485)

Preferred dividends - (177)
----------- -----------

Net loss attributable to common stockholders $ (66) $ (6,662)
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Net Loss per common share - Basic and
diluted:
Loss from continuing operations $ (0.01) $ (0.18)
Income from discontinued operations 0.01 0.02
----------- -----------
Net loss per common share $ (0.00) $ (0.16)
=========== ===========

Weighted average common shares outstanding -
basic and diluted 64,440,273 42,684,834
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http://www.usplasticlumber.com/