Convergence Ethanol Inc. Announces Profit Improvement Initiative
Thursday January 11, 7:00 am ET
LOS ANGELES--(BUSINESS WIRE)--Convergence Ethanol, Inc. (OTCBB:CETH - News), a biorenewable energy project developer and provider of engineered products and systems to the energy industry, announced today a profit improvement initiative.
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The initiative is intended to improve financial performance, efficiency and productivity, as well as to realign the company's professional skills with its profit opportunities. Its points include: administrative workforce reduction, phase out of low-margin products, tighter control of travel costs and a decrease in external costs across the company.
The initiative is targeted to deliver over $1.2 million in future annualized savings, for a one-time $0.2 million related pre-tax charge. Based on current business activity, the company expects an overall annualized profit increase of more than $2 million when these savings are combined with the company's strong sales growth.
"We are committed to increasing our rate of return on invested capital and to delivering stronger bottom-line performance," said Dr. James A. Latty, president and chief executive officer, Convergence Ethanol. "Senior management is focused on ensuring that our cost structure is both competitive and in alignment with our strategic market opportunities, such as developing our woodwaste-to-ethanol refinery in Ontario, Canada."
All workforce reductions were made in non-revenue-generating areas, with the greatest number in corporate headquarters' administrative jobs and non-legal outside consulting. The company has not reduced sales, marketing, engineering, manufacturing, finance or audit capabilities.
Latty explained, "We plan to have a greater percentage of the company developing and selling Convergence Ethanol projects, products and services. Our customers and partners will continue to receive world-class products and support."
Richard W. York, chief financial officer, added, "These measures will improve business unit performance and optimize our investments in project development, manufacturing, sales and marketing."
California-based Convergence Ethanol is a biorenewable energy project developer and an ISO 9001:2000-certified provider of engineered products and systems to the energy industry. The company's mission is to support the energy industry's production of cleaner burning fuels.
For more information visit the company's developing website at www.c-eth.com
Safe Harbor Disclosure
This press release contains certain forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that involve a number of risks and uncertainties. Actual events or results may differ from the company's expectations. In addition to the matters described in this press release, risk factors listed from time to time in the reports and filings with the U.S. Securities and Exchange Commission may affect the results achieved by the Company.
Contact:
Grass Roots Investor Relations
Scott Robbins, 570-472-2287
wsr2000@ptd.net
