KBF Pollution (fka KBFP)

[jobynimble]

from an e-mail I just got:

Dear Shareholder:

On January 14, 2002, Kevin Kreisler, KBF's President, was interviewed by CEOcast. We have prepared and provided below the transcript of this interview in response to many of your requests for copies of the transcript.

Thank you and please feel free to contact me should you have any questions or require any additional information.

Regards,
Joseph B. Schmidt, Corporate Relations
[e-mail]

KBF Pollution Management, Inc.
One Jasper Street
Paterson, New Jersey 07522
973.942.7700 p
973.942.7527 f
http://www.kbf-pmi.com

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MW: This is Michael Wachs of CEOcast.com. I’m here today with Kevin Kreisler. Kevin is President of KBF Pollution Management, Inc., a company that trades over-the-counter under the Bulletin Board symbol KBFP and one that is an emerging company in the recycling services sector. Thanks for joining CEOcast Kevin.

KK: Thank you, sir.

MW: I thought perhaps you could begin with an overview of the company and then we’ll get into the flagship technology, which is dubbed the Selective Separation Technology.

KK: KBF is an emerging environmental company with a unique patented technology that chemically removes metals from hazardous waste and physically transforms hazardous industrial by-products into commodities. By doing so we eliminate what is known as the federal cradle-to-grave liability, exempting generators of industrial hazardous wastes from their long-term liabilities. We’ve built a commercial scale facility to process large volumes of these hazardous wastes into commodities based on our technologies.

MW: Let’s start if we could with the technology itself. How does it work?

KK: The technology is a chemical and physical process that selectively separates and chemically transforms the hazards within industrial by-products into metallic ore products. For example, printed circuit board manufacturers produce a copper-laden liquid waste, which we mine for its copper content. We see those materials as very potent forms of liquid and solid ore that merely require intelligent mining rather than disposal in the environment.

MW: What about the applications? How do you apply this technology?

KK: The process is engineered for flexibility and simplicity. Scaling the technology for large volumes of material has required a tremendous amount of logistical flexibility. As applied, we use process reactors, filter presses, thermal dryers and oxidation systems to carry out the various stages of the process. Ultimately what happens is we will separate a solid from a liquid or transform the form of the solid that comes into the facility into another form of solid, which is then sold to a primary or secondary metal manufacturer, for example a smelter or a refinery. The outbound product of our processes in our facility is a high quality ore material which can have anywhere from twenty to eighty percent of a particular metallic ore commodity which could be copper or nickel or zinc or palladium or titanium or various other metals.

MW: As you look at the opportunities now, you’ve recently entered into a seven-year $21 million recycling services agreement. How will this work and how does this perhaps reflect the benefits and strengths of your technology?

KK: That particular contract involves a material that falls squarely within our core competency. It is a long-term supply contract that involves a material with high concentrations of silver in the by-product. We process the material here in our facility, recover the silver and sell the silver to primary and secondary metal manufacturers. How does that affect our model going forward? It’s pretty substantial and is fairly indicative of the type of diversity of materials that are found in the market. The domestic hazardous waste generation market is a $6 billion annualized market. Roughly thirty percent of that market is potentially recyclable and less than one percent is today recycled.

MW: Given the opportunities now, what about acquisitions? You recently entered into a letter of intent to acquire a subsidiary of R.M. Jones and Company. How might this change the face of the company?

KK: KBF’s business model is today premised on distribution of hazardous wastes into a centralized processing facility. In order to distribute these materials logistically, practically and economically the hazardous wastes have to go through regional, federally permitted transfer stations before they are brought back to our centralized facility. The R.M. Jones division includes such a permitted facility, a sales force and additional management and administrative infrastructure. It will allow us to increase our service capabilities as well, where we will be able to diversify into a full-service environmental services provider, which is what most of our recycling customers expect - to be a one-stop shop capable of managing all of their recyclables and their disposables in a safe, compliant and cost-effective manner. The acquisition will increase our management and administrative infrastructure dramatically and greatly enhance our transfer and distribution infrastructure.

MW: What about integration issues? What’s involved there?

KK: That’s an excellent question. We’ve been developing a relationship with this company for about twenty-four months, first under a distribution agreement and then under a joint venture agreement and along the way we’ve been integrating our various systems and procedures, preparing for the acquisition in the process.

MW: What about some of the additional revenue opportunities? What might some of those be?

KK: Our projections for the consolidated organization are for $18 million in annualized revenue with approximately $2 million in EBITDA. Within twenty-four months of the completion of the transaction we’re targeting to achieve $25 million in revenues with $3 million to $4 million in EBITDA.

MW: What about capital? Will you need to raise additional capital as a result of this? Will you be able to penetrate new markets?

KK: We will absolutely be able to penetrate new markets, defined primarily by geographical region in terms of our logistical, management and administrative capability to do so. As far as additional capital is concerned, need - no, want - yes. Our plans have always been to construct five waste facilities throughout the nation in key demographic regions, defined by transfer infrastructure, defined by the market where the bulk of the waste is generated. If you look to the Southeast market, the Southwest, the Northwest and the Midwest, they are all prime locations for additional facilities and the plan has always been to build the company to a certain substance where we could then go and talk about raising some additional capital to accomplish those objectives, along the way possibly acquiring additional transfer and distribution companies in the key demographic regions, bridging the gap, so to speak, between where we want to put our processing facilities.

MW: What should investors look for in the coming quarters in terms of key milestones?

KK: Our projections for recycling service volume through our New Jersey processing facility is $5 million in revenue with roughly $1 million in EBIDTA in 2002 - without the anticipated acquisition. The post-acquisition company will target $18 million in revenue within a year of completion and $2 to $2.5 million EBITDA.

MW: I’ve been speaking today with Kevin Kreisler. Kevin is President of KBF Pollution Management, Inc., a company that trades over-the-counter under the Bulletin Board symbol KBFP, one that recently announced the acquisition of a division of R.M. Jones and Company, as it seeks to broaden the applications for its flagship Selective Separation Technology. Kevin, thanks for joining CEOcast today.

KK: Thank you.



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