Tuesday, 1 May 2007

JER Q2 Released

JER Envirotech has released its second quarter financial results, which can be accessed here.

As expected, the numbers didn't show anything meaningful. Revenues were down to $138 thousand for the six months vs. $229 thousand last year. Management attributes the downturn to the complete change out of the senior team. It is also important to note that all sales recorded up to this point are from small sample orders.
Inventories rose to just over $1.0 million dollars by the end of Q2 in preparation for major orders, which according to management and the previous JER newsletter, should be booked in short order.

The key focus to shareholders at this time should be on the previously announced financings cumulatively totaling $7.0 million. Management has spent a good portion of the month touring Canada and Europe meeting with key investors and has stated that they have "more than half of the financing is now completed with a significant number of other investors completing their due diligence". The financing is expected to close by the end of May.

Feedback from the roadshows have been very positive, in particular in Europe. Europeans have an excellent grasp on the importance that Wood Plastic Composites will play in the future, in particular in the emerging construction and housing markets.

We believe that once the financing is complete it will be more meaningful for investors to use sales growth as a gauge of success.