NEW YORK, Nov. 24, 2006 (PRIMEZONE) -- Industrial Enterprises of America, Inc. (OTCBB:IEAME) a specialty automotive aftermarket supplier, reports financial results for the fiscal 2007 first quarter ended September 30, 2006.
The Company recorded revenues of approximately $10 million for the quarter, representing a substantial increase from $4.9 million for fiscal first quarter ended September 30, 2005. Before auditor final review IEAM earned net income of $2.5 million for the quarter before non-cash charges associated with derivatives booked in fiscal 2006 compared to a net loss of $300 thousand during the same period of fiscal 2005. Based on 13.5 million fully diluted shares (treasury method), this translated into a net income of $0.19 per share. This is after accounting expenses of approximately 2 cents per share related to various restatements of previous financials caused by the change in accounting treatment previously disclosed. The non-cash charges associated with the derivatives booked in fiscal 2006 will continue throughout the year. The 10-Q with full financial details is expected to be filed Monday.
John Mazzuto, Chief Executive Officer of Industrial Enterprises of America, Inc., commented, "The first quarter results are on pace with previously provided guidance and we reaffirm our $1.20 earnings guidance before the non-cash derivative charges for fiscal 2007. With the increased capacity of our Pitt Penn facility in addition to predictable seasonal fluctuations, we expect to experience a surge in revenues and earnings in second quarter as we continue to increase our total unit production.
"The integration issues are, for the most part, behind us. We have put forth an enormous amount of effort to effectively change the entire operating structure of three organizations. Within a six month period, we moved or drastically altered three large facilities and more than doubled our production. At the same time, due to different requirements at the personnel level, approximately 75% of our middle and upper management positions have undergone substantial changes, with the final phase of these changes to be completed by the end of next week. The increase in profit margins reflects, in part, an unexpected increase in our tolling business. On accounting basis, we only recognize a processing fee rather than a full revenue stream. The next six months will show substantial improvement in all phases of our operations as one time expenses, such as additional accounting expenses that approached $400,000 over the last 90 days, will be behind us. The Company can now reflect the achievements of our integrated operations."
Additionally, Industrial Enterprises of America will conduct an investor conference call in the coming weeks to discuss these financial results as well as the Company's recent developments.
Statement Under The Private Securities Litigation Reform Act
Except for the historical information contained herein, the matters discussed in this press release may include forward-looking statements or information. All statements, other than statements of historical fact, including, without limitation, those with respect to the objectives, plans and strategies of Industrial Enterprises of America set forth herein and those preceded by or that include the words "believes," "expects," "given," "targets," "intends," "anticipates," "plans," "projects", "forecasts" or similar expressions, are forward-looking statements. Although the Company's management believes that such forward-looking statements are reasonable, it cannot guarantee that such expectations are, or will be, correct. These forward-looking statements involve a number of risks and uncertainties which could cause the Company's future results to differ materially from those anticipated, including: (i) the Company's history of ongoing operating losses; (ii) the overall marketplace and clients' usage of products, including demand therefore, the impact of competitive technologies, products and pricing, particularly given the substantially larger size and scale of certain competitors and potential competitors, control of expenses, and revenue generation by the acquisition of new customers. Other risks are detailed from time to time in the Company's 2005 Annual Report on Form 10-K, as amended, its Quarterly Reports on Form 10-QSB, and in its other Securities and Exchange Commission reports and statements. The Company assumes no obligation to update any of the information contained or referenced in this press release.