Environmental Elements posts gain in earnings But company predicts period of slow sales

August 01, 1996|By Ted Shelsby | Ted Shelsby,SUN STAFF

Environmental Elements Corp., a Baltimore-based supplier of industrial air pollution control systems, reported a modest first-quarter profit yesterday, but warned shareholders not to expect more of the same in the near future.

The company said it anticipates low sales for much of the year, but hopes to return to profitability in the fourth quarter.

For the quarter ended June 30, Environmental Elements reported net income of $45,000, or 1 cent a share, from sales of $14 million. That compares with a loss of $609,000, or 9 cents a share, from sales of $18.7 million in the same period a year ago.

The company said that new orders for the quarter fell to $6.2 million from $10.2 million last year.

"We are very pleased with our first quarter profits," Edward H. Verdery, president and chief executive, said in a prepared statement.

He said that improvements in gross margins and continued progress in lowering the costs of doing business in all areas have significantly reduced the sales volume needed for a profitable operation.

"While orders for the quarter were below our expectations, we anticipate improvement on this front during the remainder of the fiscal year," he said. "And, while we expect very low sales volumes during this summer to result in a loss for our second fiscal quarter we look forward to a return to profitability by our fourth fiscal quarter."

Environmental Elements' business volume has been hurt in recent years by customers' decisions to hold off on the purchase of new pollution control equipment until new regulations are issued by the federal government.

It has not posted an operating profit since 1992.

Its stock closed yesterday at $2.25, up 12.5 cents.

Pub Date: 8/01/96

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