Debt-laden U.S. Plastic Lumber Corp. may be forced into bankruptcy as it struggles under continued operating losses.
In an April 2 filing with the Securities and Exchange Commission, officials from the Boca Raton, Fla.-based firm said bankruptcy is an option if they do not manage to close on the sale of Clean Earth Inc. or restructure $39.9 million in senior debt. Meanwhile, independent auditors questioned USPL's viability as a going concern because of its inability to repay debt and its recurring losses.
Accounting firm KPMG LLP's Miami office said USPL has an accumulated deficit and a working capital deficit of about $61 million and $60.5 million, respectively, and that the firm has missed scheduled principal and interest payments on its senior debt.
USPL officials are relying on the sale of Clean Earth Inc., a Boca Raton unit that cleans contaminated soil, to New CEI Inc. The sale to New York-based New CEI, which would generate net proceeds of $42.7 million, was supposed to close in late March but was delayed because New CEI failed to meet certain terms, USPL said. Officials now expect to close the deal by April 21.
``Our biggest challenge is to improve our short-term liquidity and restructure the company's debt,'' John Poling, the firm's chief financial officer, said in a news release. ``In order to accomplish this, we need to complete the sale of Clean Earth Inc. or restructure our outstanding credit facilities, both of which we are pursuing.''
USPL President Mark Alsentzer said the company expects to show an operating profit in the first quarter in both divisions for the first time since 2000.
``Our sales backlog, in both divisions, is ahead of last year's numbers at this time and we expect to see continued improvements in revenues and operating results in the quarters to come,'' he said.
USPL reported sales of $174 million in 2001 with an operating loss of nearly $34.6 million, vs. a $5.9 million operating loss on sales of $173.7 million in 2000.