Wood composite decking producer AERT of Springdale, Arkansas, reports Q1 net income of US$0.8M, up from year-ago loss of US$0.4M, on recapitalization gain; sales drop 8.5% to US$15M on reduced sales of ChoiceDek to BlueLinx

SPRINGDALE, Arkansas , May 11, 2011 (press release) – Advanced Environmental Recycling Technologies, Inc. (OTCBB:AERT), a leading plastic recycler and manufacturer of green building products, announced today that sales for the quarter ended March 31, 2011 were $15 million, down 8.5% from $16.4 million for the quarter ended March 31, 2010. This sales reduction was a result of the reduced sales of ChoiceDek® to BlueLinx who lowered their inventory levels, that was partially offset by increased MoistureShield® sales.

Cost of goods sold was lower in the first quarter of 2011 compared to the first quarter of 2010 due to reduced sales. As a percentage of sales, cost of goods sold increased by 5.2 percentage points, reflecting increased raw material costs and reduced manufacturing overhead absorption.

SG&A costs were up $0.4 million in the first quarter of 2011 compared to the first quarter of 2010 due to a one time charge of $0.4 million for employee stock awards, in connection with the recapitalization.

An operating loss of $0.9 million was incurred in the first quarter of 2011 versus $0.5 million operating income in the first quarter of 2010. However, net income of $0.8 million was realized as a result of a $2.7 million gain on recapitalization. In 2010 a net loss of $0.4 million was recorded in the first quarter.

"AERT successfully completed a complex financing with an affiliate of H.I.G. Capital during the quarter which positively positions the company for growth and allows it to commercialize and enter the recycled plastics market in the near future," stated AERT CEO Joe G. Brooks. "Our AERT team is excited with this new partnership as 'The Future is Now'."

AERT will host their first quarter conference call and webcast on Thursday, May 12, 2011 beginning at 10:00 am (EDT)/9:00 am (CDT) to discuss the results. Listeners may participate in a question and answer session toward the end of the webcast by calling 877-561-2747. To listen via internet visit http://aert.com/ir/webcasts.aspx .

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