Date: Thu, 20 Nov 1997 21:06:29 GMT Server: Apache/1.2.4 lock_local/0.1 Last-Modified: Tue, 22 Jul 1997 19:03:05 GMT ETag: "277e09-ed8-33d503e9" Content-Length: 3800 Accept-Ranges: bytes Connection: close Content-Type: text/html PureTec Corporation Chairman's Letter

Chairman's Letter To Shareholders


July 7, 1997

To our Shareholders:

During the past few months, PureTec has taken a number of significant steps in a series of actions designed to improve future earnings. These steps include: expanding medical plastics capacity in the western United States and Europe; reducing workforce and overhead costs at the Burlington Resins subsidiary; initiating a sale of the Styrex Industries subsidiary; and writing down most of the remaining investment in Evolutions, Inc. Styrex has been reclassified as a discontinued operation effective with the third quarter of 1997, and 1996 results have been restated to reflect this change.

The medical plastics expansions involved two additions to PureTec's growing Colorite Polymers division. Colorite Polymers is the world's leading producer of medical-grade vinyl, used by manufacturers of a wide variety of medical devices. Colorite opened its new, state-of-the-art medical plastics facility in a suburb of Belfast, Northern Ireland, which will operate as "Colorite Europe, Ltd." Colorite also completed an upgrade of existing facilities in Nevada that will enable the Company to better serve customers on the West Coast and in northern Mexico.

At the Burlington Resins subsidiary, the Company initiated a reorganization of operational and administrative functions. These moves included a reduction of approximately 10% of Burlington's employee base. The Company anticipates that this action will reduce annualized expenses by approximately $750,000.

These are long-term positive actions, although they all have a cost in the current year. In spite of these costs, and a slower season in garden hose, we still posted a profitable quarter. Net income from continuing operations was $2.3 million, or 8 cents per share, for the fiscal third quarter ended April 30, 1997. Sales for the quarter were $93.1 million. After accounting for discontinued operations at Styrex, net income for the quarter was $1.1 million, or 4 cents per share.

As previously announced, PureTec has retained Schroder Wertheim & Co. Incorporated to advise management on various strategic and financing initiatives with the goal of enhancing shareholder value and positioning the Company for future growth.

All of our announcements are covered in full in the press release section of this home page. Because we are a small company, this news is generally not covered by the financial press. However, I know that many of our shareholders would like to be aware of these actions, and so we always include the full text of all press releases here. Also, I believe it is important for investors to understand the initiatives we are taking to improve shareholder value.

Since I and the other members of the Board of Directors own 20% of the outstanding shares of this Corporation, I can assure you that we are not satisfied with the current price of our common stock. We are working hard to improve the value of your investment and we appreciate your continuing support.

Sincerely,

Fred W. Broling
Chairman and Chief Executive Officer


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